Skip to content
October 9, 2010 / The V Artist Tree

An Easier Read For A Lazy Saturday

Yes, one of my “beefs” with the codifying industry continues to remain the inconsistent and irresponsible nature of relationship between what should be a plain ol’ publisher and then having a general audience.  You know.  Here’s the text.  Here’s the ISBN number.  Here’s the UPC symbol.  Good luck!

But with terminology already making it a more exclusive collection of text, the idea of excessive clicking being forced upon a person seeking to read through law in a far more fluid offering and format than what the Sterling Codifiers website provides its visitors, let alone the production number provided by the Illinois Department of Insurance.

With no argument of wasted paper and ink for such tidbits and morsels being plopped and flopped onto a website coming from me, it remains in the arena of providing a little content – sans the excessive clicking from the original source located at http://www.ilga.gov/commission/jcar/admincode/050/050parts.html on a few topics near and dear to my heart, which includes pension issues, advertising rules and regulations and a few other little side tracks.

These aren’t sexy reads for even the sanest of individuals – unless this type of information is a passion of yours – but it still continues to be revealed that even glancing at some of these rosters of rules and regulations every now and again has some semblance of value upon one’s own personal life.

I may not have tried to read very much of the national health care bill in its hard-core, line-item by line-item setting, but the thought crossed my mind as to just how many people have taken a similar interest in getting to know their local municipal code books…

Joint Committee on Administrative Rules

Administrative Code

Title 50: Insurance

——————————————————————————–

Part 101          Nation-Wide Marine Definition Of The National Association Of Insurance Commissioners

Part 102          Plate Glass Service Contracts

Part 201          Subordinated Indebtedness

Part 202          Mortgage Guaranty Insurance

Part 203          Proxies, Consents And Authorizations Of Domestic Stock Companies

Part 204          Insider Trading Of Domestic Stock Insurance Company Equity Securities

Part 205          Municipal Bond Insurance

Part 301          Accumulation Of Guaranty Fund Or Guaranty Capital – Reporting And Accounting Of Such Indebtedness

Part 401          Accumulation Of Guaranty Fund Or Guaranty Capital – Reporting And Accounting Of Such Indebtedness

Part 551          Illinois Insurance Exchange Annual Statement

Part 575          Workers’ Compensation Pools

Part 601          Foreign And Alien Insurer Annual Audited Financial Reports (Repealed)

Part 751          Preamble And Definitions

Part 752          License, Documents Necessary To Engage In Activities And Examinations

Part 753          Filing Policy And Endorsements Form

Part 754          Rules And Rate Filings

Part 801          Valuation Of Investments (Repealed)

Part 802          Purchasing And Selling Call And Put Options Contracts (Repealed)

Part 803          Lending Of Securities (Repealed)

Part 804          Repurchase And Reverse Repurchase Agreements (Repealed)

Part 805          Financial Futures Contracts (Repealed)

Part 806          Derivative Instruments

Part 807          Custody Agreements

Part 851          Acquisition Of Control Of A Domestic Company

Part 852          Registration Of Insurers

Part 853          Pre-Acquisition Notification

Part 854          Prior Notification Of Transactions

Part 855          Prior Notification Of Dividends On Common Stock And Other Distributions

Part 901          Destruction Of Records

Part 902          Insurance Companies Originating Payday Loans

Part 903          Uniform Accounting Instructions For Fire And Marine And Casualty And Surety Insurers

Part 904          Internal Security Standard And Fidelity Bonds

Part 906          Illegal Groups And Unfair Rate Discrimination

Part 907          Exempt Sale Of Insurance Company Shares

Part 908          Recording Of Premiums Collected And Definition Of Gross Premiums

Part 909          Advertising And Sales Promotion Of Life Insurance And Annuities

Part 910          Correlated Sales Of Life Insurance And Mutual Funds

Part 911          Unearned Premium Reserve Computation

Part 912          Commission Accounting For Direct Premium (Repealed)

Part 913          Securities Regulation

Part 914          Life And Accident And Health Policy Forms; Dividends

Part 915          Management Information Reports

Part 916          Required Procedure For Filing And Securing Approval Of Policy Forms

Part 917          Life Insurance And Annuity Replacement

Part 918          Policyholder Security Deposit Act (Repealed)

Part 919          Improper Claims Practice

Part 920          Actuarial Qualification (Repealed)

Part 921          Exclusion Provisions – Automobile

Part 922          Retrospective Compensation Agreements (Repealed)

Part 923          Ceded Reinsurance Of Property And Liability Insurers (Repealed)

Part 924          Equipment Exclusion

Part 925          Annual Financial Reporting

Part 926          Insurance DePartment Consumer Complaints

Part 927          Anticipated Salvage And Subrogation Recoverable (Repealed)

Part 928          Medical Malpractice Data Base

Part 929          Medical Liability Insurance Rules And Rate Filings

Part 930          Life Insurance Solicitation

Part 931          Required Procedure For Consumer Complaint Notification

Part 932          Automobile Anti-Theft Mechanisms

Part 933          Professional Liability Insurance Reporting Requirements And Resource Center

Part 934          Usage Of Smoker/Nonsmoker Mortality Tables In Determining Minimum Reserve Liabilities And Nonforfeiture Benefits

Part 935          The Minimum Mortality Standard For Valuation Of Annuity And Pure Endowment Contracts

Part 936          Supplemental Reports For Property And Casualty Insurance Companies

Part 937          Stated Value Policies (Repealed)

Part 938          Accident And Health Risk Ratio Notice (Repealed)

Part 939          Medical Liability Insurance Loss Reports

Part 940          Mid-Term Cancellations

Part 942          Tax Allocation (Repealed)

Part 945          Admitted Assets

Part 951          Credit Life And Credit Accident And Health Insurance

Part 952          Credit Accident And Health Insurance

Part 953          Premium Refunds

Part 1101        Reinsurance Ceded Contracts

Part 1102        Letters Of Credit (Repealed)

Part 1103        Life Reinsurance Agreements

Part 1104        Credit For Reinsurance Ceded

Part 1250        Corrective Orders

Part 1401        Security Valuation Reserve

Part 1402        War Clauses

Part 1403        Family Group Life Insurance Policy Forms

Part 1404        Valuation Of Reserves

Part 1405        Construction And Filing Of Life Insurance And Annuity Forms

Part 1406        Individual And Group Life Insurance Policy Illustrations

Part 1407        Accelerated Life Benefit/Terminal Illness/Qualified Conditions

Part 1408        Actuarial Opinion And Memorandum

Part 1409        Valuation Of Life Insurance Policies Including The Use Of Select Mortality Factors

Part 1410        Modified Guaranteed Annuity (Mga) Contracts

Part 1411        Universal Life Insurance

Part 1412        Recognition Of The 2001       Cso Mortality Table For Use In Determining Minimum Reserve Liabilities And Nonforfeiture Benefits

Part 1413        Recognition Of 2001  Cso Preferred Class Structure Mortality Tables For Use In Determining Minimum Reserve Liabilities

Part 1414        Preneed Life Insurance Minimum Standards For Determining Reserve Liabilities And Nonforfeiture Values

Part 1451        Variable Contracts

Part 1601        Securities Valuation Reserve

Part 1602        War Clauses

Part 1603        Family Group Life Insurance Policy Forms

Part 1604        Valuation Of Reserves

Part 1605        Legal Reserve Life Blank

Part 1701        Explanation Of Special And Contingency Reserves

Part 1702        Security Valuation Reserve (Repealed)

Part 1703        War Clauses

Part 1704        Segregation Of Accident And Health Business

Part 1705        Construction And Filing Of Forms

Part 1706        Adoption By Fraternal Benefit Societies Of Cso 1958          Mortality Table

Part 2001        Construction And Filing Of Accident And Health Insurance Policy Forms

Part 2002        Advertising Of Accident And Sickness Insurance

Part 2003        Definitions Of The Terms “Noncancellable,” “Noncancellable And Guaranteed Renewable,” And “Guaranteed Renewable”

Part 2004        Accident And Health Reserves

Part 2005        Pre-Existing Illness

Part 2006        Required Benefits For Mental, Emotional Or Nervous Disorders

Part 2007        Minimum Standards Of Individual Accident And Health Insurance

Part 2008        Minimum Standards For Individual And Group Medicare Supplement Insurance

Part 2009        Group Coordination Of Benefits

Part 2010        Advertisements Of Medicare Supplement Insurance

Part 2011        Transitional Requirements For The Conversion Of Medicare Supplement Insurance Benefits And Premiums To Conform To Medicare Program Revisions (Repealed)

Part 2012        Long-Term Care Insurance

Part 2013        Group Coverage Discontinuance And Replacement

Part 2014        Small Employer Group Health Insurance

Part 2015        Infertility Coverage

Part 2016        Mastectomies

Part 2017        Uniform Medical Claim And Billing Forms

Part 2018        Long-Term Care Partnership Insurance (Repealed)

Part 2019        Minimum Benefit Standards For Diabetes Coverage

Part 2020        Reimbursement And Subrogation Provisions Contained In Individual And Group Accident And Health Policies

Part 2021        Group Health Policy Mandate Applicability To Nonresident Certificateholders Not Employed In Illinois

Part 2025        Illinois Health Insurance Portability And Accountability Standards

Part 2051        Preferred Provider Programs

Part 2101        Legal Reserve Life Blank

Part 2201        Loss And Loss Reserves

Part 2301        Standard Fire Policy

Part 2302        Required Procedures For Group Inland Marine Insurance

Part 2303        Arson Fraud Detection Reporting System

Part 2401        Agreements For Apportionment Of Property And Casualty Insurance

Part 2402        Administrative Hearing Procedures

Part 2403        Producer Felony Review

Part 2405        Intergovernmental Joint Insurance Pool Annual Audited Financial Statement

Part 2410        Administrative Dissolutions Or Withdrawal Of Statutory Deposit

Part 2500        General Provisions

Part 2501        Fees For Examination (Repealed)

Part 2502        Fees For Various Certificates Under Section 408      (Repealed)

Part 2505        Fees And Charges

Part 2510        Annual Privilege Tax

Part 2515        Annual Retaliatory Tax

Part 2520        Annual State Fire Marshal Tax

Part 2525        Overpayments, Refunds, Amendments And Penalties

Part 2601        Billing Procedures

Part 2602        Limits Use Of Benefits To Adjust Or Correct Prior Benefits Paid

Part 2603        Unfair Discrimination Based On Sex, Sexual Preference Or Marital Status

Part 2605        Military Sales Practices

Part 2801        Surplus Line Business Requirements

Part 2901        Workers’ Compensation Self Insurance (Repealed)

Part 2902        Workers’ Compensation Rate And Manual Filing

Part 2903        Workers’ Compensation Experience Reporting

Part 2904        Assigned Risk Procedures

Part 2905        Registration Of Workers’ Compensation Utilization Review Organizations

Part 3101        Countersigning Of Policies By Resident Agents (Repealed)

Part 3102        Limited Licenses For Life And Accident And Health Agents (Repealed)

Part 3103        Application, Qualification And Restrictions On Temporary Licenses (Repealed)

Part 3104        License Requirements For Resident Agents Of Multiple Line Companies (Repealed)

Part 3106        Licensing Of Foreign Corporations As Non-Resident Brokers (Repealed)

Part 3108        Designation Of Persons Authorized To Act For Partnerships, Associations And Domestic Corporations Licensed As Insurance Agents Or Brokers (Repealed)

Part 3109        Insurance Producers Doing Business Under An Assumed Name Or Firm Name

Part 3110        Licensed Persons In Military Service

Part 3111        Collection Of Charges By Business Firms For Customer’s Insurance (Repealed)

Part 3112        Re-Examination Of License Applicants (Repealed)

Part 3113        Premium Fund Trust Account

Part 3114        Announcement Of Availability Of Insurance By Savings And Loan Associations And Banks (Repealed)

Part 3115        Business Entities

Part 3116        Agents And Brokers License Examination (Repealed)

Part 3117        Licensing And Suitability Requirements For The Solicitation Of Variable Contracts

Part 3118        Licensing Of Public Adjusters

Part 3119        Pre-Licensing And Continuing Education

Part 3120        Suitability In Annuity Transactions

Part 3150        Third Party Prescription Administrators

Part 3201        Books And Records (Repealed)

Part 3202        Filing Of Rate Charts And Agreement Forms (Repealed)

Part 3203        Changes In Officers And Directors Of A Corporation Holding A License As A Premium Finance Company (Repealed)

Part 3204        Reports Of Indictments And Convictions (Repealed)

Part 3205        Financing Insurance Premiums Defined (Repealed)

Part 3301        Fair Plan Credit Program

Part 3401        Summary Document And Disclaimer

Part 4001        Privacy Of Personal Information

Part 4002        Personal Information Privacy Protection

Part 4003        Standards For Safeguarding Customer Information

Part 4201        Insurance Cost Containment Annual Fee

Part 4202        Cost Containment Form And Data Reporting Requirements (Repealed)

Part 4203        Insurance Data Reporting Requirements

Part 4401        Examination And Audit Procedure

Part 4402        Definition Of Salary

Part 4404        Portability Of Creditable Service Time For Downstate And Suburban Police Pension Funds

Part 4405        Electronic Filing

Part 4415        Payment Of Annual Compliance Fees For Pension Funds

Part 4425        Securities Custody Affidavit

Part 4430        Investment Fee Disclosure Requirements For Pension Funds

Part 4435        Noncompliance Notification And Penalties

Part 4440        Irs Qualification Status Requirements For Article 3  Police Pension Funds

Part 4445        Irs Qualification Status Requirements For Article 4  Firefighter Pension Funds

Part 4801        Assigned Risk Procedures (Recodified)

Part 5100        Small Employer Carrier Actuarial Certification And Documentation Requirements (Repealed)

Part 5101        Small Employer Carrier Actuarial Certification And Documentation Requirements

Part 5301        Notice Of Eligibility

Part 5302        Destruction Of Records (Recodified)

Part 5420        Managed Care Reform & Patient Rights

Part 5421        Health Maintenance Organization

Part 5425        Managed Care Dental Plans

Part 5430        Health Carrier External Review

Part 5460        Internal Security Standard And Fidelity Bonds (Repealed)

Part 5501        Internal Security Standards And Fidelity Bonds

Part 5502        Destruction Of Records

Part 5601        Requirements

Part 5602        Extension Of Service To Additional Counties (Repealed)

Part 5701        Viatical Settlement Provider Reporting Requirements

Part 6101        Health Maintenance Organization (Recodified)

Part 6201        Requirements (Recodified)

Part 6301        Pension And Examination Procedure (Repealed)

Part 6302        Definition Of Salary (Recodified)

Part 6501        Preferred Provider Program Administrators (Repealed)

Part 6601        Insurance Cost Containment Annual Fee (Recodified)

Part 6602        Cost Containment Form And Data Reporting Requirements (Recodified)

Part 6701        Notice Of Eligibility (Recodified)

Part 7010        Accident Reporting

Part 7020        Pre-Arbitration

Part 7030        Arbitration

Part 7040        Review

Part 7050        Oral Arguments

Part 7060        Judicial Review

Part 7070        Settlement Contracts And Lump Sum Petitions

Part 7080        Attorney’s Fees

Part 7090        Disciplining Of Attorneys; Agents

Part 7100        Insurance Regulations

Part 7110        Miscellaneous

Part 7120        Anti-Corruption Rule

Part 7130        Hearing Loss Guidelines

Part 7500        Commission Review Board Procedures

Part 8000        Motor Vehicle Accident Prevention Courses For Liability Insurance Premium Reduction

Part 8010        Mandatory Vehicle Liability Insurance

Part 8100        Title Insurance Act

TITLE 50: INSURANCE

CHAPTER I: DEPARTMENT OF INSURANCE

SUBCHAPTER a: DEFINITIONS AND CLASSIFICATIONS

PART 101 NATION-WIDE MARINE DEFINITION OF THE NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS

——————————————————————————–

The General Assembly’s Illinois Administrative Code database includes only those rulemakings that have been permanently adopted. This menu will point out the Sections on which an emergency rule (valid for a maximum of 150      days, usually until replaced by a permanent rulemaking) exists. The emergency rulemaking is linked through the notation that follows the Section heading in the menu.

Section 101.10            Purpose

Section 101.20            Restrictions

Section 101.30            Marine and/or Transportation Policies

Section 101.40            Coverage not Permitted

AUTHORITY: Implementing Section 4, Class 3 and authorized by Section 401 of the Illinois Insurance Code (Ill. Rev. Stat. 1983, ch. 73, pars 616 and 1013).

SOURCE: Filed July 11, 1958; codified at 7 Ill. Reg. 3457; amended at 8 Ill. Reg. 12222, effective July 13, 1984.

Section 101.10            Purpose

The purpose of this Part is to describe the kinds of risks and coverages which may be classified or identified under State Insurance laws as Marine, Inland Marine or Transportation insurance, but does not include all of the kinds of risks and coverages which may be written, classified or identified under Marine, Inland Marine or Transportation insuring powers, nor shall it be construed to mean that the kinds of risks and coverages are solely marine, Inland Marine or Transportation insurance in all instances.

Section 101.20            Restrictions

This Part shall not be construed to restrict or limit in any way the exercise of any insuring powers granted under charters and license whether used separately, in combination or otherwise.

Section 101.30            Marine and/or Transportation Policies

Marine and/or Transportation policies may cover the following risks and coverages:

a) Imports

1) Imports on consignment may be covered wherever the property may be and without restriction as to time, provided the coverage of the issuing companies includes hazards of transportation.

2) An Import, as a proper subject of marine or transportation insurance, shall be deemed to maintain its character as such so long as the property remains segregated in such a way that it can be identified and has not become incorporated and mixed with the general mass of property in the United States, and shall be deemed to have been completed when such property has been:

A) sold and delivered by the importer, factor or consignee; or

B) removed from place of storage and placed on sale as Part of importer’s stock in trade at a point of sale-distribution; or

C) delivered for manufacture, processing or change in form to premises of the importer or premises of any other which are used for any such purpose.

b) Exports

1) Exports may be covered wherever the property may be without restriction as to time, provided the coverage of the issuing companies includes hazards of transportation.

2) An export, as a proper subject of marine or transportation insurance, shall be deemed to acquire its character as such when labeled or identified or while being prepared for export and retain that character unless diverted for domestic trade, and when so diverted, the provisions of this Part concerning domestic shipments shall apply, provided, however, that this provision shall not apply to long established methods of insuring certain commodities, e.g., cotton.

c) Domestic Shipments

1) Domestic shipments on consignment, provided that the coverage of the issuing companies includes hazards of transportation;

A) for sale or distribution; and

B) for exhibit, or trial, or approval or auction, while in transit, while in the custody of others and while being returned; provided that in no event shall the policy cover the property on premises owned, leased or operated by the consignor.

2) Domestic shipments not on consignment, provided the coverage of the issuing companies includes hazards of transportation, beginning and ending within the United States, provided that such shipments shall not be covered at manufacturing premises nor after arrival at premises owned, leased or operated by Assured or purchaser.

d) Bridges, tunnels and other similar instrumentalities of transportation and communication including auxiliary facilities and equipment attendant thereto but excluding buildings, their improvements and betterments, furniture and furnishings, fixed contents and supplies held in storage. The foregoing includes:

1) Piers, wharves, docks, slips, dry docks and marine railways.

2) Pipelines, including on-line propulsion, regulating and other equipment appurtenant to such pipelines, but excluding all property at manufacturing, producing, refining, converting, treating on conditioning plants.

3) Power transmission and telephone and telegraph lines, excluding all property at generating, converting or transforming stations, sub-stations and exchanges.

4) Radio and television communication equipment in use as such including towers and antennae with auxiliary equipment, and appurtenant electrical operating and control apparatus.

5) Outdoor cranes, loading bridges and similar equipment used to load, unload and transport.

e) Personal Property Floater Risks covering individuals and/or generally, which include the following:

1) Personal Effects Floater Policies.

2) The Personal Property Floater.

3) Government Service Floaters.

4) Personal Fur Floaters.

5) Personal Jewelry Floaters.

6) Wedding Present Floaters for not exceeding 90    (ninety) days after the day of the wedding.

7) Silverware Floaters.

8) Fine Arts Floaters covering paintings, etchings, pictures, tapestries, art glass windows, and other bonafide works of art of rarity, historical value or artistic merit.

9) Stamp and Coin Floaters.

10) Musical Instrument Floaters. Radios, televisions, record players and combinations thereof are not deemed musical instruments.

11) Mobile Articles, Machinery and Equipment Floaters (excluding motor vehicles designed for highway use and auto homes, trailers and semi-trailers when hauled by tractors not designed for highway use) covering identified property of a mobile or floating nature pertaining to or usual to a household. Such polcies shall not cover furniture and fixtures not customarily used away from premises where such property is usually kept.

12) Installment Sales and Leased Property Policies covering property pertaining to a household and sold under conditional contract of sale, Partial payment contract or installment sales contract or leased, but excluding motor vehicles designed for highway use. Such policies must cover in transit but shall not extend beyond the termination of the seller’s or lessor’s interest.

13) Live Animal Floaters.

f) Commercial Property Floater Risks covering property pertaining to a business, profession or occupation including the following:

1) Radium Floaters.

2) Physicians’ and Surgeons’ Instrument Floaters. Such policies may include coverage of such furniture, fixtures and tenant Assured’s interest in such improvements and betterments of buildings as are located in that portion of the premises occupied by the Assured in the practice of his profession.

3) Pattern and Die Floaters.

4) Theatrical Floaters, excluding buildings and their improvements and betterments, and furniture and fixtures that do not travel about with theatrical troupes.

5) Film Floaters, including builders’ risk during the production and coverage on completed negatives and positives and sound records.

6) Salesmen’s Samples Floaters.

7) Exhibition Policies on property while on exhibition and in transit to or from such exhibitions.

8) Live Animal Floaters.

9)

A) Builder’s Risks and/or Installation Risks covering interest of owner, seller or contractor, against lost or damage to machinery, equipment, building materials or supplies, being used with the during the course of installation, testing, building, renovating or repairing. Such policies may cover at points or places where work is being performed, while in transit and during temporary storage or deposit, of property designated for and awaiting specific installation, building, renovating or repairing.

B) Such coverage shall be limited to Builder’s Risks or Installation Risks where Perils in addition to Fire and Extended Coverage are to be insured.

C) If written for account of owner, the coverage shall cease upon completion and acceptance thereof; or if written for account of a seller or contractor the coverage shall terminate when the interest of the seller or contractor ceases.

10) Mobile Articles, Machinery and Equipment Floaters (excluding motor vehicles designed for highway use and auto homes, trailers and semi-trailers except when hauled by tractors not designed for highway use and snow plows constructed exclusively for highway use), covering identified property of a mobile or floating nature, not on sale or consignment, or in course of manufacture, which has come into custody or control of Parties who intend to use such property for the purpose for which it was manufactured or created. Such policies shall not cover furniture and fixtures not customarily used away from premises where such property is usually kept.

11) Property in transit to or from and in the custody of bailees (not owned, controlled or operated by the bailor). Such policies shall not cover bailee’s property at his premises.

12) Installment Sales and Leased Property. Policies covering property sold under conditional contract of sale, Partial payment contract, installment sales contract, or leased but excluding motor vehicles designed for highway use. Such policies must cover in transit but shall not extend beyond the termination of the seller’s or lessor’s interest. This Section is not intended to include machinery and equipment under certain “lease-back” contracts where the original lessee leases back to the original lessor.

13) Garment Contractors Floaters.

14) Furriers or Fur Storer’s Customer’s Policies (i.e., policies under which certificates or receipts are issued by furriers or fur storers) covering specified articles the property of customers.

15) Accounts Receivable Policies, Valuable Papers and Records Policies.

16) Floor Plan Policies

A) Covering property for sale while in possession of dealers under a Floor Plan or any similar plan under which the dealer borrows money from a bank or lending institution with which to pay the manufacturer, provided:

i) Such merchandise is specifically identifiable as encumbered to the bank or leading institution.

ii) The dealer’s right to sell or otherwise dispose of such merchandise is conditioned upon its being released from encumbrance by the bank or lending institution.

iii) That such policies cover in transit and do not extend beyond the termination of the dealer’s interest.

B) Provided that such policies shall not cover automobiles or motor vehicles; merchandise for which the dealer’s collateral is the stock or inventory as distinguished from merchandise specifically identifiable as encumbered to the lending institution.

17) Sign and Street Clock Policies, including neon signs, automatic or mechanical signs, street clocks, while in use as such.

18) Fine Arts Policies covering paintings, etchings, pictures, tapestries, art glass windows, and other bonafide works of art of rarity, historical value or artistic merit, for account of museums, galleries, universities, businesses, municipalities and other similar interests.

19) Policies covering personal property

A) when sold to the ultimate purchaser, may be covered specifically, by the owner, under Inland Marine Policies including:

i) Musical Instrument Dealers Policies, covering property consisting principally of musical instruments and their accessories. Radios, televisions, record players and combinations thereof are not deemed musical instruments.

ii) Camera Dealers Policies, covering property consisting principally of cameras and their accessories.

iii) Furrier’s Dealers Policies, covering property consisting principally of furs and fur garments.

iv) Equipment Dealers Policies, covering mobile equipment consisting of binders, reapers, tractors, harvesters, harrows, tedders and other similar agricultural equipment and accessories therefor; construction equipment consisting of bulldozers, road scrapers, tractors, compressors, pneumatic tools and similar equipment and accessories therefor; but excluding motor vehicles designed for highway use.

v) Stamp and Coin Dealers covering property of philatelic and numismatic nature.

vi) Jewelers’ Block Policies.

vii) Fine Arts Dealers.

B) Such policies may include coverage of money in locked safes or vaults on the Assured’s premises. Such policies also may include coverage of furniture, fixtures, tools, machinery, patterns, molds, dies and tenant insureds interest in improvements of buildings.

20) Wool Growers Floaters.

21) Domestic Bulk Liquids Policies, covering tanks and domestic bulk liquids stored therein.

22) Difference in Conditions Coverage excluding fire and extended coverage perils.

23) Electronic Data Processing Policies.

(Source: Amended at 8 Ill. Reg. 12222, effective July 13, 1984)

Section 101.40            Coverage not Permitted

Unless otherwise permitted, nothing in the foregoing shall be construed to permit Marine or Transportation Policies to Cover:

a) Storage of Assured’s merchandise, except as hereinbefore provided.

b) Merchandise in course of manufacture, the property of and on the premises of the manufacturer.

c) Furniture and fixtures and improvements and betterments to buildings.

d) Monies and/or securities in safes, vaults, safety deposit vaults, bank or Assured’s premises, except while in course of transportation.

(Source: Amended at 8 Ill. Reg. 12222, effective July 13, 1984)

TITLE 50: INSURANCE

CHAPTER I: DEPARTMENT OF INSURANCE

SUBCHAPTER b: DOMESTIC STOCK COMPANIES

PART 201 SUBORDINATED INDEBTEDNESS

——————————————————————————–

The General Assembly’s Illinois Administrative Code database includes only those rulemakings that have been permanently adopted. This menu will point out the Sections on which an emergency rule (valid for a maximum of 150      days, usually until replaced by a permanent rulemaking) exists. The emergency rulemaking is linked through the notation that follows the Section heading in the menu.

Section 201.5 Statutory Authority

Section 201.10            Application and Effective Date

Section 201.20            Approval of Debenture Form by Director Prior to Shareholder Approval

Section 201.30            Approval by Shareholders

Section 201.40            Consideration

Section 201.50            Reporting and Accounting of Indebtedness

Section 201.60            Repayment of Principal and Payment of Interest

AUTHORITY: Implementing Section 34.1 and authorized by Section 401 of the Illinois Insurance Code [215 ILCS 5/34.1 and 401].

SOURCE: Filed September 27, 1971, effective October 1, 1971; codified at 7 Ill. Reg. 2356; amended at 13 Ill. Reg. 14054, effective September 11, 1989; amended at 23 Ill. Reg. 3782, effective March 10, 1999.

Section 201.5 Statutory Authority

The following rule is promulgated and adopted pursuant to and in accordance with the provisions of Section 401 of the Illinois Insurance Code in order to implement Section 34.1 thereof.

Section 201.10            Application and Effective Date

This rule applies to all companies organized under Article II of the Illinois Insurance Code and is applicable to any and all debts other than those shown as a legal liability of the company. It shall become effective September 1, 1963.

Section 201.20            Approval of Debenture Form by Director Prior to Shareholder Approval

The subordinated indebtedness agreement (debenture) shall be submitted for the approval of the Illinois Director of Insurance (Director) as required by Section 34.1 of the Illinois Insurance Code [215 ILCS 5/34.1].

a) The agreement must state that:

1) All payments of principal and/or interest must be approved by the Director, and

2) The obligation of the company under such debenture may not be offset or be subject to recoupment with respect to any liability or obligation owed to the company, and

3) No agreement or interest securing such debentures, whether existing on the date of such debenture or subsequently entered into, applies to the obligation under such debenture.

b) The following shall be submitted for the Director’s approval prior to submission to the shareholders of the company:

1) Duplicate copies of the entire debenture.

2) Certified copy of the resolution of the board of directors or proper company body or committee which is empowered to authorize such agreements. This resolution shall stipulate the maximum amount of subordinated indebtedness authorized.

(Source: Amended at 23 Ill. Reg. 3782, effective March 10, 1999)

Section 201.30            Approval by Shareholders

After submission of the documents specified in Section 201.20       and approval thereof by the Director, the proposed form of debenture and the resolution authorizing it shall be presented for consideration at a regular or special shareholder’s meeting called to determine the question of whether or not the debenture shall be made. All agreements shall be executed and the consideration received within one year after the date of shareholder’s approval.

(Source: Amended at 13 Ill. Reg. 14054, effective September 11, 1989)

Section 201.40            Consideration

The consideration tendered to the company in exchange for the agreement shall be lawful money.

Section 201.50            Reporting and Accounting of Indebtedness

a) The Director shall be notified immediately in writing upon the execution of any such debenture as to the amount thereof and to whom payable.

b) All outstanding subordinated indebtedness and interest accrued thereon shall be reported separately in the Annual Statement on Page 3 and in any other financial statements of the company as special surplus funds.

c) The issuance and repayment of the debenture, as well as the payment of the interest thereon, shall be reflected as direct debits or credits to the Capital and Surplus Account of the company’s financial statement.

d) The interest expense incurred on the debenture during the current period shall be reflected as a deduction from income in lieu thereof on the Statement of Income/Summary of Operations of the company’s financial statements.

(Source: Amended at 23 Ill. Reg. 3782, effective March 10, 1999)

Section 201.60            Repayment of Principal and Payment of Interest

A company may only repay principal and make payment of interest on any indebtedness as provided under Section 34.1 of the Illinois Insurance Code [215 ILCS 5/34.1]. No payment shall be authorized by the Director unless:

a) The company’s surplus as regards policyholders is reasonable in relation to its outstanding liabilities and adequate for its financial needs (the determination of the reasonableness and adequacy of surplus shall include consideration of the following factors: premium volume as referenced in Sections 144 and 244.1 of the Illinois Insurance Code [215 ILCS 5/144 and 244.1]; lines of business and additional authority as referenced in Sections 4, 11, 39, and 245.23 of the Illinois Insurance Code [215 ILCS 5/4, 11, 39, and 245.23] and Section 2-1 of the Health Maintenance Organization Act [215 ILCS 125/2-1]; reserves, company size and operational history as referenced in Section 113 of the Illinois Insurance Code [215 ILCS 5/113]), and

b) Such payment will not reduce the company’s surplus as regards policyholders to less than that currently required under Section 13 of the Illinois Insurance Code [215 ILCS 5/13], and

c) Such payment is consistent with the terms of the debenture approved pursuant to Section 201.20         of this Part.

(Source: Amended at 23 Ill. Reg. 3782, effective March 10, 1999)

TITLE 50: INSURANCE

CHAPTER I: DEPARTMENT OF INSURANCE

SUBCHAPTER b: DOMESTIC STOCK COMPANIES

PART 202 MORTGAGE GUARANTY INSURANCE

——————————————————————————–

The General Assembly’s Illinois Administrative Code database includes only those rulemakings that have been permanently adopted. This menu will point out the Sections on which an emergency rule (valid for a maximum of 150      days, usually until replaced by a permanent rulemaking) exists. The emergency rulemaking is linked through the notation that follows the Section heading in the menu.

Section 202.10            Authority and Application

Section 202.20            Definitions

Section 202.30            Restrictions on the Transaction of Business

Section 202.40            Reinsurance

Section 202.50            Reserves

Section 202.60            General

Section 202.ILLUSTRATION A Unearned Premium Factor to be Applied to Premiums In Force on Valuation Date

AUTHORITY: Implementing Article II and authorized by Sections 4 and 401 of the Illinois Insurance Code [215 ILCS 5/4, 6 through 35, and 401].

SOURCE: Adopted at 3 Ill. Reg. 50, p. 265, effective December 3, 1979; emergency repealer and emergency rule adopted at 6 Ill. Reg. 5830, effective April 23, 1982, for a maximum of 150           days; rules repealed and new rules adopted and codified at 6 Ill. Reg. 15181, effective December 7, 1982; amended at 10     Ill. Reg. 14672, effective August 25, 1986; emergency amendment at 24 Ill. Reg. 7557, effective May 3, 2000, for a maximum of 150            days; amended at 24 Ill. Reg. 14738, effective September 25, 2000.

Section 202.10            Authority and Application

Part 202 is promulgated pursuant to the provisions of Section 401 of the Illinois Insurance Code to regulate the writing and servicing of the kind of insurance described in Clause (h) of Class 2 of Section 4 of the Illinois Insurance Code relating to loss or damage which may result from the failure of debtors to pay their obligations, more specifically known as a mortgage guaranty insurance.

Section 202.20            Definitions

Authorized real estate security means a promissory note, bond or other evidence of indebtedness which, at the time of origination, does not, when added to any prior secured indebtedness relating to the real estate, exceed 100% of the fair market value of said real estate, and which is secured by mortgage, deed of trust, or other instrument constituting a lien or charge, provided such indebtedness represents a type of loan authorized to be made by a bank, savings and loan association, insurance company and, in the case of residential loans only, mortgage bankers regulated and supervised by a DePartment of the State of Illinois or by an agency of the federal government of the United States of America.

Director means the Director of Insurance of the State of Illinois or anyone to whom the Director’s responsibilities and authority are lawfully delegated.

Fair market value means the lesser of sales price or appraised value.

Mortgage guaranty insurance means insurance against financial loss by reason of the nonpayment of principal, interest and other sums agreed to be paid under the terms of:

A promissory note, bond or other evidence of indebtedness secured by a mortgage, deed of trust or other instrument constituting a lien or charge on improved one to four family residential or commercial real estate, including, without limitation, condominiums and owner-occupied mobile homes;

A promissory note, bond or other evidence of indebtedness secured by a mortgage, deed of trust, pledge or other instrument constituting a lien or charge on shares of stock evidencing ownership of a residential cooperative housing unit; or

A written lease for the possession, use or occupancy of improved residential or commercial real estate.

Mortgage pool insurance means mortgage guaranty insurance written on a group of loans insuring each one individually but which limits liability to an agreed percentage of all loans in the group.

Reserves shall have the following meanings:

Reserves for policyholders means surplus as regards policyholders and contingency reserves as reported in the last filed annual financial statement;

Reserve for general expenses required by Section 202.50(a) of this Part;

Reserve for losses outstanding required by Section 202.50(b) of this Part;

Reserve for unearned premiums required by Section 202.50(c) of this Part.

(Source: Amended at 24 Ill. Reg. 14738, effective September 25, 2000)

Section 202.30            Restrictions on the Transaction of Business

a) A company shall not transact the business of mortgage guaranty insurance unless it originally has and continues to have capital and surplus of at least the amounts specified in Section 13 of the Illinois Insurance Code.

b) A mortgage guaranty insurance company:

1) Shall not insure loans with balloon provisions unless either:

A) liability for the balloon payment is specifically excluded; or

B) the policy provides, by its terms, that at the time the lender calls the loan, the lender will cause to be offered new or extended financing at then market rates.

2) Shall not, at any one time, have more than 20% of its insurance in force net of reinsurance ceded but including reinsurance assumed, on adjustable rate loan instruments which establish payments insufficient to fully amortize the loan over its term and negatively amortizing graduated payment mortgage which, at any time during the term of mortgage, causes the outstanding indebtedness to exceed 100% of the initial fair market value of the real estate, thereby causing the outstanding loan balance to increase following loan origination (vis, “dual rate” mortgages).

3) Shall not insure mortgages referred to in subSection(b)(2) above which:

A) Permit the accumulation of negative amortization of principal to an amount exceeding 120% of the initial fair market value, or

B) Provide for the borrower to make payment in an amount less than would be required for the full amortization of the mortgage at an interest rate of 10%, or

C) Were established under agreements which authorize the lender to bind coverage on the insurer’s behalf without prior underwriting by the insurer.

4) Shall not, at any one time following two years from receipt of its initial Certificate of Authority from its state of domicile, have more than 10% of its insurance in force, net of reinsurance ceded but including reinsurance assumed, on loans originating from any one lender.

5) Which writes residential mortgage guaranty insurance shall not, either directly or indirectly, have at any time more than 20% of its insurance in force on commercial properties.

6) Shall not assume reinsurance in an amount exceeding 20% of the company’s total insurance in force.

7) Shall maintain a policyholders reserve in an amount no less than the amount arrived at by the calculations set forth in this subSection (b)(7) and if its policyholders reserve is less than that amount it shall discontinue all writing of business until its policyholders reserve equals or exceeds the minimum amount required in this subSection (b)(7). The required policyholders reserve shall be calculated in the following manner:

A) subject to the provisions of subSections (b)(7)(B), (C), (D), (E), (F), and (G) of this Section, if the indebtedness is:

i) 75% or greater of the value of the securing property:

Per Cent

Coverage

Policyholders Reserve Per $100        of the Face Amount of The Mortgage

5%

$ .20

10

.40

15

.60

20

.80

25

1.00

30

1.10

35

1.20

40

1.30

45

1.35

50

1.40

55

1.50

60

1.55

65

1.60

70

1.65

75

1.75

80

1.80

85

1.85

90

1.90

95

1.95

100

2.00

ii) 50% or greater but less than 75% of the value of the securing property, the required amount of the policyholders reserve shall be 50% of the amount required by subSection (b)(7)(A)(i) above; and

iii) less than 50% of the value of the securing property, the required amount of the policyholders reserve shall be 25% of the amount required by subSection (b)(7)(A)(i) above.

B) In the case of mortgage pool insurance:

i) If the total aggregate indebtedness of the group of loans covered is 75% or greater of the total aggregate value of the securing properties after giving appropriate credit for any primary mortgage guaranty insurance thereon and/or deductibles:

Per Cent Coverage

Policyholders Reserve Per $100        of the Face Amount of The Mortgage

1%

$ .60

5

1.00

10

1.20

15

1.30

20

1.40

25

1.50

30

1.55

40

1.60

50

1.65

60

1.70

70

1.75

75

1.80

80

1.85

90

1.90

100

2.00

ii) If the total aggregate indebtedness of the group of loans covered is 50% or greater but less than 75% of the total aggregate value of the securing properties after giving appropriate credit for any primary mortgage guaranty insurance thereon and/or deductibles, the required amount of policyholders reserve shall be 50% of the amount required by subSection (b)(7)(B)(i) above; and

iii) If the total aggregate indebtedness of the group of loans covered is 50% of the total aggregate value of the securing properties after giving appropriate credit for any primary mortgage guaranty insurance and/or deductibles, the required amount of policyholders reserve shall be 25% of the amount required by subSection (b)(7)(B)(i) above.

C) In the case of:

i) mortgage guaranty insurance covering loans secured by liens other than first liens, the policyholders reserve shall be calculated in accordance with subSection (b)(7)(A) above after first dividing the insured portion of the junior loan by the entire loan indebtedness on the securing property to determine the percentage coverage and then dividing the total of all loans on the securing property to determine the percentage of loan-to-value ratio; and

ii) mortgage pool insurance on a group of loans secured by liens other than first liens, the policyholders reserve shall be calculated in accordance with subSection (b)(7)(B) above after the percentage of coverage and loan-to-value ratios have been determined.

D) In the case of mortgage guaranty insurance covering all of the risk in excess of a fixed percentage of the initial fair market value of the real estate, the required amount of policyholders reserve shall be 125% of the amount required under subSection (b)(7)(A)(i).

E) In the case of mortgage guaranty insurance covering loan installments referenced in subSection(b)(2) above, the required amount of policyholders reserves shall be 150% of the amount required under subSection (b)(7)(A). In the case of such mortgage also meeting conditions under subSection (b)(7)(D) above, the required reserve shall be 175% of the amount required under subSection (b)(7)(A)(i).

F) In the case of mortgage guaranty insurance which specifically covers leasehold obligations, the policyholders reserve shall be $4.00  for each $100  of leasehold rentals insured.

G) If a policy of mortgage guaranty insurance or of mortgage pool insurance provides for layers of coverage, deductibles or reinsurance, the required amount of policyholders reserves shall be computed by subtraction of the required policyholders reserve for the lower percentage coverage limit from the required policyholders reserve for the upper or greater coverage limit.

H) All calculations done under subSection (b)(7) shall be done in a uniform and consistent fashion to assure that the policyholders reserve so established and maintained bears a reasonable relationship to the risk undertaken by the company.

8) Shall, in connection with the writing of mortgage guaranty insurance, individually underwrite all loans insured.

9) Which anywhere transacts, directly or indirectly, any class of insurance other than mortgage guaranty insurance and/or mortgage pool insurance shall not be permitted to transact any insurance business in the State of Illinois.

10) Shall not declare any dividends except from undivided profits remaining on hand over and above the amount of its policyholders reserve.

11) Shall adopt, print and make available a schedule of premium charges for mortgage guaranty insurance policies which schedule shall show the entire amount of premium charge for each type of mortgage guaranty insurance policy issued by the company.

12) Shall not pay to any person who is acting as agent, representative, attorney or employee of the owner, mortgage of the prospective owner, or mortgagee of real property or any interest therein, either directly or indirectly, any commission, or any Part of its premium charges or any other consideration as an inducement for or as compensation on any mortgage guaranty insurance policy.

13) Rebates

No mortgage guaranty company shall make any rebate of any portion of the premium charge shown by the schedule required by subSection (b)(11). No mortgage guaranty company shall quote any premium charge to any person which is less than that currently available to others for the same type of mortgage guaranty insurance policy. The amount by which any premium charge is less than that called for by the current schedule of premium charge is an unlawful rebate.

c) Whenever a mortgage guaranty company provides coverage exceeding 30% of the mortgage indebtedness at the time foreclosure proceedings are completed and title to the authorized real estate security is vested in such assured, unless the coverage provides that the lender be a not less than 5% co-insurer of losses, no mortgage guaranty insurer shall permit an insured to bind coverage on its behalf and shall not assume contracts of insurance without first individually underwriting each mortgage loan insured.

d) A mortgage guaranty insurance company:

1) Must not have a total liability, net of reinsurance, of mortgage pool insurance on mortgages from any one originating lender which exceeds 10% of the mortgage guaranty insurance company’s surplus, including contingency reserve.

2) Shall not permit substitutions in a pool of mortgages and shall not permit additions to a pool of mortgages after 3 years following the issuance of a policy providing mortgage pool insurance.

e) An insurance company with multiple line authority that transacts insurance business other than mortgage insurance and/or mortgage pool insurance is prohibited, either directly or indirectly, from transacting mortgage insurance and/or mortgage pool insurance in the State of Illinois.

(Source: Amended at 24 Ill. Reg. 14738, effective September 25, 2000)

Section 202.40            Reinsurance

a) A mortgage guaranty insurance company may, by contract, reinsure any of its insurance with another mortgage guaranty company licensed to transact business in the State of Illinois.

b) The reserves of the ceding company and the reinsurance shall be adjusted to reflect the amount of risk retained by the ceding company and the amount of risk assumed by the reinsurer but in no event shall the reserves as adjusted total less than the reserves that would be required if such ceding had not taken place.

Section 202.50            Reserves

A mortgage guaranty insurance company shall establish and maintain the following four reserve accounts:

a) Reserve for General Expenses – A reserve in an amount sufficient to meet general expenses, including amounts due vendors for goods, supplies, equipment and amounts due for compensation, taxes and licenses:

b) Loss Reserve – A loss reserve computed upon the case basis in a manner to accurately reflect loss frequency and loss severity which shall take into consideration, among other things, claims incurred but not yet reported, including estimated losses on;

1) Insured loans which have resulted in the conveyance to the company of property which remains unsold;

2) Insured loans in the process of foreclosure; and

3) Insured loans and insured lease obligations in default for four months or longer for any lesser period of time which is defined as a default in the company’s policy;

c) Unearned Premium Reserve – A reserve for unearned premiums computed and maintained on an annual or monthly pro rata basis on all unexpired coverage, except that in the case of premiums paid in advance for coverage issued for the terms of years shown in Illustration 1, the unearned premium factors specified shall be utilized in calculating the reserved amount provided, however, that on premiums paid in advance for coverage periods in excess of 15 years, the unearned portion of the premium during the first 15 years of coverage shall be the premium collected minus an amount equal to the premium that would have been earned had the applicable premium for 15 years’ coverage been received and the premium remaining after 15 years shall be released from the unearned premiums reserve pro rata over the remaining term of coverage.

d) Contingency Reserve – A reserve for contingencies to protect against the effect of adverse economic cycles affecting the housing industry and to permit compliance with Section 832(e) of the Internal Revenue Code of 1954, as amended (26 U.S.C. 832e). To which shall be contributed annually the greater

1) Fifty percent (50%) of the earned premium reported for the year in the fire and casualty annual statement; or

2) The sum of

A) One seventh of the policyholders reserve attributable to residential properties designed for occupancy by not more than four families; plus

B) One fourth of the policyholders reserve attributable to residential properties designed for occupancy by five or more families; plus

C) One third of the policyholders reserve attributable to properties occupied for industrial or commercial purposes; plus

D) One tenth of the policyholders reserve attributable to leases;

i) The contingency reserve shall be maintained for a period of 120   months after which it shall be released and become a Part of the general and unrestricted assets of the company.

ii) Upon notice to the Director, the contingency reserve shall be available to the company to the extent necessary to make loss payments either; when the incurred losses in a year exceed 35% of the earned premiums in that year or; when incurred losses in a year exceed 70% of the amount contributed to the contingency reserve, whichever is greater. Funds used in this manner shall be accounted for on a first-in first-out basis.

Section 202.60            General

a) Forms – All policy forms for mortgage guaranty insurance must be filed with and approved by the Director pursuant to Section 143 of the Illinois Insurance Code prior to their utilization in the State of Illinois.

b) Prohibition Against Deficiency Judgment – With respect to owner-occupied single family homes, a borrower shall not be liable to any mortgage guaranty insurance company for any deficiency arising upon a foreclosure sale except for foreclosures arising from fraud or misrepresentation by the borrower;

c) Agents, Brokers and Solicitors – Any person proposing engage in the sale of mortgage guaranty insurance or mortgage pool insurance shall first obtain the requisite fire and casualty license pursuant to the provisions of Article XXXI of the Illinois Insurance Code.

d) Prohibition on Real Estate Investments – A mortgage guaranty insurance company may not invest in notes or other evidences of indebtedness secured by a lien on real property except if same are acquired in the course of the good faith settlement of claims or in the good faith disposition of real property pursuant to said settlement.

e) Conflict of Interest – No mortgage guaranty insurance company shall insure any loans originated by a lender if such lender or any service corporation affiliate, or any other affiliate or controlling person thereof, owns any equity interest of any type of such mortgage guaranty insurance company.

f) Advertising – No bank, savings and loan association or insurance company, any of whose real estate securities are insured pursuant to this Part 202 may advertise that its real estate loans are insured or are “insurance loans” only if clearly stating that they are insured by private mortgage insurance giving the names of the mortgage guaranty insurance companies writing such insurance.

g) Applicability of Other Regulations – All of the applicable provisions of the Illinois Insurance DePartment’s Rules and Regulations shall govern the conduct and operation of a mortgage guaranty insurance company except to the extent inconsistent with or in conflict with this Part 202.

h) Applicability of Part – Unless this Part specifically provides to the contrary, no mortgage guaranty insurance company licensed to transact business in this State may continue to hold its Certificate of Authority if it anywhere transacts mortgage guaranty insurance in a manner not in conformity with this Part unless it does so pursue to a statute or regulation more stringent than similar provisions contained herein. Section 202.30(b)(12) and (13) apply only to business written in Illinois and are exempted from this provision. The Certificate of Authority of a mortgage guaranty insurer shall not be suspended or revoked unless such insurer fails within 30        days after notice from the Director to correct any noncompliance with the provisions of this Part 202.

TITLE 50: INSURANCE

CHAPTER I: DEPARTMENT OF INSURANCE

SUBCHAPTER b: DOMESTIC STOCK COMPANIES

PART 204 INSIDER TRADING OF DOMESTIC STOCK INSURANCE COMPANY EQUITY SECURITIES

——————————————————————————–

The General Assembly’s Illinois Administrative Code database includes only those rulemakings that have been permanently adopted. This menu will point out the Sections on which an emergency rule (valid for a maximum of 150      days, usually until replaced by a permanent rulemaking) exists. The emergency rulemaking is linked through the notation that follows the Section heading in the menu.

Section 204.5 Authority

Section 204.10            General Application

Section 204.20            Regulations Under SubSection (a) of the Act

Section 204.30            Regulations Under SubSection (b) of the Act

Section 204.40            Regulations Under SubSection (c) of the Act

Section 204.50            Regulation Under SubSection (e) of the Act

Section 204.EXHIBIT A Initial Statement of Beneficial Ownership of Securities

Section 204.EXHIBIT B Statement of Changes in Beneficial Ownership of Securities

AUTHORITY: Implementing Section 28.1 and authorized by Section 401 of the Illinois Insurance Code (Ill. Rev. Stat. 1981, ch. 73, pars. 640.1 and 1013).

SOURCE: Filed and effective January 21, 1966; codified at 7 Ill. Reg. 8252.

Section 204.5 Authority

(Insider Trading of Domestic Stock Insurance Company Equity Securities). This Part is issued by the Director of Insurance pursuant to Section 401 of the Illinois Insurance Code in order to implement Section 28.1 thereof. It shall be effective from and after January 21, 1966.

Section 204.10            General Application

a) Definition of Terms

1) “Company” means any domestic stock insurance company, with an equity security subject to the provisions of Section 28.1 of the Illinois Insurance Code and not exempt thereunder.

2) “Act” means Section 28.1 of the Illinois Insurance Code. (Ill. Rev. Stat. 1981, ch. 73, par. 640.1)

3) “Officer” means a president, vice president, treasurer, chief actuary, secretary, controller, general counsel, and any other person regardless of his title or lack of title who performs for the company functions corresponding to those usually performed by the foregoing officers.

4) “Equity security” means any stock or similar security; or any voting trust certificate or certificate of deposit for such a security; or any security convertible, with or without consideration into such a security, or carrying any warrant or right to subscribe to or purchase such a security; or any such warrant or right.

5) Securities “held of record.”

A) For the purpose of determining whether the equity securities of a company are held of record by one hundred or more persons, securities shall be deemed to be “held of record” by each person who is identified as the owner of such securities on records of security holders maintained by or on behalf of the company, subject to the following:

i) In any case where the records of security holders have not been maintained in accordance with accepted practice, any additional person who would be identified as such an owner on such records if they had been maintained in accordance with accepted practice shall be included as a holder of record.

ii) Securities identified as held of record by a corporation, a Partnership, a trust whether or not the trustees are named, or other organization shall be included as so held by one person.

iii) Securities identified as held of record by one or more persons as trustees, executors, guardians, custodians or in other fiduciary capacities with respect to a single trust, estate or account shall be included as held of record by one person.

iv) Securities held by two or more persons as co-owners shall be included as held by one person.

v) Each outstanding unregistered or bearer certificate shall be included as held of record by a separate person, except to the extent that the company can establish that, if such securities were registered, they would be held of record, under the provisions of this Rule, by a lesser number of persons.

vi) Securities registered in substantially similar names where the company has reason to believe because of the address or other evidence that such names represent the same person, may be included as held of record by one person.

B) Notwithstanding subSection (a) of this Section:

i) Securities held, to the knowledge of the company, subject to a voting trust, deposit agreement or similar arrangement shall be included as held of record by the record holders of the voting trust certificates, certificates of deposit, receipts or similar evidences of interest in such securities; provided however, that the company may rely in good faith on such information as is received in response to its request from a non-affiliated company of the certificates or evidences of interest.

ii) If the company knows or has reason to know that the form of holding securities of record is used primarily to circumvent the provisions of the Act, the beneficial owners of such securities shall be deemed to be the record owners thereof.

6) “Class” means all securities of a company which are of substantially similar character and the holders of which enjoy substantially similar rights and privileges.

b) Transactions Exempted From the Operation of SubSection (b) of the Act

Any acquisition or disposition of any equity security by a director or officer of a company within six months prior to the date on which the Act shall first become applicable with respect to the securities of such company shall not be subject to the operation of subSection (b) of the Act.

c) Applicability of Rules

Pursuant to subSection (i) of the Act, this Part 204 shall not apply to any transactions prior to January 31, 1966.

Section 204.EXHIBIT A Initial Statement of Beneficial Ownership of Securities

STATE OF ILLINOIS

Director of Insurance

Form 1-Initial Statement of Beneficial Ownership of Securities

Filed pursuant to Section 28.1 of the Illinois Insurance Code

(Name of insurance company)

(Name of person whose ownership is reported)

(Business address of such person; street, city, zone, state)

Relationship of such person to company named above. (See instruction 5)

Date of event which requires the filing of this statement. (See Instruction 6)

SECURITIES BENEFICIALLY OWNED

Title of Security (See instruction 7)

Nature of Ownership

(See instruction 8)

Amount Owned

(See Instruction 9)

REMARKS: (See instruction 10)

Subscribed and sworn to before me this _____ day of ____________A.D., _____.

NOTARY PUBLIC

SIGNATURE

ILLINOIS DEPARTMENTAL REGULATIONS

STATE OF ILLINOIS

Director of Insurance

Form 1 – Instructions for Initial Statement of Beneficial Ownership of Securities

1. Persons Required to File Statements

A statement on this form is required to be filed by every person who is directly or indirectly the beneficial owner of more than 10   percent of any class of equity security of an Illinois stock insurance company, or who is a director or an officer of such a company.

2. When Statements Are to Be Filed.

(a) Persons who hold any of the relationships specified in instruction 1 are required to file a statement by January 31, 1966, or within 10       days after assuming such relationship, whichever date is later.

(b) Statements are not deemed to have been filed with the Director until they have actually been received by him.

3. Where Statements Are to Be Filed.

One signed, sworn true copy of each statement shall be filed with the Director of Insurance, State of Illinois, Springfield, Illinois 62767.

4. Separate Statements For Each Company.

A separate statement shall be filed with respect to the securities of each company.

5. Relationship of Reporting Person to Company.

Indicate clearly the relationship of the reporting person to the company; for example, “Director”, “Director and Vice President”, “Beneficial owner of more that 10           percent of the company’s common stock”, etc.

6. Date As of Which Beneficial Ownership Is To Be Given.

The information as to beneficial ownership of securities shall be given as of January 31, 1966, or, in the case of persons who subsequently assume any of the relationships specified in Instruction 1, as of the date that relationship was assumed.

7. Title of Security

The statement of the title of a security shall be such as clearly to identify the security even though there may be only one class; for example, “Class A Common Stock”, “5% Debentures Due 1965″, etc.

8. Nature of Ownership

Under “Nature of ownership”, state whether ownership of the securities is “direct” or “indirect”. If the ownership is indirect, i.e., through a Partnership, corporation, trust or other entity, indicate, in a footnote or other appropriate manner, the name or identity of the medium through which the securities are indirectly owned. The fact that securities are held in the name of a broker or other nominee does not, of itself, constitute indirect ownership. Securities owned indirectly shall be reported on separate lines from those owned directly and also from those owned through a different type of indirect ownership.

9. Statement of Amount Owned.

In stating the amount of securities beneficially owned, give the face amount of debt securities or the number of shares or other units of other securities. In the case of securities owned indirectly, the entire amount of securities owned by the Partnership, corporation, trust or other entity shall be stated. The person whose ownership is reported may, if he so desires, also indicate in a footnote, or other appropriate manner, the extent of his interest in the Partnership, corporation, trust or other entity.

10. Inclusion of Additional Information.

A statement may include any additional information or explanation deemed relevant by the person filing the statement.

11. Signature.

If the statement is filed for a corporation, Partnership, trust, etc., the name of the organization shall appear over the signature of the officer or other person authorized to sign the statement. If the statement is filed for an individual, it shall be signed by him or specifically on his behalf by a person authorized to sign for him.

In those cases where the statement is signed by someone other than the person whose ownership is being reported, documentary evidence of the signing authority shall be filed with the statement.

In all cases, the signature must be duly notarized.

TITLE 50: INSURANCE

CHAPTER I: DEPARTMENT OF INSURANCE

SUBCHAPTER b: DOMESTIC STOCK COMPANIES

PART 205 MUNICIPAL BOND INSURANCE

——————————————————————————–

The General Assembly’s Illinois Administrative Code database includes only those rulemakings that have been permanently adopted. This menu will point out the Sections on which an emergency rule (valid for a maximum of 150      days, usually until replaced by a permanent rulemaking) exists. The emergency rulemaking is linked through the notation that follows the Section heading in the menu.

Section 205.10            Authority

Section 205.20            Purpose

Section 205.30            Definitions

Section 205.40            Requirements

Section 205.50            Limitations and Restrictions

Section 205.60            Financial Statements

Section 205.70            Reinsurance

Section 205.80            Collateral Security

Section 205.90            Applicability of Other Laws

AUTHORITY: Implementing Section 144 and authorized by Section 401 of the Illinois Insurance Code (Ill. Rev. Stat. 1985, ch. 73, pars. 756 and 1013).

SOURCE: Adopted at 11 Ill. Reg. 3876, effective February 13, 1987.

Section 205.10            Authority

Part 205 is promulgated by the Director of Insurance pursuant to Sections 401 and 144 of the Illinois Insurance Code (Ill. Rev. Stat. 1985, ch. 73, pars. 1013 and 756), which empowers the Director…to make reasonable rules and regulations as may be necessary for making effective…the insurance laws of the State.

Section 205.20            Purpose

It is the purpose of this Part to regulate the writing and servicing of municipal bond insurance.

Section 205.30            Definitions

a) Municipal Bond Insurance – insurance or reinsurance against financial loss by reason of nonpayment of principal, interest or other payment obligations pursuant to the terms of municipal bonds as defined in subSection (b) hereof.

b) Municipal Bond – any security (or other instrument under which a payment obligation is created) issued by or on behalf of, or payable or guaranteed by a state, territory or possession of the United States of America, a municipality, or a political subdivision of any of the foregoing, or by any public agency or instrumentality thereof.

c) Contingency Reserve – an additional premium reserve established for the protection of insureds covered by policies insuring municipal bonds against the effect of excessive losses occurring during adverse economic cycles.

d) Cumulative Net Liability – the insured unpaid principal and insured unpaid interest due or to become due covered by in-force policies of municipal bond insurance, reduced by the appropriate allowance for acceptable reinsurance.

e) Average Annual Debt Service – in respect to any issue or Part thereof of municipal bonds covered by an in-force policy, the product of the total insured, unpaid principal and insured, unpaid interest thereon times the number of such bonds (assuming that each $1,000          of par value represents one bond), divided by an amount equal to the aggregate life (in years) of such bonds (assuming that each $1,000   of par value represents one bond); i.e.:

(Unpaid Principal + Unpaid Interest) x (Number of Bonds)

(Number of Bond Years)

f) Industrial Revenue Bonds – municipal bonds issued primarily to finance property for use in a trade or business and without a substantial public purpose, and backed by a revenue source other than a governmental unit described in the definition of municipal bonds above.

g) Insurer – includes a company engaged in the reinsurance of municipal bonds unless the text provides otherwise.

Section 205.40            Requirements

a) Any direct insurer issuing contracts insuring municipal bonds must:

1) be authorized to write the kinds of business defined in Class 2(g) and 2(h) of Section 4 of the Illinois Insurance Code (Ill. Rev. Stat. 1985, ch. 73, par. 616), and

2) have a policyholders’ surplus and contingency reserve of not less than $50,000,000        as shown by its last annual statement on file with the Director.

b) Any insurer issuing contracts insuring municipal bonds shall establish a contingency reserve which shall consist of allocations of sums representing fifty percent (50%) of the earned premiums on policies insuring municipal bonds. Allocations to such reserve made during each calendar year shall be maintained for a period of at least 240            months, except that withdrawals may be made by the company in any year and to the extent that the actual incurred losses on policies insuring municipal bonds exceed thirty-five percent (35%) of the earned premiums thereon or, notwithstanding the foregoing, withdrawals may be made by the company in any year and to the extent that the contingency reserve equals or exceeds one half of one percent (½%) of the cumulative net liability. No such release shall be made without written notice to the Director.

Section 205.50            Limitations and Restrictions

a)

1) In no event, shall the insured average annual debt service (net of the appropriate allowance for acceptable reinsurance and collateral allowable under Section 205.80) in respect to securities, backed by a single revenue source, exceed an amount representing ten percent (10%) of the insurer’s policyholders’ surplus plus its contingency reserve.

2) In no event, shall the insured unpaid principal (net of the appropriate allowance for acceptable reinsurance and collateral allowable under Section 205.80) in respect to securites backed by a single revenue source, when added to the admitted value of the securities of such source in which the insurer has invested, exceed amount representing seventy-five percent (75%) of the insurer’s policyholders’ surplus plus its contingency reserve.

3) In no event, shall twice the outstanding cumulative net liability under policies in force insuring industrial revenue bonds described in subSection 205.30(f) plus the outstanding cumulative net liability under policies in force insuring all other municipal bonds exceed:

A) 300 times the sum of the insurer’s policyholders’ surplus plus its contingency reserve if the insurer transacts only municipal bond insurance, or

B) 60   times the sum of the insurer’s policyholders’ surplus plus its contingency reserve if the insurer transacts any insurance in addition to municipal bond insurance.

b) In the event that the requirement of subSection (a)(2) is exceeded because of municipal bond insurance written prior to the effective date of this Part, then

1) the insurer shall not transact any new insurance of securities backed by such a single revenue source as described in subSection (a)(2), and

2) the insurer shall not invest in any additional securities of such single revenue source as described in subSection (a)(2), unless and until the requirement of subSection (a)(2) has been met.

c) In the event that an insurer exceeds the limitation in subSection (a)(3), it shall not transact any new insurance of municipal bonds until the such excess no longer exists.

d) No insurer authorized to transact the business of insuring municipal bonds shall pay any commission or make any gift of money, property or other valuable thing to any employee, agent or representative of any issuer of municipal bonds or of any underwriter of any issue of such bonds, as an inducement to the purchase of a policy insuring such bonds, and no such employee, agent or representative of such issuer or underwriter shall receive any such payment or gift. However, violation of the provisions of this Section shall not have the effect of rendering void the insurance policy issued by the insurer.

e) Any insurer that transacts any insurance other than municipal bond insurance may not have more than twenty percent (20%) of its gross (direct plus assumed) written premiums, net of acceptable reinsurance, in any one year represented by municipal bond premiums.

Section 205.60            Financial Statements

a) A municipal bond insurer shall maintain an unearned premium reserve computed to show gross premiums, without any deductions, received and receivable upon all unexpired risks, net of reinsurance, on a monthly pro rata basis, except that in the case of premiums paid more than one (1) year in advance, the premiums shall be earned proportionally with the expiration of exposure, or by such other method which will correlate the expiration of exposure with the premium earned as the Director may prescribe or approve when the company’s exposure to loss does not correlate with the passage of time.

b) In addition to the contingency reserve, a municipal bond insurer shall compute and maintain reserves for losses and loss adjustment expenses for claims reported and unpaid determined by use of the case basis method or, when the requirements of Section 378 of the Insurance Code will not be met by the case basis method, such other methods as the Director may prescribe or approve which produces the reserves required by Section 378 of the Insurance Code. (Ill. Rev. Stat. 1985, ch. 73, par. 990).

1) Except as otherwise permitted by the Director, no deduction shall be made for anticipated salvage in computing case basis loss reserves unless such salvage is held by or under the control of the insurer and would qualify as an admitted asset under Section 3.1 of the Illinois Insurance Code (Ill. Rev. Stat. 1985, ch. 73, par. 615.1) or unless such salvage constitutes or is secured by a clean, irrevocable letter of credit.

2) A deduction from reserves for losses shall be allowed for the time value of money by application of a discount rate equal to the average rate of return on the admitted assets of the insurer as of the date of the computation of any such reserve. The discount rate shall be adjusted annually on the last day of each year. No deduction from reserves for losses shall be otherwise allowed for the time value of money unless the insurer can satisfy the Director that bonds, notes and other fixed income investment, as authorized under Sections 124 through 125.24a of the Illinois Insurance Code (Ill. Rev. Stat. 1985, ch. 73, pars. 736 through 737.24a inclusive) sufficient to meet obligations for insured unpaid principal and insured unpaid interest calculated to the redemption of the defaulted issue have been deposited in trust for the purpose of meeting such obligations.

3) If the insured principal and interest on a defaulted issue of bonds due and payable over the period of the next three years exceeds ten percent (10%) of the insurer’s policyholders’ surplus plus its contingency reserve, and such default is a default in payment of sums due, the insurer’s reserve shall be supported by a report from a qualified independent source if the reserve is set up for less than the entire unpaid insured principal and unpaid insured interest to redemption.

c) Treatment of Contingency Reserve on Financial Statements

1) The contingency reserve required by subSection 205.40(b) shall be reported as a separate liability in all statutory financial statements. Any increase or decrease in the contingency reserve for the period shall be reported as a direct adjustment to surplus and shown separately in the Capital and Surplus Account of the Underwriting and Investment Exhibit.

2) For purposes of determining whether a dividend or distribution is extraordinary pursuant to Section 131.20    of the Illinois Insurance Code (Ill. Rev. Stat. 1985, ch. 73, par. 743.20(3)), the change in the contingency reserve shall be included as net income (loss) for the period.

Section 205.70            Reinsurance

a) An insurer qualified to write municipal bond insurance may, by contract, reinsure any such insurance it transacts, provided that credit in accounting and financial statements for reinsurance ceded shall be allowed only if the reinsurer is either:

1) An insurer, authorized in Illinois to write the kinds of business defined in Class 2(g) and 2(h) of Section 4 of the Illinois Insurance Code (Ill. Rev. Stat. 1985, ch. 73, par. 616), which has policyholders’ surplus of not less than twenty-five million dollars ($25,000,000), or

2) An insurer that meets the surplus requirements of subSection 205.70(a)(1) hereof, but is not licensed in Illinois; however, such credit shall be allowed only to the extent and under the conditions specified in Section 173.1(2) of the Illinois Insurance Code (Ill Rev. Stat. 1985, ch. 73, par. 785.1(2)). The security requirements of such Sections shall also cover any contingency reserve established by such reinsurer.

b) The contingency reserve required by subSection 205.40(b) shall not be reduced by reason of any risk ceded unless the risk is ceded to a reinsurer described in subSection (a)(1) or (2) hereof and provided such reinsurer establishes the reserves required in subSections 205.40(b) and 205.60   with respect to the ceded portion of the risk.

c)

1) A municipal bond insurer may not reinsure such insurance with affiliated companies unless the limitations of Section 205.50            are measured against the consolidated policyholders’ surplus of such affiliated insurers.

2) SubSection 205.70(a) hereof does not diminish the applicability of Section 173.1 of the Illinois Insurance Code (Ill Rev. Stat. 1985, ch. 73, par. 785.1).

Section 205.80            Collateral Security

An insurer transacting municipal bond insurance as defined in Section 205.30        insurer may, for the purposes of Section 205.50, treat the amount of a clean, irrevocable letter of credit or other assets which would qualify under Section 173.1(2) of the Illinois Insurance Code (Ill. Rev. Stat. 1985, ch.73, par. 171.1(2)) deposited with it or held in trust to secure payment of the insured principal and interest, as a reduction in the amount of exposure insured.

Section 205.90            Applicability of Other Laws

a) All the applicable provisions of the Illinois Insurance Code and the Illinois Insurance Regulations of the DePartment of Insurance and of other statutes and regulations of this State, except as the same may be in conflict herewith, shall apply to the operation and conduct of business described herein as municipal bond insurance.

b) This Part does not prohibit any surety or municipal bond insurer from directly obtaining or receiving any form of collateral as security for its protection.

TITLE 50: INSURANCE

CHAPTER I: DEPARTMENT OF FINANCIAL AND PROFESSIONAL REGULATION

SUBCHAPTER c: DOMESTIC MUTUAL COMPANIES

PART 301 ACCUMULATION OF GUARANTY FUND OR GUARANTY CAPITAL – REPORTING AND ACCOUNTING OF SUCH INDEBTEDNESS

——————————————————————————–

The General Assembly’s Illinois Administrative Code database includes only those rulemakings that have been permanently adopted. This menu will point out the Sections on which an emergency rule (valid for a maximum of 150      days, usually until replaced by a permanent rulemaking) exists. The emergency rulemaking is linked through the notation that follows the Section heading in the menu.

Section 301.10            Authority

Section 301.20            Application and Effective Date

Section 301.30            Approval of Certificate Form by Director

Section 301.40            Execution of Agreement

Section 301.50            Consideration

Section 301.60            Reporting and Accounting of Indebtedness

Section 301.70            Retirement of Guaranty Fund and Guaranty Capital and Payment of Interest

AUTHORITY: Implementing Section 56 and authorized by Section 401 of the Illinois Insurance Code [215 ILCS 5/56 and 401].

SOURCE: Filed September 27, 1971, effective Oct. 1, 1971; codified at 7 Ill. Reg. 6488; amended at 13 Ill. Reg. 14042, effective September 11, 1989; amended at 23 Ill. Reg. 3699, effective March 10, 1999; amended at 29 Ill. Reg. 14935, effective September 20, 2005.

Section 301.10            Authority

This Part is promulgated by the Director of the DePartment of Financial and Professional Regulation-Division of Insurance (Director) under Section 401(a) of the Illinois Insurance Code which empowers the Director to make reasonable rules and regulations as may be necessary for making effective the insurance laws of this State. It is the purpose of this Part to implement Section 56 of the Illinois Insurance Code.

(Source: Amended at 29 Ill. Reg. 14935, effective September 20, 2005)

Section 301.20            Application and Effective Date

This Part applies to all companies organized under Article III of the Illinois Insurance Code and is applicable to any and all debts other than shown as a legal liability of the company. It shall become effective on October 1, 1971.

(Source: Amended at 29 Ill. Reg. 14935, effective September 20, 2005)

Section 301.30            Approval of Certificate Form by Director

Guaranty Fund or Guaranty Capital certificates issued pursuant to Section 56 of the Illinois Insurance Code [215 ILCS 5/56] shall be submitted, in duplicate, for the approval of the Illinois Director of Insurance (Director) prior to being issued by the company. The certificate must state that, all payments of principal and/or interest must be approved by the Director; and that the obligation of the company under such certificate may not be offset or be subject to recoupment with respect to any liability or obligation owed to the company; and that no agreement or interest securing such certificate, whether existing on the date of such certificate or subsequently entered into, applies to the obligation under such certificate.

(Source: Amended at 23 Ill. Reg. 3699, effective March 10, 1999)

Section 301.40            Execution of Agreement

After submission of the documents specified in Section 301.30       and approval by the Director, the proposed agreement may be executed by the company.

Section 301.50            Consideration

The consideration tendered to the company in exchange for the agreement shall be lawful money.

Section 301.60            Reporting and Accounting of Indebtedness

a) The Director shall be notified immediately, in writing, upon the execution of any such certificate, as to the amount thereof and to whom payable.

b) The company shall furnish a copy of the deposit slip evidencing that the funds derived from the execution of such certificate have been deposited to the company’s account.

c) All outstanding guaranty funds or guaranty capital and interest accrued thereon shall be reported separately in the Annual Statement on Page 3 and in any other financial statements of the company as special surplus funds.

d) The issuance and repayment of the guaranty fund or guaranty capital, as well as the payment of the interest thereon, shall be reflected as direct debits or credits to the Capital and Surplus Account of the company’s financial statement.

e) The interest expense incurred on the guaranty fund or guaranty capital during the current period shall be reflected as a deduction from income on the Statement of Income/Summary of Operations of the company’s financial statement.

(Source: Amended at 23 Ill. Reg. 3699, effective March 10, 1999)

Section 301.70            Retirement of Guaranty Fund and Guaranty Capital and Payment of Interest

A company may only retire guaranty funds and guaranty capital and make payment of interest on any indebtedness as provided under Section 56 of the Illinois Insurance Code [215 ILCS 5/56]. No payment shall be authorized by the Director unless:

a) The company’s surplus as regards policyholders is reasonable in relation to its outstanding liabilities and adequate for its financial needs (the determination of the reasonableness and adequacy of surplus shall include consideration of the following factors: premium volume as referenced in Sections 144 and 244.1 of the Illinois Insurance Code (Code) [215 ILCS 5/144 and 244.1]; lines of business and additional authority as referenced in Sections 4, 11, 39, and 245.23 of the Code [215 ILCS 5/4, 11, 39, 245.23] and Section 2-1 of the Health Maintenance Organization Act [215 ILCS 125/2-1]; reserves, company size and operational history as referenced in Section 113 of the Code [215 ILCS 5/113]), and

b) Such payment will not reduce the company’s surplus as regards policyholders to less than that currently required under Section 43 of the Illinois Insurance Code [215 ILCS 5/43], and

c) Such payment is consistent with the terms of the certificate approved pursuant to Section 301.30         of this Part.

(Source: Amended at 29 Ill. Reg. 14935, effective September 20, 2005)

TITLE 50: INSURANCE

CHAPTER I: DEPARTMENT OF INSURANCE

SUBCHAPTER d: RECIPROCALS

PART 401 ACCUMULATION OF GUARANTY FUND OR GUARANTY CAPITAL – REPORTING AND ACCOUNTING OF SUCH INDEBTEDNESS

——————————————————————————–

The General Assembly’s Illinois Administrative Code database includes only those rulemakings that have been permanently adopted. This menu will point out the Sections on which an emergency rule (valid for a maximum of 150      days, usually until replaced by a permanent rulemaking) exists. The emergency rulemaking is linked through the notation that follows the Section heading in the menu.

Section 401.10            Authority

Section 401.20            Application and Effective Date

Section 401.30            Approval of Certificate Form by Director

Section 401.40            Execution of Agreement

Section 401.50            Consideration

Section 401.60            Reporting and Accounting of Indebtedness

Section 401.70            Retirement of Guaranty Fund and Guaranty Capital and Payment of Interest

AUTHORITY: Implementing Section 76 and authorized by Section 401(a) of the Illinois Insurance Code (Ill. Rev. Stat. 1987, ch. 73, pars. 688 and 1013(a)).

SOURCE: Filed September 27, 1971, effective October 1, 1971; codified at 6 Ill. Reg. 12454; amended at 13 Ill. Reg. 14048, effective September 11, 1989.

Section 401.10            Authority

This Part is promulgated by the Director of Insurance under SubSection (a) of Section 401 of the Illinois Insurance Code which empowers the Director to make reasonable rules and regulations as may be necessary for making effective the insurance laws of this State. It is the purpose of this Rule to implement Section 76 of the Illinois Insurance Code.

Section 401.20            Application and Effective Date

This Rule applies to all companies organized under Article IV of the Illinois Insurance Code and is applicable to any and all debts other than shown as a legal liability of the company. It shall become effective on October 1, 1971.

Section 401.30            Approval of Certificate Form by Director

Guaranty Fund or Guaranty Capital certificates issued pursuant to Section 76 of the Illinois Insurance Code (Ill. Rev. Stat. 1987, ch. 73 par. 688) shall be submitted, in duplicate, for the Director’s approval prior to being issued by the company. The certificate must state that all payments of principal and/or interest must be approved by the Director of Insurance. It also must state that neither principal nor interest may be repaid unless after such payment, surplus as regards policyholders is equal to or greater than surplus as regards policyholders immediately after the issuance of the guaranty fund or guaranty capital certificates.

(Source: Amended at 13 Ill. Reg. 14048, effective September 11, 1989)

Section 401.40            Execution of Agreement

After submission of the documents specified in Section 401.30       and approval by the Director, the proposed agreement may be executed by the company.

Section 401.50            Consideration

The consideration tendered to the company in exchange for the agreement shall be lawful money.

Section 401.60            Reporting and Accounting of Indebtedness

a) The Director shall be notified immediately, in writing, upon the execution of any such certificate, as to the amount thereof and to whom payable.

b) The company shall furnish a copy of the deposit slip evidencing that the funds derived from the execution of such certificate have been deposited into the company’s account.

c) All outstanding guaranty funds or guaranty capital and interest accrued thereon shall be reported separately in the Annual Statement on Page 3 and in any other financial statements of the company as special surplus funds.

d) The issuance and repayment of the guaranty fund or guaranty capital, as well as the payment of the interest thereon, shall be reflected as direct debits or credits to the Capital and Surplus Account of the company’s financial statement.

e) The interest expense incurred on the guaranty fund or guaranty capital during the current period shall be reflected on the Statement of Income of the company’s financial statement.

(Source: Amended at 13 Ill. Reg. 14048, effective September 11, 1989)

Section 401.70            Retirement of Guaranty Fund and Guaranty Capital and Payment of Interest

a) A company may only retire guaranty funds and guaranty capital and make payment of interest on any indebtedness as provided under Section 76 of the Illinois Insurance Code. No payment shall be authorized by the Director unless:

1) The company’s surplus as regards policyholders is reasonable in relation to its outstanding liabilities and adequate for its financial needs [the determination of the reasonableness and adequacy of surplus shall include consideration of the following factors: premium volume as referenced in Sections 144 and 244.1 of the Illinois Insurance Code (Code) (Ill. Rev. Stat. 1987, ch. 73, pars. 756 and 856.1); lines of business and additional authority as referenced in Sections 4, 11, 39, 245.23 of the Code (Ill. Rev. Stat. 1987, ch. 73, pars. 616, 623, 651, 857.23) and Section 2-1 of the Health Maintenance Organization Act (Ill. Rev. Stat. 1987, ch. 111½, par. 1403), reserves, company size and operational history as referenced in Section 113 of the Code (Ill. Rev. Stat. 1987, ch. 73, par. 725)], and

2) Such payment will not reduce the company’s surplus as regards policyholders to less than that currently required under Section 66 of the Illinois Insurance Code (Ill. Rev. Stat. 1987, ch. 73, par. 678), and

3) Such payment is consistent with the terms of the certificate pursuant to Section 401.30 of this Part.

b) Any payment which reduces the company’s surplus as regards policyholders beyond the amount permitted under Section 401.70            hereof must be immediately returned in lawful money to the company.

(Source: Amended at 13 Ill. Reg. 14048, effective September 11, 1989)

TITLE 50: INSURANCE

CHAPTER I: DEPARTMENT OF INSURANCE

SUBCHAPTER f: INSURANCE EXCHANGE

PART 551 ILLINOIS INSURANCE EXCHANGE ANNUAL STATEMENT

——————————————————————————–

The General Assembly’s Illinois Administrative Code database includes only those rulemakings that have been permanently adopted. This menu will point out the Sections on which an emergency rule (valid for a maximum of 150      days, usually until replaced by a permanent rulemaking) exists. The emergency rulemaking is linked through the notation that follows the Section heading in the menu.

Section 551.10            Authority

Section 551.20            Purpose and Scope

Section 551.30            Definitions

Section 551.40            Contents of the Illinois Insurance Exchange Annual Statement

Section 551.50            Annual Financial Report on each syndicate

Section 551.60            Severability Provision

AUTHORITY: Implementing Sections 107.12, 107.13, 107.20       and 107.21 and authorized by Section 401(a) of the Illinois Insurance Code (Ill. Rev. Stat. 1981, ch. 73, pars. 719.12, 719.13, 719.20, 719.21 and 1013).

SOURCE: Adopted at 6 Ill. Reg. 2132, effective February 2, 1982; codified at 6 Ill. Reg. 12454.

Section 551.10            Authority

This Rule is promulgated by the Director of Insurance pursuant to Sections 107.12, 107.13, 107.20, 107.21 and 401 of the Illinois Insurance Code (Ill. Rev. Stat. 1981, ch. 73, pars. 719.12, 719.13, 719.20, 719.21 and 1013.)

Section 551.20            Purpose and Scope

The purpose of this Rule is to specify the format of an Annual Statement required to be filed with the Director of Insurance concerning the activities of the Illinois Insurance Exchange.

Section 551.30            Definitions

In addition to the definitions of Section 107.15 of the Illinois Insurance Code (Ill. Rev. Stat. 1981, ch. 73, par. 719.15), the following definitions shall apply to this Rule:

“Board of Trustees” means the duly elected Trustees of the Exchange pursuant to Section 107.17 of the Illinois Insurance Code.

“Central Processing Facility” means the recordkeeping facility formed pursuant to Section 107.21 of the Illinois Insurance Code.

“Exchange” means the Illinois Insurance Exchange, formed pursuant to Article V 1/2 of the Illinois Insurance Code.

“Rules of the Exchange” and “By-laws” means the body of the Rules or By-laws adopted by the Board of Trustees, as amended, pursuant to Sections 107.06, 107.07, 107.10, 107.19, 107.21, 107.22 and 107.24 of the Illinois Insurance Code.

“Security Association” means the Illinois Insurance Exchange Immediate Access Security Association formed pursuant to Section 107.26 of the Illinois Insurance Code.

Section 551.40            Contents of the Illinois Insurance Exchange Annual Statement

a) The Annual Statement from the Exchange to the Director of Insurance shall include the following:

1) Title page containing the following:

A) Name

B) “As of Date” of the annual statement.

C) List of Officers.

D) List of Directors.

E) Signatures of three officers in the format of the jurat of the National Association of Insurance Commissioners (N.A.I.C.) annual statement for fire and casualty insurance companies. Appropriate changes may be made to the jurat.

2) Annual Financial Report on the Central Processing Facility.

A) Balance sheet reporting assets, liabilities, capital and surplus.

B) Statement of gain or loss from operations.

C) Statement of changes in financial position.

D) Statement of changes in capital and surplus.

E) Notes to the above financial statements as required by generally accepted accounting principles, including a description of the accounting method used in this report.

3) Annual Financial Report on the Security Association in the form of item 2) of this Section.

4) Annual Financial Report on each syndicate as described in Section 551.50         of this Rule.

5) Copies of amendments to the Articles of Incorporation, By-laws and Rules of the Exchange made during the year of this statement.

b) Two manually signed and notarized copies of the Annual Statement shall be filed with the Director on or before April 1 of each year for the year ended December 31 immediately preceding.

c) Any changes, additional notes or qualifications made by independent auditors to the financial data filed pursuant to the above shall be filed with the Director within five days after receipt by the Exchange.

Section 551.50            Annual Financial Report on each syndicate

The annual financial report on each syndicate shall include the following:

a) N.A.I.C. Fire and Casualty annual statement pages representing the following:

1) Schedule of assets, liabilities, surplus and other funds.

2) Statement of income and capital and surplus account.

3) Statement of changes in financial position.

4) Schedule of premiums written, earned, unearned and in force by annual statement line of business.

5) Schedules of losses paid and incurred and loss adjustment expense outstanding by annual statement line of business.

6) Five-year historical data.

7) Loss development schedules.

8) Exhibit of premiums and losses allocated by states and territories.

9) All additional schedules filed annually with the Exchange pursuant to Section 107.13a of the Illinois Insurance Code.

b) Notes to the above financial statements as required by generally accepted accounting principles, including a description of the accounting method used in this report.

Section 551.60            Severability Provision

If any Section or portion of a Section of this Rule or the applicability thereof to any person or circumstances is held invalid in a court, the remainder of the Rule or the applicability of such provision to other persons or circumstances shall not be affected thereby.

TITLE 50: INSURANCE

CHAPTER I: DEPARTMENT OF INSURANCE

SUBCHAPTER f: INSURANCE EXCHANGE/GROUP WORKERS’ COMPENSATION POOLS; POOLING AND INSOLVENCY FUND

PART 575 WORKERS’ COMPENSATION POOLS

——————————————————————————–

The General Assembly’s Illinois Administrative Code database includes only those rulemakings that have been permanently adopted. This menu will point out the Sections on which an emergency rule (valid for a maximum of 150      days, usually until replaced by a permanent rulemaking) exists. The emergency rulemaking is linked through the notation that follows the Section heading in the menu.

Section 575.100          Applicability

Section 575.105 Purpose and Scope

Section 575.110          Definitions

Section 575.112 Evaluation of Membership Scope

Section 575.115 Noncompliance

Section 575.125 Non-homogeneous Pools and Members

Section 575.400          Pool Membership and Homogeneity

Section 575.EXHIBIT A Requirements for Certification of Homogeneity and Certification Format

AUTHORITY: Implementing Article V¾ [215 ILCS 5/Art. V¾] and authorized by Section 107a.09 and 401 of the Illinois Insurance Code [215 ILCS 5/107a.09 and 401].

SOURCE: Adopted at 34 Ill. Reg. 151, effective December 21, 2009.

Section 575.100          Applicability

Every qualified group workers’ compensation pool, as defined in Section 107a.05 of the Illinois Insurance Code, must have homogeneous risk characteristics as provided in Section 107a.08 of the Code and shall be subject to the requirements of this Part.

Section 575.105 Purpose and Scope

The purpose of this Part is to establish standards to ensure that members of a group workers’ compensation pool possess homogeneous risk characteristics.

Section 575.110          Definitions

Administrator shall mean the Service Company that has been issued a license under Section 107a.09 of the Code and has contracted with a group workers’ compensation pool to manage the activities of the pool, or, if the pool is self-administered, administrator shall mean the pool officers or employees designated by the pool to provide this service.

Basic Manual means the Basic Manual for Workers Compensation and Employers Liability Insurance (10920      W. Glennon Dr., Lakewood, Colorado 80226, 2001 edition, as supplement through October 26, 2006) of the National Council on Compensation Insurance, Incorporated (NCCI) that is used to classify employers by assigning their payroll to one or more NCCI codes.

Code means the Illinois Insurance Code [215 ILCS 5].

DePartment means the DePartment of Insurance.

Director means the Director of the Illinois DePartment of Insurance.

Homogeneous Risk Characteristics means similar qualities or dispositions that impact the likelihood of incurring a financial loss from workers’ compensation and employers’ liability exposures. The following are characteristics identifying some, but not all, elements of homogeneity:

Inherent means existing in the risk as a natural and inseparable quality or characteristic.

Loss means the amount that any person providing workers’ compensation coverage has a legal obligation to pay.

Loss Frequency means the ratio of the total number of claims divided by the number of units of exposure, such as the number of claims divided by the number of employees exposed to injury, or the number of claims divided by the employees’ total payroll.

Loss Severity, which is also known as the average loss amount, means the ratio of the total costs for all claims divided by the total number of claims.

Occupational Framework means factors describing a member’s business operations, including but not limited to industries, locations, production and services processes, materials handled, machinery and equipment used, tasks performed by employees, and exposure of employees to injury or disease.

Membership Scope means the type of businesses or employers eligible to join a pool. Membership scope will be evaluated by the Director pursuant to Section 575.112 of this Part.

Member means an employer who pools the workers’ compensation and employer’s liability exposures imposed on the employer pursuant to the Workers’ Compensation Act, or the Workers’ Occupational Diseases Act [820   ILCS 305 and 820           ILCS 310] with other employers that either exhibit homogeneous risk characteristics or are members of a bona fide professional, commercial, industrial or trade association that exhibits homogeneous risk characteristics.

NCCI means the National Council on Compensation Insurance, Incorporated.

NCCI Class Code means one of the four digit numbers assigned according to the Basic Manual.

Person means any individual, entity, corporation, Partnership, association, group workers’ compensation pool or limited liability company.

Pool has the same meaning as qualified group workers’ compensation pool defined in Section 107a.05 of the Code.

Trustee means, for purposes of this Part, any member of the pool’s Board of Trustees, if the pool is a trust, or any member of the pool’s Board of Directors, if the pool is any other type of entity.

Section 575.112 Evaluation of Membership Scope

The Director shall evaluate the membership scope of a pool based on a description of the types of employers eligible for membership in the pool along with the list of NCCI classifications into which the member payrolls can be primarily classified. Primarily classified means that no more than 10% of a member’s payroll would be classified in a classification code that is not included in the membership scope using the classifications in the NCCI basic manual. The membership scope may also include businesses that have homogeneous risk characteristics and will involve business activities that are common groupings or common business combinations. Example of acceptable scopes (common groupings) would be pools of restaurants, offices, trucking companies, and nursing homes. Examples of acceptable scopes (common business combinations) would be moving and storage companies, gas stations and convenience stores, and residential and commercial construction contractors. An example of an unacceptable scope would be the members of a chamber of commerce of a city.

Section 575.115 Noncompliance

Failure of a pool to meet the requirements of this Part shall subject the pool to penalty provisions of Section 403A of the Code.

Section 575.125 Non-homogeneous Pools and Members

Pursuant to Section 107a.15 of the Code, if the Director determines that a pool does not exhibit homogeneous risk characteristics, the Director shall require the pool to eliminate the condition within 90        days after certified notice has been given to the pool.

Section 575.400          Pool Membership and Homogeneity

For the initial certification, March 1, 2010, and annually each March 1 thereafter, every pool authorized by the Director that is issuing new or renewal pooling agreements shall file with the Director certifications signed by each trustee of the pool that certify the pool, for the prior calendar year, is in compliance with Section107a.08 of the Code and this Part.

Section 575.EXHIBIT A Requirements for Certification of Homogeneity and Certification Format

Certification by the Trustees

a) Each pool must certify its compliance with Section 107a.08(a) and (b) of the Illinois Insurance Code [215 ILCS 5/107a.08(a) and (b)] to the Director by having each pool trustee file the prescribed certification form below by March 1 of each year to indicate that the pool members possess homogeneous risk characteristics. The Director may require certifications more frequently than on an annual basis if deemed necessary.

b) The Trustees shall each certify that:

1) The trustee has requested the administrator to provide all relevant information regarding the homogeneous risk characteristics of the members.

2) The trustee has reviewed all relevant information regarding the homogeneous risk characteristics of the members as well as the guidelines relating to homogeneity in Section 107a.08 of the Code, in addition to those defined in Section 575.110          of this Part.

3) Based on the trustee’s knowledge and review, the trustee shall verify that the certification is true, complete and not misleading.

4) Based on the trustee’s knowledge, the certification presents in all material respects that the members exhibit homogeneous risk characteristics under the membership scope adopted by the pool.

5) The trustee understands his or her legal responsibility to ensure under Article V¾ of the Code that the members exhibit homogeneous risk characteristics.

c) The certification must be accompanied by a list of members as of the end of the previous year that includes for each member a description of business activities, list of NCCI class codes used to classify the member’s payroll, gross annual payroll by class code, number of employees, and identification of new members added during the previous year.

d) For the initial certification, March 1, 2010, an affidavit describing the membership scope of the pool consistent with the standards prescribed in this Part must accompany the certification. Supporting documentation must be submitted that demonstrates that the membership scope possesses homogeneous risk characteristics.

STATE OF ILLINOIS

CERTIFICATION OF HOMOGENEITY

I,

(Name of Trustee)

, a Trustee or Director of

(Name of Workers’ Compensation

Pool)

present this Certification to the Director of Insurance of the State of Illinois

for the period of January 1 through December 31,

. I certify that:

(1) I have requested the administrator provide all relevant information regarding the homogeneous risk characteristics of the members.

(2) I have reviewed all relevant information regarding the homogeneous risk characteristics of the members, as well as the guidelines relating to homogeneity in Section 107a.08 of the Illinois Insurance Code [215 ILCS 5/107a.08] and 50 Ill. Adm. Code 575.

(3) Based on my knowledge and review of (2) above, I verify that the certification is true, complete and not misleading.

(4) I understand the legal responsibility I have in respect to ensuring that the members exhibit homogeneous risk characteristics.

(5) I certify that the members do exhibit or do not exhibit (Please check one) homogeneous risk characteristics relative to the membership scope adopted by the pool.

Signature

Title

Printed Name

Date

Street Address

City

State

ZIP Code

Notary Public

(Seal)

Date

TITLE 50: INSURANCE

CHAPTER I: DEPARTMENT OF INSURANCE

SUBCHAPTER g: FOREIGN OR ALIEN COMPANIES

PART 601 FOREIGN AND ALIEN INSURER ANNUAL AUDITED FINANCIAL REPORTS (REPEALED)

——————————————————————————–

The General Assembly’s Illinois Administrative Code database includes only those rulemakings that have been permanently adopted. This menu will point out the Sections on which an emergency rule (valid for a maximum of 150      days, usually until replaced by a permanent rulemaking) exists. The emergency rulemaking is linked through the notation that follows the Section heading in the

SOURCE: Repealed at 19 Ill. Reg. 12248, effective August 14, 1995.

TITLE 50: INSURANCE

CHAPTER I: DEPARTMENT OF INSURANCE

SUBCHAPTER i: ADVISORY ORGANIZATIONS

PART 751 PREAMBLE AND DEFINITIONS

——————————————————————————–

The General Assembly’s Illinois Administrative Code database includes only those rulemakings that have been permanently adopted. This menu will point out the Sections on which an emergency rule (valid for a maximum of 150      days, usually until replaced by a permanent rulemaking) exists. The emergency rulemaking is linked through the notation that follows the Section heading in the menu.

Section 751.10            Preamble

Section 751.20            Definitions

AUTHORITY: Implementing Article VII and authorized by Section 401 of the Illinois Insurance Code (Ill. Rev. Stat. 1979, ch. 73, pars. 735 et seq. and 1013).

SOURCE: Filed November 3, 1972, effective November 15, 1972; codified at 6 Ill. Reg. 12457.

Section 751.10            Preamble

The purpose of the regulations under this Part is to interpret and effect the purpose and provisions of the new Article VII-A and to set forth the responsibilities of advisory organizations and companies in the compilation and distribution of insurance statistics and other ancillary or related activities.

Section 751.20            Definitions

a) The term “compiles insurance statistics” as used in Article VII-A includes but is not limited to:

1) Classifying risks for statistical purposes;

2) Obtaining statistical data from members, subscribers, service purchasers or any source;

3) Combining, collating, comparing and analyzing statistical data;

4) Preparing pure premiums, loss ratios, hazard analysis, risk analysis, classifications of municipal fire defenses and other information relating to past and prospective loss experience.

b) The term “prepares insurance policies, bond forms, and underwriting rules” as used in Article VII-A, includes but is not limited to such functions as:

1) Consulting with members, subscribers and service purchasers relative to the preparation, use and application of policy forms and endorsements;

2) Obtaining information from members, subscribers and service purchasers relative to the preparation of underwriting rule manuals, statistical plans, classifications and other schedules.

c) The term “activities of advisory organization” as used in Article VII-A includes, in addition to primary functions, other permitted related functions such as:

1) Conducting research in regard to matters that could or reasonably might affect the proper use of historical statistics in determining future courses of action by members or subscribers;

2) Conducting inspections and other fact gathering activities that would permit the application of statistics to individual risks and Particular geographical areas;

3) Conducting audit services for members, subscribers and service purchasers on the basis of their specific instructions;

4) Consultation with insureds, or prospective insureds of members, subscribers and service purchasers relative to coverages, construction, fire protection and other matters relating to fire hazards;

5) Consultation with municipal officials regarding municipal fire protection as it would affect members, subscribers and service purchasers;

6) Assisting members and subscribers and service purchasers in the application of statistical information, provided, however, that such services are not contingent upon the submission of relevant information to the advisory organization.

d) The term “furnishes that which it compiles and prepares to insurance companies who are its only members and subscribers” as used in Article VII-A includes but is not limited to such functions as:

1) Publishing and otherwise distributing statistical data and information compiled and prepared through its primary functions and its permitted activities, for use by members, subscribers and service purchasers, and others, including municipalities;

2) Providing electronic data processing or other related assistance to members, subscribers and service purchasers for the compilation, collation, comparison and analyzation of statistical data; and

3) Acting as filing and/or statistical agent relative to any material which it prepares, publishes or otherwise distributes to members, subscribers, service purchasers or others, and which may be required to be filed by the Director.

e) The term “any group, association or organization of admitted companies which engages in joint underwriting or joint reinsurance” as used in Article VII-A includes a joint underwriting or joint reinsurance arrangement or transaction by two or more admitted companies with respect to any single risk, regardless or whether such companies are or are not members of a formal group, association or organization.

f) The term “allow admitted companies who are not members or subscribers to the organization to purchase the same services of such organization as are made available to members and subscribers without discrimination as respects costs to members and subscribers” as used in Article VII-A, requires advisory organizations to sell their services to non-member, non-subscriber admitted companies (service purchasers) at the same cost charged members and subscribers.

g) The term “permit any admitted company to become a member of or a subscriber to such organization at a reasonable cost and without discrimination, or to withdraw therefrom” as used in Article VII-A, requires advisory organizations to permit admitted companies to become members or subscribers at a reasonable cost based upon a schedule or formula that would not affect a company large or small unfairly.

h) The term “subject to the provisions of this Article two or more companies are authorized to act in concert with each other and with others with respect to any activities of an advisory organization as authorized in the Article” taken in conjunction with the term, Any group, association or organization of admitted companies which engages in joint underwriting or joint reinsurance through any group, association or organizations or by standing agreement among the members of such organization, which has complied with the applicable provision of this Article, are authorized to conduct joint reinsurance and joint underwriting activities relative to individual risks in this State as used in Article VII-A authorizes:

1) Two or more companies engaging in authorized joint underwriting and joint reinsurance to act in concert with each other and with others with regard to those activities which are authorized for advisory organizations under Article VII-A and Part 751.

2) The joint underwriting activities of companies engaged in authorized joint underwriting to include in addition, acting in concert with each other and with others with regard to any matters pertaining to the making of rates or rating systems subject to Article VII-A and Section 478.1 of the Act and Part 751 Rules.

3) The joint underwriting activities relative to individual risks in this State to include the making of rates or the establishing of rating systems for improvements on real property.

i) The term “In examining any organization pursuant to this Section“, as used in Section 123A-13 of Article VII-A includes the examination of joint underwriting and joint reinsurance groups, associations or organizations of companies, or any company.

j) The term “admitted company” as used in Article VII-A includes all companies permitted by the laws of this State to write the kinds of insurance to which Article VII-A applies.

k) The term “company or companies”, as used in Article VII-A means an admitted insurance company which may or may not be a member, subscriber or service purchaser of an advisory organization or which may or may not be a Part of any group, association or organization of joint underwriters and joint reinsurers.

TITLE 50: INSURANCE

CHAPTER I: DEPARTMENT OF INSURANCE

SUBCHAPTER i: ADVISORY ORGANIZATIONS

PART 752 LICENSE, DOCUMENTS NECESSARY TO ENGAGE IN ACTIVITIES AND EXAMINATIONS

——————————————————————————–

The General Assembly’s Illinois Administrative Code database includes only those rulemakings that have been permanently adopted. This menu will point out the Sections on which an emergency rule (valid for a maximum of 150      days, usually until replaced by a permanent rulemaking) exists. The emergency rulemaking is linked through the notation that follows the Section heading in the menu.

Section 752.10            License

Section 752.20            Documents-Joint Underwriting and Joint Reinsurance

Section 752.30            Submission of Application

Section 752.40            Examinations

AUTHORITY: Implementing Article VII and authorized by Section 401 of the Illinois Insurance Code (Ill. Rev. Stat. 1979, ch. 73, pars. 735 A-1 et seq. and 1013).

SOURCE: Filed September 9, 1975, effective September 30, 1975; codified at 6 Ill. Reg. 12454.

Section 752.10            License

a) All advisory organizations conducting activities as defined in Article VII-A and in the regulations issued to effect Article VII-A must apply to and be licensed by the DePartment of Insurance no later than December 31, 1972.

b) Licenses issued to advisory organizations by the State of Illinois prior to October 1, 1972 become null and void on January 1, 1973.

c) Every application for a license must include:

1) Copies certified by the custodian of the originals of the following:

A) Constitution;

B) The Articles of Incorporation;

C) Articles of Agreement;

D) Articles of Associations;

E) The by-laws, plan of operations, rules or regulations which govern eligibility for membership and the activities of members relative to their membership.

2) A list of members and subscribers.

3) The name and address of a resident of the state upon whom Notices or Orders of the Director or process may be served.

4) A list of the officers and principal managers.

5) A $25.00     fee payable to the Illinois Director of Insurance.

d) Notification of substantive changes in Item 1), 3), and 4) above must be made within 60           days of the change. The list of members and subscribers should be submitted annually, but addition or deletions to the list should be submitted monthly.

e) Licenses must be renewed annually prior to January 1st each year beginning January 1, 1973, but application for renewal need include only an update of existing document and information previously submitted to the DePartment.

Section 752.20            Documents-Joint Underwriting and Joint Reinsurance

a) All groups, associations or organizations of admitted companies which engage in joint underwriting or joint reinsurance through a formal group, association, or organization must file necessary documents prior to January 1, 1973.

b) Necessary documents of these entities in a) above must include:

1) Copies certified by the custodian of the originals of the following:

A) its Articles of Incorporation, Agreement or Association;

B) its Constitution;

C) by-laws, rules or regulations governing its activities.

2) Its list of members.

3) The name and address of its resident agent for service of process.

c) Joint underwriting or joint reinsurance arrangements or transactions by two or more admitted companies which do not constitute formal group, association, or organization arrangements or transactions do not require filing under this Article of the Insurance Code.

d) Notification of substantive changes in those documents required in b) above must be made within 60  days of the change.

Section 752.30            Submission of Application

All applications, information documents and fees required under 752.10     and 752.20      above must be received by:

Illinois DePartment of Insurance

Rating and Policy Examination Division

Springfield, Illinois 62767

Section 752.40            Examinations

a) Every advisory organization and its members, subscribers and service purchasers; and every formal group, association or organization of admitted companies engaging in joint underwriting and joint reinsurance and their member companies shall maintain reasonable records, of the type and kind reasonably adopted to its method of operation, of its experience, or the experience of its members and of the data, statistics, or information collected or used by it in connection with the activities authorized by the laws and regulations under Article VII-A so that such records will be available at all reasonable times to enable the Director to determine if these entities are complying with the provisions of Article VII-A and Part 751 Rules.

b) The maintenance of these records in the offices of the advisory organization will be sufficient compliance for members, subscribers and service purchasers.

c) These records must be made available for examination or inspection by the Director at any time upon reasonable notice.

d) To assist the Director in gathering information, the Director may designate one or more advisory organizations to gather, compile and file information. This information may be made available, subject to rules adopted by the Director, to companies, advisory organizations, and others.

e) The examination, hearing, violation, suspense or revocation, and penalty provisions of Article VII-A which include Sections 123A-12, 123A-13, 123A-14, and 123A-15 apply to companies as constituting groups, associations or organizations authorized to conduct joint underwriting and joint reinsurance activities and to the formal groups, associations, or organizations themselves.

TITLE 50: INSURANCE

CHAPTER I: DEPARTMENT OF INSURANCE

SUBCHAPTER i: ADVISORY ORGANIZATIONS

PART 754 RULES AND RATE FILINGS

——————————————————————————–

The General Assembly’s Illinois Administrative Code database includes only those rulemakings that have been permanently adopted. This menu will point out the Sections on which an emergency rule (valid for a maximum of 150      days, usually until replaced by a permanent rulemaking) exists. The emergency rulemaking is linked through the notation that follows the Section heading in the menu.

Section 754.10            Companies Must File

Section 754.20            Other Company Filings

Section 754.30            Documentation – Individual Risks

Section 754.40            Submission of Filings

Section 754.50            Prohibited Acts and Practices

Section 754.EXHIBIT A Summary Sheet (Form RF-3)

Section 754.EXHIBIT B Automobile Annual Premium Comparison (Form RF-4)

Section 754.EXHIBIT C Homeowners Annual Premium Comparison (Form RF-5)

AUTHORITY: Implementing Articles VII-A and XXVI of the Illinois Insurance Code (Ill. Rev. Stat. 1989, ch. 73, par. 735A) and authorized by Section 401(a) of the Illinois Insurance Code (Ill. Rev. Stat. 1989, ch. 73, par. 1013).

SOURCE: Filed September 9, 1975, effective September 30, 1975; amended at 4 Ill. Reg. 26, p. 164, effective July 1, 1980; codified at 7 Ill. Reg. 3458; amended at 13 Ill. Reg. 1542, effective January 23, 1989; amended at 14 Ill. Reg. 5793, effective April 6, 1990; amended at 15 Ill. Reg. 4458, effective March 6, 1991.

Section 754.10            Companies Must File

a) All companies are subject to this filing requirement which write any of the following kinds of insurance:

1) Motor Vehicle as used here includes only Private Passenger Automobiles, Taxicabs, and Motorcycles;

2) Homeowners including Mobile Homeowners;

3) Dwelling Fire and Allied Lines;

4) Liquor Liability.

b) The following must be filed:

1) All Companies – All underwriting rule manuals which contain rules for applying rates or rating plans, plans for reporting statistics to statistical agencies, classifications, or other such schedules used in writing the kinds of insurance in Section 754.10    (a)(1)-(a)(4) above; and

2) All Companies – All rates applied to the writing of the kinds of insurance in Sections 754.10    (a)(1)-(a)(4) above.

3) All Advisory Organizations – All underwriting rule manuals which contain rules for applying rates or rating plans, plans for reporting statistics to statistical agencies, classifications, or other such schedules used in writing the kinds of insurance enumerated in Class 2, except paragraphs (a), (d), and (g), and Class 3 of Section 4 of the Code.

c) Filing requirement Section 754.10(b)(1) above can be met by:

1) A company making a direct filing on its own behalf; or

2) A company making a rule reference filing on its own behalf by utilizing its advisory organization’s data relative to Section 754.10(b)(1); or

3) A company authorizing the advisory organization, of which it is a member or subscriber, to make the filing on the company’s behalf.

d) All filings required under Section 754.10(b)(1) must be accompanied by duplicate copies of a rule submission letter which includes:

1) The name of the advisory organization or company making the filing.

2) Identification of the rule with the manual or kind of insurance to which it applies.

3) Notification as to whether the filing is new or supersedes a present filing. Identification of all changes in all superseding filings, as well as identification of all superseded filings is required.

4) The effective date of use.

e) Companies under the same ownership or general management are required to make separate individual filings in Section 754.10(b)(1). Company Group filings are unacceptable.

f) Filing requirement Section 754.10(b)(2) can be met by:

1) A company making a direct filing on its own behalf; and

2) A company filing a Form RF-3 (see Exhibit A attached to this Part) which provides information on changes in rate level based on the distribution of business with respect to the kinds of insurance to which the rate revision applies. If the rate filing is not a change in rate level, no RF-3 Form is required.

3) A company filing Form RF-4 for private passenger automobile or Form RF-5 for homeowners insurance which provide premium comparisons based on the company’s current rate levels for the specified risks.

4) Forms RF-4 and RF-5 must be submitted in duplicate, as described in Exhibits A & B attached to this rule.

5) Any variation in coverage or amounts of insurance should be indicated on Forms RF-4 and RF-5.

6) If a specified form of coverage is not available, please indicate “Not Written.”

g) All filing required under Section 754.10(b)(2) above must be accompanied by duplicate copies of a rate submission letter which includes:

1) The name of the company making the filing.

2) Identification of the kinds of insurance to which the filing applies.

3) Notification of whether the filing is new or supersedes a present filing. Identification of all changes in superseding filings, as well as identification of all superseded filing is required.

4) The effective date of use.

h) A company making a filing under Section 754.10(b)(2) must maintain documentary data for rate changes in its files so that it will be available for review by the DePartment’s Property and Casualty Evaluation Section.

i) Companies under the same ownership or general management are required to make separate individual filings under Section 754.10(b)(2). Company Group filings are unacceptable.

j) A company making a rule reference filing under Section 754.10(c)(2) must file a Form RF-1, in duplicate. (See Exhibit attached to 50            Ill. Adm. Code 753, Filing Policy and Endorsement Forms). The RF-1 Form lists the kinds of business written, the corresponding advisory organization and the rules to which the reference is being made).

k) A company making a filing under Section 754.10(c)(2) or Section 754.10(c)(3) which wants to vary from advisory organization rules must file:

1) Manual size exception pages in duplicate.

2) The manual rule number, which must be the same as the rule number being replaced.

3) The effective date of use.

l) A company making a filing under Section 754.10(c)(2) or (c)(3) above which wants an effective date different from that of the advisory organization’s advisory effective date must file:

1) Manual size exception pages in duplicate establishing an automatic uniform delayed effective date applicable to all future advisory organization rule revisions, or

2) Copies of the Advisory Organization Checking Slip, in duplicate, establishing a special effective date for a Particular advisory organization rule revision.

m) A company authorizing its advisory organization to file on the company’s behalf under Section 754.10(c)(3) must have on file a rule authorization letter, in duplicate, including:

1) The name of their authorized advisory organization.

2) The kinds of insurance for which the filing is being made.

3) Authorization clause or language.

4) Effective date of authorization.

(Source: Amended at 4 Ill. Reg. 26, p. 164, effective July 1, 1980)

Section 754.20            Other Company Filings

a) All companies must file a Form RF-3 for any rate level change affecting any of the kinds of business enumerated in Class 2 and Class 3 of Section 4 of Illinois Insurance Code (The Act) except:

1) Reinsurance;

2) Ocean Marine;

3) Aircraft;

4) Title Insurance;

5) Worker’s Compensation;

6) Accident and Health;

7) Inland Marine risks which by general custom are not written according to manual rates or rating plans.

b) A company must indicate whether the information in the Form RF-3 is “exact” or estimated.

Note: (The purpose of the Form RF-3 is to provide information on changes in rate level based on the company’s premium volume rating system and distribution of business, with respect to the kind of business to which the rate revision applies. The Form RF-3 is attached to the Rule. Supplies of it will not be furnished.)

c) A company must maintain documentary data for rate level changes required by Section 754.20 (a) so that it will be available for review by the DePartment’s Property and Casualty Evaluation Section.

(Source: Amended at 4 Ill. Reg. 26, p. 164, effective July 1, 1980)

Section 754.30            Documentation – Individual Risks

a) A company is not required to file under Section 754.10    or Section 754.20        for individual risks in this State which cannot be rated in the normal course of business rating because of special or unusual characteristics and which must be rated on the basis of underwriting judgement. This procedure does not apply to Worker’s Compensation insurance.

b) A company must maintain documentary information regarding rates determined in Section 754.30(a) for review by the DePartment’s Property and Casualty Evaluation Section.

c) A company is not required to file rates on individual risks in this State where the development of the rate for the individual risk is dependent upon an inspection of improvements on real property and an application of a schedule, the elements of which include loss ratio, hazard analysis, risk analysis and classification of municipal fire defenses.

d) A company must, however, maintain documentary information for the rates in Section 754.30(c) by:

1) Maintaining the information in files and records in its offices which will be available for review by the DePartment’s Property and Casualty Evaluation Section; or

2) Authorizing an advisory organization by use of an individual risk authorization letter to maintain documentary information for all rates in Section 754.30(c) in its files and records which will be available for review by the DePartment’s Property and Casualty Evaluation Section; and

3) Filing duplicate copies of an individual risk authorization letter which must include:

A) the name of their authorized advisory organization;

B) the kind of insurance for which the information will be maintained;

C) authorization clause or language; and

D) effective date of authorization.

Section 754.40            Submission of Filings

a) All rule and rate filings required in Sections 754.10, 754.20         and 754.30      above must be received no later than ten days after their stated effective date or the stated effective date of the rule or rate filing to which the information or authorization relates.

b) All filings required in Sections 754.10, 754.20      and 754.30      above must be received by:

Illinois DePartment of Insurance

Property and Casualty Evaluation Section

Springfield, Illinois 62767

c) All filings required in Sections 754.10, 754.20      and 754.30      above must be accompanied by a self-addressed envelope.

(Source: Amended at 4 Ill. Reg. 26, p. 164, effective July 1, 1980)

Section 754.50            Prohibited Acts and Practices

a) The purpose of Article XXVI of the Illinois Insurance Code, entitled “Unfair Methods of Competition and Unfair and Deceptive Acts and Practices”, according to Section 421 is to regulate trade practices in the business of insurance in accordance with the intent of Congress as expressed in the Act of Congress of March 9, 1945 (Regulation of Insurance 15 U.S.C.A. 1011 et seq.) by prohibiting such trade practices.

b) Violation of the Regulations, which are made by the Director of Insurance in effecting or implementing Article XXVI and Article VII-4, or any Articles of the Illinois Insurance Code are violations of the Articles themselves and subjects the violators to the procedures and penalties provided by these Articles.

c) Acts and practices related to activities authorized or permitted by Article VII-A and this Part 754 Rules, which are prohibited by Article XXVI of the Act as constituting unfair methods of competition or unfair and deceptive acts and practices, whether committed or practiced by a company, an advisory organization or companies constituting a group, association, or organization authorized to engage in joint underwriting or joint reinsurance activities include the following:

1) Two or more companies, unless permitted or authorized by Article VII-A of the Act, this Part 754 Rules or Section 478.1 of the Act, may not act in concert with each other with respect to the compilation of insurance statistics; the preparation of insurance policies, bond forms, and underwriting rules; and the furnishing of that which it compiles and prepares to insurance companies, nor with respect to the activities of making rates.

2) Two or more companies engaged in authorized joint underwriting or joint reinsurance activities, unless permitted or authorized by Article VII-A of the Act, this Part 754 Rules, or Section 478.1 of the Act, may not act in concert with each other with respect to the activities enumerated in Section 754.50(c)(1) nor with respect to the activity of making rates.

3) All companies making rate level changes which require the filing of a Form RF-3 under Section 754.10(f)(2) or 754.20(a) are prohibited from continuing to use the new rate level if the Form RF-3 has not been submitted to the Illinois DePartment of Insurance within ten days after its effective date.

4) All companies making a rule reference filing under Section 754.10(c)(2) are prohibited from continuing to use the rule reference after ten days from its effective date filing unless or until the Form RF-1 required by Section 754.10(j) is submitted to the Illinois DePartment of Insurance.

5) All companies authorizing an advisory organization to make a rule filing on its behalf under Section 754.10(c)(3) are prohibited from continuing to use the rule filings after ten days from its effective date unless or until the required rule authorization letter required by Section 754.10(m) is submitted to the Illinois DePartment of Insurance.

6) Groups, associations, organizations of companies authorized to engage in joint underwriting and joint reinsurance activities are prohibited from establishing rules which in any way unreasonably inhibit a company from individually underwriting any risks.

7) All companies, advisory organizations, and groups, associations, or organizations of companies authorized to engage in joint underwriting activities are prohibited from practicing or sanctioning any plan or act of boycott or intimidation tending to result in the unreasonable restraint of trade or in a monopoly in the business of insurance.

8) All companies, advisory organizations, and group, association, or organization or companies authorized to engage in joint underwriting activities are prohibited from willfully withholding information from, or knowingly give false information or misleading information to the Director or to any organization authorized by him to receive information relative to underwriting rules, rating systems or rate filings required by Article VII-A of the Act or this Part 754 rules.

9) All companies required by Section 754.30(d)(2) above to file an individual risk authorization letter are prohibited from using the rate developed unless or until the individual risk authorization letter has been submitted to the Illinois DePartment of Insurance.

(Source: Amended at 4 Ill. Reg. 26, p. 164, effective July 1, 1980)

Section 754.EXHIBIT A Summary Sheet (Form RF-3)

FORM (RF-3)

SUMMARY SHEET

Change in Company’s premium or rate level produced by rate revision

effective_______________________.

(1)

(2)

(3)

Coverage

Annual Premium

Volume (Illinois) *

Percent

Change (+or-) **

1.

Automobile Liability Private

Passenger

Commercial

2

Automobile Physical Damage

Private Passenger

Commercial

3.

Liability Other Than Auto

4.

Burglary and Theft

5.

Glass

6.

Fidelity

7.

Surety

8.

Boiler and Machinery

9.

Fire

10.

Extended Coverage

11.

Inland Marine

12.

Homeowners

13.

Commercial Multi-Peril

14.

Crop Hail

15.

Other

Life of Insurance

Does filing only apply to certain territory (territories) or certain

Classes? If so, specify:

Brief description of filing. (If filing follows rates of an advisory

Organization, specify organization):

*Adjusted to reflect all prior rate changes.

**Change in Company’s premium level which will result from application of new rates.

Name of Company

Official – Title

Section 754.EXHIBIT B Automobile Annual Premium Comparison (Form RF-4)

AUTOMOBILE ANNUAL PREMIUM COMPARISON

COVERAGE

Liability – $20/40,000            Bodily Injury

Physical Damage –

$100   Deductible Comprehensive

$15,000          Property Damage

$1,000            Medical Payments

$250   Deductible Collision

$20/40,000     Uninsured Motorists

CAR

Ford Taurus L 4 Door (Current Model Year)

DRIVERS

#1

36-year-old married principal driver, no accidents or traffic violations in last five years, driving eight miles each way to and from work, 11,000       miles annually.

#2

16-year-old single male, occasional operator (less than 25% usage), no accidents or traffic violations in last five years, driving eight miles each way to and from work, 11,000          miles annually.

#3

20-year-old single female, principal operator (more than 50% usage), no accidents or traffic violations in last five years, driving eight miles each way to and from work, 11,000          miles annually.

#4

20-year-old single male, principal operator (more than 50% usage), no accidents or traffic violations in last five years, driving eight miles each way to and from work, 11,000          miles annually.

Driver #1

Driver #2

Driver #3

Driver #4

Liability

Physical Damage

Liability

Physical Damage

Liability

Physical Damage

Liability

Physical Damage

Aurora

Chicago*

Chicago**

Chicago***

Danville

East St. Louis

Joliet

Mt. Vernon

Peoria

Quincy

Rockford

Springfield

Waukegan

*

5200   N. Western 60625

**

2400   W. Roosevelt 60608

***

7900   S. Ashland 60620

Effective Date

Name of Company

FEIN Number

RF-4

(Source: Amended at 14 Ill. Reg. 5793, effective April 6, 1990)

Section 754.EXHIBIT C Homeowners Annual Premium Comparison (Form RF-5)

Coverage

HO-2 & 3-One-Family Dwelling, 20 years old

HO-4-Six unit Nonfire Resistive Building

$250   Deductible

$100,000         Personal Liability

$1,000 Medical Payments

$250   Deductible

$100,000         Personal Liability

$1,000 Medical Payments

Construction

Frame

Brick

Forms

HO-2

HO-3

HO-4

HO-2

HO-3

HO-4

Limits

$70,000

$120,000

$70,000

$120,000

$30,000

$60,000

$70,000

$120,000

$70,000

$120,000

$30,000

$60,000

Aurora

Chicago*

Chicago**

Chicago***

Danville

East St. Louis

Joliet

Mt. Vernon

Peoria

Quincy

Rockford

Springfield

Waukegan

* 5200            N. Western 60625

** 2400          W. Roosevelt 60608

*** 7900         S. Ashland 60620

Effective Date

Name of Company

FEIN Number

(Source: Amended at 15 Ill. Reg. 4458, effective March 6, 1991)

TITLE 50: INSURANCE

CHAPTER I: DEPARTMENT OF INSURANCE

SUBCHAPTER j: INVESTMENTS OF DOMESTIC COMPANIES

PART 801 VALUATION OF INVESTMENTS (REPEALED)

——————————————————————————–

The General Assembly’s Illinois Administrative Code database includes only those rulemakings that have been permanently adopted. This menu will point out the Sections on which an emergency rule (valid for a maximum of 150      days, usually until replaced by a permanent rulemaking) exists. The emergency rulemaking is linked through the notation that follows the Section heading in the menu.

SOURCE: Repealed at 26 Ill. Reg. 1196, effective January 18, 2002.

TITLE 50: INSURANCE

CHAPTER I: DEPARTMENT OF INSURANCE

SUBCHAPTER j: INVESTMENTS OF DOMESTIC COMPANIES

PART 802 PURCHASING AND SELLING CALL AND PUT OPTIONS CONTRACTS (REPEALED)

——————————————————————————–

The General Assembly’s Illinois Administrative Code database includes only those rulemakings that have been permanently adopted. This menu will point out the Sections on which an emergency rule (valid for a maximum of 150      days, usually until replaced by a permanent rulemaking) exists. The emergency rulemaking is linked through the notation that follows the Section heading in the menu.

SOURCE: Repealed at 26 Ill. Reg. 1198, effective January 18, 2002.

TITLE 50: INSURANCE

CHAPTER I: DEPARTMENT OF INSURANCE

SUBCHAPTER j: INVESTMENTS OF DOMESTIC COMPANIES

PART 803 LENDING OF SECURITIES (REPEALED)

——————————————————————————–

The General Assembly’s Illinois Administrative Code database includes only those rulemakings that have been permanently adopted. This menu will point out the Sections on which an emergency rule (valid for a maximum of 150      days, usually until replaced by a permanent rulemaking) exists. The emergency rulemaking is linked through the notation that follows the Section heading in the menu.

SOURCE: Repealed at 26 Ill. Reg. 1200, effective January 18, 2002.

TITLE 50: INSURANCE

CHAPTER I: DEPARTMENT OF INSURANCE

SUBCHAPTER j: INVESTMENTS OF DOMESTIC COMPANIES

PART 804 REPURCHASE AND REVERSE REPURCHASE AGREEMENTS (REPEALED)

——————————————————————————–

The General Assembly’s Illinois Administrative Code database includes only those rulemakings that have been permanently adopted. This menu will point out the Sections on which an emergency rule (valid for a maximum of 150      days, usually until replaced by a permanent rulemaking) exists. The emergency rulemaking is linked through the notation that follows the Section heading in the menu.

SOURCE: Repealed at 26 Ill. Reg. 1202, effective January 18, 2002.

TITLE 50: INSURANCE

CHAPTER I: DEPARTMENT OF INSURANCE

SUBCHAPTER j: INVESTMENTS OF DOMESTIC COMPANIES

PART 805 FINANCIAL FUTURES CONTRACTS (REPEALED)

——————————————————————————–

The General Assembly’s Illinois Administrative Code database includes only those rulemakings that have been permanently adopted. This menu will point out the Sections on which an emergency rule (valid for a maximum of 150      days, usually until replaced by a permanent rulemaking) exists. The emergency rulemaking is linked through the notation that follows the Section heading in the menu.

SOURCE: Repealed at 26 Ill. Reg. 1204, effective January 18, 2002.

TITLE 50: INSURANCE

CHAPTER I: DEPARTMENT OF INSURANCE

SUBCHAPTER j: INVESTMENTS OF DOMESTIC COMPANIES

PART 806 DERIVATIVE INSTRUMENTS

——————————————————————————–

The General Assembly’s Illinois Administrative Code database includes only those rulemakings that have been permanently adopted. This menu will point out the Sections on which an emergency rule (valid for a maximum of 150      days, usually until replaced by a permanent rulemaking) exists. The emergency rulemaking is linked through the notation that follows the Section heading in the menu.

Section 806.10            Purpose

Section 806.20            Applicability

Section 806.30            Definitions

Section 806.40            Guidelines and Internal Control Procedures

Section 806.50            Documentation Requirements

Section 806.60            Trading Requirements

AUTHORITY: Implementing Article VIII and authorized by Sections 126.8 and 401 of the Illinois Insurance Code [215 ILCS 5/Art. VIII and 401].

SOURCE: Adopted at 22 Ill. Reg. 15300, effective August 10, 1998; amended at 25 Ill. Reg. 4578, effective March 15, 2001.

Section 806.10            Purpose

The purpose of this Part is to set standards for the prudent use of derivative instruments in accordance with Article VIII of the Illinois Insurance Code [215 ILCS 5.126.1 through 126.32] (see P.A. 90-418, effective August 15, 1997).

Section 806.20            Applicability

This Part shall be applicable to investments and investment practices of all domestic insurers and United States branches of alien insurers entered through this State.

Section 806.30            Definitions

Business Entity includes a sole proprietorship, corporation, limited liability company, association, Partnership, joint stock company, joint venture, mutual fund, trust, joint tenancy or other similar form of business organization, whether organized for profit or not for profit. [215 ILCS 5/126.2(H] (see P.A. 90-418, effective August 15, 1997).

CounterParty Exposure Amount means:

The amount of credit risk attributable to a derivative instrument entered into with a business entity other than through a qualified exchange or qualified foreign exchange, or cleared through a qualified clearinghouse (“over-the-counter derivative instrument”). The amount of credit risk equals:

The market value of the over-the-counter derivative instrument if the liquidation of the derivative instrument would result in a final cash payment to the insurer; or

Zero if the liquidation of the derivative instrument would not result in a final cash payment to the insurer.

If over-the-counter derivative instruments are entered into under a written master agreement which provides for netting of payments owed by the respective Parties, and the domicile of the counterParty is either within the United States or, if not within the United States, within a foreign jurisdiction listed in the Purposes and Procedures of the Securities Valuation Office as eligible for netting, the net amount of credit risk shall be the greater of zero or the net sum of:

The market value of the over-the-counter derivative instruments entered into under the agreement, the liquidation of which would result in a final cash payment to the insurer; and

The market value of the over-the-counter derivative instruments entered into under the agreement, the liquidation of which would result in a final cash payment by the insurer to the business entity.

For open transactions, market value shall be determined at the end of the most recent quarter of the insurer’s fiscal year and shall be reduced by the market value of acceptable collateral held by the insurer or placed in escrow by one or both Parties. [215 ILCS 5/126.2(S)] (see P.A. 90-418, effective August 15, 1997).

Derivative Instrument means:

An agreement, option, instrument or a series or combination thereof:

To make or take delivery of, or assume or relinquish, a specified amount of one or more underlying interests, or to make a cash settlement in lieu thereof; or

That has a price, performance, value or cash flow based primarily upon the actual or expected price, level, performance, value or cash flow of one or more underlying interests.

Derivative instruments include options, warrants used in a hedging transaction and not attached to another financial instrument, caps, floors, collars, swaps, forwards, futures and any other agreements, options or instruments substantially similar thereto or any series or combination thereof and any agreements, options or instruments permitted pursuant to this Part. Derivative instruments shall not include an investment authorized by Sections 126.11 through 126.17, 126.19 and 126.24 through 126.30  of the Illinois Insurance Code. [215 ILCS 5/126.2(V)] (see P.A. 90-418, effective August 15, 1997).

Derivative Transaction means a transaction involving the use of one or more derivative instruments. [215 ILCS 5/126.2(W)] (see P.A. 90-418, effective August 15, 1997).

Qualified Clearinghouse means a clearinghouse for, and subject to the rules of, a qualified exchange or a qualified foreign exchange, which provides clearing services, including acting as a counterParty to each of the Parties to a transaction such that the Parties no longer have credit risk as to each other. [215 ILCS 5/126.2(OOO)] (see P.A. 90-418, effective August 15, 1997).

Qualified Exchange means:

A securities exchange registered as a national securities exchange, or a securities market regulated under the Securities Exchange Act of 1934 (15 USC 78 et seq.), as amended;

A board of trade or commodities exchange designated as a contract market by the Commodity Futures Trading Commission or any successor thereof;

Private Offerings, Resales and Trading through Automated Linkages (PORTAL);

A designated offshore securities market as defined in Securities Exchange Commission Regulation S, 17 C.F.R. Part 230, as amended; or

A qualified foreign exchange. [215 ILCS 5/126.2(PPP)] (see P.A. 90-418, effective August 15, 1997).

Qualified Foreign Exchange means a foreign exchange, board of trade or contract market located outside the United States, its territories or possessions:

That has received regulatory comparability relief under Commodity Futures Trading Commission (CFTC) Rule 30.10   (as set forth in Appendix C to Part 30           of the CFTC’s Regulations, 17 C.F.R. Part 30);

That is, or its members are, subject to the jurisdiction of a foreign futures authority that has received regulatory comparability relief under CFTC Rule 30.10 (as set forth in Appendix C to Part 30           of the CFTC’s Regulations, 17 C.F.R. Part 30) as to futures transactions in the jurisdiction where the exchange, board of trade or contract market is located; or

Upon which foreign stock index futures contracts are listed that are the subject of no-action relief issued by the CFTC’s Office of General Counsel, provided that an exchange, board of trade or contract market that qualifies as a “qualified foreign exchange” only under this definition shall only be a “qualified foreign exchange” as to foreign stock index futures contracts that are the subject of no-action relief. [215 ILCS 5/126.2(QQQ)] (see P.A. 90-418, effective August 15, 1997).

Section 806.40            Guidelines and Internal Control Procedures

a) Before engaging in a derivative transaction, an insurer shall establish written guidelines that shall be used for effecting and maintaining the transactions. The guidelines shall:

1) Address investment or, if applicable, underwriting objectives, and risk constraints, such as credit risk limits;

2) Address permissible transactions and the relationship of those transactions to its operations, such as a precise identification of the risks being hedged by a derivative transaction; and

3) Require compliance with internal control procedures.

b) An insurer shall have a system for determining whether a derivative instrument used for hedging has been effective. In so doing a company should set specific criteria at the inception of the hedge as to what will be considered “effective” in measuring the hedge and then apply those criteria in the ongoing assessment based on actual hedge results.

c) An insurer shall have a credit risk management system for over-the-counter derivative transactions that measures credit risk exposure using the counterParty exposure amount.

d) An insurer’s board of directors shall, in accordance with Section 126.4 of the Illinois Insurance Code [215 ILCS 5/126.4]:

1) Approve the guidelines required by subSection (a) of this Section and the systems required by subSections (b) and (c) of this Section; and

2) Determine whether the insurer has adequate professional personnel, technical expertise and systems to implement investment practices involving derivatives.

e) An insurer may used derivatives for replication transactions as permitted pursuant to Sections 126.18 and 126.31 of the Illinois Insurance Code [215 ILCS 5/126.18 and 126.31]. An insurer engaging in replication transactions shall:

1) Comply with the following requirements:

A) The disclosure and annual and quarterly statement reporting of such replication transactions;

B) The inclusion of such transaction in the insurer’s Risk Based Capital Report (as required by Section 35A-10    of the Illinois Insurance Code [215 ILCS 5/35A-10]); and

C) If applicable, the calculation and reporting of the asset valuation reserve for such transaction;

2) Comply with the filing requirements for Replication Synthetic Asset Transactions (RSATs) contained in the Purposes and Procedures Manual of the Securities Valuation Office of the National Association of Insurance Commissioners (Volume-Issue 99-2, July 2000, no subsequent dates or editions);

3) File with the Director of Insurance a duplicate copy of all RSAT filings made with the Securities Valuation Office of the National Association of Insurance Commissioners; after June 1, 2002, the Director may waive this duplicate filing requirement;

4) Have a system for determining whether a replication transaction has been effective in replicating the intended investment position; and

5) Include all replicated investment positions in calculating compliance with the limitations on investments contained in Article VIII of the Illinois Insurance Code [215 ILCS 5/Art. VIII]; provided, that no replicated investment position shall be held pursuant to the additional investment authority contained in Sections 126.20           and 126.32 of the Illinois Insurance Code [215 ILCS 5/126.20   and 126.32].

AGENCY NOTE: For purposes of determining whether internal control procedures are in compliance with this Part, the DePartment may consider, but is not limited to, the following items: that only board authorized individuals can effect derivative instrument transactions, that there is a separation of administrative functions from trading functions, that periodic reporting to chief investment officer of open positions occurs and that periodic assessing of effectiveness of hedging transaction be conducted by a designated person.

(Source: Amended at 25 Ill. Reg. 4578, effective March 15, 2001)

Section 806.50            Documentation Requirements

An insurer shall maintain documentation and records relating to each derivative transaction, including, but not limited to:

a) The purpose or purposes of the transaction;

b) The assets or liabilities to which the transaction relates;

c) The specific derivative instrument used in the transaction;

d) For over-the-counter derivative instrument transactions, the name of the counterParty and the counterParty exposure amount; and

e) For exchange traded derivative instruments, the name of the exchange and the name of the firm that handled the trade.

Section 806.60            Trading Requirements

Each derivative instrument shall be:

a) Traded on a qualified exchange;

b) Entered into with, or guaranteed by, a business entity;

c) Issued or written by, or entered into with, the issuer of the underlying interest on which the derivative instrument is based; or

d) Entered into with a qualified foreign exchange.

TITLE 50: INSURANCE

CHAPTER I: DEPARTMENT OF FINANCIAL AND PROFESSIONAL REGULATION

SUBCHAPTER k: INSURANCE HOLDING COMPANY SYSTEMS

PART 852 REGISTRATION OF INSURERS

——————————————————————————–

The General Assembly’s Illinois Administrative Code database includes only those rulemakings that have been permanently adopted. This menu will point out the Sections on which an emergency rule (valid for a maximum of 150      days, usually until replaced by a permanent rulemaking) exists. The emergency rulemaking is linked through the notation that follows the Section heading in the menu.

Section 852.10            Purpose

Section 852.20            Definitions

Section 852.30            Registration of Insurers – Form of Statement Filing

Section 852.40            Summary of Changes to Registration Statement

Section 852.ILLUSTRATION A Insurance Holding Company System Registration Statement – Initial, Annual or Amendment (Repealed)

Section 852.ILLUSTRATION B Form B – Insurance Holding Company System Registration Statement – Initial, Annual or Amendment

Section 852.ILLUSTRATION C Form C – Summary of Registration Statement

AUTHORITY: Implementing Article VIII½ and authorized by Sections 131.13 and 401 of the Illinois Insurance Code [215 ILCS 5/131.13 and 401].

SOURCE: Emergency rule adopted at 10      Ill. Reg. 2114, effective January 1, 1986, for a maximum of 150            days; adopted at 10    Ill. Reg. 17177, effective October 1, 1986; amended at 31 Ill. Reg. 4031, effective February 23, 2007.

Section 852.10            Purpose

The purpose of this Part is to set forth requirements the Director deems necessary to carry out the provisions of Sections 131.13 through 131.19 of the Illinois Insurance Code [215 ILCS 5/131.13 through 131.19].

(Source: Amended at 31 Ill. Reg. 4031, effective February 23, 2007)

Section 852.20            Definitions

Terms found in this Part, other than those defined in this Section, are used as defined in Section 131.1 of the Insurance Code [215 ILCS 5/131.1].

Code means the Illinois Insurance Code [215 ILCS 5].

DePartment means the DePartment of Financial and Professional Regulation.

Director means the Director of the Illinois DePartment of Financial and Professional Regulation-Division of Insurance (see Section 1-2(2) of the Act).

Division means the Illinois DePartment of Financial and Professional Regulation-Division of Insurance.

Executive officer means any individual charged with active management and control in a senior executive capacity as described by the company’s by-laws (including a president, senior vice president, treasurer, secretary, controller, and any other individual regardless of title performing functions the same as those performed by the foregoing officers).

Foreign insurer shall include an alien insurer except where clearly noted otherwise.

Secretary means the Secretary of the Illinois DePartment of Financial and Professional Regulation.

Ultimate controlling person means any controlling person within an insurance holding company system who is not controlled by any other person.

(Source: Amended at 31 Ill. Reg. 4031, effective February 23, 2007)

Section 852.30            Registration of Insurers – Form of Statement Filing

a) An insurer required to file a statement pursuant to Section 131.13 of the Code shall furnish the required information in the format and as specified in the instructions contained in Form B, which is Illustration B to this Part. The insurer is to identify whether the filing is an initial, annual or amendment to the Form B.

b) An annual filing shall be made on or before each May 1 in the format of Form B containing current information for the preceding calendar year.

c) Amendments

1) An amendment to Form B shall be filed within 15 days after the end of any month in which the following occurs:

A) there is a change in the control of the registrant, in which case the entire Form B shall be made current;

B) there is a material change in the information given in Item 5 or Item 6 of Form B.

2) Each amendment shall include the Form B cover page and the transactions that are the subject of the amendment. A current signature and certification shall be given in regard to the information in the amendment.

d) Alternative and Consolidated Registration

1) Any authorized insurer may file a registration statement on behalf of any affiliated insurer or insurers required to register under Section 131.13 of the Code. Two or more affiliated insurers required to file may file a consolidated registration statement unless required otherwise by the Director. The Director shall request separate registration statements when the consolidated registration statement does not provide adequate information regarding the domestic insurer pursuant to Section 131.14 of the Code. A registration statement may include information regarding any insurer in the insurance holding company system even if such insurer is not authorized to do business in this State. In lieu of filing a registration statement in the format designated on Form B, the authorized insurer may file a copy of the registration statement or similar report the authorized insurer is required to file in its state of domicile provided:

A) the statement or report contains substantially similar information required to be furnished on Form B. The report or statement shall be deemed substantially similar when a Division analyst can reasonably make the same determinations regarding the information contained in the report or statement as the analyst does for Form B filings made by domestic insurers; and

B) the filing insurer demonstrates that the insurer is the principal insurance company in the insurance holding company system. The principal insurer shall be the insurer that:

i) has the most admitted assets; or

ii) has the most insurance in force; or

iii) has the most premium volume on an annualized basis; or

iv) is the insurer that controls all other insurers.

2) The question of whether the filing insurer is the principal insurance company in the insurance holding company system as defined in Section 131.1(c) of the Code is a question of fact and an insurer filing a registration statement or report in lieu of Form B on behalf of an affiliated insurer shall, when required by the Director, set forth a brief statement of facts that will substantiate the filing insurer’s claim that it, in fact, is the principal insurer in the insurance holding company system.

3) With the prior approval of the Director, an unauthorized insurer that is the principal insurer may follow any of the procedures which could be done by an authorized insurer under subSection (d)(1).

e) Exemptions

1) A foreign or alien insurer otherwise subject to this Section shall not be required to register pursuant to Section 131.13 of the Code if it is admitted in the domiciliary state of the principal insurer (as the term is defined in subSection (d)(2) of this Section) and in that State is subject to disclosure requirements and standards adopted by statute or regulation that are substantially similar to those contained in Sections 131.13 through 131.19 of the Code. The Director may require a copy of the registration statement or other information filed with the domiciliary state.

2) The state of entry of an alien insurer shall be deemed to be its domiciliary state for the purpose of this Part.

f) Disclaimers and Termination of Registration

1) A disclaimer or a request for termination of registration claiming that a person does not or will not, upon the taking of some proposed action, control any other person (i.e., the “subject”) shall contain the following information:

A) the number of authorized, issued and outstanding voting securities of the subject;

B) with respect to the person whose control is denied and all affiliates of that person:

i) the number and percentage of shares of the subject’s voting securities that are held of record or known to be beneficially owned and the number of shares for which there is a right to acquire, directly or indirectly;

ii) information as to all transactions in any voting securities of the subject that were effected during the past six months by that person;

C) all relationships and bases for affiliation between the subject and the person whose control is denied and all affiliates of that person;

D) a statement explaining why the person whose control is denied would not be considered to control the subject.

2) A request for termination of registration shall be deemed to have been granted unless the Director, within 30            days after receiving the request, notifies the registrant otherwise. The request will be granted if the request is in compliance with the requirements of Article VIII½ of the Code and this Part.

(Source: Amended at 31 Ill. Reg. 4031, effective February 23, 2007)

Section 852.40            Summary of Changes to Registration Statement

An insurer required to file a statement pursuant to Section 131.13 of the Code shall also file a summary of changes to the registration statement in the format and as specified in Form C, which is Illustration C of this Part. A Summary of Changes to the Registration Statement must be filed simultaneously with the annual registration statement filed pursuant to 50            Ill. Adm. Code 852.30(c).

(Source: Amended at 31 Ill. Reg. 4031, effective February 23, 2007)

Section 852.ILLUSTRATION A Insurance Holding Company System Registration Statement – Initial, Annual or Amendment (Repealed)

(Source: Repealed at 31 Ill. Reg. 4031, effective February 23, 2007)

Section 852.ILLUSTRATION B Form B − Insurance Holding Company System Registration Statement – Initial, Annual or Amendment

FORM B

GENERAL INSTRUCTIONS

A. Use of Form B

Form B shall be used by an insurer required to file a Statement with the Director pursuant to Sections 131.14 and 131.16 of the Code. Subsequent amendments also shall be filed on Form B, but shall include on the top of the cover sheet “Amendment No.______ to” and shall indicate the date of the amendment and not the date of the original filing.

1) One complete copy of each statement, including exhibits and all other papers and documents filed as a Part of the statement, shall be filed with the Director.

2) The statement filed with the Director shall be manually signed in the manner prescribed by this form. If the signature of any person is affixed pursuant to a power of attorney or other similar authority, a copy of the power of attorney or other authority shall also be filed with the statement.

B. Requirements as to Printing and Language

1) All filed statements, papers or documents shall be clear, readable and suitable for photocopying. Debits in credit categories and credits in debit categories shall be designated in a manner other than color so as to be distinguishable on photocopies.

2) Statements shall be in the English language and monetary values shall be stated in United States currency. If any exhibit or other paper or document filed with a statement is in a foreign language, it shall be accompanied by a translation into the English language and any monetary value shown in a foreign currency shall be converted into United States currency. Monetary conversions made in financial statements shall be made as of the date of the financial statements. Other required conversions shall be made as of the date of the Form B cover page.

C. Preparation of Statement

This form is not to be used as a blank form to be filled in, but only as a guide in the preparation of the statement.

The statement shall contain the numbers and captions of all items, but the text of the items may be omitted provided the answers indicate to the reader the coverage of the items without the necessity of referring to the text of the items or instructions. All instructions, whether appearing under the items of the form or elsewhere in the form, are to be omitted. Unless expressly provided otherwise within this Part, if any item is inapplicable or the answer to the item is in the negative, a statement to that effect shall be made.

D. Additional Information

In addition to the information expressly required to be included in the statement, there may be added further material information, if any, as may be necessary to make the information contained in the statement not misleading.

E. Information Unknown or Not Available

Information required need be given only insofar as it is known or reasonably available to the Registrant. If any required information is unknown and not reasonably available to the Registrant, either because obtaining it would involve unreasonable effort or expense, or because it rests peculiarly within the knowledge of another person not affiliated with the Registrant, the information may be omitted, subject to the following conditions:

1) The Registrant shall give such information on the subject as it possesses or can acquire without unreasonable effort or expense, including, but not limited to, impossibility or the loss or destruction of documents, together with the source of the information.

2) The Registrant shall include a statement either showing that unreasonable effort or expense would be involved or indicating the absence of any affiliation with the person within whose knowledge the information rests and stating the result of a request made to the person for the information.

F. Incorporation by Reference

1) Matters required by any item of this statement may be incorporated by reference in any answer or Partial answer to any other item.

2) Information contained in a statement filed pursuant to the Federal Securities Act of 1933, the Federal Securities and Exchange Act of 1934 or a state law requiring registration or disclosure, and information contained in any financial statement, annual report, proxy statement or any other document, may be incorporated by reference in any answer or Partial answer to any item or items of this statement, provided the information meets the requirements of this statement. A copy of incorporated documents shall be included on an exhibit to Form B.

3) Material incorporated by reference shall be clearly identified in the reference. An express statement that the specified matter is incorporated by reference shall be made at that Particular place in the statement where the information is required. Matter shall not be incorporated by reference in any case in which the incorporation would render the statement incomplete, unclear or confusing.

G. Summaries or Outlines of Documents

When an item requires a summary or outline of the provisions of any document, only a brief statement shall be made as to the most important provisions of the document. In addition to the statement, the summary or outline may incorporate by reference Particular Parts of any exhibit and may be qualified in its entirety by the reference.

H. Extension of Time for Furnishing Information

If it is impractical to furnish any required information, document or report at the time it is required to be filed, the Registrant may file with the Director as a separate document an application (l) identifying the information, document or report in question; (2) stating why filing at the time required is impractical; and (3) requesting an extension to a specified date for filing the information, document or report. The application shall be deemed granted unless the Director, within 30 days after receipt of the application, shall enter an order denying the application.

Information required needs to be given only insofar as it is known or reasonably available to the registrant. If any required information is unknown and not reasonably available to the registrant, either because obtaining it would involve unreasonable effort or expense, or because it rests peculiarly within the knowledge of another person not affiliated with the registrant, the information may be omitted, subject to the following conditions:

1) The registrant shall give such information on the subject as it possesses or can acquire without unreasonable effort or expense, including, but not limited to, impossibility or the loss or destruction of documents, together with the sources of the documents.

2) The registrant shall include a statement either showing that unreasonable effort or expense would be involved or indicating the absence of any affiliation with the person within whose knowledge the information rests and stating the result of a request made to that person for the information.

I. Additional Exhibits

The Registrant may file such exhibits as it may desire, in addition to those expressly required by the statement. The additional exhibits shall be marked to indicate clearly the subject matters to which they refer.

J. Omission of Substantially Identical Documents

In any case where two or more documents required to be filed as exhibits are substantially identical in all material aspects except as to the Parties to the document, the dates of execution, or other details, the registrant need file a copy of only one of the documents, with a schedule identifying the omitted documents and setting forth the material details in which the documents differ from the documents filed. The Director may at any time in his or her discretion require the filing of copies of any omitted documents in order to verify that the omitted documents are substantially identical to documents on file. For purposes of this instruction, documents will be deemed substantially similar in all material aspects when a Division analyst, upon examining the documents independently, could reasonably make the same determinations and decisions regarding the documents.

K. Financial Statements

The financial statements shall include the annual financial statements of each ultimate controlling person in the insurance holding company system as of the end of the person’s latest fiscal year. If, at the time of the initial registration, the annual financial statements for the previous fiscal year are not available, annual statements for the previous fiscal year shall, unless previously filed by amendment, be filed and similar financial information consisting of balance sheet, operational statement and a statement of source and application of funds shall be filed for any subsequent period to the extent that information is available. The financial statements are to be audited by an independent certified public accountant in accordance with generally accepted auditing standards and are to contain financial information presented in accordance with generally accepted accounting principles. If the ultimate controlling person is an insurer that has been actively engaged in the business of insurance for the previous 10            years, the financial statements need not be audited, provided they are based on the Annual Statement of the insurer filed with the insurance DePartment of the insurer’s domiciliary state and are in accordance with requirements of insurance or other accounting principles prescribed or permitted under laws and regulations of that state.

L. Shareholder Reports and Proxy Material

Exhibits shall include copies of the latest annual reports to shareholders of the ultimate controlling person and any proxy material used by the ultimate controlling person during the preceding year.

M. Signature and Certification

For purpose of filing Form B and Form C, the signatures and certifications required by this Part shall be signed by an executive officer of the registrant.

N. Filing Fee

Pursuant to Section 408 of the Code [215 ILCS 5/408], the Director shall collect a fee for the filing of a registration statement. The filing of the registration statement shall not be deemed complete until the Director has received the appropriate filing fee as required by Section 408.

FORM B

INSTRUCTIONS FOR COMPLETION

Filed with the DePartment of Financial and Professional Regulation-

Division of Insurance of the State of Illinois.

BY

(Name of Registrant)

On Behalf of the Following Insurance Companies

Date:

, 20

Name, Title and Address of Officer to Whom Notices and Correspondence Concerning this

Statement Should be Addressed:

ITEM 1. Identity and Control of Registrant

Furnish the exact name of each insurer registering or being registered (hereinafter called “the Registrant”); the address and principal executive offices of each; the date on which each Registrant became a Part of the insurance holding company system; and the methods by which control of each Registrant was acquired and is maintained.

ITEM 2. Organization Chart

Furnish a chart or listing presenting the identities of and interrelationships among all affiliated persons within the insurance holding company system. No affiliate need be shown if its total assets are equal to less than ½ of 1 % of the total assets of each ultimate controlling person within the insurance holding company system. The chart or listing shall show the percentage of voting securities of each affiliate that is owned, directly or indirectly, by another affiliate. If control of any person within the system is maintained other than by the ownership or control of voting securities, indicate the basis of the control. As to each person specified in the chart or listing indicate the type of organization (e.g., corporation, trust, Partnership) and the state or other jurisdiction of domicile.

ITEM 3. Each Ultimate Controlling Person

As to each ultimate controlling person, furnish the following information:

a) Name;

b) Address;

c) Principal executive office;

d) The organizational structure of the person, i.e., corporation, Partnership, individual, trust, etc.;

e) The principal business of the person;

f) The name and address of any person who holds or owns 10% or more of any voting security, the number of shares held of record or known to be beneficially owned, and the percentage of all shares so held or owned;

g) If court proceedings looking toward a reorganization or liquidation are pending, indicate the title of the court, the nature of proceedings and the date when commenced.

ITEM 4. Biographical Information

Furnish the following information for the directors and executive officers of each ultimate controlling person: the individual’s name and address, his or her principal occupation and all offices and positions held during the past 5 years, and any conviction of crimes, other than minor traffic violations, during the past 10 years.

ITEM 5. Transactions, Relationships and Agreements

a) Briefly describe the following agreements in force, relationships subsisting, and transactions currently outstanding or that have occurred during the last calendar year between the Registrant and its affiliates:

1) loans, other investments, or purchases, sales or exchanges of securities of the affiliates by the Registrant or of the Registrant by its affiliates;

2) purchases, sales or exchanges or assets;

3) transactions not in the ordinary course of business;

4) guarantees or undertakings for the benefit of an affiliate that result in a contingent exposure of the Registrant’s assets to liability, other than insurance contracts entered into in the ordinary course of the Registrant’s business;

5) all management agreements, service contracts and all cost-sharing arrangements, any other contracts providing for the rendering of services on a regular systematic basis, and contracts on a “pooled” fund basis or service company management basis, where the costs to the individual member companies are on an actually incurred or closely estimated basis;

6) reinsurance agreements;

7) any pledge of the company’s own securities, or securities of any subsidiary or affiliate, to secure a loan made to any member of the insurance holding company system;

8) consolidated tax allocation agreements; and

9) dividends and other distributions to shareholders.

No information need be disclosed if that information is not material. Sales, purchases, exchanges, guarantees or loans or extensions of credit or investments involving ½ of 1% or less of the Registrant’s admitted assets as of the December 31 next preceding shall not be deemed material. All other amounts shall be deemed material.

b) The description shall be in a manner permitting proper evaluation by the Director and shall include at least the following: the nature and purpose of the transaction; the nature and amounts of any payments or transfers of assets between the Parties and the identity of all Parties to the transaction; and relationship of the affiliated Parties to the Registrant.

ITEM 6. Litigation or Administrative Proceedings

A brief description of any litigation or administrative proceedings of the following types, either then pending or concluded within the preceding fiscal year, to which each ultimate controlling person or any of its directors or executive officers was a Part or of which the property of any such person is or was the subject. Give the names of the Parties and the court or agency in which the litigation or proceeding is or was pending.

a) Criminal prosecutions or administrative proceedings by any government agency or authority other than minor traffic violations.

b) Proceedings that may have a material effect upon the solvency or capital structure of each ultimate controlling company, including, but not necessarily limited to, bankruptcy, receivership or other corporate reorganizations. For purposes of this instruction, an effect upon the solvency or capital structure of each ultimate controlling company shall be deemed material if it is likely that a reasonable corporate officer would attach importance to the effect that a proceeding or litigation would have on the corporation.

ITEM 7. Financial Statements and Exhibits

Financial statements and exhibits shall be attached to this statement as an appendix, but list under this item the financial statements and exhibits attached.

ITEM 8. Signature and Certification

Signature and certification shall be in the following form:

SIGNATURE

Pursuant to the requirements of Section 131.14 of the Code and 50            Ill. Adm. Code 852, the registrant has caused this registration statement to be duly signed on its behalf in the city of

and state of

on the

day of

, 20

.

(Name of Registrant

BY

(Name)

(Title)

Attest:

(Signature of Officer)

(Title)

CERTIFICATION

The undersigned deposes and says that (s)he has duly executed the attached registration statement

dated

, 20

, for and on behalf of

(Name of

Company

that (s)he is the

(Title of Officer)

of such company, and that (s)he has authority to

execute and file the instrument. Deponent further says that (s)he is familiar with the instrument and that the facts set forth in the instrument are true to the best of his or her knowledge, information and belief.

Signature

(Type or Print Name)

(Source: Amended at 31 Ill. Reg. 4031, effective February 23, 2007)

Section 852.ILLUSTRATION C Form C − Summary of Registration Statement

FORM C

SUMMARY OF CHANGES TO REGISTRATION STATEMENT

Filed with the DePartment of Financial and Professional Regulation-

Division of Insurance of the State of Illinois

By

Name of Registrant

On Behalf of the Following Insurance Companies

Name

Address

Date:

, 20

Name, Title, Address and telephone number of Individual to Whom Notices and Correspondence Concerning This Summary Should Be Addressed:

Furnish a brief description of all items in the current annual registration statement that represent changes from the prior year’s annual registration statement. The description shall include specific references to item numbers in the annual registration statement and to the terms contained in the item. Changes occurring under Item 2, insofar as changes in the percentage of each class of voting securities held by each affiliate is concerned, need only be included if the changes are ones that result in ownership or holdings of 10% or more of voting securities, or loss or transfer of control, but nothing need be reported if the change is an amount less than ½ of 1% of the total assets of the ultimate controlling person in the holding company system. Changes occurring under Item 4 of the annual registration statement need only be included if: an individual is, for the first time, made a director or executive officer of the ultimate controlling person or a director or executive officer terminates his or her responsibilities with the ultimate controlling person.

If a transaction disclosed on the prior year’s annual registration statement has been amended, the nature of the amendment shall be included. If a transaction disclosed on the prior year’s annual registration statement has been completed, furnish the mode of completion and any flow of funds between affiliates resulting from the transaction.

The insurer shall furnish statements that transactions entered into since the filing of the prior year’s annual registration statement are not Part of a plan or series of like transactions whose purpose it is to avoid statutory threshold amounts, disclosure and the review that might otherwise occur pursuant to Section 131.20a of the Code.

SIGNATURE Signature and certification of the form as follows:

SIGNATURE

Pursuant to 50 Ill. Adm. Code 852.40, the Registrant has caused this summary of registration

statement to be duly signed on its behalf in the City of

State of

on the

day of

, 20

(Name of Registrant)

(Name)

(Title)

Attest:

(Signature of Officer)

(Title)

CERTIFICATION

The undersigned deposes and says that (s)he has duly executed the attached summary of

registration statement dated

, 20

, for and on behalf of

; that (s)he is the

(Name of Company)

(Title of Officer)

of that company, and that (s)he is authorized to execute and file the instrument. Deponent further says that (s)he is familiar with the instrument and that the facts set forth in the instrument are true to the best of his/her knowledge, information and belief.

(Signature)

(Type or Print Name)

(Source: Amended at 31 Ill. Reg. 4031, effective February 23, 2007)

TITLE 50: INSURANCE

CHAPTER I: DEPARTMENT OF INSURANCE

SUBCHAPTER k: INSURANCE HOLDING COMPANY SYSTEMS

PART 854 PRIOR NOTIFICATION OF TRANSACTIONS

——————————————————————————–

The General Assembly’s Illinois Administrative Code database includes only those rulemakings that have been permanently adopted. This menu will point out the Sections on which an emergency rule (valid for a maximum of 150      days, usually until replaced by a permanent rulemaking) exists. The emergency rulemaking is linked through the notation that follows the Section heading in the menu.

Section 854.10            Purpose

Section 854.20            Definitions

Section 854.30            Prior Notification of Transactions – Required Information

Section 854.40            Penalties

Section 854.ILLUSTRATION A Form D-1

AUTHORITY: Implementing Article VIII 1/2 and authorized by Sections 131.20a(1) and 401 of the Illinois Insurance Code (Ill. Rev. Stat. 1991, ch. 73, pars. 743.1 et seq. as amended by P.A. 88-364, effective August 16, 1993, 743.20a(1) and 1013) [215 ILCS 5/131.1 et seq., as amended by P.A. 88-364, effective August 16, 1993, 131.20a(1) and 401].

SOURCE: Emergency rule adopted at 10      Ill. Reg. 2105, effective January 1, 1986, for a maximum of 150            days; adopted at 10    Ill. Reg. 17168, effective October 1, 1986; emergency amendment at 17 Ill. Reg. 21198, effective November 30, 1993, for a maximum of 150           days; amended at 18 Ill. Reg. 6176, effective April 6, 1994.

Section 854.10            Purpose

The purpose of this Part is to describe that information which must be provided by a domestic company to notify the Director of certain transactions pursuant to Section 131.20a(1) of the Illinois Insurance Code (Ill. Rev. Stat. 1991, ch. 73, par. 743.20a(1)) [215 ILCS 5/131.20a(1)].

(Source: Amended at 18 Ill. Reg. 6176, effective April 6, 1994)

Section 854.20            Definitions

“Executive officer” means any individual charged with active management and control in a senior executive capacity as described by the company’s by-laws (including a president, senior vice president, treasurer, secretary, controller, and any other individual regardless of title performing functions the same as those performed by the foregoing officers).

(Source: Amended at 18 Ill. Reg. 6176, effective April 6, 1994)

Section 854.30            Prior Notification of Transactions – Required Information

a) Any domestic company required, pursuant to Section 131.20a(1) of the Illinois Insurance Code, to notify the Director of a transaction between it and any person in its holding company system shall notify the Director of the transaction in writing at least 30         days prior to entering into such transaction. Such notice shall be deemed incomplete unless all the information required by this Part has been included therein.

b) The Director shall, within the 30    day period, disapprove such transactions if the standards as contained in Section 131.20            of the Illinois Insurance Code (Ill. Rev. Stat. 1991, ch. 73, par. 743.20) [215 ILCS 5/131.20] have not been met.

c) The domestic company shall provide to the Director the information required by, and in the format specified by, Form D-1 which is Illustration A to this Part.

d) The notification shall be directed to the Deputy Director of the Financial-Corporate Regulatory Division of the Illinois DePartment of Insurance, Springfield, Illinois 62767.

(Source: Amended at 18 Ill. Reg. 6176, effective April 6, 1994)

Section 854.40            Penalties

Failure of a company to timely file the report required by this Part and Section 131.20a of the Illinois Insurance Code [215 ILCS 5/131.20a] shall subject the company to the provisions of Sections 131.24 and 403A of the Illinois Insurance Code [215 ILCS 5/131.24 and 403A].

(Source: Section repealed, new Section added at 18 Ill. Reg. 6176, effective April 6, 1994)

FORM D-1

GENERAL INSTRUCTIONS

A. Signature and Certification

For purposes of filing the Form D-1, the signature and certification required by this Part shall be signed by an executive officer of the insurer requesting the Director’s approval.

B. Copy of the Transaction Agreement

A copy of the proposed transaction agreement shall be attached to the Form D-1 filing as Exhibit A. If the agreement is in other than final form, it shall be so identified.

PRIOR NOTICE OF A TRANSACTION

Filed with the Insurance DePartment of the State of Illinois

By

Name of Domestic Company

On Behalf of the Following Insurance Companies:

Name

Address

Date: _________________, 19 ___

Name, Title, Address and Telephone Number of Individual to Whom Notices and Correspondence Concerning this Request Should Be Addressed:

Item 1. Identity of Parties to the Transaction

Furnish the following information for each of the Parties to the transaction:

a) Name.

b) Home Office Address.

c) Principal executive office address.

d) The organizational structure, i.e. corporation, Partnership, individual, trust, etc.

e) A description of the nature of the Parties’ business operations.

f) Relationship, if any, of other Parties to the transaction to the insurer filing the notice, including any ownership or debtor/creditor interest by any other Parties to the transaction in the insurer seeking approval, or by the insurer filing the notice in the affiliated Parties.

g) Where the transaction is with a non-affiliate, the name(s) of the affiliate(s) which will receive, in whole or in substantial Part, the proceeds of the proposed transaction. For purposes of this subSection, substantial Part means an amount which would trigger disclosure if given directly to the affiliate.

Item 2. Description of the Transaction

Furnish the following information for each transaction for which notice is being given:

a) A statement as to whether notice is being given under Section 131.20a(1)(a)(i), (ii), (iii), (iv), or (v) of the Illinois Insurance Code. At the time of adoption of this rulemaking, the DePartment has not adopted a rule under subSection (v) above.

b) A brief description of the nature and purpose of the transaction.

c) The proposed effective date of the transaction.

Item 3. Sales, Purchases, Exchanges, Loans, Extensions of Credit, Guarantees, or Investments.

Furnish a brief description of the amount and source of funds, securities, property or other consideration for the sale, purchase, exchange, loan, extension of credit, guarantee, or investment, whether any provision exists for purchase by the insurer filing notice, by any Party to the transaction, or by any affiliate of the insurer filing notice, a description of the terms of any securities being received, and a description of any other agreements relating to the transaction such as contracts or agreements for services, consulting agreements and the like. If the transaction involves other than cash, furnish a description of the consideration, its cost and its fair market value, together with an explanation of the basis for evaluation.

If the transaction involves a loan, extension of credit or a guarantee, furnish a description of the maximum amount which the insurer will be obligated to make available under such loan, extension of credit or guarantee, the date on which the credit or guarantee will terminate, and any provisions for the accrual of or deferral of interest.

If borrowed funds are to be used by the insurer identify the lender, any collateral requirements, interest due dates, interest rates, and principal payment due date.

If the transaction involves an investment, guarantee or other arrangement, state the time period during which the investment, guarantee or other arrangement will remain in effect, together with any provisions for extensions or renewals of such investments, guarantees or arrangements. Furnish a brief statement as to the effect of the transaction upon the insurer’s surplus.

Item 4. Loans or Extensions of Credit to a Non-Affiliate

If the transaction involves a loan or extension of credit to any person who is not an affiliate, furnish a brief description of the agreement or understanding whereby the proceeds of the proposed transaction, in whole or in substantial Part, are to be used to make loans or extensions of credit to, to purchase the assets of, or to make investments in, any affiliate of the insurer making such loans or extensions of credit, and specify in what manner the proceeds are to be used to loan to, extend credit to, purchase assets of or make investments in any affiliate. Describe the amount and source of funds, securities, property or other consideration for the loan or extension of credit and, if the transaction is one involving consideration other than cash, a description of its cost and its fair market value together with an explanation of the basis for evaluation. Furnish a brief statement as to the effect of the transaction upon the insurer’s surplus.

Item 5. Reinsurance

If the transaction is a reinsurance agreement or modification thereto, furnish a description of the known and/or estimated amount of liability to be ceded and/or assumed in each calendar year, the period of time during which the agreement will be in effect, and a description of any agreement or understanding that exists between the insurer and a non-affiliate to the effect that any portion of the assets constituting the consideration for the agreement will be transferred to one or more of the insurer’s affiliates. Furnish a brief description of the consideration involved in the transaction, and a brief statement as to the effect of the transaction upon the insurer’s surplus.

Item 6. Management Agreements, Service Agreements and Cost Sharing Arrangements.

For management and service agreements, furnish:

a) a brief description of the managerial responsibilities, or services to be performed.

b) a brief description of the agreement, including a statement of its duration, together with brief descriptions of the basis for compensation and the terms under which payment or compensation is to be made.

For cost-sharing arrangements, furnish:

a) a brief description of the purpose of the agreement.

b) a description of the period of time during which the agreement is to be in effect.

c) a brief description of each Party’s expenses or costs covered by the agreement.

d) a brief description of the accounting basis to be used in calculating each Party’s cost under the agreement.

Pursuant to the requirements of Section 131.20a of the Illinois Insurance Code,

has caused this notice to be duly signed on its behalf in the City of

and State

of

on the

day of

, 19

Name of Requesting Insurer

By

(Name)

(Title)

Attest:

(Signature of Officer)

(Title)

CERTIFICATION

The undersigned deposes and says that (s)he has duly executed the attached notice dated

, 19

, for and on behalf of

; that (s)he is the

(Name of Insurer)

of such company and that (s)he is authorized to execute and file such

(Title of Officer)

instrument. Deponent further says that (s)he is familiar with such instrument and the contents thereof, and that the facts therein set forth are true to the best of his/her knowledge, information and belief.

(Signature)

(Type or print name beneath)

(Source: Amended at 18 Ill. Reg. 6176, effective April 6, 1994)

TITLE 50: INSURANCE

CHAPTER I: DEPARTMENT OF INSURANCE

SUBCHAPTER l: PROVISIONS APPLICABLE TO ALL COMPANIES

PART 901 DESTRUCTION OF RECORDS

——————————————————————————–

The General Assembly’s Illinois Administrative Code database includes only those rulemakings that have been permanently adopted. This menu will point out the Sections on which an emergency rule (valid for a maximum of 150      days, usually until replaced by a permanent rulemaking) exists. The emergency rulemaking is linked through the notation that follows the Section heading in the menu.

Section 901.5 Introduction

Section 901.10            Definitions

Section 901.20            Procedures for Compiling and Submitting Lists and Schedules of Records for Destruction

AUTHORITY: Implementing Section 133 and authorized by Section 401 of the Illinois Insurance Code (Ill. Rev. Stat. 1981, ch. 73, pars. 745 and 1013).

SOURCE: Filed and effective November 25, 1968; codified at 7 Ill. Reg. 4213.

Section 901.5 Introduction

No domestic company shall destroy any books, records, documents, accounts or vouchers, hereafter referred to as “records”, except in conformity with the requirements of this Part.

Section 901.10            Definitions

“Non-Record” material means:

Material not filed as evidence of the company’s administrative or business activities or for the informational content thereof;

Extra copies of documents or reproductions of documents maintained for convenience or reference;

Stocks of printed or reproduced documents kept for supply purposes, where file copies have been retained for record purposes;

Books, periodicals, newspapers, posters, pamphlets and other materials made or acquired and preserved solely for reference or exhibition purposes;

Private materials neither made nor received by a company pursuant to law or in connection with the transaction of its business;

Company dailies more than six (6) months after expiry or cancellation date of the policy if the data therein contained is, to the extent material or necessary to the determination of the financial condition of the company, contained in other records.

“Records” material means all books, papers and documentary materials regardless of physical form or characteristics, made, produced, executed or received by any domestic insurance company pursuant to law or in connection with the transaction of its business and preserved or appropriate for preservation by such company or its successors as evidence of the organization, function, policies, decisions, procedures, obligations and business activities of the company or because of the informational data contained therein. If doubt arises as to whether certain papers are “non-record” materials, it should be assumed that the documents are “records”.

Non-Record materials may be destroyed at any time by the company in possession of such materials without the prior approval of the Director of Insurance.

Section 901.20            Procedures for Compiling and Submitting Lists and Schedules of Records for Destruction

a) The company shall submit to the Director lists or schedules of records in its custody that are not needed in the transaction of current business or for the final settlement or disposition of any claim arising out of a policy of insurance issued by the company and are not required to determine the financial condition of the company for the period since the date of the last examination report of the company officially filed with the DePartment of Insurance and that do not have sufficient administrative legal or fiscal value to warrant their further preservation, or that the retention of the records is an unnecessary expense to the company and such records serve no useful purpose.

1) Lists are applications for authority to destroy accumulated records.

2) Schedules are applications for continuing authority to destroy records after specified periods of time or the occurrence of specified events.

b) New schedules are required whenever the informational contents of a records series are changed.

c) Duplicate copies of all requests for authority to destroy records, accompanied by lists or schedules of such records, shall be submitted to the Director of Insurance at the offices of the DePartment in Springfield, Illinois, attached to duplicate executed copies of the following form of Affidavit:

AFFIDAVIT

FOR PERMISSION TO DESTROY RECORDS PURSUANT TO

SECTION 133 (2) OF THE ILLINOIS INSURANCE CODE

STATE OF ILLINOIS

)

)

ss

COUNTY OF

)

We, the undersigned, _____________, President and _________________, Secretary, duly authorized in this regard as representatives of ________________ Insurance Company, being separately sworn, each for himself on his oath says:

that he is the above described Officer of the Company; that he is familiar with the records described and listed or scheduled on the attached sheets; that, as to listed records, all such records pertain to the business of said Company prior to _____________, the date of the last examination report of the Company officially filed with the DePartment of Insurance of the State of Illinois; that, as to scheduled records containing any information necessary to the determination of the financial condition of the Company, records so scheduled regardless of any proposed time for destruction in such schedule will not, in any case, be destroyed until after the next examination report of the Company is officially filed with the DePartment of Insurance of the State of Illinois; that listed records do not contain any information necessary for the final settlement or disposition of any claim arising out of any policy of insurance issued by the Company; that, as to scheduled records, notwithstanding any period of time specified for the occurrence of any specified event, no such records will be destroyed if they contain information necessary for the final settlement or disposition of any claim; that there is no actual notice or knowledge that the Statute of Limitations has not run against all matters to which listed records may pertain and that no scheduled records will be destroyed if prior to the time scheduled for destruction the Company receives notice that the Statute of Limitations has not run against matters to which the records may pertain; that no listed records are required to be retained in order to determine the financial condition of the Company or to verify the condition of the Company as stated in any annual statement filed subsequent to the date of the last examination report officially filed by the DePartment of Insurance; that other records exist as to any item which may become material in the future for the determination of the financial condition of the Company.

This Affidavit is signed for the purpose of obtaining the approval of the Director of Insurance for the destruction of records, to save unnecessary expense of unwarranted preservation, and for no other purpose.

President

Secretary

Subscribed and sworn to before me this

day of

, 20     19

Notary

The destruction of records described as listed or scheduled in the foregoing Affidavit is hereby

authorized this

day of

, 20     19

Director of Insurance

TITLE 50: INSURANCE

CHAPTER I: DEPARTMENT OF FINANCIAL AND PROFESSIONAL REGULATION

SUBCHAPTER l: PROVISIONS APPLICABLE TO ALL COMPANIES

PART 909 ADVERTISING AND SALES PROMOTION OF LIFE INSURANCE AND ANNUITIES

——————————————————————————–

The General Assembly’s Illinois Administrative Code database includes only those rulemakings that have been permanently adopted. This menu will point out the Sections on which an emergency rule (valid for a maximum of 150      days, usually until replaced by a permanent rulemaking) exists. The emergency rulemaking is linked through the notation that follows the Section heading in the menu.

Section 909.10            Authority

Section 909.20            Definitions

Section 909.30            Applicability

Section 909.40            Form and Content of Advertisements

Section 909.50            Disclosure Requirements

Section 909.60            Identity of Insurer

Section 909.70            Jurisdictional Licensing and Status of Insurer

Section 909.80            Statements about an Insurer

Section 909.85 Advertising and Marketing of Annuities and Variable Life Contracts

Section 909.90            Advertising Records and Certificate

Section 909.100          Noncompliance

Section 909.110          Conflict with Other Rules

Section 909.120          Severability Provision

AUTHORITY: Implementing Sections 149, 151, 236, 237, 426 and Article XXXI and authorized by Section 401 of the Illinois Insurance Code [215 ILCS 5/149, 151, 236, 237, 401, 426 and Article XXXI].

SOURCE: Filed April 26, 1976, effective May 7, 1976; codified at 7 Ill. Reg. 3460; amended at 14 Ill. Reg. 13584, effective August 14, 1990; amended at 15 Ill. Reg. 15665, effective October 18, 1991; amended at 22 Ill. Reg. 3027, effective June 1, 1998; amended at 22 Ill. Reg. 16468, effective September 1, 1998; amended at 26 Ill. Reg. 16500, effective October 28, 2002; amended at 28 Ill. Reg. 4591, effective March 1, 2004; amended at 31 Ill. Reg. 12732, effective January 1, 2008.

Section 909.10            Authority

This Part is issued by the Director of Insurance pursuant to Sections 401 and 500-145 of the Illinois Insurance Code [215 ILCS 5/401 and 500-145], which empower the Director to make reasonable rules and regulations as may be necessary for making effective the insurance laws of this State. The purpose of this Part is to set forth minimum standards and guidelines to assure a full and truthful disclosure to the public of all material and relevant information in the advertising or solicitation of life insurance policies and annuity contracts. This Part implements the Illinois Insurance Code [215 ILCS 5] by defining acts and practices that constitute a violation of one or more of the following Sections of the Illinois Insurance Code: Sections 149, 151, 236, 237 and 426 and Article XXXI [215 ILCS 5/149, 151, 236, 237 and 426 and Article XXXI], which generally relate to the use of false or misleading statements and certain prohibited actions in the sale of insurance and that apply variously to life insurance companies and to insurance producers and solicitors.

(Source: Amended at 31 Ill. Reg. 12732, effective January 1, 2008)

Section 909.20            Definitions

For the purpose of this Part:

Advertisement shall not include:

Communications or materials used within an insurer’s own organization and not intended for dissemination to the public;

Communications with policyholders other than material urging policyholders to purchase, increase, modify, reinstate or retain a policy;

A general announcement from a group or blanket policyholder to eligible individuals on an employment or membership list that a policy or program has been written or arranged, provided the announcement clearly indicates that it is preliminary to the issuance of a booklet explaining the proposed coverage.

Advertisement means material designed to create public interest in life insurance or annuities or in an insurer, or to induce the public to purchase, increase, modify, reinstate or retain a policy including:

Printed and published material, audio-visual material and descriptive literature of an insurer used in direct mail, newspapers, magazines, radio and television scripts, billboards and similar displays;

Descriptive literature and sales aids of all kinds issued by an insurer or agent, including but not limited to circulars, leaflets, booklets, depictions, illustrations and form letters;

Material used for the recruitment, training, and education of an insurer’s sales personnel, agents, solicitors and brokers which is designed to be used or is used to induce the public to purchase, increase, modify, reinstate or retain a policy;

Prepared sales talks, presentations, and material for use by sales personnel, agents, solicitors and brokers.

Code means the Illinois Insurance Code [215 ILCS 5].

Currently Payable Scale means a scale of non-guaranteed elements in effect for a policy form as of the preparation date of the illustration, or declared to become effective within the next 95 days of the preparation date.

DePartment means the DePartment of Financial and Professional Regulation.

Director means the Director of the Illinois DePartment of Financial and Professional Regulation-Division of Insurance.

Disciplined Current Scale means a scale of non-guaranteed elements constituting a limit on illustrations currently being illustrated by an insurer that is reasonably based on actual recent historical experience, as certified annually by an illustration actuary designated by the insurer. The standards established by the Actuarial Standards Board (ASB) (1720   I Street, N.W., 7th Floor, Washington, D.C. 20006) (Actuarial Standard of Practice No. 24, Compliance with the NAIC Life Insurance Illustrations Model Regulation as of December 1995, no subsequent dates or editions) may be relied upon if the standards:

Are consistent with all provisions of this Part;

Limit a disciplined current scale to reflect only actions that have already been taken or events that have already occurred;

Do not permit a disciplined current scale to include any projected trends of improvements in experience or any assumed improvements in experience beyond the illustration date; and

Do not permit assumed expenses to be less than minimum assumed expenses.

Division means the Illinois DePartment of Financial and Professional Regulation-Division of Insurance.

Illustrated Scale means a scale of non-guaranteed elements, currently being illustrated for policies other than variable life insurance, individual and group annuity contracts, credit life insurance, or life insurance policies and certificates with guaranteed death benefits of $10,000    or less, or illustrated death benefits less than $15,000, that is not more favorable to the policy owner than the lesser of:

The disciplined current scale; or

The currently payable scale.

Insurance Producer means a person required to be licensed under the laws of this State to sell, solicit, or negotiate insurance [215 ILCS 5/500-10].

Insurer shall include any organization or person which issues life insurance or annuities to residents of this State.

Non-guaranteed Elements means premiums, benefits, values, credits or charges under a policy of life insurance that are not guaranteed or not determined at issue.

Policy shall include any policy, plan, certificate, contract, agreement, statement of coverage, rider or endorsement which provides for life insurance or annuity benefits.

Preneed Funeral Contract or Prearrangement shall mean an arrangement by or for an individual before the individual’s death relating to the purchase or provision of specific funeral or cemetery merchandise or services.

(Source: Amended at 31 Ill. Reg. 12732, effective January 1, 2008)

Section 909.30            Applicability

a) This Part shall apply to any life insurance or annuity advertisement intended for dissemination in this State.

b) Every insurer shall establish and at all times maintain a system of control over the content, form and method of dissemination of its advertisements. All such advertisements, regardless of by whom written, created, designed or presented, shall be the responsibility of the insurer.

(Source: Amended at 22 Ill. Reg. 3027, effective June 1, 1998)

Section 909.30            Applicability

a) This Part shall apply to any life insurance or annuity advertisement intended for dissemination in this State.

b) Every insurer shall establish and at all times maintain a system of control over the content, form and method of dissemination of its advertisements. All such advertisements, regardless of by whom written, created, designed or presented, shall be the responsibility of the insurer.

(Source: Amended at 22 Ill. Reg. 3027, effective June 1, 1998)

Section 909.50            Disclosure Requirements

a) The information required to be disclosed by this Part shall not be minimized, rendered obscure or presented in an ambiguous fashion or intermingled with the text of the advertisement so as to be confusing or misleading.

b) No advertisement shall omit material information or use words, phrases, statements, references or illustrations if such omission or such use has the capacity, tendency or effect of misleading or deceiving purchasers or prospective purchasers as to the nature or extent of the insurance, any policy benefit payable, loss covered, premium payable or state or federal tax consequences. The fact that the policy offered is made available to a prospective insured for inspection prior to consummation of the sale, or an offer is made to refund the premium if the purchaser is not satisfied, does not remedy misleading statements.

c) In the event an advertisement used “Non-Medical,” “No Medical Examination Required” or similar terms where issue is not guaranteed, such terms shall be accompanied by a further disclosure of equal prominence and in juxtaposition thereto to the effect that issuance of the policy may depend upon the answers to the health questions.

d) An advertisement shall not use as the name or title of a life insurance policy or an annuity, any phrase which does not include the words “life insurance” or “annuity” unless accompanied by other language clearly indicating it is life insurance.

e) An advertisement shall prominently include the specific title of the type of the policy being marketed and such title shall not be misleading as to the policy benefits.

f) An advertisement of an insurance policy marketed by the direct response techniques shall not state or imply that because there is no agent or commission included, there will be a cost savings to prospective purchasers unless such is the fact. No such cost savings may be stated or implied without justification satisfactory to the Insurance Director prior to use.

g) An advertisement for a policy containing graded or modified benefits shall prominently display any limitation of benefits. If the premium is level and coverage decreases or increases with age or duration, such fact shall be prominently disclosed.

h) An advertisement for a policy with non-level premiums shall prominently describe the premium changes.

i) Dividends and Other Non-Guaranteed Elements

1) An advertisement shall not utilize or describe dividends or other non-guaranteed elements in a manner which is misleading or has the capacity or tendency to mislead.

2) An advertisement shall not state or imply that the payment or amount of dividends is guaranteed. If dividends or other non-guaranteed elements are illustrated they must be based on the insurer’s illustrated scale and the illustration must contain a statement to the effect that they are not to be construed as guarantees or estimates of dividends to be paid in the future.

3) An advertisement shall not state or imply that illustrated dividends under a Participating policy and/or pure endowments will be or can be sufficient at any future time to assure, without the further payment of premiums, the receipt of benefits, such as a paid-up policy, unless the advertisement clearly and precisely explains:

A) what benefits or coverage would be provided at such time, and

B) under what conditions this would occur.

j) An advertisement shall not state that a purchaser of a policy will share in or receive a stated percentage or portion of the earnings on the general account assets of the company.

k) Testimonials or Endorsements by Third Parties

1) Testimonials used in advertisements must be genuine; represent the current opinion of the author; be applicable to the policy advertised, if any; and be accurately reproduced. In using a testimonial the insurer acknowledges as its own all of the statements contained therein, and such statements are subject to all the provisions of this Part.

2) If the individual making a testimonial or an endorsement has a financial interest in the insurer or a related entity as a stockholder, director, officer, employee or otherwise, or receives any benefit directly or indirectly other than required union scale wages, such fact shall be disclosed in the advertisement.

3) An advertisement shall not state or imply that an insurer or policy has been approved or endorsed by a group of individuals, society, association or other organization unless such is the fact and unless any proprietary relationship between an organization and the insurer is disclosed. If the entity making the endorsement or testimonial is owned, controlled or managed by the insurer, or receives any payment or other consideration from the insurer for making such endorsement or testimonial, such fact shall be disclosed in the advertisement.

l) An advertisement shall not contain statistical information relating to any insurer or policy unless it accurately reflects recent and relevant facts. The source of any such statistics used in an advertisement shall be identified therein.

m) Introductory, Initial or Special Offers and Enrollment Periods

1) An advertisement of an individual policy or combination of such policies shall not state or imply that such policy or combination of such policies is an introductory, initial or special offer or that applicants will receive substantial advantages not available at a later date, or that the offer is available only to a specified group of individuals, unless such is the fact. An advertisement shall not describe an enrollment period as “special” or “limited” or use similar words or phrases in describing it when the insurer uses successive enrollment periods as its usual method of marketing its policies.

2) An advertisement shall not state or imply that only a specific number of policies will be sold, or that a time is fixed for the discontinuance of the sale of the Particular policy advertised because of special advantages available in the policy.

3) An advertisement shall not offer a policy which utilizes a reduced initial rate in a manner which over emphasizes the availability and the amount of the initial premium. When an insurer charges an initial premium that differs in amount from the amount of the renewal premium payable on the same mode, all references to the reduced initial premium shall be followed by an asterisk or other appropriate symbol which refers the reader to that specific portion of the advertisement that contains a full rate schedule for the policy being advertised.

4) An enrollment period during which a Particular insurance policy may be purchased on an individual basis shall not be offered within this State unless there has been a lapse of not less than six months between the close of the immediately preceding enrollment period for the same policy and the opening of the new enrollment period. The advertisement shall specify the date by which the applicant must mail the application, which shall be not less than ten days and not more than forty days following the date on which such enrollment period is advertised for the first time. This Part applies to all advertising media: i.e., mail, newspapers, radio, television, magazines and periodicals, by any one insurer. The phrase “any one insurer” includes all the affiliated companies of a group of insurance companies under common management or control. This Part does not apply to the use of a termination or cut-off date beyond which an individual application for a guaranteed issue policy will not be accepted by an insurer in those instances where the application has been sent to the applicant in response to his request. It is also inapplicable to solicitations to employees or members of a Particular group or association which otherwise would be eligible under specific provisions of the Insurance Code for group or blanket insurance. In cases where an insurance product is marketed on a direct mail basis to prospective insureds by reason of some common relationship with a sponsoring organization, this Part shall be applied separately to such sponsoring organization.

n) An advertisement of a Particular policy shall not state or imply that prospective insureds shall be or become members of a special class, group, or quasi-group and as such enjoy special rates, dividends or underwriting privileges, unless such is the fact.

o) An advertisement shall not make unfair or incomplete comparisons of policies, benefits, dividends or rates of other insurers. An advertisement shall not falsely or unfairly describe other insurers, their policies, services or methods of marketing.

p) An advertisement for the solicitation or sale of a preneed funeral contract or prearrangement as defined in Section 909.20 of this Part, which is funded or to be funded by a life insurance policy or annuity contract, shall disclose the following:

1) the fact that a life insurance policy or annuity contract is involved or being used to fund a prearrangement as defined in Section 909.20      of this Part,

2) the nature of the relationship among the soliciting producer or producers, the provider of the funeral merchandise or services, the administrator and any other persons,

3) the fact that the family or representative of the deceased has the right to change the choice of the prearranged provider of funeral/cemetery merchandise and services upon the demise of the insured,

4) the fact that in the event the policy proceeds exceed the prearranged cost for funeral/cemetery merchandise and services, the excess proceeds will be payable to a secondary beneficiary.

(Source: Amended at 22 Ill. Reg. 3027, effective June 1, 1998)

Section 909.60            Identity of Insurer

a) The name of the insurer shall be clearly identified, and if any specific individual policy is advertised it shall be identified either by form number or other appropriate name of the parent company of the insurer, name of the Particular division of the insurer, description. An advertisement shall not use a trade name, any insurance group designation, service mark, slogan, symbol or other device or reference without disclosing the name of the insurer, if the advertisement would have the capacity or tendency to mislead or deceive as to the true identity of the insurer or create the impression that a company other than the insurer would have any responsibility for the financial obligation under a policy.

b) No advertisement shall use any combination of words, symbols or physical materials which by their content, phraseology, shape, color, or other characteristics are so similar to a combination of words, symbols or physical materials used by a governmental program or agency or otherwise appear to be of such a nature that they tend to mislead prospective insureds into believing that the solicitation is in some manner connected with such governmental program or agency.

Section 909.70            Jurisdictional Licensing and Status of Insurer

a) An advertisement which is intended to be seen or heard beyond the limits of the jurisdiction in which the insurer is licensed shall not imply licensing beyond such limits.

b) An advertisement may state that an insurer is licensed in the state where the advertisement appears, provided it does not exaggerate such fact or suggest or imply that competing insurers may not be so licensed.

c) An advertisement shall not create the impression that the insurer, its financial condition or status, the payment of its claims or the merits, desirability or advisability of its policy forms or kinds of plans of insurance are recommended or endorsed by any governmental entity. However, where a governmental entity has recommended or endorsed a policy form or plan, such fact may be stated if the entity authorizes its recommendation or endorsement to be used in an advertisement.  such policies is an introductory, initial or special offer or that applicants will receive substantial advantages not available at a later date, or that the offer is available only to a specified group of individuals, unless such is the fact. An advertisement shall not describe an enrollment period as “special” or “limited” or use similar words or phrases in describing it when the insurer uses successive enrollment periods as its usual method of marketing its policies.

2) An advertisement shall not state or imply that only a specific number of policies will be sold, or that a time is fixed for the discontinuance of the sale of the Particular policy advertised because of special advantages available in the policy.

3) An advertisement shall not offer a policy which utilizes a reduced initial rate in a manner which over emphasizes the availability and the amount of the initial premium. When an insurer charges an initial premium that differs in amount from the amount of the renewal premium payable on the same mode, all references to the reduced initial premium shall be followed by an asterisk or other appropriate symbol which refers the reader to that specific portion of the advertisement that contains a full rate schedule for the policy being advertised.

4) An enrollment period during which a Particular insurance policy may be purchased on an individual basis shall not be offered within this State unless there has been a lapse of not less than six months between the close of the immediately preceding enrollment period for the same policy and the opening of the new enrollment period. The advertisement shall specify the date by which the applicant must mail the application, which shall be not less than ten days and not more than forty days following the date on which such enrollment period is advertised for the first time. This Part applies to all advertising media: i.e., mail, newspapers, radio,

television, magazines and periodicals, by any one insurer. The phrase “any one insurer” includes all the affiliated companies of a group of insurance companies under common management or control. This Part does not apply to the use of a termination or cut-off date beyond which an individual application for a guaranteed issue policy will not be accepted by an insurer in those instances where the application has been sent to the applicant in response to his request. It is also inapplicable to solicitations to employees or members of a Particular group or association which otherwise would be eligible under specific provisions of the Insurance Code for group or blanket insurance. In cases where an insurance product is marketed on a direct mail basis to prospective insureds by reason of some common relationship with a sponsoring organization, this Part shall be applied separately to such sponsoring organization.

n) An advertisement of a Particular policy shall not state or imply that prospective insureds shall be or become members of a special class, group, or quasi-group and as such enjoy special rates, dividends or underwriting privileges, unless such is the fact.

o) An advertisement shall not make unfair or incomplete comparisons of policies, benefits, dividends or rates of other insurers. An advertisement shall not falsely or unfairly describe other insurers, their policies, services or methods of marketing.

p) An advertisement for the solicitation or sale of a preneed funeral contract or prearrangement as defined in Section 909.20 of this Part, which is funded or to be funded by a life insurance policy or annuity contract, shall disclose the following:

1) the fact that a life insurance policy or annuity contract is involved or being used to fund a prearrangement as defined in Section 909.20 of this Part,

2) the nature of the relationship among the soliciting producer or producers, the provider of the funeral merchandise or services, the administrator and any other persons,

3) the fact that the family or representative of the deceased has the right to change the choice of the prearranged provider of funeral/cemetery merchandise and services upon the demise of the insured,

4) the fact that in the event the policy proceeds exceed the prearranged cost for funeral/cemetery merchandise and services, the excess proceeds will be payable to a secondary beneficiary.

(Source: Amended at 22 Ill. Reg. 3027, effective June 1, 1998)

Section 909.60            Identity of Insurer

a) The name of the insurer shall be clearly identified, and if any specific individual policy is advertised it shall be identified either by form number or other appropriate description. An advertisement shall not use a trade name, any insurance group designation, name of the parent company of the insurer, name of the Particular division of the insurer, service mark, slogan, symbol or other device or reference without disclosing the name of the insurer, if the advertisement would have the capacity or tendency to mislead or deceive as to the true identity of the insurer or create the impression that a company other than the insurer would have any responsibility for the financial obligation under a policy.

b) No advertisement shall use any combination of words, symbols or physical materials which by their content, phraseology, shape, color, or other characteristics are so similar to a combination of words, symbols or physical materials used by a governmental program or agency or otherwise appear to be of such a nature that they tend to mislead prospective insureds into believing that the solicitation is in some manner connected with such governmental program or agency.

Section 909.70            Jurisdictional Licensing and Status of Insurer

a) An advertisement which is intended to be seen or heard beyond the limits of the jurisdiction in which the insurer is licensed shall not imply licensing beyond such limits.

b) An advertisement may state that an insurer is licensed in the state where the advertisement appears, provided it does not exaggerate such fact or suggest or imply that competing insurers may not be so licensed.

c) An advertisement shall not create the impression that the insurer, its financial condition or status, the payment of its claims or the merits, desirability or advisability of its policy forms or kinds of plans of insurance are recommended or endorsed by any governmental entity. However, where a governmental entity has recommended or endorsed a policy form or plan, such fact may be stated if the entity authorizes its recommendation or endorsement to be used in an advertisement.

July 30, 2010 / The V Artist Tree

One Glimpse At An Existing Risk Factor of Legacy SEO Efforts

One Danger of Legacy SEO Efforts
Without SERP’s, PR’s and other Elements Present and Accounted For
Who is responsible for updating account information?

With yet another potential source of humorous encounter in the near future, I was temporarily side-tracked into the SEO realm and the various directories SEO strives to thrive within.

I was trying to find a phone number using a generic search.  Okay.  I found it.  It showed up in the search engine results under the website of www.villageprofile.com.

Here’s the snapshot.

A danger of legacy SEO trails in some of the more well-referenced directory-structured settings.

So what’s the big deal?

First, someone had to gather the information.  That takes time and research if you don’t already know.

“The web’s most comprehensive and complete source of community profiles”

How convenient that there is no dating relationship between the claim of “comprehensive” and “complete source” for sure enough, there is a relatively comprehensive listing of non-outdated materials seemingly absent from the Village’s actual web site.

So who gets contacted to update the info?  That takes time and research if you don’t already know.

“2007 Community Profile Network. All Rights Reserved.”

2007?  Okay.  Back then this was the truth.

Roll forward to 2010.

New mayor.

New trustees.

No link to company.  Back to the engines?

Probably not.

The engines are too filled with legacy SEO trails performed using keywords such as the former Mayor’s name, the Village, etc.

Does it even matter if only one individual performed the SEO movements when so many sites are driven by end-user information being uploaded to a group of people for publication purposes?

Unfortunately, yes.

The name of the former Mayor should have been removed from the Village’s own website right after the election and it took until around August 21st for the former Mayor to remove his election sign hanging over his headquarters in a local shopping mall.

And there is virtually no means available to the general observer as to whether it was the former Mayor himself who made the call for the keyword derivative drive on his name and even the Village as so many politicians with deep pockets and extensive networks tend to do just with their campaigns…

Even before they get into an office!

The Legacy of an SEO Artist can cause real pain and create real gain for those who inherit the awareness factors involved with sculpting constructs around the constructs they themselves own and/or operate.

Website real estate is being bought and sold in the hundreds, thousands, and even millions and if a buyer is unaware of the potential for damaging data being etched into these various search engines and directories and even with backlinking schematics and other techniques available to gather a decent list of externally linking/referencing sites intentionally colored by an SEO Artist over typically an extended period of time, sometimes upwards into the 3, 5 and even 10 year length of efforts.

It is this SEO Artist Longevity Variable that made the InBev-AB buyout so intriguing to me and understanding the various metrics being used to value online real estate may be beyond my realm and scope of understand…here was a deep search-engine keyword-rich set of well-known and recognized keywords that could be Twittered at a moments notice during a Super Bowl game, for example built on decades of branding efforts and here comes along the next paper tiger in the game, created back in the mid 2000’s as a collection point for multiple derivatives.

No one may ever know what line-item value their online presence was assigned in that particular deal, but when ignorance can be not only bliss, but the inescapable norm for the most for none can remember all for none can absorb the all in its entirety no matter how broad the scope of knowledge, the bantering back and forth about the topic made the keywords dance enough to where those who buy and sell keywords for their own marketing purposes made it worth taking the snapshot, posting it and then hoping for a day when I could expand on this idea in a much shorter context than the multiple hard drives I went through trying to understand even a sliver of how the unavoidable mathematical opportunities via the online community allow for Twitter catalogs to be migrated over to the government for record-keeping purposes, but we can’t do the same for our law books and the possible inactivity of InBev to actively build its own unique keyword derivatives means nothing more or less than continued observation, discussion, contemplation and consideration for what will happen to the legacy trails left by those who never get the chance to close their accounts…let alone the rest of what goes on this Terabytes Are Teeny List that can show up in a variety of forms of camouflaged circumstances such as this particular one:

Once a rule has been established by an operator, the next step technique answers the wide open question of "So what's next?"

It might be difficult to read, but the basic gist is this.  One site operator apparently has rules governing the frequently easy to recognize link of an affiliate marketing address.  This particular entry suggests the way to address this issue of this type of rule is to use the purchase and re-direct method, although even tiny urls can slip through as well, which sends a clicker through a whole different series of re-direct instructions compared to the basic redirect method of setting up a domain from the server side to re-direct to another site.  “You’re not breaking their rules.  You are not directly connecting your account to their service.” is the marketing of many of the materials out there today…

This is a part of the purchase and re-direct economics assigned/associated with the general idea there is not only high volume buying and selling of keywords going on, its being done right in front of us…well, sort of.  It is this appearance of the advertising revenues that are creating and acting as a marketplace, when even the buying and selling of domain names as a solo act can be a sometimes brutal business arena in which even an iced tea party during a beautiful summer day can be jolted by notice of domain name/real estate related opportunities to buy and sell.

So as I understand this portion of what maybe only scratches the surface of SEO Artist Legacy trails, the Village Profile doesn’t make mention that what is posted is outdated materials that continues to reflect poorly for this particular Village since Village Profile is typically a relatively reliable source of timely data and it shouldn’t be that much of a challenge to update the data regardless of the current owner activities and/or involvement.  There should always be paths and portals to make such requests and generally, the major players have extensive means and methods to accept such contributions for internal processing first rather than the Wiki formula of publish first and then let the public escalate the fight until someone needs to get involved.  Without the Wiki formula in the VP, it seems this site was left up to the first, last and every in between developer who worked on the site to keep it updated and without further exploration, these are just observations being connected in frequently uncommon collective measurements.

This particular side track reminded me of the days when I was active with the original Wikipedia community as well as a few organizations turning to the Wiki interface for their own directory-building desires.  If there is conflict surrounding the published materials, there are resolution processes in place to work through such conflicts.  I had gone ahead and updated the Village’s site using my own account and within a matter of days, the exact old version was posted and mine was gone.

Now my position still remains questions of credibility surrounding my source of data versus the battle I eventually walked away from once I pointed out that using data and information from a 1950’s annual report to fill in more information into the background of this Village, which really has a far more profound story behind it greater than any legends about Al Capone being in the community, let alone any of the other characters that are at least mentioned in microfiche copies of older newspapers.  This was part of why I eventually turned to the blogging community and built up my own archive of materials for use.

And with that position now being stated, I will now float deeper into this Dungeon’s and Dragon’s Bag of Holding* and get back to the typing I originally wanted to do on this Friday…

Oh how I am such the flake sometimes when it comes to online versus reality.

Mashed potatoes anyone?

Oh wait.  I haven’t left the keyboard yet. :)

Valerie

*  A Bag of Holding as I recall it within the context of playing D&D complete with dice, books, notes., etc. was a bottomless bag in which I was permitted to put absolutely anything in it at all and it would not weight upon myself at all when it came to things like agility and speed.

Too bad it didn’t cross my mind back then to try to stuff the universe in there to see what the Dungeon Master would say as a response to advancing enemies.  What a debate that would have been!

July 27, 2010 / The V Artist Tree

And with a touch of SEO…social norms became normal again…

Quoted from the New York Times

The Web Means Forgetting
By Jeffrey Rosen
Published: July 19, 2010

So far, however, Zuckerberg, Facebook’s C.E.O., has been moving in the opposite direction — toward transparency rather than privacy. In defending Facebook’s recent decision to make the default for profile information about friends and relationship status public rather than private, Zuckerberg said in January to the founder of the publication TechCrunch that Facebook had an obligation to reflect “current social norms” that favored exposure over privacy. “People have really gotten comfortable not only sharing more information and different kinds but more openly and with more people, and that social norm is just something that has evolved over time,” he said.

It isn’t that the last reference to a “social norm” is flat out wrong, but it certainly only addresses the more personality-to-personality(ies)-related manifestations that tend to crop up and out in terms of it being acceptable to list an abusive person’s name with a database and that since such an act is altruistic in both intent and motive, whether such reporting only forestalls an additional event with the keywords attached to the individual or whether it brings on such additional weight that the only conclusions left are from the wide array of spectacular means and methods to at least have a chance to influence the eventual records people continue to thirst from both a consumption and production side.

People have really gotten comfortable with the idea that it is okay for a set of laws to be absent from the Internet, let alone a central reporting location.

People have really gotten comfortable with the idea that it is okay for records from a public board meeting to remain absent.

People have really gotten comfortable with the idea that not every community is spending the same amount of money on a web presence, with the many being absent entirely while others flood DSL lines with fancy flash and animation-based sites designed to ignore the literal blind while filling the site with so much content, it can be blinding to see such elasticity in public opinion as to what their government agencies are responsible to provide in a responsible manner, which includes some form of access, if not altogether distribution.

People have really gotten comfortable with the idea that school district’s still are building their own manuals for annual distribution and mandating an option to opt in or out of receiving a paper copy compared to a digital copy is nothing compared to the limited transient nature of enrollment in a particular school district, let alone a different one in the same state, and that a binder system disappeared with this sweep of information of any and all kinds to be divided into “online” and “not online” and then creating an invisible line far away from the actual connect point in which being “online” can and does reference the process of booting up a computer.

Constructs such as Facebook in many ways lead the drive by being a group of programmers who laid out enough code to make such a service attractive to (hopefully) the many and then with forward-looking automation to exchange and interchange intuition as but one of the many aggregation properties included in any site with the label “social networking.”

The idea that anyone with a social networking site would champion the push for even more personal data to be pushed through at least to a base digital format is not that far-fetched, since the passion from the very start was to succeed with such a development in such a way that the traffic and outside development of the site could free them to pursue these other elements of what “society” is clamoring for today.

But this is the same interface that leaves accounts not only fully intact once they are closed down by the account holder, they provide steps to re-activate it should one ever wish to return.  Now if anyone is interested in my FarmVille and Vampire Wars stats, that’s fine, but it is the ability to revive my account entirely intact that challenges a sense of trust and faith that constructs such as Facebook will do their best to avoid the long laundry list of circumstances in which the revival of any closed account by an account holder should be a pretty tough circumstance to do and even then, services can only hold content in their caches for so long before it has to be migrated either to another set of hardware or through upgrades.

From what I can tell from my own explorations of all of this data being published, “we” seem to come across as a group of people more afraid of posting and publishing our various sets of rules and regulations that people use to defend their use of services above and beyond “social networking sites,” let alone their real life behaviors that it ultimately matters not if you are being observed 24/7 or observed through one single instant of a moment.

Without these rules and regulations being more than just easily accessible, but also absent of government oversight in some capacity (i.e. the metrics behind a visit including but not limited to IP profiling, tracking, etc. cannot and should not be permitted to be the only online location to look into any law since the cameras in a library, for example, are not accessed unless circumstance dictates such reference, thereby rendering a relatively reasonable semblance of privacy as to what text is and/or is not being read), it still surprises me that the general cheers going up and down on “where to next?” in favor of resources (especially that of the web developer direction) to be invested into attracting real live humans into spending even more time clicking and clacking around as a part of the portion of this continued examination period into just what kinds of affects are transpiring in a literal global economic setting…(“anyone here a click metrics reader?”)

Driven by all of this content added by individuals choosing to fill the airwaves with such socialized conversation, the text of actual municipal code books can’t even always rise to the top of a search for such an item…

But a bunch of solo artists have multiple entries trying to cover over the distance of the gaps presented with such a nationwide circumstance influenced by global keyword activities…

Wow.  That’s the power of the Online Flash and Dash For Portions of Pennies for ya!

Other than this particular quote, the article was actually quite filled with additional perspectives both near and far to what I just ran my fingers about…and I’m not a hard-core fan of the New York Times…

But everyone has their moments…even for-profit entities!

And now I’m finished taking this moment of your reading time.

But somehow you probably already knew that was coming, right?

The text strings are getting shorter, until…

darn!  I forgot what I was going to say.

Let me just scroll up a little…

Oh yeah!  Those who specialize in SEO compared to any other practice or principle when designing for online exposure tend to not only drive the success/failure ratio with their speed in formulating mass broadcast interfaces designed exclusively for such a task and then marketing it to people with encouragement and direction that use of such software isn’t going to get them “into trouble.”

With this one news article containing but one of the many discussion bubbles (or perhaps clouds) available to address these types of assaults that someone is paying for in some way, shape or form…

Whether or not this converts to a dollar sign or not in the search engines, those in real life affected by such releases on the boldness of encouragement in these types of directions to set forth upon lists containing thousands, if not sometimes millions, of addresses in a matter of moments.

Welcome to another normal side to the current metrics for what constitutes a “social norm” other than common acceptance of maintaining enough lists to blackmail virtually anyone into doing virtually anything…if only by knowing how to use blackhat SEO techniques and tactics…or at least knowing someone who knows how to do such a thing?

Valerie

July 23, 2010 / The V Artist Tree

Inbev versus AB/Bud Check-in July 23 2010

10:30 PM 10:46 AM
Keyword July 22, 2010 July 23, 2010 Difference
texas 961,000,000 973,000,000 12,000,000
inbev 4,000,000 4,140,000 140,000
callahan brakes 2,970,000 3,070,000 100,000
“carlos brito” 350,000 351,000 1,000
globalbeerleader 253 264 11
“Peter Hart” 243,000 243,000 0
InterbrewAmBev 3,050 3,050 0
Interbrew 161,000 161,000 0
“august bush” 20,600 20,200 -400
AmBev 1,850,000 1,570,000 -280,000
budweiser 8,120,000 7,840,000 -280,000
busch 19,800,000 19,400,000 -400,000
Total 998,517,903 1,009,798,514 11,280,611

With a check-in a little over 12 hours later, an 11 million shift in count is not unexpected or unexplainable elasticity, especially when the majority of the shift came through the rise of the keyword TEXAS, which is not entirely unexpected when dealing with a state or nation.  Entries into that particular keyword category can be naturally flooded into the indexes by manual entries and these floods could also be due to various template-related leakage issues and/or other automated events.

Still, with INBEV rising and both AMBEV and BUDWEISER falling identical quantities, there is a 50/50 chance that this keyword count for AMBEV and BUDWEISER were set into one cluster of addresses and subsequently taken down by any number of participants, including that of the publisher as well as each and every conduit such content has/had touched.  Also, BUDWEISER is an active brand whereas AMBEV is a lingering derivative from one of the many name changes INBEV has undergone since at least 2004.

10:46 AM 11:14 AM
Keyword July 23, 2010 July 23, 2010 Difference
texas 973,000,000 973,000,000 0
inbev 4,140,000 4,140,000 0
callahan brakes 3,070,000 3,070,000 0
“carlos brito” 351,000 351,000 0
globalbeerleader 264 264 0
“Peter Hart” 243,000 243,000 0
InterbrewAmBev 3,050 3,050 0
Interbrew 161,000 161,000 0
“august bush” 20,200 20,200 0
AmBev 1,570,000 1,570,000 0
budweiser 7,840,000 7,830,000 -10,000
busch 19,400,000 19,400,000 0
Total 1,009,798,514 1,009,788,514 -10,000

Elements that can create a quick drop with a keyword are frequently tied into the closing of an account somewhere.  For example, this last wave of Facebook closings set forth thousands of indexed locations were no longer available through the accounts that were turned off.  With scrolling link spam set forth on various pages (heavily within the gaming community), let alone all of the other linking abilities set forth by developers as a norm for most news reporting services, the gaming industry and other social networking clusters, the closing of one account can drag down the count of any keyword and that there is no limit to the number of entries that would be removed.  Multiply this by even 100 accounts, all linked as budweiser fans in various ways, and it is no longer just a closing of Facebook accounts that could be the influence behind such a small drop within a 30 minute time period.


11:14 AM 11:30 AM
Keywords July 23, 2010 July 23, 2010 Difference
texas 973,000,000 973,000,000 0
inbev 4,140,000 4,140,000 0
callahan brakes 3,070,000 3,070,000 0
“carlos brito” 351,000 351,000 0
globalbeerleader 264 264 0
“Peter Hart” 243,000 243,000 0
InterbrewAmBev 3,050 3,050 0
Interbrew 161,000 161,000 0
“august bush” 20,200 20,200 0
AmBev 1,570,000 1,570,000 0
budweiser 7,830,000 7,850,000 20,000
busch 19,400,000 19,400,000 0
Total 1,009,788,514 1,009,808,514 20,000

Within 15 minutes, there was not only a restoration of the previously recorded 10,000 count, an additional 10,000 count showed up only for BUDWEISER.  This can also possibly be a result of the various attributes associated with the act of opening and closing both/either accounts and/or addresses.


11:30 AM 12:15 PM
Keywords July 23, 2010 July 23, 20104 Difference
texas 973,000,000 973,000,000 0
inbev 4,140,000 4,140,000 0
callahan brakes 3,070,000 3,080,000 10,000
“carlos brito” 351,000 351,000 0
globalbeerleader 264 264 0
“Peter Hart” 243,000 243,000 0
InterbrewAmBev 3,050 3,050 0
Interbrew 161,000 161,000 0
“august bush” 20,200 20,200 0
AmBev 1,570,000 1,570,000 0
budweiser 7,850,000 7,850,000 0
busch 19,400,000 19,400,000 0
Total 1,009,808,514 1,009,818,514 10,000

This time CALLAHAN BRAKES reflects a rise of a 10,000 count while all other keywords appear to have remained relatively stable.  This assumption of relative stability also is highly speculative due to the absence of a more in-depth ticker tape of the engine’s counts over any time period.

July 23, 2010 / The V Artist Tree

Quick InBev versus AB/Bud Checkup

Back in 2008, I took snapshots of the result in the Google search engine to include pretty much only the number of total possible results, which can be reviewed by clicking here.

In the meantime, I held back on my commentary as to what exactly I thought I was about to watch in terms of movement and count surrounding the various SEO trails being revealed with further research into that list of keywords during that specific time period.

Here is a comparison chart showing which words went up and which words actually went down in their counts.

Keyword(s) July 6, 2008 July 22, 2010 Difference
texas 438,000,000 961,000,000 523,000,000
callahan brakes 68,800 2,970,000 2,901,200
inbev 2,070,000 4,000,000 1,930,000
AmBev 526,000 1,850,000 1,324,000
“Peter Hart” 3,540 243,000 239,460
“carlos brito” 191,000 350,000 159,000
“august bush” 6,920 20,600 13,680
InterbrewAmBev 1,970 3,050 1,080
globalbeerleader 2,430 253 -2,177
Interbrew 422,000 161,000 -261,000
budweiser 9,080,000 8,120,000 -960,000
busch 32,100,000 19,800,000 -12,300,000
Total 482,472,660 998,517,903 516,045,243

First of all, this is a highly speculative at-a-glance analysis tool, but it can sometimes present some interesting hindsight reflections into various time periods that somehow were considered tumultuous or full of large conflict, such as during the bailout debate and other various events being classified as a crisis.

With that said, there are a few assumptions that can be viewed momentarily in a question format.  Out of all the keywords listed here, the term BUSCH holds the most significant drop in count and at a 12 million count, it is not unreasonable to believe a percentage of this count was revealed to be some form of fluff and stuff that was either no longer needed and/or no longer welcome in the index.

Also, Budweiser as a brand did take a keyword count hit, with a less than a million drop, despite Budweiser and Bud being the strongest of all of InBev’s options as to which keywords should be driving the rest of their roster, most especially that of the various brands they have now had distribution rights over for the past few years, including the various Budweiser derivatives as well as their musical roster as well.

The dramatic downturn for the globalbeerleader term certainly allows for further contemplation into what would/could cause such a significant drop in total count when it is such a unique term to begin with.

With callahan brakes being more culturally viewed in a fiction setting, it’s dramatic jump in count might have video and/or audio file distribution issues involved with its climb, or it could simply be that a second movie came out or perhaps a book or video game invoking the business name.

October 18, 2009 / The V Artist Tree

October 2009 Status Summary Update

With all that has already happened this year, it still is difficult to accept that it is already October.  So with only a few more months left to the year, and still a few more text-based and technical issues to work through, I thought I’d take pause and quickly mention some of the projects that have drawn me away from publishing even more audio than the slim pickings I’ve already tossed out.

I am still responsible for maintaining quite a few blogs and despite a few updates here and there, the past few months have been more about explaining the individual purpose of each sites by first integrating them under one identity (“The Exoteric Record”) and then investing some quality time into the purpose and/or demonstration of each individual site.

For example, The Terica Island Series entries still exists in the natural course of blog archives but that fiction blog was turned into The Exoteric Tavern for 2009 and is now home to a variety of lyrics and other materials, some previously hosted at other addresses while others just never made it the first few times around.

I also have been working harder to better categorize existing entries on each site as well as augmenting the benefits of tagging takes time and thought for each entry.  I still have a few more integration methods to apply to these sites and remain appreciative of those who at least have given some of these writings a moment of their time and attention and advisement on how to make it “better.”  I have even made the jump to Facebook and am not entirely looking forward to once again immersing myself into social networking technology…but that’s just me being a brat from Generation X not wanting to re-educated myself again and again and again about things that are new to at least me.

And since  websites can be considered perpetual works in progress, my vision of producing reliable audio entertainment still seems like a better task to pick up and focus on during the colder months, for I have also been quite busy away from these Internet efforts…but what else seems to be new with this online version 2009 Exoteric Record project, right? ;)

How about this entry?

Valerie

October 17, 2009 / The V Artist Tree

Dan Brown Interview via Television + Internet Research = Contradicting Conclusion To Question

A few years ago I must profess even I took a crack at “cracking” codes…always keeping an eye out for activities typically held in some public capacity (i.e. learning the codes to broadcast spam emails or blog entries) and the Kryptos Sculpture in front of the CIA buliding is one of those seemingly “prized” mathematical equations that until it is broken down into its most familiar format willing to be accepted as a “true” result versus a “false” equation producing a false impression, this secret “code” has yet to be broken.

Being reminded of the sculpture tonight while listening to Dan Brown and once again feeling quite daunted by such a puzzling task, I had moved my mind onto other matters in my inbox…until a few minutes ago.

That sculpture holds the same rules as any piece of material being labeled that of “artwork,” which means each and every panel ultimately will come to mean whatever the user chooses to use to define such a vision before them.  Just as people form opinions about lyrics and music videos, the originally embedded message eventually outgrew this original challenge for someone to duplicate the exact pattern Jim Sanborn wanted to be revealed via a series of steps only Sanborn was aware of.

Therefore, the question of what true message Sanborn left encrypted upon the sculpture in its panel format might still be a matter of finding the right mathematical patterns…

But I also question the idea that the only conclusion to what was left behind on this sculpture was that of some secret message other than reminding me that it matters not what meaning I put into crafting the lyrics to one of my songs.

People will interpret it as they see fit.

Just as there will be those who find familiar or unfamiliar sensations while reviewing some of the interpretive breakdowns as I saw done for the first three panels via the Internet.

Perhaps such a conclusion could be offered up as an equal alternative to correctly decoding of the mysterious 4th panel versus the answer that Sanborn intended on claiming to the correct answer to what the “code” actually said for all of the panels, one and all?  I didn’t see anything about the panels being used to work with one another for example and maybe his final answer isn’t a 1, 2, 3, 4 panel progression after all?  Back in the 1990’s, computers were already churning calculation after calculation.  What if he used the results of a series of not widely know, or contemplated and the movie “Contact” was inspired by his work with layers upon layers of mathematics?  Can a pen and paper crack the code?

I realize I am being contradictory to believe for at least this moment that the Sanborn Sculpture is impossible to “break” in its “code,” since inevitably as with any piece of artwork, it began to take on its own meaning…its own legacy…its own set of interpretations…the moment it begins to manifest itself into said “final” piece of artwork.

That’s the real twist to “breaking its code.”

It’s a piece of artwork that has no final point of conclusion as to what Sanborn might or might not have intended to leave behind in the originally chiseled message and that with all true artwork, such conclusions are unnecessary when evaluating the quality and value of the work left behind.

Although this kind of mathematics is far out of my league to pull together in a numeric format, perhaps the elusive solution to what was embedded in Sanborn’s 4th Panel Decryption has something to do with this kind of multi-dimension mathematics…?

Follow

Get every new post delivered to your Inbox.