(a) Except as otherwise expressly provided in this Section, when a division becomes effective, each resulting company is responsible, automatically, by operation of law, for:
         (1) individually, the liabilities, including policy
    
liabilities, that the resulting company issues, undertakes, or incurs in its own name after the division;
        (2) individually, the liabilities, including policy
    
liabilities, of the dividing company that are allocated to or remain the liability of the resulting company to the extent specified in the plan of division; and
        (3) jointly and severally with the other resulting
    
companies, the liabilities, including policy liabilities, of the dividing company that are not allocated by the plan of division.
    (b) Except as otherwise expressly provided in this Section, when a division becomes effective, no resulting company is responsible for or shall have any liability or obligation in respect of:

Terms Used In Illinois Compiled Statutes 215 ILCS 5/35B-40

  • Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Assets: means all assets or property, whether real, personal or mixed, tangible or intangible, and any right or interest therein, including all rights under contracts and other agreements. See Illinois Compiled Statutes 215 ILCS 5/35B-10
  • Capital: means the capital stock component of statutory surplus, as defined in the National Association of Insurance Commissioners Accounting Practices and Procedures Manual, version effective January 1, 2001, and subsequent revisions. See Illinois Compiled Statutes 215 ILCS 5/35B-10
  • Contract: A legal written agreement that becomes binding when signed.
  • division: means the act by operation of law by which a domestic stock company divides into 2 or more resulting companies in accordance with a plan of division and this Article;
         "Dividing company" means a domestic stock company that approves a plan of division pursuant to Section 35B-20;
         "Domestic stock company" means a domestic stock company transacting or being organized to transact any of the kinds of insurance business enumerated in Section 4. See Illinois Compiled Statutes 215 ILCS 5/35B-10
  • Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
  • Guarantor: A party who agrees to be responsible for the payment of another party's debts should that party default. Source: OCC
  • Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
  • Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
  • Liability: means a liability or obligation of any kind, character, or description, whether known or unknown, absolute or contingent, accrued or unaccrued, disputed or undisputed, liquidated or unliquidated, secured or unsecured, joint or several, due or to become due, determined, determinable, or otherwise. See Illinois Compiled Statutes 215 ILCS 5/35B-10
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
  • Plan of division: means a plan of division approved by a dividing company in accordance Section 35B-20. See Illinois Compiled Statutes 215 ILCS 5/35B-10
  • Resulting company: means a domestic stock company created by a division or a dividing company that survives a division. See Illinois Compiled Statutes 215 ILCS 5/35B-10
  • State: when applied to different parts of the United States, may be construed to include the District of Columbia and the several territories, and the words "United States" may be construed to include the said district and territories. See Illinois Compiled Statutes 5 ILCS 70/1.14
  • Surplus: means total statutory surplus less capital, calculated in accordance with the National Association of Insurance Commissioners Accounting Practices and Procedures Manual, version effective January 1, 2001, and subsequent revisions. See Illinois Compiled Statutes 215 ILCS 5/35B-10
  • Transfer: includes an assignment, assumption, conveyance, sale, lease, encumbrance, including a mortgage or security interest, gift, or transfer by operation of law. See Illinois Compiled Statutes 215 ILCS 5/35B-10
  • Uniform Commercial Code: A set of statutes enacted by the various states to provide consistency among the states' commercial laws. It includes negotiable instruments, sales, stock transfers, trust and warehouse receipts, and bills of lading. Source: OCC

         (1) any liabilities, including policy liabilities,
    
that another resulting company issues, undertakes, or incurs in its own name after the division; or
        (2) any liabilities, including policy liabilities, of
    
the dividing company that are allocated to or remain the liability of another resulting company in accordance with the plan of division.
    (c) If a provision of a debt security, note, or similar evidence of indebtedness for money borrowed, whether secured or unsecured, indenture or other contract relating to indebtedness, or a provision of any other type of contract other than an insurance policy, annuity, or reinsurance agreement, that was issued, incurred, or executed by the domestic stock company before requires the consent of the obligee to a merger of the dividing company or treats the merger as a default, that provision applies to a division of the dividing company as if the division was a merger.
     (d) If a division breaches a contractual obligation of the dividing company at the time the division becomes effective, all of the resulting companies are liable, jointly and severally, for the contractual breach, but the validity and effectiveness of the division, including, without limitation, the allocation of liabilities in accordance with the plan of division, shall not be affected by the contractual breach.
     (e) A direct or indirect allocation of capital, surplus, assets, or liabilities, including policy liabilities, in a division shall occur automatically, by operation of law, and shall not be treated as a distribution or transfer for any purpose with respect to either the dividing company or any of the resulting companies.
     (f) Liens, security interests, and other charges on the capital, surplus, or other assets of the dividing company are not impaired by the division, notwithstanding any otherwise enforceable allocation of liabilities, including policy liabilities, of the dividing company.
     (g) If the dividing company is bound by a security agreement governed by Article 9 of the Uniform Commercial Code as enacted in this State or in any other jurisdiction, and the security agreement provides that the security interest attaches to after-acquired collateral, each resulting company is bound by the security agreement.
     (h) An allocation of a policy or other liability does not:
         (1) except as provided in the plan of division and
    
specifically approved by the Director, affect the rights that a policyholder or creditor has under other law in respect of the policy or other liability, except that those rights are available only against a resulting company responsible for the policy or liability under this Section; or
        (2) release or reduce the obligation of a reinsurer,
    
surety, or guarantor of the policy or liability.
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