il-v50i40-50-ill-adm-code-1305: 50 Ill. Adm. Code 1305 — Prior Notification of Dividends or Distributions

1) Heading of the Part: Prior Notification of Dividends or Distributions 2) Code Citation: 50 Ill. Adm. Code 1305 3) Section Number: Proposed Action: 1305.30 Amendment 4) Statutory Authority: Implementing and authorized by Section 123C-26 and Article XXIV of the Illinois Insurance Code [215 ILCS 5]. 5) A Complete Description of the Subjects and Issues Involved: This rulemaking is filed pursuant to Section 5-15 of the Illinois Administrative Procedure Act and is only changing the address of the Department's Springfield Office to reflect the fact that the office is moving on September 23, 2026. Section 5-15 of the Illinois Administrative Procedure Act requires agencies to include a statement of how the proposed rule made under this Section satisfies the criteria established by subsections (a) and (b). The Department's address is used by the public to obtain information from the Department and/or make submissions or requests of the Department. These members of the public may include insurance companies, persons licensed by the Department, and Illinois insurance consumers. The address provided in the rules should be accurate, otherwise such persons may go to or send correspondence to the wrong address. The decision to relocate the Springfield office was an internal management decision. The private rights of individuals are not affected by Department rules containing the accurate address, although having the incorrect address in rule will cause unnecessary confusion and delay for people seeking information from and/or making submissions to the Department in person or via mail. It is in the public interest to have the Department's office address published in the Illinois Administrative Code be correct. 6) Published studies or reports, and sources of underlying data, used to compose this rulemaking: Not required for Section 5-15 notices. 7) Will this proposed rulemaking replace an emergency rule currently in effect? Not required for Section 5-15 notices. 8) Does this rulemaking contain an automatic repeal date? Not required for Section 5-15 notices. 9) Does this proposed amendment contain incorporations by reference? Not required for Section 5-15 notices. 10) Are there any other proposed rulemakings pending on this Part? No 11) Statement of Statewide Policy Objectives: Not required for Section 5-15 notices. 12) Time, Place, and Manner in which interested persons may comment on this proposed rulemaking: Persons who wish to comment on this proposed rulemaking may submit written comments no later than 14 days after the publication of this Notice to: Kathryn Williams Department of Insurance th 115 S. LaSalle Street, 13 Floor Chicago IL 60603 (312) 814-8212 Kathryn.A.Williams@illinois.gov 13) Initial Regulatory Flexibility Analysis: Not required for Section 5-15 notices. A) Description of the type of small business, not for profit corporations or small municipalities subject to the proposed amendment: None B) Description of the proposed reporting, bookkeeping and other procedures required for compliance with the amendment: None C) Description of the types of professional skills necessary for compliance: None 14) Small Business Economic Impact Analysis: Not required for Section 5-15 notices. 15) Regulatory Agenda on which this rulemaking was summarized: Not required for Section 5-15 notices. 16) Any other information or justification for the proposed rule or amendment that the agency believes would be helpful to the public regarding the proposed rule or amendment. For example, a discussion or analysis of the benefits of the proposed rule or amendment is projected to have on the Illinois public, consumers, investors or other similar groups. Not required for Section 5-15 notices. The full text of the Proposed Amendment begins on the next page: DEPARTMENT OF INSURANCE NOTICE OF PROPOSED AMENDMENT TITLE 50: INSURANCE CHAPTER I: DEPARTMENT OF INSURANCE PART 1305 PRIOR NOTIFICATION OF DIVIDENDS OR DISTRIBUTIONS Section 1305.10 Purpose 1305.20 Definitions 1305.30 Prior Notification of Dividends and Other Distributions 1305.40 Penalties AUTHORITY: Implementing and authorized by Section 123C-26 and Article XXIV of the Illinois Insurance Code [215 ILCS 5]. SOURCE: Adopted at 44 Ill. Reg. 13347, effective July 31, 2020; amended at 50 Ill. Reg. ______, effective ____________. Section 1305.30 Prior Notification of Dividends and Other Distributions a) Notice 1) Any domestic captive insurance company required by Section 123C-26 of the Code to notify the Director of a dividend or other distribution to holders of an equity interest in the captive insurance company shall notify the Director of the proposed dividend or distribution in writing within 5 business days following the declaration and no less than 10 business days prior to payment. The 10-day period shall begin the day the notice is received by the Department. The notice shall be deemed incomplete unless all the information required by this Part has been included. 2) Proof of Receipt. Certified mail confirmation, confirmation from a commercial delivery service, or the date stamped upon the notice by the Department acknowledging receipt of the filing required by this Part shall serve as proof of the date of receipt of the filing. b) The domestic captive insurance company shall provide to the Director the information required in this Part on Form D-2 (see 50 Ill. Adm. Code DEPARTMENT OF INSURANCE NOTICE OF PROPOSED AMENDMENT 655.Illustration A) or on a similar form from and via the website of the Department. c) The notification shall be directed to the Deputy Director of the Financial- Corporate Regulatory Division of the Illinois Department of Insurance, 4800 Wabash Ave.320 W. Washington Street, Springfield, Illinois 6271162767. d) The notification shall contain the following information: 1) name and addresses of the company sending the notification and of any companies on whose behalf the notification is being sent; 2) date of mailing; 3) name, title, address and telephone number or email address for the person to whom notices should be sent regarding this notification; 4) the amount of the dividend or other distribution and the date established for payment; 5) a statement as to whether the dividend or other distribution is to be in cash or other property, and, if in property, a description of the property, its cost, statutory carrying value, and the fair market value of the property, together with an explanation of the basis for valuation; 6) the amounts and payment dates of all dividends paid within the period of 12 consecutive months ending on the date fixed for payment of the proposed dividend for which notification is being given or approval is being sought; 7) a balance sheet and statement of income, for the period intervening from the last annual statement filed with the Director and the end of the month preceding the month in which the prior notification of the dividend is submitted, indicating the amount of all unrealized capital gains included in unassigned funds; 8) a brief statement of: A) the effect of the proposed dividend upon the insurer's surplus; DEPARTMENT OF INSURANCE NOTICE OF PROPOSED AMENDMENT B) the reasonableness of surplus in relation to the insurer's outstanding liabilities; and C) the adequacy of surplus relative to the insurer's financial position; 9) a calculation of the insurer's risk based capital level as of the most recently filed financial statement (quarterly or annual), adjusted to show the effect of the proposed dividend or other distribution; and 10) date, name and signature of the individual sending the notification, attested to by an officer of the company. e) In determining whether to approve the issuance of the dividends or other distributions, the Director shall review the notification, information included in the notification, and any other relevant information to determine if the issuance or other distribution may materially impair the domestic captive insurance company or companies. (Source: Amended at 50 Ill. Reg. ______, effective ____________)