Illinois Compiled Statutes 215 ILCS 5/123C-7 – Directors – conflicts of interest
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A. The provisions of Section 10 shall apply to stock captive insurance companies and all those having dealings therewith and the provisions of Section 40 shall apply to mutual captive insurance companies and all those having dealings therewith; provided that no residents or citizens of this State need be directors. No director may serve who has been convicted of fraud involving any financial institution or of a felony. The Director may waive the prohibition regarding a felony if he determines that the particular felony does not jeopardize the person’s ability to act as a director.
B. Every captive insurance company shall report to the Director within 30 days after any change in its executive officers or directors, including in its report a statement of the business and professional affiliations of any new executive officer or director. For purposes of this subsection B, the term “executive officer” includes only the following: chairman of the board of directors; president; executive or senior vice-president; secretary; and treasurer.
C. No director, officer, or employee having any authority in the investment or disposition of the funds of a captive insurance company shall accept, except on behalf of the company, or be the beneficiary of, any fee, brokerage, gift, or other emolument because of any investment, loan, deposit, purchase, sale, payment, or exchange made by or for the company; but a director who is not otherwise an officer or employee of the company may receive reasonable compensation for services performed for sales or purchases made to or for the company in the ordinary course of its business and in the usual private professional or business capacity of such director.
D. Any profit or gain received by or on behalf of any person in violation of subsection C of this Section shall inure to and be recoverable by the company. A suit to recover such profit may be instituted in any court of competent jurisdiction by the company, or by any stockholder of the company in its name and on its behalf if the company fails or refuses to bring such suit within 60 days after request in writing or if the company fails diligently to prosecute the same thereafter. No such suit shall be brought more than 2 years after the date such profit or gain was discovered.
B. Every captive insurance company shall report to the Director within 30 days after any change in its executive officers or directors, including in its report a statement of the business and professional affiliations of any new executive officer or director. For purposes of this subsection B, the term “executive officer” includes only the following: chairman of the board of directors; president; executive or senior vice-president; secretary; and treasurer.
Terms Used In Illinois Compiled Statutes 215 ILCS 5/123C-7
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Captive insurance company: means any pure captive insurance company, association captive insurance company or industrial insured captive insurance company organized under the provisions of this Article. See Illinois Compiled Statutes 215 ILCS 5/123C-1
- Director: means the Director of the Department of Insurance. See Illinois Compiled Statutes 215 ILCS 5/123C-1
- Fraud: Intentional deception resulting in injury to another.
- Gift: A voluntary transfer or conveyance of property without consideration, or for less than full and adequate consideration based on fair market value.
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Prosecute: To charge someone with a crime. A prosecutor tries a criminal case on behalf of the government.
- State: when applied to different parts of the United States, may be construed to include the District of Columbia and the several territories, and the words "United States" may be construed to include the said district and territories. See Illinois Compiled Statutes 5 ILCS 70/1.14
C. No director, officer, or employee having any authority in the investment or disposition of the funds of a captive insurance company shall accept, except on behalf of the company, or be the beneficiary of, any fee, brokerage, gift, or other emolument because of any investment, loan, deposit, purchase, sale, payment, or exchange made by or for the company; but a director who is not otherwise an officer or employee of the company may receive reasonable compensation for services performed for sales or purchases made to or for the company in the ordinary course of its business and in the usual private professional or business capacity of such director.
D. Any profit or gain received by or on behalf of any person in violation of subsection C of this Section shall inure to and be recoverable by the company. A suit to recover such profit may be instituted in any court of competent jurisdiction by the company, or by any stockholder of the company in its name and on its behalf if the company fails or refuses to bring such suit within 60 days after request in writing or if the company fails diligently to prosecute the same thereafter. No such suit shall be brought more than 2 years after the date such profit or gain was discovered.