215 ILCS 5/531.03(2)(a). This Article shall provide coverage to the persons specified in subsection (1) of this Section for policies or contracts of direct, (i) nongroup life insurance, health insurance (that, for the purposes of this Article, includes health maintenance organization subscriber contracts and certificates), annuities and supplemental contracts to any of these, (ii) for certificates under direct group policies or contracts, (iii) for unallocated annuity contracts and (iv) for contracts to furnish health care services and subscription certificates for medical or health care services issued by persons licensed to transact insurance business in this State under this Code. Annuity contracts and certificates under group annuity contracts include but are not limited to guaranteed investment contracts, deposit administration contracts, unallocated funding agreements, allocated funding agreements, structured settlement agreements, lottery contracts and any immediate or deferred annuity contracts.
215 ILCS 5/531.03(2)(b). Except as otherwise provided in paragraph (c) of this subsection, this Article shall not provide coverage for: (i) that portion of a policy or contract not guaranteed by the member insurer, or under which the risk is borne by the policy or contract owner; (ii) any such policy or contract or part thereof assumed by the impaired or insolvent insurer under a contract of reinsurance, other than reinsurance for which assumption certificates have been issued; (iii) any portion of a policy or contract to the extent that the rate of interest on which it is based or the interest rate, crediting rate, or similar factor is determined by use of an index or other external reference stated in the policy or contract employed in calculating returns or changes in value: (A) averaged over the period of 4 years prior to the date on which the member insurer becomes an impaired or insolvent insurer under this Article, whichever is earlier, exceeds the rate of interest determined by subtracting 2 percentage points from Moody’s Corporate Bond Yield Average averaged for that same 4-year period or for such lesser period if the policy or contract was issued less than 4 years before the member insurer becomes an impaired or insolvent insurer under this Article, whichever is earlier; and (B) on and after the date on which the member insurer becomes an impaired or insolvent insurer under this Article, whichever is earlier, exceeds the rate of interest determined by subtracting 3 percentage points from Moody’s Corporate Bond Yield Average as most recently available; (iv) any unallocated annuity contract issued to or in connection with a benefit plan protected under the federal Pension Benefit Guaranty Corporation, regardless of whether the federal Pension Benefit Guaranty Corporation has yet become liable to make any payments with respect to the benefit plan; (v) any portion of any unallocated annuity contract which is not issued to or in connection with a specific employee, union or association of natural persons benefit plan or a government lottery; (vi) an obligation that does not arise under the express written terms of the policy or contract issued by the member insurer to the enrollee, certificate holder, contract owner, or policy owner, including without limitation: (A) a claim based on marketing materials; (B) a claim based on side letters, riders, or other documents that were issued by the member insurer without meeting applicable policy or contract form filing or approval requirements; (C) a misrepresentation of or regarding policy or contract benefits; (D) an extra-contractual claim; or (E) a claim for penalties or consequential or incidental damages; (vii) any stop-loss insurance, as defined in clause (b) of Class 1 or clause (a) of Class 2 of Section 4, and further defined in subsection (d) of Section 352 [215 ILCS 5/352]; (viii) any policy or contract providing any hospital, medical, prescription drug, or other health care benefits pursuant to Part C or Part D of Subchapter XVIII, Chapter 7 of Title 42 of the United States Code (commonly known as Medicare Part C & D), Subchapter XIX, Chapter 7 of Title 42 of the United States Code (commonly known as Medicaid), or any regulations issued pursuant thereto; (ix) any portion of a policy or contract to the extent that the assessments required by Section 531.09 of this Code [215 ILCS 5/531.09] with respect to the policy or contract are preempted or otherwise not permitted by federal or State law; (x) any portion of a policy or contract issued to a plan or program of an employer, association, or other person to provide life, health, or annuity benefits to its employees, members, or others to the extent that the plan or program is self-funded or uninsured, including, but not limited to, benefits payable by an employer, association, or other person under: (A) a multiple employer welfare arrangement as defined in 29 U.S.C. Section 1002; (B) a minimum premium group insurance plan; (C) a stop-loss group insurance plan; or (D) an administrative services only contract; (xi) any portion of a policy or contract to the extent that it provides for: (A) dividends or experience rating credits; (B) voting rights; or (C) payment of any fees or allowances to any person, including the policy or contract owner, in connection with the service to or administration of the policy or contract; (xii) any policy or contract issued in this State by a member insurer at a time when it was not licensed or did not have a certificate of authority to issue the policy or contract in this State; (xiii) any contractual agreement that establishes the member insurer’s obligations to provide a book value accounting guaranty for defined contribution benefit plan participants by reference to a portfolio of assets that is owned by the benefit plan or its trustee, which in each case is not an affiliate of the member insurer; (xiv) any portion of a policy or contract to the extent that it provides for interest or other changes in value to be determined by the use of an index or other external reference stated in the policy or contract, but which have not been credited to the policy or contract, or as to which the policy or contract owner’s rights are subject to forfeiture, as of the date the member insurer becomes an impaired or insolvent insurer under this Code, whichever is earlier. If a policy’s or contract’s interest or changes in value are credited less frequently than annually, then for purposes of determining the values that have been credited and are not subject to forfeiture under this Section, the interest or change in value determined by using the procedures defined in the policy or contract will be credited as if the contractual date of crediting interest or changing values was the date of impairment or insolvency, whichever is earlier, and will not be subject to forfeiture; or (xv) that portion or part of a variable life insurance or variable annuity contract not guaranteed by a member insurer.
215ILCS 5/531.03(1)(b)(ii). Yes. Covers nonresidents but only under all of the following conditions: (A) the member insurer that issued the policies or contracts is domiciled in this State; (B) the states in which the persons reside have associations similar to the Association created by this Article; (C) the persons are not eligible for coverage by an association in any other state due to the fact that the insurer or health maintenance organization was not licensed in that state at the time specified in that state’s guaranty association law.
215 ILCS 5/531.08(a)(1). If a member insurer is an impaired insurer. Amended effective 8.20.2010.
215 ILCS 5/531.08(a)(2). If a member insurer is an insolvent insurer. Amended effective 8.20.2010.
No separate provision. Amended effective 8.20.2010.
215 ILCS 5/531.05 “Impaired insurer” means (A) a member insurer which, after the effective date of this amendatory Act of the 96th General Assembly, is not an insolvent insurer, and is placed under an order of rehabilitation or conservation by a court of competent jurisdiction or (B) a member insurer deemed by the Director after the effective date of this amendatory Act of the 96th General Assembly to be potentially unable to fulfill its contractual obligations and not an insolvent insurer. Amended effective 8.20.2010.
215 ILCS 5/531.05 “Insolvent insurer” means a member insurer that, after the effective date of this amendatory Act of the 96th General Assembly, is placed under a final order of liquidation by a court of competent jurisdiction with a finding of insolvency. Amended effective 8.20.2010.
215 ILCS 5/531.05 “Member insurer” means an insurer or health maintenance organization licensed or holding a certificate of authority to transact in this State any kind of insurance or health maintenance organization business for which coverage is provided under Section 531.03 of this Code and includes an insurer or health maintenance organization whose license or certificate of authority in this State may have been suspended, revoked, not renewed, or voluntarily withdrawn or whose certificate of authority may have been suspended pursuant to Section 119 of this Code, but does not include: (1) a hospital or medical service organization, whether profit or nonprofit; (2) (blank); (3) any burial society organized under Article XIX of this Code [215 ILCS 5/338 et seq.], any fraternal benefit society organized under Article XVII of this Code [215 ILCS 5/282.1 et seq.], any mutual benefit association organized under Article XVIII of this Code [215 ILCS 5/316 et seq.], and any foreign fraternal benefit society licensed under Article VI of this Code [215 ILCS 5/254 et seq.]; (4) a mandatory State pooling plan; (5) a mutual assessment company or other person that operates on an assessment basis; (6) an insurance exchange; (7) an organization that is permitted to issue charitable gift annuities pursuant to Section 121-2.10 of this Code [215 ILCS 5/121-2.10]; (8) any health services plan corporation established pursuant to the Voluntary Health Services Plans Act [215 ILCS 165/1 et seq.]; (9) any dental service plan corporation established pursuant to the Dental Service Plan Act [215 ILCS 110/1 et seq.]; or (10) an entity similar to any of the above.
215 ILCS 5/531.09(5). (a) Subject to the provisions of this paragraph, the total of all assessments authorized by the Association with respect to a member insurer for each subaccount of the life insurance and annuity account and for the health account shall not in one calendar year exceed 2% of that member insurer’s average annual premiums received in this State on the policies and contracts covered by the subaccount or account during the 3 calendar years preceding the year in which the member insurer became an impaired or insolvent insurer.
215 ILCS 5/215 ILCS 5/531.09(2). There shall be 2 classes of assessments, as follows: (a) Class A assessments shall be made for the purpose of meeting administrative costs and other general expenses and examinations conducted under the authority of the Director under subsection (5) of Section 531.12 [215 ILCS 5/531.12]. (b) Class B assessments shall be made to the extent necessary to carry out the powers and duties of the Association under Section 531.08 [215 ILCS 5/531.08] with regard to an impaired or insolvent domestic insurer or insolvent foreign or alien insurers.