A. The Department may not issue a certificate of authority to a captive insurance company unless the company possesses and maintains unencumbered capital and surplus in an amount determined by the Director after considering:
         (1) the amount of premium written by the captive
    
insurance company;
        (2) the characteristics of the assets held by the
    
captive insurance company;
        (3) the terms of reinsurance arrangements entered
    
into by the captive insurance company;
        (4) the type of business covered in policies
    
issued by the captive insurance company;
        (5) the underwriting practices and procedures of
    
the captive insurance company; and
        (6) any other criteria that has an impact on the
    
operations of the captive insurance company determined to be significant by the Director.
    B. The amount of capital and surplus determined by the Director under subsection A of this Section may not be less than $250,000 for a pure captive insurance company, $500,000 for an industrial insured captive insurance company, and $750,000 for an association captive insurance company.

Terms Used In Illinois Compiled Statutes 215 ILCS 5/123C-3

  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Association: means any entity meeting the requirements set forth in either of the following paragraphs (1), (2) or (3):
             (1) any organized association of individuals, legal
    
representatives, corporations (whether for profit or not for profit), partnerships, trusts, associations, units of government or other organizations, or any combination of the foregoing, that has been in continuous existence for at least one year, the member organizations of which collectively:
            (a) own, control, or hold with power to vote
        
(directly or indirectly) all of the outstanding voting securities of an association captive insurance company incorporated as a stock insurer; or
            (b) have complete voting control (directly or
        
indirectly) over an association captive insurance company organized as a mutual insurer;
        (2) any organized association of individuals, legal
    
representatives, corporations (whether for profit or not for profit), partnerships, trusts, associations, units of government or other organizations, or any combination of the foregoing:
            (a) whose member organizations are engaged in
        
businesses or activities similar or related with respect to the liability of which such members are exposed by virtue of any related, similar, or common business, trade, product, services, premises, or operations; and
            (b) whose member organizations:
                 (i) directly or indirectly own or control,
            
and hold with power to vote, at least 80% of all of the outstanding voting securities of an association captive insurance company incorporated as a stock insurer; or
                (ii) directly or indirectly have at least 80%
            
of the voting control over an association captive insurance company organized as a mutual insurer; or
        (3) any risk retention group, as defined in
    
subsection (11) of Section 123B-2, domiciled in this State and organized under this Article; however, beginning 6 months after the effective date of this amendatory Act of 1995, a risk retention group shall no longer qualify as an association under this Article. See Illinois Compiled Statutes 215 ILCS 5/123C-1
  • Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
  • Captive insurance company: means any pure captive insurance company, association captive insurance company or industrial insured captive insurance company organized under the provisions of this Article. See Illinois Compiled Statutes 215 ILCS 5/123C-1
  • Director: means the Director of the Department of Insurance. See Illinois Compiled Statutes 215 ILCS 5/123C-1
  • Industrial insured: means an insured which (together with its affiliates) at the time of its initial procurement of insurance from an industrial insured captive insurance company:
             (1) has available to it advice with respect to the
    •     
    purchase of insurance through the use of the services of a full-time employee acting as an insurance manager or buyer or the services of a regularly and continuously retained qualified insurance consultant; and
            (2) pays aggregate annual premiums in excess of
            
    $100,000 for insurance on all risks except for life, accident and health; and
            (3) either (i) has at least 25 full-time employees,
        
    or (ii) has gross assets in excess of $3,000,000, or (iii) has annual gross revenues in excess of $5,000,000. See Illinois Compiled Statutes 215 ILCS 5/123C-1
  • Pure captive insurance company: means any company that insures only risks of its parent or affiliated companies or both. See Illinois Compiled Statutes 215 ILCS 5/123C-1
  • 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
  • United States: may be construed to include the said district and territories. See Illinois Compiled Statutes 5 ILCS 70/1.14

    •      C. The capital and surplus required by subsection A of this Section must be in the form of:
             (1) United States currency;
             (2) an irrevocable letter of credit, in a form
        
    approved by the Director and not secured by a guarantee from an affiliate, naming the Director as beneficiary for the security of the captive insurance company’s policyholders and issued by a bank approved by the Director;
            (3) bonds of this State; or
             (4) bonds or other evidences of indebtedness of
        
    the United States, the principal and interest of which are guaranteed by the United States.
      Previous section
    Next section  
     Article VIIC Contents

    LawServer is used by

    New York Times, IRS, USDA, UCLA, DOT