SB 1289 — INS-SURPLUS LINE HOME STATE

SB1289 EngrossedEnrolled LRB104 08171 BAB 18220 b AN ACT concerning regulation.

"Authorized insurer" means an insurer that holds a certificate of authority issued by the Director but, for the SB1289 EngrossedEnrolled - 2 - LRB104 08171 BAB 18220 b purposes of this Section, does not include a domestic surplus line insurer as defined in Section 445a or any residual market mechanism.

(IV) The person is a not-for-profit organization SB1289 EngrossedEnrolled - 3 - LRB104 08171 BAB 18220 b or public entity generating annual budgeted expenditures of at least $30,000,000, as such amount is adjusted pursuant to the provision in this definition concerning percentage change.

(B) If more than one insured from an affiliated group are named insureds on a single surplus line insurance contract, then "home state" means the home state, as determined pursuant to item (A) of this definition, of the SB1289 EngrossedEnrolled - 4 - LRB104 08171 BAB 18220 b member of the affiliated group that has the largest percentage of premium attributed to it under such insurance contract.

"Multi-State risk" means a risk with insured exposures in SB1289 EngrossedEnrolled - 5 - LRB104 08171 BAB 18220 b more than one State.

(a) a bachelor's degree or higher from an SB1289 EngrossedEnrolled - 6 - LRB104 08171 BAB 18220 b accredited college or university in risk management, business administration, finance, economics, or any other field determined by the Director or his designee to demonstrate minimum competence in risk management;

(DD) a designation as a RIMS Fellow (RF) issued by the Global Risk Management SB1289 EngrossedEnrolled - 7 - LRB104 08171 BAB 18220 b Institute;

"Residual market mechanism" means an association, organization, or other entity described in Article XXXIII of this Code or Section 7-501 of the Illinois Vehicle Code or any SB1289 EngrossedEnrolled - 8 - LRB104 08171 BAB 18220 b similar association, organization, or other entity.

surplus line SB1289 EngrossedEnrolled - 9 - LRB104 08171 BAB 18220 b insurer requirements.

Licensed surplus line producers may procure surplus line insurance from an unauthorized insurer not domiciled in any state only if the insurer meets the standards for unauthorized insurers SB1289 EngrossedEnrolled - 10 - LRB104 08171 BAB 18220 b domiciled in any state in paragraph (b) of this subsection (1.5) or is listed on the Quarterly Listing of Alien Insurers maintained by the International Insurers Department of the NAIC at the time of procurement.

In the course of making a diligent effort to procure insurance from authorized insurers, an insurance SB1289 EngrossedEnrolled - 11 - LRB104 08171 BAB 18220 b producer shall not be required to submit a risk to a residual market mechanism when the risk is not eligible for coverage or exceeds the limits available in the residual market mechanism.

SB1289 EngrossedEnrolled - 12 - LRB104 08171 BAB 18220 b (f) Commercial wholesale transaction diligent effort.

Any licensed producer who is a resident of this State, or any nonresident who qualifies under Section 500-40, may be licensed as a surplus SB1289 EngrossedEnrolled - 13 - LRB104 08171 BAB 18220 b line producer upon payment of an annual license fee of $400.

A surplus line producer shall file with the Director on or before February 1 and August 1 of each year a report in the form prescribed by the Director on all surplus line insurance procured from unauthorized insurers and submitted to the Surplus Line Association of Illinois during the preceding 6 month period ending December 31 or June 30 respectively, and on the filing of such report shall pay to the Director for the use and benefit of the SB1289 EngrossedEnrolled - 14 - LRB104 08171 BAB 18220 b State a sum equal to the surplus line tax rate multiplied by the gross taxable premiums less returned taxable premiums upon all surplus line insurance submitted to the Surplus Line Association of Illinois during the preceding 6 months.

The taxes imposed under this subsection and the recording fees SB1289 EngrossedEnrolled - 15 - LRB104 08171 BAB 18220 b charged by the Surplus Line Association of Illinois may be charged to and collected from surplus line insureds.

The submission of insuring contracts to the Surplus Line Association of Illinois constitutes a certification by the surplus line producer or by the insurance producer who SB1289 EngrossedEnrolled - 16 - LRB104 08171 BAB 18220 b presented the risk to the surplus line producer for placement as a surplus line risk that after diligent effort, where required, the required insurance could not be procured from authorized insurers and that such procurement was otherwise in accordance with the surplus line law.

Whenever it appears to the satisfaction of the Director that a surplus line producer has made a documented good faith SB1289 EngrossedEnrolled - 17 - LRB104 08171 BAB 18220 b determination of the home state for a surplus line insurance contract and has paid the surplus line taxes to a state other than Illinois, and the Director determines that the producer's good faith determination was incorrect and the home state is Illinois, the surplus line producer may, at the discretion of the Director, be required to submit the contract to the Surplus Line Association of Illinois and pay applicable taxes and recording fees, but there shall be no penalty, interest, or late fee assessed.

SB1289 EngrossedEnrolled - 18 - LRB104 08171 BAB 18220 b The Director at his option is authorized to forward a copy of the process to the Surplus Line Association of Illinois for delivery to the unauthorized insurer or the Director may deliver the process to the unauthorized insurer by other means which he considers to be reasonably prompt and certain.

The Illinois Surplus Line law does not apply to insurance of property and operations of railroads or aircraft engaged in interstate or foreign commerce, insurance of vessels, crafts or hulls, SB1289 EngrossedEnrolled - 19 - LRB104 08171 BAB 18220 b cargoes, marine builder's risks, marine protection and indemnity, or other risks including strikes and war risks insured under ocean or wet marine forms of policies.