§ 1725 — Application to the court for approval of a plan

Illinois § 1725

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

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(a) Within 30 days after notice from the Director that the applicant may proceed with the court filing, the applicant shall apply to the court for approval of the insurance business transfer plan. Upon written request by the applicant, the Director may extend the period for filing an application with the court for an additional 30 days. (b) The applicant shall inform the court of the reasons why he or she petitions the court to find no material adverse impact to policyholders, reinsurers, or claimants affected by the proposed transfer. (c) The application shall be in the form of a verified petition for implementation of the insurance business transfer plan in the court. The petition shall include the insurance business transfer plan and shall identify any documents and witnesses which the applicant intends to present at a hearing regarding the petition. (d) The Director shall be a party to the proceedings before the court concerning the petition and shall be served with copies of all filings. The Director's position in the proceeding shall not be limited by his or her initial review of the plan. The Director shall have all the rights of a litigant under the Illinois Supreme Court Rules and the Code of Civil Procedure, including, but not limited to, the right to appeal. (e) Following the filing of the petition, the applicant shall file a motion for a scheduling order setting a hearing on the petition. (f) Within 15 days after receipt of the scheduling order, the applicant shall cause notice of the hearing to be provided in accordance with the notice provisions of Section 1715. Following the date of distribution of the notice, there shall be a 60-day comment period. The notice and all comments received shall be part of the court record. (g) The notice shall be filed with and approved by the court before distribution, and the Director shall be given the opportunity to review and comment on the sufficiency of the notice before court approval. The notice shall state or provide: (1) the date and time of the approval hearing; (2) the name, address, and telephone number of the assuming insurer and transferring insurer; (3) that the recipient may comment on or object to the transfer and novation; (4) the procedures and deadline for submitting comments or objections on the plan; (5) a summary of any effect that the transfer and novation will have on the policyholder's rights; (6) a statement that the assuming insurer is authorized to assume the subject business and that court approval of the plan shall extinguish all rights of policyholders under policies that are part of the subject business against the transferring insurer; (7) a statement regarding whether any policyholder or group of policyholders may or will lose or gain state guaranty association coverage as a result of the transfer and the implication of losing or gaining state guaranty association coverage; (8) that recipients shall not have the opportunity to opt out of or otherwise reject the transfer and novation; (9) contact information for the Department where the policyholder may obtain further information; (10) information on how an electronic copy of the insurance business transfer plan may be accessed. If policyholders are unable to readily access electronic copies, the applicant shall provide hard copies by first-class mail; and (11) any other information that the court may require. (h) Any person, including by their legal representative, who considers himself, herself, or itself to be adversely affected can present evidence or comments to the court at the approval hearing. Any person participating in the approval hearing must follow the process established by the court and shall bear his or her own costs and attorney's fees.

Legislative History

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