(Section scheduled to be repealed on January 1, 2027)

292 words·~1 min read·/il/chapter-215/act-5/1-81

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

Sec. 16. Organization bonds.

(1)The incorporators except as stated in subsection

(3)of this Section, shall deliver to the Director two bonds in favor of the State of Illinois, in the penalty of $50,000 each, with the incorporators as principals and a duly authorized surety company as surety. One of such bonds shall be for the use and benefit of the State of Illinois, and shall be conditioned upon the payment of costs incurred by the State by reason of any legal proceedings for liquidation or dissolution of such company prior to the issuance to it of a certificate of authority to do an insurance business. The other bond shall be for the use and benefit of subscribers, shareholders and creditors, and shall be conditioned upon the full and complete accounting for all funds and property coming into the possession of the incorporators or into the possession of the company prior to the issuance to it of a certificate of authority to do an insurance business.

(2)In lieu of delivering the above bonds, the incorporators may deposit with the Director $100,000 in cash or securities of the United States Government or of the State of Illinois, having a market value of at least $100,000. The cash or securities so deposited shall be held in trust by the Director, until the issuance of a certificate of authority to the company, to indemnify the State of Illinois and all subscribers, shareholders and creditors of the company for the same matters and things set forth as conditions of the organization bonds mentioned in subsection (1).

(3)No bonds are required if the stock of the company is to be purchased by a sole shareholder.