(215 ILCS 5/Art. III.5 heading)
ALIEN COMPANIES
(215 ILCS 5/60a) (from Ch. 73, par. 672a)
Sec. 60a.
Alien companies; Illinois State of entry.
(1) An alien
company may use Illinois as a state of entry to transact insurance in the
United States by obtaining a certificate of authority pursuant to Section
111 and maintaining in this State a deposit of assets in trust in
accordance with the provisions of Section 60b.
(2) A United States branch of an alien company that uses Illinois as a
state of entry to transact insurance in the United States shall be
considered a domestic company, and as such shall be subject to all
applicable provisions of this Code.
Transactions between the United States branch and the home office of an
alien company shall not be subject to the provisions of Section 131.20 and
subsection (1) of Section 131.20a, but remittances of profits of the United
States branch to the home office of an alien company shall be considered
dividends subject to the requirements of subsection
(2) of Section 131.20a.
(Source: P.A. 89-97, eff. 7-7-95.)
(215 ILCS 5/60b) (from Ch. 73, par. 672b)
Sec. 60b.
Alien companies; Illinois trusteed assets.
(1) An alien company may not use Illinois as a state of entry to transact
insurance in the United States unless it maintains in this State a deposit of
assets in trust for the benefit of policyholders in the United States, which
assets shall be its “Trusteed Assets”. The United States branch of an alien
company shall maintain Trusteed Assets at least equal to (a) the sum of (i) its
minimum capital and surplus, and (ii) the amount of its liabilities to
policyholders, net of reinsurance for which credit is allowed pursuant to
Article XI, as reflected in its most recent financial statement on file with
the Director, minus (b) the sum of (i) the amount of all of its general state
deposits (including all interest accrued and due and payable
to the holder of the deposit), (ii) the amount of its special state
deposits (including all interest accrued and due and payable to the holder
of the deposit), (iii) the amount of its reinsurance recoverable on paid
losses (where such reinsurance is the type for which credit would be
allowed pursuant to Article XI), (iv) the amounts of its notes and bills
receivable, taken for premiums; (v) with respect to a company authorized to
write the kinds of insurance specified in Classes 2 and 3 of Section 4 of
this Code, the amount of its agents’ balances and uncollected premiums; and
(vi) the amount of its funds held by or deposited with reinsureds.
(2) Only those assets that qualify as authorized investments as provided
in Article VIII (and in Sections 131.2 and 131.3) shall be included in an alien
company’s Trusteed Assets.
(Source: P.A. 88-45; 89-97, eff. 7-7-95.)
(215 ILCS 5/60c) (from Ch. 73, par. 672c)
Sec. 60c.
Requirements and contents of trust agreement.
Trust
agreements governing Trusteed Assets required by Section 60b shall satisfy
the following conditions:
(1) Legal title to the Trusteed Assets shall be vested in the trustee or
trustees, and their successors lawfully appointed, in trust for the benefit
and security of policyholders of the alien company in the United States.
(2) The agreement shall provide for substitution of a new trustee or
trustees, subject to the Director’s approval.
(3) All Trusteed Assets shall at all times be maintained as a trust fund
separate and distinct from all other assets.
(4) The trustee or trustees shall maintain a record at all times
sufficient to identify the assets of the trust.
(5) Withdrawal of or from the Trusteed Assets shall be made only as
provided in Section 60d.
(Source: P.A. 85-1373.)
(215 ILCS 5/60d) (from Ch. 73, par. 672d)
Sec. 60d.
Withdrawal of Trusteed Assets.
(1) The trust agreement
shall provide that no withdrawals of Trusteed Assets shall be made by the
alien company or permitted by the trustee or trustees without the prior
approval of the Director, except as follows:
(a) Any or all income, earnings, dividends, or interest accumulations of
the Trusteed Assets may be paid over to the United States branch of the
alien company upon request of the company or its manager, provided that no
withdrawal shall be made that reduces the Trusteed Assets below the amount
required by Section 60b.
(b) For the purpose of substituting other assets authorized for
investment by Article VIII and at least equal in value (as reflected in
the most recent financial statement on file with the Director) to those
being withdrawn, if such withdrawal is requested in writing by the alien
company’s (i) United States manager or (ii) other United States
representative pursuant to general or specific written authority previously
given or delegated by the alien company’s board of directors or other
similar governing body, and a copy of such authority has been filed with
the trustee or trustees.
(c) For the purpose of making deposits required by law in any state for
the protection of the alien company’s policyholders in the United States.
The trustee or trustees shall transfer any assets so withdrawn, and in the
amount so required to be deposited in the other state, directly to the
depository required to receive such deposit in such other state.
(d) For the payment of obligations due from the United States branch of
the alien company to policyholders in the United States, provided that no
withdrawal shall be made that reduces the Trusteed Assets below the amount
required by Section 60b.
(e) For the purpose of withdrawing any amount of the Trusteed Assets in
excess of the amount required by Section 60b, as determined by the alien
company’s then most current annual statement on file with the Director.
(f) For the purpose of transferring the Trusteed Assets to an appointed
liquidator, conservator, or rehabilitator pursuant to the order of a court
of competent jurisdiction.
(2) If at any time the alien company becomes insolvent, or if its
Trusteed Assets are less than required under Section 60b, the Director
shall in writing order the trustee to suspend the right of the alien
company or any other person to withdraw assets as otherwise authorized
under paragraphs (a), (b), (c), (d) and (e) of subsection (1); and the
trustee shall comply with such order until otherwise ordered by the Director.
(Source: P.A. 85-1373.)
(215 ILCS 5/60e) (from Ch. 73, par. 672e)
Sec. 60e.
Domestication of Alien Company; definitions.
As used in
Sections 60e through 60i:
(1) “Domestication” means the reorganization of the United States branch
of an alien company as the result of which a domestic company shall succeed
to all the business and assets and assume all the liabilities of the United
States branch of the alien company.
(2) “United States branch” means the business unit through which
business is transacted within the United States by an alien company and the
assets and liabilities of such insurer within the United States pertaining
to such business.
(3) “Domestic Company” means a stock or mutual insurer incorporated
under the laws of this State.
(Source: P.A. 85-1373.)
(215 ILCS 5/60f) (from Ch. 73, par. 672f)
Sec. 60f.
Domestication procedure.
(1) Upon compliance with Sections 60e
through 60i, any alien company authorized to do business in this State may,
with the prior written approval of the Director, domesticate its United
States branch by entering into an agreement in writing with a domestic
company providing for the acquisition by the domestic company of all of the
assets and the assumption of all of the liabilities of the United States branch.
(2) The acquisition of assets and assumption of liabilities of the
United States branch by the domestic company shall be effected by filing
with the Director an instrument of transfer and assumption in form
satisfactory to the Director and executed by the alien company and the domestic company.
(Source: P.A. 85-1373.)
(215 ILCS 5/60g) (from Ch. 73, par. 672g)
Sec. 60g.
Domestication agreement; authorization; execution.
(1) The
domestication agreement referred to in Section 60f shall be authorized,
adopted, approved, signed, and acknowledged by the alien company in
accordance with the laws of the country under which it is organized.
(2) In the case of a domestic company, the domestication agreement shall
be approved, adopted, and authorized by its board of directors and executed
by its president or any vice president and attested by its secretary or
assistant secretary under its corporate seal.
(Source: P.A. 85-1373.)
(215 ILCS 5/60h) (from Ch. 73, par. 672h)
Sec. 60h.
Director’s approval of domestication agreement.
An executed
counterpart of the
domestication agreement, together with certified copies of the corporate
proceedings of the domestic company and the alien company, approving,
adopting and authorizing the execution of the domestication agreement,
shall be submitted to the Director for approval. The Director shall
thereupon consider the agreement, and, if the Director finds that the same
is in accordance with the provisions hereof and that the interests of
policyholders of the United States branch of the alien insurer and of the
domestic company are not materially adversely affected, the Director shall
approve the domestication agreement and authorize the consummation thereof
in compliance with the provisions of Section 60i. The Director shall
approve or disapprove the domestication agreement within 60 days
after it is submitted to the Director.
(Source: P.A. 85-1373.)
(215 ILCS 5/60i) (from Ch. 73, par. 672i)
Sec. 60i.
Consummation of domestication; transfer of assets and
deposits. (1) Upon the filing with the Director of a certified copy of
the instrument of transfer and assumption pursuant to which a domestic
company succeeds to the business and assets of the United States branch of
an alien company and assumes all its liabilities, the domestication of the
United States branch shall be deemed to be effective; and thereupon all the
rights, franchises, and interests of the United States branch in and to
every species of property, real, personal, and mixed, and things in actions
thereunder belonging shall be deemed as transferred to and vested in the
domestic company, and simultaneously therewith the domestic company shall
be deemed to have assumed all of the liabilities of the United States
branch. The domestic company shall be considered as having the age as the
oldest of the 2 parties to the domestication agreement for purposes of
complying with the requirements of laws relating to age of company.
(2) All deposits of the United States branch held by the Director, or by
state officers or other state regulatory agencies pursuant to requirements
of state laws, shall be deemed to be held as security for the satisfaction
by the domestic company of all liabilities to policyholders within the
United States assumed from the United States branch; and such deposits
shall be deemed to be assets of the domestic company and shall be reported
as such in the annual financial statements and other reports which the
domestic company may be required to file. Upon the ultimate release by any
such state officer or agency of any such deposits, the securities and cash
constituting such released deposit shall be delivered and paid over to the
domestic company as the lawful successor in interest to the United States branch.
(3) Contemporaneously with the consummation of the domestication of the
United States branch, the Director shall direct the trustee, if any, of the
U. S. branch’s Trusteed Assets to transfer and deliver to the domestic
company all assets, if any, held by such trustee.
(Source: P.A. 85-1373.)
(215 ILCS 5/60j) (from Ch. 73, par. 672j)
Sec. 60j.
Trustees of alien companies.
(1) The directors of an alien
company may appoint citizens or
corporations of the United States as its trustees to hold funds and assets
in trust for the benefit of the policyholders and creditors of the company
in the United States. A certified copy of the record of such appointment
and of the deed of trust, approved by the Director, shall be filed with
him.
(2) The Director may examine such trustee and any officers and agents,
books and papers thereof, with respect to the affairs of such alien company
in the same manner as he may examine officers, agents, books, papers and
affairs of companies.
(3) The funds and assets so held by such trustees shall, with the
deposits otherwise made by the United States branch of the alien company in the
United States together with
loans in connection with its policies to policyholders,
and all other funds and assets held by the United States branch of the
alien company in the United States,
constitute
the assets of the company for the purpose of making its financial
statements required by this Code. For purposes of making financial
statements required by this Code, the liabilities of an alien company shall
be limited to only those liabilities incurred in connection with its United
States business.
(4) In applying the risk limitations as provided in Section 144 or any
limit on premium volume, the Director shall calculate such limitations
based solely on the alien company’s assets in the United States that,
pursuant to subsection (3) of this Section, constitute the assets of the
company for purposes of making its financial statements required by this
Code and its surplus as regards policyholders as reflected in the most
recent financial statement on file with the Director.
(Source: P.A. 85-1373.)