Illinois Compiled Statutes 215 ILCS 5/126.14 – Tangible personal property under lease
Current as of: 2024 | Check for updates
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A. (1) Subject to the limitations of Section 126.10, an insurer may acquire tangible personal property or equity interests therein located or used wholly or in part within a domestic jurisdiction either directly or indirectly through limited partnership interests and general partnership interests not otherwise prohibited by Section 126.5D, joint ventures, stock of an investment subsidiary or membership interests in a limited liability company, trust certificates, or other similar instruments.
(2) Investments acquired under paragraph (1) of this subsection shall be eligible only if:
(a) The property is subject to a lease or other
(2) Investments acquired under paragraph (1) of this subsection shall be eligible only if:
Terms Used In Illinois Compiled Statutes 215 ILCS 5/126.14
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- 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.
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
- Personal property: All property that is not real property.
- Recourse: An arrangement in which a bank retains, in form or in substance, any credit risk directly or indirectly associated with an asset it has sold (in accordance with generally accepted accounting principles) that exceeds a pro rata share of the bank's claim on the asset. If a bank has no claim on an asset it has sold, then the retention of any credit risk is recourse. Source: FDIC
(a) The property is subject to a lease or other
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agreement with a person whose rated credit instruments in the amount of the purchase price of the personal property the insurer could then acquire under Section 126.11; and
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(b) The lease or other agreement provides the insurer
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the right to receive rental, purchase or other fixed payments for the use or purchase of the property, and the aggregate value of the payments, together with the estimated residual value of the property at the end of its useful life and the estimated tax benefits to the insurer resulting from ownership of the property, shall be adequate to return the cost of the insurer’s investment in the property, plus a return deemed adequate by the insurer.
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B. The insurer shall compute the amount of each investment under this Section on the basis of the out of pocket purchase price and applicable related expenses paid by the insurer for the investment, net of each borrowing made to finance the purchase price and expenses, to the extent the borrowing is without recourse to the insurer.
C. An insurer shall not acquire directly or indirectly through an investment subsidiary an investment under this Section if, as a result of and after giving effect to the investment, the aggregate amount of all investments then held by the insurer under this Section would exceed:
(1) 2% of its admitted assets; or
(2) 0.5% of its admitted assets as to any single item
C. An insurer shall not acquire directly or indirectly through an investment subsidiary an investment under this Section if, as a result of and after giving effect to the investment, the aggregate amount of all investments then held by the insurer under this Section would exceed:
(1) 2% of its admitted assets; or
(2) 0.5% of its admitted assets as to any single item
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of tangible personal property.
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D. For purposes of determining compliance with the limitations of Section 126.10, investments acquired by an insurer under this Section shall be aggregated with those acquired under Section 126.11, and each lessee of the property under a lease referred to in this Section shall be deemed the issuer of an obligation in the amount of the investment of the insurer in the property determined as provided in subsection B of this Section.
E. Nothing in this Section is applicable to tangible personal property lease arrangements between an insurer and its subsidiaries and affiliates under a cost sharing arrangement or agreement permitted under Section 131.20a(1)(a)(iv).
E. Nothing in this Section is applicable to tangible personal property lease arrangements between an insurer and its subsidiaries and affiliates under a cost sharing arrangement or agreement permitted under Section 131.20a(1)(a)(iv).