(215 ILCS 5/123C-4) (from Ch. 73, par. 735C-4)
(Section scheduled to be repealed on January 1, 2017)
Sec. 123C-4. Minimum Surplus.
A. No captive insurance company shall be issued a certificate of authority unless it shall possess paid-in surplus of not less than the minimum paid-in surplus requirement applicable to the class or classes and clause or clauses of Section 4 describing the kind or kinds of insurance which such captive insurance company is authorized to write, as set forth in subsection (2) of Section 13 or subsection (1) of Section 43, as applicable.
B. Each captive insurance company shall, in addition to the minimum capital required by Section 123C-3, at all times maintain free surplus of not less than the minimum surplus requirement applicable to the class or classes and clause or clauses of Section 4 describing the kind or kinds of insurance which such captive insurance company is authorized to write, as set forth in subsection (3) of Section 13 or subsection (6) of Section 43, as applicable.
C. The surplus referred to in subsections A or B may be in the form of (1) all cash or cash equivalents; or (2) cash or cash equivalents representing at least 20% of the requisite surplus, together with an irrevocable letter of credit for the remainder of the requisite surplus, which letter of credit must (a) be approved by the Director, (b) be issued or unconditionally confirmed by (i) a bank chartered by this State, (ii) a member bank of the Federal Reserve System or (iii) a United States office of a foreign banking corporation that is: (A) licensed under the laws of the United States or any state thereof, (B) regulated, supervised and examined by United States federal or state authorities having regulatory authority over banks and trust companies, and (C) designated by the Securities Valuation Office of the National Association of Insurance Commissioners as meeting its credit standards for issuing or confirming letters of credit or, in the event that the Director elects to establish credit standards by rule, in compliance with rules promulgated by the Director establishing reasonable standards of safety and soundness substantially equivalent to those of the Securities Valuation Office of the National Association of Insurance Commissioners, and (c) satisfy the requirements of Section 123C-19; or (3) cash or cash equivalents representing at least 33% of the requisite surplus, together with irrevocable contractual obligations of the member organizations of the captive insurance company for the payment of the remainder of the requisite surplus in no more than 3 equal installments in each of the 3 calendar years following the date of grant of the certificate of authority to the captive insurance company, which irrevocable contractual obligations shall by contract be subject to acceleration (in a manner acceptable to the Director) by the Company at the direction of the Director and shall be secured by a letter of credit or other form of guarantee or security acceptable to the Director.
D. Notwithstanding any other provision of this Section and Section 123C-3, each captive insurance company shall at all times maintain at least $300,000 of capital and surplus in the form of cash or securities permitted by Article VIII.
(Source: P.A. 86-632.)
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Last modified: February 18, 2015