Life, Accident & Health Insurers and Fraternal:
Property & Casualty:
For information regarding the Division Law, please visit the IDOI website at https://insurance.illinois.gov/Hearings/ConsumerHearing.html.How does the Division process begin?
To affect a division, an applicant must file a Plan of Division with the Illinois Department of Insurance (“IDOI” or the “Department”). Unless defined in this FAQ, initially capitalized terms have the meaning ascribed to them in the Division Law, 215 ILCS 5/35B-1 thru 50.)What information must be included in an application for a Division?
The proposed Plan of Division must include all relevant details about the proposed Division, including, but not limited to, the name of the Dividing Company; names of the Resulting Companies created by the proposed Division and their respective proposed organizational documents; how Assets and Liabilities (including but not limited to Capital and Surplus) will be allocated between or among the Resulting Companies; the manner of distributing shareholder interests in the New Companies to the Dividing Company and/or other owners; and a reasonable description of the liabilities, including Policy Liabilities, and items of capital, surplus, or other assets that the Dividing Company proposes to allocate to each Resulting Company, including specifying the reinsurance contract, reinsurance coverage obligations, and related claims that are applicable to the policies.Is a hearing required?
A hearing is only required if the Director of Insurance deems it to be in the public interest or if it is requested by the Dividing Company.What lines of business does the Division Law apply to?
The Division Law applies to all lines of insurance business.Does the Division Law apply to all insurers?
The Division Law applies only to Illinois domestic stock insurance companies.Are documents submitted with a Division application considered confidential?
The Division Law contains provisions that protect the confidentiality of information submitted to the Department in connection with a Division transaction. For example, 215 ILCS 5/35B-25(f) states:
All information, documents, materials, and copies thereof submitted to, obtained by, or
disclosed to the Director in connection with a plan of division or in contemplation thereof, including any information, documents, materials, or copies provided by or on behalf of a domestic stock company in advance of its adoption or submission of a plan of division, shall be confidential and shall be subject to the same protection and treatment in accordance with Section 131.14d as documents and reports disclosed to or filed with the Director pursuant to Section 131.14b (Enterprise Risk Filing) until such time, if any, as a notice of the hearing is issued.
From and after the issuance of a notice of the hearing (a) all business, financial, and actuarial information that the domestic stock company requests confidential treatment, other than the plan of division, shall continue to be confidential and shall not be available for public inspection and shall be subject to the same protection and treatment in accordance with Section 131.14d as documents and reports disclosed to or filed with the Director pursuant to Section 131.14b.
Other provisions of the Illinois Insurance Code may provide additional protection against disclosure.
To approve a Plan of Division the Director must find that each New Company, except a New Company that is a non-surviving party to a merger, is eligible to receive a license to do insurance business in Illinois. (See 215 ILCS 5/35B-25 (2))
The Director must also find that each New Company created by the proposed division, except a New Company that is a non-surviving party to a merger pursuant to subsection (b) of Section 156 and will be a member insurer of the Illinois Life and Health Insurance Guaranty Association that will have policy liabilities allocated to it will be licensed to do insurance business in each state where such policies were written by the Dividing Company. (See 215 ILCS 5/35B-25 (2.5))
Allocation of a Policy Liability will not affect the rights or obligations of a policyholder, except those rights only will be available against the Resulting Company responsible for the Policy or Liability.Will a Division affect reinsurer, surety or guarantor obligations?
Allocation of a Policy or Liability will not release any reinsurer, surety or guarantor of the Policy or Liability.Will IDOI issue any formal rules or regulations?
IDOI has no plans to promulgate rules at this time.
Effective July 1, 2004:
For every company subject to 215 ILCS 5/416 (a) of the Illinois Insurance Code (215 ILCS 5/416), the Industrial Commission Operations Fund Surcharge is amended by Public Act 093-0840 to 1.01% of its direct written premium for insuring employers' liabilities arising under the Workers' Compensation Act or Workers' Occupational Diseases Act as reported in each company's annual statement filed for the previous year as required by Section 136.