Illinois Legislation Revises Laws Applicable to Captive Insurance Companies
Illinois has adopted a bill that includes a number of revisions to its laws regarding captive insurance companies. These include, inter alia:
- changes to the types of risk that a captive insurance company may insure;
- new requirements regarding minimum capital and surplus;
- a new requirement that captive insurance companies include with their annual reports of financial condition a statement of actuarial opinion regarding the reasonableness of their losses and loss adjustment expense reserves;
- a provision allowing captive insurance companies to make loans to affiliates with the prior approval of the Director of Insurance;
- new notice requirements for reinsurance agreements;
- a provision allowing captive insurance companies to accept risks from or cede risks to captive reinsurance pools or affiliated captive insurance companies with the prior approval of the Director of Insurance;
- standards for the approval of captive reinsurance pools;
- authority for the Director of Insurance to issue standards for risk management of controlled unaffiliated businesses;
- rules regarding the issuance of dividends by captive insurance companies;
- rule regarding credits allowed to ceding insurers for reinsurance;
- reporting and certification requirements for assuming insurers regarding trust funds, capital and surplus requirements, and financial strength ratings;
- a requirement that the Director of Insurance create and publish a list of jurisdictions with rules sufficient to allow assuming insurers licensed in those jurisdictions to be certified in Illinois and standards for determining the sufficiency of those rules.
These revisions went into effect immediately upon the adoption of the law on November 27, 2018.
2017 Illinois Senate Bill No. 1737, Illinois One Hundredth General Assembly – Second Regular Session