Illinois Administrative Code

Section 1052.40 Filing and Approval of Premiums In determining whether or not the benefits in any policy form submitted by an insurer for approval are "reasonable" in relation to the premium, an ultimate loss ratio of fifty percent (50%) will be deemed to provide benefits reasona…

Section 1053.10 Computation of Premium Refunds a) The refund of return premiums in the case of Decreasing Term Insurance issue under Article IX½ of the Illinois Insurance Code shall be computed by the "Sum of Digits" formula, commonly known as the "Rule of Seventy Eighths". b) Th…

Section 1103.10 Preamble a) The Department of Financial and Professional Regulation-Division of Insurance (Division) recognizes that licensed insurers routinely enter into reinsurance agreements that yield legitimate relief to the ceding insurer from strain to surplus. b) However…

Section 1103.20 Scope This Part shall apply to all domestic life, accident and health insurers and to all other licensed life and health insurers who are not subject to the same regulation in their domiciliary state. This Part shall also apply to licensed property and casualty in…

Section 1103.25 Definitions Department means the Illinois Department of Financial and Professional Regulation. Director means the Director of the Illinois Department of Financial and Professional Regulation-Division of Insurance. Division means the Department of Financial and Pro…

Section 1103.30 Accounting Requirements a) No insurer subject to this Part shall, for reinsurance ceded, reduce any liability or establish any asset in any financial statement filed with the Division if, by the terms of the reinsurance agreement, in substance or effect, any of th…

Section 1103.40 Written Agreements a) No reinsurance agreement or amendment to any agreement shall be used to reduce any liability or to establish any asset in any financial statement filed with the Division, unless the agreement or amendment or a binding letter of intent has bee…

Section 1103.50 Existing Agreements On or before December 31, 2011, all insurers that are subject to this Part must be able to certify that they have reduced to zero any reserve credits or assets established with respect to reinsurance agreements entered into prior to December 31…

Section 1103.EXHIBIT A Risk Category Risk Categories: a) Morbidity b) Mortality c) Lapse This is the risk that a policy will voluntarily terminate prior to the recoupment of a statutory surplus strain experienced at issue of the policy. d) Credit Quality (C1) This is the risk tha…

Section 1104.10 Purpose The purpose of this Part is to set forth procedural requirements the Director deems necessary to carry out the provisions of Article XI of the Code. (Source: Amended at 43 Ill. Reg. 14133, effective November 19, 2019)

Section 1104.100 Reinsurance Contract Credit will not be granted to a ceding insurer for reinsurance effected with assuming insurers meeting the requirements of Section 1104.20, 1104.30, 1104.35, 1104.40, 1104.45, 1104.47 or 1104.60 or otherwise in compliance with Section 173.1(1…

Section 1104.110 Contracts Affected All new and renewal reinsurance transactions entered into after January 1, 1996 shall conform to the requirements of this Part if credit is to be given to the ceding insurer for such reinsurance.

Section 1104.120 Severability If any provisions of this Part, or their application to any person or circumstance is held invalid, such determination shall not affect other provisions or applications of this Part which can be given effect without the invalid provision or applicati…

Section 1104.15 Definitions "Code" means the Illinois Insurance Code [215 ILCS 5]. "Covered Agreement" means an agreement entered into pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (31 U.S.C. 313 and 314) that is currently in effect or in a period of p…

Section 1104.20 Credit for Reinsurance – Reinsurer Licensed in this State Pursuant to Section 173.1(1)(A) of the Code, the Director shall allow credit for reinsurance ceded by a domestic insurer to assuming insurers which were licensed in this State as of the date of the ceding i…

Section 1104.30 Credit for Reinsurance – Accredited Reinsurers a) Pursuant to Section 173.1(1)(B) of the Code, the Director shall allow credit for reinsurance ceded by a domestic insurer to an assuming insurer that is accredited as a reinsurer in this State as of the date of the …

Section 1104.35 Credit for Reinsurance – Reinsurer Domiciled in Another State a) As part of complying with Section 173.1(1)(B-5)(1)(b) of the Code, an assuming insurer or U.S. branch of an alien assuming insurer must file with the Director a properly executed Form AR-1 found in A…

Section 1104.40 Credit for Reinsurance – Reinsurers Maintaining Trust Funds a) Pursuant to Section 173.1(1)(C) of the Code, the Director shall allow credit for reinsurance ceded by a domestic insurer to an assuming insurer that, as of the date of the ceding insurer's most recent …

Section 1104.45 Credit for Reinsurance – Certified Reinsurers a) Pursuant to Section 173.1 of the Code, the Director shall allow credit for reinsurance ceded by a domestic insurer to an assuming insurer that has been certified as a reinsurer in Illinois at all times for which sta…

Section 1104.47 Credit for Reinsurance - Reciprocal Jurisdictions a) Pursuant to Section 173.1(1)(C-10) of the Code, the Director shall allow credit for reinsurance ceded by a domestic insurer to an assuming insurer that is licensed to write reinsurance by, and has its head offic…

Section 1104.50 Credit for Reinsurance Required by Law The Director shall allow credit for reinsurance ceded by a domestic insurer to an assuming insurer not meeting the requirements of Section 173.1(1)(A), (B), (B-5), (C), (C-5) or (C-10) of the Code but only with respect to the…

Section 1104.60 Reduction from Liability for Reinsurance Ceded to an Unauthorized Assuming Insurer Pursuant to Section 173.1(2) of the Code, the Director shall allow a reduction from liability for reinsurance ceded by a domestic insurer to an assuming insurer not meeting the requ…

Section 1104.70 Trust Agreements Qualified Under Section 1104.60 a) As used in this Section: 1) Beneficiary means the entity for whose sole benefit the trust has been established and any successor of the beneficiary by operation of law. If a court of law appoints a successor in i…

Section 1104.80 Letters of Credit Qualified Under Section 1104.60 a) The letter of credit must be clean, irrevocable and unconditional and issued or confirmed by a qualified U.S. financial institution as defined in Section 173.1(3)(A) of the Code. The letter of credit shall conta…

Section 1104.90 Other Security A ceding insurer may take credit for unencumbered funds withheld by the ceding insurer in the United States subject to withdrawal solely by the ceding insurer and under its exclusive control.

Section 1104.APPENDIX C Form RJ-1 Certificate of Reinsurer Domiciled in Reciprocal Jurisdiction FORM RJ-1 CERTIFICATE OF REINSURER DOMICILED IN RECIPROCAL JURISDICTION I, , (name of officer) (title of officer) of , the Assuming Insurer (name of Assuming Insurer) under a reinsuran…

Section 1250.10 Purpose a) The purpose of this Part is to set forth the standards the Director may use for identifying insurers found to be in such condition as to render the continuance of their business hazardous to their policyholders, creditors or the general public. b) This …

Section 1250.15 Definitions Actuarial Standards of Practice means the actuarial standards used in keeping with current professional practice by the Actuarial Standards Board (1100 Seventeenth Street, NW, Seventh Floor, Washington DC 20036) that are to be utilized by actuaries in …

Section 1250.20 Standards Depending upon an examination of the factual circumstances, applicable law and financial situation of the company involved, the following standards, either singly or a combination of two or more, may be considered by the Director to determine whether the…

Section 1250.30 Director's Authority a) For purposes of making a determination of an insurer's financial condition under this Part, the Director may: 1) Disregard any credit or amount receivable resulting from transactions with a reinsurer that is insolvent, impaired or otherwise…

Section 1250.40 Judicial Review Any order or decision of the Director shall be subject to review in accordance with the Administrative Review Law [735 ILCS 5/Art. III] at the instance of any party to the proceedings whose interests are substantially affected. (Source: Amended at …

Section 1305.10 Purpose The purpose of this Part is to describe the information that shall be provided to the Director by a domestic captive insurance company to notify the Director to seek approval of all dividends and other distributions under Section 123C-26 of the Illinois In…

Section 1305.20 Definitions "Code" means the Illinois Insurance Code [215 ILCS 5]. "Department" means the Illinois Department of Insurance. "Director" means the Director of the Illinois Department of Insurance.

Section 1305.30 Prior Notification of Dividends and Other Distributions a) Notice 1) Any domestic captive insurance company required by Section 123C-26 of the Code to notify the Director of a dividend or other distribution to holders of an equity interest in the captive insurance…

Section 1305.40 Penalties Failure of a domestic captive insurance company to timely file the report required by this Part or Section 123C-26 of the Code or to issue dividends or other distributions without the approval of the Director shall subject the domestic captive insurance …

Section 1402.10 Military Exclusion Risk of death may be excluded: a) As a result of war or act of war, if the cause of death occurs while the insured is serving in the military, naval or air forces of any country, combination of countries or international organization, provided s…

Section 1402.20 Non-Combatant Civilian Exclusion Risk of death may be excluded: a) As a result of war or an act of war while the insured is serving in any civilian non-combatant unit serving with such forces, provided such death occurs while in such units or within six (6) months…

Section 1402.30 Civilian Exclusion Risk of death may be excluded as a result of war on an act of war, within two (2) years from the date of issue of the policy, while the insured is not in such forces or units, if the cause of death occurs while the insured is outside the home ar…

Section 1402.5 Introduction Life insurance policy forms may contain war clauses substantially complying with the recommendations contained in the report, dated December 3, 1951, of the special Sub-Committee of the Life Committee of the National Association of Insurance Commission…

Section 1404.10 Completion and Review of Valuation of Reserves The valuation of policies referred to in Section 223 of the Illinois Insurance Code will be completed in the companies' offices. Annually these valuations will be inspected, reviewed and test checked by the Actuarial …

Section 1405.10 Authority This Part is issued by the Director of the Department of Insurance (Director) pursuant to Section 401 of the Illinois Insurance Code, which empowers the Director to make reasonable rules and regulations as may be necessary for making effective the insura…

Section 1405.15 Definitions Code means the Illinois Insurance Code [215 ILCS 5]. Department means the Department of Insurance. Director means the Director of the Department of Insurance. (Source: Added at 34 Ill. Reg. 5835, effective April 7, 2010)

Section 1405.20 Illinois Guidelines for Filing and Approval of Life and Annuity Forms Following are some general requirements that should be helpful to industry personnel involved in drafting and filing policy forms. a) Policy Forms 1) "Policy Form" Defined. The term "policy form…

Section 1405.30 Applications a) General 1) The application for a policy shall contain spaces for the name and signature of the producer or other licensee who solicited and wrote the application, pursuant to Section 500-155 of the Code. 2) The size of the type in the declaration p…

Section 1405.40 Policy Forms a) Payment of Premiums 1) Advance Premium Deposits – A fund or account for payment of unspecified premiums (whether by policy or by rider) must conform to the requirements of Section 240 of the Code. 2) Grace Period – Policy must provide for continuan…

Section 1405.50 Group Insurance a) Group Insurance is defined in Section 230.1 of the Code. Standard Provisions for Group Policies are cited in Section 231.1 of the Code. b) Group Insurance Contributory or Non-Contributory The policy shall state whether it is either contributory …

Section 1405.60 Franchise Life Insurance Franchise (or Wholesale) Life Insurance is a form of personal coverage issued under individual policies to a group under conditions which are similar to Group Insurance but which do not necessarily qualify under the Group Insurance definit…

Section 1405.70 Annuities a) Group Variable Annuities The applicable jurisdiction for group variable annuity contracts is the jurisdiction where the group master policy is delivered. b) Fixed Dollar or Flexible Premium Individual Annuity Contracts – Options to Purchase Additional…

Section 1405.80 Alternate and/or Insert Pages For "alternate" and/or "insert" pages, a company may use the following guideline: a) If the policy jacket or the outside covers are to be used with more than one plan of insurance, the form shall be submitted on this basis. The usual …

Section 1405.90 Substitution Filings A substitution filing of a new form for a previously approved form having the same form number must contain the following: a) The approval date of the original form and a statement that the original form was never used; and b) A red-lined vers…