215 ILCS 5/179A-15
2021 Illinois Compiled Statutes|Chapter 215 - INSURANCE|215 ILCS 5/ - Illinois Insurance Code.|Article XI 1/2 - Protected Cell Companies

Sec. 179A-15.     Establishment of protected cells.(a) A domestic company may,  with the prior written approval by the Director of a  plan of operation  submitted by the domestic company with respect to each protected cell,  establish one or more  protected cells in connection with an insurance securitization. Upon the  written approval by the Director of the plan of  operation, which shall  include, but not be limited to, the specific business and investment  guidelines  of the protected  cell, the protected cell company may, in accordance with the approved plan  of operation,  attribute to the  protected cell insurance obligations with  respect to  its insurance  business and obligations relating to the insurance securitization and  assets to fund those obligations. A protected cell shall have  its own distinct name  or designation, which shall include the words "protected cell". The protected  cell company  shall transfer all  assets attributable to a protected cell to one or more separately established  and identified  protected cell accounts bearing the name or designation of that protected cell.   Protected cell  assets shall be held in the protected cell accounts for the purpose of  satisfying the obligations of  that protected cell.(b) All attributions of assets and  liabilities between a protected  cell and the general account shall be in accordance  with the  plan  of operation approved by the Director. No  other  attribution of assets or  liabilities may be made by a protected cell company  between the  protected cell company's general account and its  protected cells.  Any attribution of assets and  liabilities between the general account and a protected cell  or from investors in the form of principal on a debt instrument  issued by a  protected cell company shall be in cash or in readily marketable securities  with  established market values.(c) The creation of a protected cell does not create, in respect of that  protected cell, a legal person  separate from the protected cell company. Amounts attributed to a protected  cell under this  Article, including  assets transferred to a protected cell account, are owned by the protected  cell company and  the protected cell company may  not be, nor hold itself out to be, a trustee with respect to those protected  cell assets of that  protected cell account. Notwithstanding the foregoing, the company may allow  for a security  interest to attach to protected cell assets or a protected cell account when in  favor of a creditor of  the protected cell and otherwise allowed under applicable law.(d) This Article shall not be construed to prohibit the protected cell  company from  contracting with or  arranging for an investment advisor, commodity trading advisor, or other third  party to manage  the protected cell assets of a protected cell, provided that all remuneration,  expenses, and other  compensation of the third party advisor or manager are payable from the  protected cell assets of  that protected cell and not from the protected cell assets of other protected  cells or the assets of  the protected cell company's general account.(e) A protected cell company shall  establish  administrative and  accounting procedures necessary to properly identify the one or more  protected cells of the  protected cell company and the protected cell assets and protected cell  liabilities  attributable to the protected cells.  It shall be  the duty of the directors of a protected cell company to:(1) keep protected cell assets and protected cell     liabilities separate and separately identifiable from the assets and liabilities of the protected cell company's general account; and(2) keep protected cell assets and protected cell     liabilities attributable to one protected cell separate and separately identifiable from protected cell assets and protected cell liabilities attributable to other protected cells.If this Section is violated,  the remedy of tracing shall  be  applicable to protected cell assets when commingled with protected cell assets  of other protected  cells or the assets of the protected cell company's general account.  The remedy of tracing shall not be construed as an exclusive remedy.(f) The protected cell company shall, when  establishing a protected cell, attribute to the protected cell assets with a  value at least equal to the reserves and other insurance liabilities attributed  to that protected cell.    (Source: P.A. 91-278, eff. 7-23-99; 92-74, eff. 7-12-01.)