Section 201.20 Approval of
Debenture Form by Director Prior to Shareholder Approval
The subordinated indebtedness
agreement (debenture) shall be submitted for the approval of the Illinois
Director of Insurance (Director) as required by Section 34.1 of the Illinois
Insurance Code [215 ILCS 5/34.1].
a) The agreement must state that:
1) All payments of principal and/or interest must be approved by
the Director, and
2) The obligation of the company under such debenture may not be
offset or be subject to recoupment with respect to any liability or obligation
owed to the company, and
3) No agreement or interest securing such debentures, whether
existing on the date of such debenture or subsequently entered into, applies to
the obligation under such debenture.
b) The following shall be submitted for the Director's approval
prior to submission to the shareholders of the company:
1) Duplicate copies of the entire debenture.
2) Certified copy of the resolution of the board of directors or
proper company body or committee which is empowered to authorize such
agreements. This resolution shall stipulate the maximum amount of subordinated
indebtedness authorized.
(Source: Amended at 23 Ill. Reg. 3782, effective March 10, 1999)
 |
TITLE 50: INSURANCE
CHAPTER I: DEPARTMENT OF INSURANCE
SUBCHAPTER b: DOMESTIC STOCK COMPANIES
PART 201
SUBORDINATED INDEBTEDNESS
SECTION 201.30 APPROVAL BY SHAREHOLDERS
Section 201.30 Approval by
Shareholders
After submission of the
documents specified in Section 201.20 and approval thereof by the Director, the
proposed form of debenture and the resolution authorizing it shall be presented
for consideration at a regular or special shareholder's meeting called to
determine the question of whether or not the debenture shall be made. All
agreements shall be executed and the consideration received within one year
after the date of shareholder's approval.
(Source: Amended at 13 Ill. Reg. 14054, effective September 11, 1989)
| TITLE 50: INSURANCE
CHAPTER I: DEPARTMENT OF INSURANCE
SUBCHAPTER b: DOMESTIC STOCK COMPANIES
PART 201
SUBORDINATED INDEBTEDNESS
SECTION 201.40 CONSIDERATION
Section 201.40 Consideration
The consideration tendered to
the company in exchange for the agreement shall be lawful money.
| TITLE 50: INSURANCE
CHAPTER I: DEPARTMENT OF INSURANCE
SUBCHAPTER b: DOMESTIC STOCK COMPANIES
PART 201
SUBORDINATED INDEBTEDNESS
SECTION 201.50 REPORTING AND ACCOUNTING OF INDEBTEDNESS
Section 201.50 Reporting and
Accounting of Indebtedness
a) The Director shall be notified immediately in writing upon the
execution of any such debenture as to the amount thereof and to whom payable.
b) All outstanding subordinated indebtedness and interest accrued
thereon shall be reported separately in the Annual Statement on Page 3 and in
any other financial statements of the company as special surplus funds.
c) The issuance and repayment of the debenture, as well as the
payment of the interest thereon, shall be reflected as direct debits or credits
to the Capital and Surplus Account of the company's financial statement.
d) The interest expense incurred on the debenture during the
current period shall be reflected as a deduction from income in lieu thereof on
the Statement of Income/Summary of Operations of the company's financial
statements.
(Source: Amended at 23 Ill. Reg. 3782, effective March 10, 1999)
| TITLE 50: INSURANCE
CHAPTER I: DEPARTMENT OF INSURANCE
SUBCHAPTER b: DOMESTIC STOCK COMPANIES
PART 201
SUBORDINATED INDEBTEDNESS
SECTION 201.60 REPAYMENT OF PRINCIPAL AND PAYMENT OF INTEREST
Section 201.60 Repayment of
Principal and Payment of Interest
A company may only repay
principal and make payment of interest on any indebtedness as provided under
Section 34.1 of the Illinois Insurance Code [215 ILCS 5/34.1]. No payment
shall be authorized by the Director unless:
a) The company's surplus as regards policyholders is reasonable
in relation to its outstanding liabilities and adequate for its financial needs
(the determination of the reasonableness and adequacy of surplus shall include
consideration of the following factors: premium volume as referenced in
Sections 144 and 244.1 of the Illinois Insurance Code [215 ILCS 5/144 and
244.1]; lines of business and additional authority as referenced in Sections 4,
11, 39, and 245.23 of the Illinois Insurance Code [215 ILCS 5/4, 11, 39, and 245.23]
and Section 2-1 of the Health Maintenance Organization Act [215 ILCS 125/2-1];
reserves, company size and operational history as referenced in Section 113 of
the Illinois Insurance Code [215 ILCS 5/113]), and
b) Such payment will not reduce the company's surplus as regards
policyholders to less than that currently required under Section 13 of the
Illinois Insurance Code [215 ILCS 5/13], and
c) Such payment is consistent with the terms of the debenture
approved pursuant to Section 201.20 of this Part.
(Source: Amended at 23 Ill. Reg. 3782, effective March 10, 1999)
|
|
|
|
