§ 1705 — Definitions

Illinois § 1705

• Jurisdiction: Illinois
• Topic: REGULATION
• Ch. 215: INSURANCE
• Act 215 ILCS 5/: Illinois Insurance Code.
• Art.: Article XLVII - Insurance Business Transfers

Text

As used in this Article: "Affiliate" means a person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with the person specified. "Applicant" means a transferring insurer or reinsurer applying under this Article. "Assuming insurer" means an insurer domiciled in Illinois and authorized to transact the type of business described in clause (c) of Class 1, clauses (b) through (l) of Class 2, or Class 3 of Section 4 that seeks to assume policies from a transferring insurer pursuant to this Article. "Court" means the circuit court of Sangamon County or Cook County. "Department" means the Department of Insurance. "Director" means the Director of Insurance. "Implementation order" means an order issued by a court under this Article. "Insurance business transfer" means a transfer and novation that, once approved pursuant to this Article, transfers insurance obligations or risks, or both, of existing or in-force contracts of insurance or reinsurance from a transferring insurer to an assuming insurer, and effects a novation of the transferred contracts of insurance or reinsurance with the result that the assuming insurer becomes directly liable to the policyholders of the transferring insurer and the transferring insurer's insurance obligations or risks, or both, under the contracts are extinguished. "Insurance business transfer plan" means the plan submitted to the Department to accomplish the transfer and novation pursuant to an insurance business transfer, including any associated transfer of assets and rights from or on behalf of the transferring insurer to the assuming insurer. An "insurance business transfer plan" is limited to the types of insurance described in clause (c) of Class 1, clauses (b) through (l) of Class 2, or Class 3 of Section 4. "Independent expert" means the impartial person procured to assist the Director and the court in connection with their review of a proposed transaction. The independent expert shall: (i) have no current or past, direct or indirect, financial interest in either the assuming insurer or transferring insurer or any of their respective affiliates, (ii) have not been employed by or acted as an officer, director, consultant, or other independent contractor for either the assuming insurer or transferring insurer or any of their respective affiliates within the past 12 months, (iii) not currently be appointed by the Director to assist in any capacity in any proceeding initiated under Article XIII, and (iv) receive no compensation in connection with the transaction governed by this Article other than a fee based on a fixed or hourly basis that is not contingent on the approval or consummation of an insurance business transfer. "Insurer" means an insurance, surety, or reinsurance company, corporation, partnership, association, society, order, individual, or aggregation of individuals engaging in or proposing or attempting to engage in insurance or surety business, including the exchanging of reciprocal or inter-insurance contracts between individuals, partnerships, and corporations. "Policy" means a policy, certificate of insurance, or a contract of reinsurance pursuant to which an insurer agrees to assume an obligation or risk, or both, of the policyholder or to make payments on behalf of, or to, the policyholder or its beneficiaries, and includes property and casualty insurance. "Policy" does not include any policy, contract, or certificate of life, accident, or health insurance, including those defined in clause (a) or (b) of Class 1 or clause (a) of Class 2 of Section 4. "Policyholder" means an insured or a reinsured under a policy that is part of the subject business. "State guaranty association" means the Illinois Insurance Guaranty Fund, the Illinois Life and Health Guaranty Association, or any similar organization in another state. "Subject business" means the policy or policies that are the subject of the insurance business transfer plan. "Transfer and novation" means the transfer of insurance obligations or risks, or both, of existing or in-force policies from a transferring insurer to an assuming insurer that is intended to effect a novation of the transferred policies with the result that the assuming insurer becomes directly liable to the policyholders of the transferring insurer on the transferred policies and the transferring insurer's obligations or risks, or both, under the transferred policies are extinguished. "Transferring insurer" means an insurer or reinsurer that transfers and novates or seeks to transfer and novate obligations or risks, or both, under one or more policies to an assuming insurer pursuant to an insurance business transfer plan.

Legislative History

(Source: P.A. 103-75, eff. 1-1-25 .)