(Section scheduled to be repealed on January 1, 2027)

472 words·~2 min read·/il/chapter-215/act-5/1-229

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

Sec. 60. Procedure when insufficient assets are possessed by company.

(1)Whenever the Director finds that the admitted assets of a company subject to the provisions of this Article are less than the aggregate of

(a)its liabilities and

(b)the minimum surplus required to be maintained by Section 43, he must notify the company in writing of the amount of such impairment and require that such impairment must be removed within such period, which shall not be less than 30 nor more than 90 days, as he may designate. Unless otherwise allowed by the Director, the company must discontinue the issuance of new or renewal policies while such impairment exists. If the contracts issued by the company contain a provision for a contingent liability, the Director may order the board of directors or trustees of the company to levy an assessment for the purpose of removing such impairment against each member in accordance with the terms of his policy. If the Director finds that the company will remove the impairment or a part thereof from sources other than an assessment, he may permit a reduction in the amount of the assessment to the extent of the sum so to be obtained. No member is liable for an assessment unless notified of the company's claim therefor within one year after the termination of the policy whether by expiration, cancellation or otherwise. Nothing contained in this paragraph may be construed to limit or restrict the authority of any liquidator, conservator or rehabilitator acting under Article XIII or XIII 1/2 of this Act.

(2)If policies containing provisions for a contingent liability are outstanding, and the company fails to levy an assessment within 20 days from the date of an order, or if the impairment is not removed within the period specified in the Director's notice, the company shall be deemed insolvent and the Director may cancel the company's certificate of authority and shall proceed against it in accordance with Article XIII.

(3)If, while the impairment exists, any officer, director, or trustee of the company renews, issues or delivers or causes to be renewed, issued or delivered any policy, contract or certificate of insurance unless otherwise allowed by the Director, and the fact of such impairment is known to the officer, director, or trustee of the company, such officer, director, or trustee shall be guilty of a business offense and may be fined not less than $200 and not more than $5,000 for each offense.

(4)Nothing in this Section prohibits, while such impairment exists, any such officer, director, trustee, agent or employee from issuing or renewing a policy of insurance when an insured or owner exercises an option granted to him under an existing policy to obtain new, renewed or converted insurance coverage.