The Illinois Manufacturers’ Association (IMA) has put forward an initiative to rewrite Illinois Captive law to make it more business friendly and encourage Illinois companies to locate their captives in the state, according to Mark Denzler, vice president and chief operating officer of the IMA.
Senate Bill 1286 is primarily sponsored and co-sponsored by state senators John G Mulroe and William Haine, respectively.
The bill proposes that a captive insurance company may write any type of insurance, but may only insure the operational risk of the company’s affiliates and risks of a controlled unaffiliated business.
Currently, the bill states that a pure captive insurance company may only insure the risks of its parent and affiliated companies.
Association captives similarly may only insure risk of the member organisations of its association, and their affiliated companies.
However, one of the amendments states that the Department may not issue a certificate of authority to a captive insurance company unless the company possesses and maintains unencumbered capital and surplus in an amount determined by the director.
This figure may not be less than $250,000 for a pure captive insurance company, $500,000 for an industrial insured captive insurance company, and $750,000 for an association captive insurance company.
The capital and surplus must be in the form of US currency, an irrevocable letter of credit, bonds or bond of the state.
The proposed bill also states that a captive insurance company must submit a report of its financial condition at last year's end to the Director on or before June 1 of each year.
It must also end with an independent certified public accountant's opinion of the company's financial condition.
“We are working with the Department of Insurance and other stakeholders to finalise the legislation,” said Denzler.
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Illinois, Captive Insurance, Legislation, North America