This text of Illinois § 126.6 (Loans to officers and directors) is published on Counsel Stack Legal Research, covering Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
A.
(1)Except as provided in Section 126.6B, an insurer shall not directly or indirectly, unless it has notified the Director in writing of its intention to enter into the transaction at least 30 days prior thereto, or any shorter period as the Director may permit, and the Director has not disapproved it within that period:
(a)Make a loan to or other investment in an officer or director of the insurer or a person in which the officer or director has any direct or indirect financial interest;
(b)Make a guarantee for the benefit of or in favor of an officer or director of the insurer or a person in which the officer or director has any direct or indirect financial interest; or (c) Enter into an agreement for the purchase or sale of property from or to an officer or director of the insurer
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A. (1) Except as provided in Section 126.6B, an insurer shall not directly or indirectly, unless it has notified the Director in writing of its intention to enter into the transaction at least 30 days prior thereto, or any shorter period as the Director may permit, and the Director has not disapproved it within that period: (a) Make a loan to or other investment in an officer or director of the insurer or a person in which the officer or director has any direct or indirect financial interest; (b) Make a guarantee for the benefit of or in favor of an officer or director of the insurer or a person in which the officer or director has any direct or indirect financial interest; or (c) Enter into an agreement for the purchase or sale of property from or to an officer or director of the insurer or a person in which the officer or director has any direct or indirect financial interest. (2) For purposes of this Section, an officer or director shall not be deemed to have a financial interest by reason of an interest that is held directly or indirectly through the ownership of equity interests representing less than 2% of all outstanding equity interests issued by a person that is a party to the transaction, or solely by reason of that individual's position as a director or officer of a person that is a party to the transaction. (3) This subsection does not permit an investment that is prohibited by Section 126.5. (4) This subsection does not apply to a transaction between an insurer and any of its subsidiaries or affiliates that is entered into in compliance with Section 131.20a of this Code, other than a transaction between an insurer and its officer or director. B. An insurer may make, without the prior written approval of the Director: (1) Policy loans in accordance with the terms of the policy or contract and Section 126.19; (2) Advances to officers or directors for expenses reasonably expected to be incurred in the ordinary course of the insurer's business or guarantees associated with credit or charge cards issued or credit extended for the purpose of financing these expenses; (3) Loans secured by the principal residence of an existing or new officer of the insurer made in connection with the officer's relocation at the insurer's request, if the loans comply with the requirements of Section 126.15 or 126.28 and the terms and conditions otherwise are the same as those generally available from unaffiliated third parties; (4) Secured loans to an existing or new officer of the insurer made in connection with the officer's relocation at the insurer's request, if the loans: (a) Do not have a term exceeding 2 years; (b) Are required to finance mortgage loans outstanding at the same time on the prior and new residences of the officer; (c) Do not exceed an amount equal to the equity of the officer in the prior residence; and (d) Are required to be fully repaid upon the earlier of the end of the 2 year period or the sale of the prior residence; and (5) Loans and advances to officers or directors made in compliance with state or federal law specifically related to the loans and advances by a regulated non-insurance subsidiary or affiliate of the insurer in the ordinary course of business and on terms no more favorable than available to other customers of the entity.