(215 ILCS 5/444) (from Ch. 73, par. 1056)
Sec. 444.
Retaliation.
(1) Whenever the existing or future laws of any other state or country
shall
require of companies incorporated or organized under the laws of this State
as a condition precedent to their doing business in such other state or
country, compliance with laws, rules, regulations, and prohibitions more
onerous or burdensome than the rules and regulations imposed by this State
on foreign or alien companies, or shall require any deposit of securities
or other obligations in such state or country, for the protection of
policyholders or otherwise or require of such companies or agents thereof
or brokers the payment of penalties, fees, charges, or taxes greater than
the penalties, fees, charges, or taxes required in the aggregate for like
purposes by this Code or any other law of this State, of foreign or alien
companies, agents thereof or brokers, then such laws, rules, regulations,
and prohibitions of said other state or country shall apply to companies
incorporated or organized under the laws of such state or country doing
business in this State, and all such companies, agents thereof, or brokers
doing business in this State, shall be required to make deposits, pay
penalties, fees, charges, and taxes, in amounts equal to those required in
the aggregate for like purposes of Illinois companies doing business in
such state or country, agents thereof or brokers. Whenever any other state
or country shall refuse to permit any insurance company incorporated or
organized under the laws of this State to transact business according to
its usual plan in such other state or country, the director may, if
satisfied that such company of this State is solvent, properly managed, and
can operate legally under the laws of such other state or country,
forthwith suspend or cancel the license of every insurance company doing
business in this State which is incorporated or organized under the laws of
such other state or country to the extent that it insures in this State
against any of the risks or hazards which are sought to be insured against
by the company of this State in such other state or country.
(2) The provisions of this Section shall not apply to residual market
or special purpose assessments or guaranty fund or guaranty association
assessments, both under the laws of this State and under the laws of any other
state
or country, and any tax offset or credit for any such assessment shall, for
purposes of this Section, be treated as a tax paid both under the laws of this
State and under the laws of any other state or country.
(3) The terms "penalties", "fees", "charges", and "taxes" in subsection
(1) of this
Section
shall include: the penalties, fees, charges, and taxes collected under State
law
and
referenced within Article XXV exclusive of any items referenced by
subsection
(2) of this Section, but including any tax offset allowed under Section 531.13
of this Code; the Illinois corporate income taxes imposed under
subsections (a) through (d) of Section 201 of the Illinois Income Tax Act after
any tax offset allowed under Section 531.13 of this Code;
income or personal property taxes imposed by other states or countries;
penalties, fees, charges, and taxes of other states
or countries imposed for purposes like those of the penalties, fees, charges,
and taxes
specified in Article XXV of this Code exclusive of any item referenced in
subsection (2) of this Section; and any penalties, fees, charges, and taxes
required as
a
franchise, privilege, or licensing tax for
conducting the business of insurance whether calculated as a percentage of
income, gross receipts, premium, or otherwise.
(4) Nothing contained in this Section or Section 409 or Section 444.1 is
intended to authorize or expand any power of local governmental units or
municipalities to impose taxes, fees, or charges.
(Source: P.A. 90‑583, eff. 5‑29‑98.)
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(215 ILCS 5/444.1) (from Ch. 73, par. 1056.1)
Sec. 444.1.
Payment of retaliatory taxes.
(1) Every foreign or alien
company doing insurance business in this State shall pay the Director the
retaliatory tax determined in accordance with Section 444.
(2) (a) All companies subject to the provisions of this Section shall
make an
annual return for the preceding calendar year on or before March 15 setting
forth such information on such forms as the Director may reasonably require.
Payments of quarterly installments of the taxpayer's total estimated
retaliatory tax for the current calendar year shall be due on or before April
15, June 15, September 15, and December 15 of such year, except that all
companies
transacting insurance business in this State whose annual tax for the
immediately
preceding calendar year was less than $5,000 shall make only an annual
return. Failure of a company to make the annual payment, or to make the
quarterly payments, if required, of at least one‑fourth of either (i) the total
tax paid during the previous calendar year or (ii) 80% of the actual tax for
the current calendar year shall subject it to the penalty provisions set forth
in Section 412 of this Code.
(b) Notwithstanding the foregoing provisions of paragraph (a) of this
subsection, the retaliatory tax liability of companies under Section 444 of
this Code for the calendar year ended December 31, 1997 shall be
determined in accordance with this amendatory Act of 1998 and shall include in
the aggregate comparative tax burden for the State of Illinois, any tax offset
allowed under Section 531.13 of this Code and any income
taxes paid for the year 1997 under subsections (a) through (d) of Section 201
of the Illinois Income Tax Act after any tax offset allowed under Section
531.13 of this Code.
(i) Any annual retaliatory tax returns and payments |
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made for the year ended December 31, 1997 and any quarterly installments of the taxpayer's total estimated 1998 retaliatory tax liability paid prior to the effective date of this Amendatory Act of 1998 that do not include the items specified by subsection (1) of this Section shall be amended and restated, at the taxpayer's election, on forms prepared by the Director so as to provide for the inclusion of such items. An amended and restated return for the year ended December 31, 1997 filed under this subparagraph shall treat any payment of estimated privilege taxes under Section 409 as in effect prior to October 23, 1997 as a payment of estimated retaliatory taxes for the year ended December 31, 1997.
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(ii) Any overpayment resulting from such amended
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return and restated tax liability shall be allowed as a credit against any subsequent privilege or retaliatory tax obligations of the taxpayer.
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(iii) In the year 1999 and thereafter all companies
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shall make annual and quarterly installments of their estimated tax as provided by paragraph (a) of this subsection.
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(3) Any tax payment made under this Section and any tax returns prepared
in compliance with Section 410 shall give full consideration to the impact
of any future reduction in or elimination of a taxpayer's liability under
Section 409, whether such reduction or elimination is due to an operation
of law or an Act of the General Assembly.
(4) Any foreign or alien taxpayer who makes, under protest, a tax payment
required by Section 409 shall, at the time of payment, file a retaliatory
tax return sufficient to disclose the full amount of retaliatory taxes which
would be due and owing for the tax period in question if the protest were
upheld. Notwithstanding the provisions of the State Officers and Employees
Money Disposition Act or any other laws of this State, the protested
payment, to the extent of the retaliatory tax so disclosed, shall be deposited
directly in the General Revenue Fund; and the balance of the payment, if
any, shall be deposited in a protest account pursuant to the provisions
of the aforesaid Act, as now or hereafter amended.
(5) The failure of a company to make the annual payment or to make the
quarterly payments, if required,
of at least one‑fourth of either (i) the total tax paid
during the preceding
calendar year or (ii) 80% of the actual tax for the current calendar
year shall subject it to the penalty provisions set forth in Section
412 of this Code.
(Source: P.A. 90‑583, eff. 5‑29‑98.)
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(215 ILCS 5/445) (from Ch. 73, par. 1057)
Sec. 445. Surplus line.
(1) Surplus line defined; surplus line insurer
requirements. "Surplus line insurance" means insurance on an Illinois risk of
the kinds specified in Classes 2 and 3 of Section 4 of this Code procured
from an unauthorized insurer
after the insurance producer representing the
insured or the surplus line producer is unable, after diligent effort, to
procure said insurance from authorized insurers.
"Authorized insurer" means an insurer that holds a certificate of
authority
issued by the Director but, for the purposes of this Section, does not
include a
domestic surplus line insurer as defined in Section 445a or any
residual market
mechanism.
"Residual market mechanism" means an association, organization, or other
entity described in Article XXXIII of this Code or Section 7‑501 of the
Illinois Vehicle Code or any similar association, organization, or other
entity.
"Unauthorized insurer" means an insurer that does not hold a valid
certificate of authority issued by the Director but, for the purposes of this
Section, shall also include a domestic surplus line insurer as defined in
Section 445a.
Insurance producers may procure surplus line insurance only if licensed
as a surplus line producer under this Section and may procure that
insurance only from an unauthorized insurer:
(a) that based upon information available to the |
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surplus line producer has a policyholders surplus of not less than $15,000,000 determined in accordance with accounting rules that are applicable to authorized insurers; and
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(b) that has standards of solvency and management
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that are adequate for the protection of policyholders; and
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(c) where an unauthorized insurer does not meet the
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standards set forth in (a) and (b) above, a surplus line producer may, if necessary, procure insurance from that insurer only if prior written warning of such fact or condition is given to the insured by the insurance producer or surplus line producer.
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Insurance producers shall not procure from an
unauthorized insurer an insurance policy:
(i) that is designed to satisfy the proof of
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financial responsibility and insurance requirements in any Illinois law where the law requires that the proof of insurance is issued by an authorized insurer or residual market mechanism;
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(ii) that covers the risk of accidental injury to
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employees arising out of and in the course of employment according to the provisions of the Workers' Compensation Act; or
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(iii) that insures any Illinois personal lines risk,
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as defined in subsection (a), (b), or (c) of Section 143.13 of this Code, that is eligible for residual market mechanism coverage, unless the insured or prospective insured requests limits of liability greater than the limits provided by the residual market mechanism. In the course of making a diligent effort to procure insurance from authorized insurers, an insurance producer shall not be required to submit a risk to a residual market mechanism when the risk is not eligible for coverage or exceeds the limits available in the residual market mechanism.
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Where there is an insurance policy issued by an
authorized insurer or residual market mechanism
insuring a risk described in item (i), (ii), or (iii)
above, nothing in this paragraph shall be construed
to prohibit a surplus line producer from procuring
from an unauthorized insurer a policy insuring the
risk on an excess or umbrella basis where the excess
or umbrella policy is written over one or more
underlying policies.
(2) Surplus line producer; license. Any licensed producer who is a
resident of this State, or any nonresident who qualifies under Section
500‑40, may be licensed as a surplus line producer upon:
(a) completing a prelicensing course of study. The
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course provided for by this Section shall be conducted under rules and regulations prescribed by the Director. The Director may administer the course or may make arrangements, including contracting with an outside educational service, for administering the course and collecting the non‑refundable application fee provided for in this subsection. Any charges assessed by the Director or the educational service for administering the course shall be paid directly by the individual applicants. Each applicant required to take the course shall enclose with the application a non‑refundable $20 application fee payable to the Director plus a separate course administration fee. An applicant who fails to appear for the course as scheduled, or appears but fails to complete the course, shall not be entitled to any refund, and shall be required to submit a new request to attend the course together with all the requisite fees before being rescheduled for another course at a later date; and
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(b) payment of an annual license fee of $400; and
(c) procurement of the surety bond required in
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subsection (4) of this Section.
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A surplus line producer so licensed shall keep a separate
account of
the business transacted thereunder which shall be open at all times to the
inspection of the Director or his representative.
The prelicensing course of study requirement in (a) above
shall not apply to insurance
producers who were licensed under the Illinois surplus line law on or before
January 1, 2002.
(3) Taxes and reports.
(a) Surplus line tax and penalty for late payment.
A surplus line producer shall file with the Director
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on or before February 1 and August 1 of each year a report in the form prescribed by the Director on all surplus line insurance procured from unauthorized insurers during the preceding 6 month period ending December 31 or June 30 respectively, and on the filing of such report shall pay to the Director for the use and benefit of the State a sum equal to 3.5% of the gross premiums less returned premiums upon all surplus line insurance procured or cancelled during the preceding 6 months.
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Any surplus line producer who fails to pay the full
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amount due under this subsection is liable, in addition to the amount due, for such penalty and interest charges as are provided for under Section 412 of this Code. The Director, through the Attorney General, may institute an action in the name of the People of the State of Illinois, in any court of competent jurisdiction, for the recovery of the amount of such taxes and penalties due, and prosecute the same to final judgment, and take such steps as are necessary to collect the same.
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(b) Fire Marshal Tax.
Each surplus line producer shall file with the
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Director on or before March 31 of each year a report in the form prescribed by the Director on all fire insurance procured from unauthorized insurers subject to tax under Section 12 of the Fire Investigation Act and shall pay to the Director the fire marshal tax required thereunder.
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(c) Taxes and fees charged to insured. The taxes
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imposed under this subsection and the countersigning fees charged by the Surplus Line Association of Illinois may be charged to and collected from surplus line insureds.
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(4) Bond. Each surplus line producer, as a condition to receiving a
surplus line producer's license, shall execute and deliver to the Director
a surety bond to the People of the State in the penal sum of $20,000, with
a surety which is authorized to transact business in this State,
conditioned that the surplus line producer will pay to the Director the tax,
interest and penalties levied under subsection (3) of this Section.
(5) Submission of documents to Surplus Line Association of Illinois.
A surplus line producer shall submit every insurance contract
issued
under his or her license to the Surplus Line Association of Illinois for
recording and countersignature. The submission and countersignature may be
effected through electronic means. The submission shall set
forth:
(a) the name of the insured;
(b) the description and location of the insured
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(c) the amount insured;
(d) the gross premiums charged or returned;
(e) the name of the unauthorized insurer from whom
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coverage has been procured;
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(f) the kind or kinds of insurance procured; and
(g) amount of premium subject to tax required by
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Section 12 of the Fire Investigation Act.
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Proposals, endorsements, and other documents which are
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incidental to the insurance but which do not affect the premium charged are exempted from filing and countersignature.
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The submission of insuring contracts to the Surplus Line
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Association of Illinois constitutes a certification by the surplus line producer or by the insurance producer who presented the risk to the surplus line producer for placement as a surplus line risk that after diligent effort the required insurance could not be procured from authorized insurers and that such procurement was otherwise in accordance with the surplus line law.
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(6) Countersignature required. It shall be unlawful for an insurance
producer to deliver any unauthorized insurer
contract unless such
insurance contract is countersigned by the Surplus Line Association of
Illinois.
(7) Inspection of records. A surplus line producer shall
maintain
separate records of the business transacted under his or her license,
including complete copies of surplus line insurance contracts maintained on
paper or by electronic means, which
records shall be open at all times for inspection by the Director and by
the Surplus Line Association of Illinois.
(8) Violations and penalties. The Director may suspend or revoke or
refuse to renew a surplus line producer license for any violation of this Code.
In addition to or in lieu of suspension or revocation, the Director may
subject a surplus line producer
to a civil penalty of up to $2,000 for each cause for suspension
or
revocation. Such penalty is enforceable under subsection (5) of Section
403A of this Code.
(9) Director may declare insurer ineligible. If the
Director determines
that the further assumption of risks might be hazardous to the
policyholders of an unauthorized insurer, the Director may
order the
Surplus Line Association of
Illinois not to countersign insurance contracts evidencing insurance in
such insurer and order surplus line producers to cease
procuring insurance
from such insurer.
(10) Service of process upon Director. Insurance contracts
delivered under this Section from unauthorized insurers, other than domestic
surplus line insurers as defined in Section 445a,
shall contain a
provision designating the
Director and his successors in office the true and lawful attorney of the
insurer upon whom may be served all lawful process in any
action, suit or
proceeding arising out of such insurance.
Service of process made upon the Director to be valid hereunder must state
the name of the insured, the name of the unauthorized insurer
and identify
the contract of insurance. The Director at his option is authorized to
forward a copy of the process to the Surplus Line Association of Illinois
for delivery to the unauthorized insurer or the Director may deliver the process to the
unauthorized insurer by other means which he considers to be
reasonably
prompt and certain.
(10.5) Insurance contracts delivered under this Section from unauthorized insurers, other than domestic surplus line insurers as defined in Section 445a, shall have stamped or imprinted on the first page thereof in not less than 12‑pt. bold face type the following legend: "Notice to Policyholder: This contract is issued, pursuant to Section 445 of the Illinois Insurance Code, by a company not authorized and licensed to transact business in Illinois and as such is not covered by the Illinois Insurance Guaranty Fund." Insurance contracts delivered under this Section from domestic surplus line insurers as defined in Section 445a shall have stamped or imprinted on the first page thereof in not less than 12‑pt. bold face type the following legend: "Notice to Policyholder: This contract is issued by a domestic surplus line insurer, as defined in Section 445a of the Illinois Insurance Code, pursuant to Section 445, and as such is not covered by the Illinois Insurance Guaranty Fund."
(11) The Illinois Surplus Line law does not apply to insurance of
property and operations of railroads or aircraft engaged in interstate or
foreign commerce, insurance of vessels, crafts or hulls, cargoes, marine
builder's risks, marine protection and indemnity, or other risks including
strikes and war risks insured under ocean or wet marine forms of policies.
(12) Surplus line insurance procured under this Section, including
insurance procured from a domestic surplus line insurer, is not subject
to the provisions of the Illinois Insurance Code other than Sections 123,
123.1, 401, 401.1, 402, 403, 403A, 408, 412, 445, 445.1, 445.2, 445.3,
445.4, and all of the provisions of Article XXXI to the extent that the
provisions of Article XXXI are not inconsistent with the terms of this Act.
(Source: P.A. 92‑386, eff. 1‑1‑02; 93‑29, eff. 6‑20‑03; 93‑32, eff. 7‑1‑03; 93‑876, eff. 8‑6‑04.)
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