215 ILCS 5/126.3
2021 Illinois Compiled Statutes|Chapter 215 - INSURANCE|215 ILCS 5/ - Illinois Insurance Code.|Article VIII - Investments Of Domestic Companies

Sec. 126.3.     General investment qualifications.A. Insurers may acquire, hold or invest in investments or engage in  investment practices as set forth in this Article.  Insurers may also acquire,  hold or invest in investments not conforming to the requirements of this  Article that are not otherwise prohibited by this Code.  Investments not  conforming to this Article shall not be admitted assets unless they are  acquired under other authority of this Code.B. Subject to subsection C of this Section, an insurer shall not acquire or  hold an  investment as an admitted asset unless at the time of acquisition it is:(1) Eligible for the payment or accrual of interest     or discount (whether in cash or other forms of income or securities), eligible to receive dividends or other distributions or is otherwise income producing; or(2) Acquired under Section 126.15B, 126.15C, 126.16,     126.18, 126.20, 126.28C, 126.29, 126.31, or 126.32 or under the authority of Sections of the Code other than this Article.C. An insurer may acquire or hold as admitted assets investments that do not  otherwise qualify as provided in this Article if the insurer has not acquired  them for the purpose of circumventing any limitations contained in this  Article, if the insurer acquires the investments in the following circumstances  and the insurer complies with the provisions of Sections 126.5 and 126.7 as to  the investments:(1) As payment on account of existing indebtedness or     in connection with the refinancing, restructuring or workout of existing indebtedness, if taken to protect the insurer's interest in that investment;(2) As realization on collateral for indebtedness;(3) In connection with an otherwise qualified     investment or investment practice, as interest on or a dividend or other distribution related to the investment or investment practice or in connection with the refinancing of the investment, in each case for no additional or only nominal consideration;(4) Under a lawful and bona fide agreement of     recapitalization or voluntary or involuntary reorganization in connection with an investment held by the insurer; or(5) Under a bulk reinsurance, merger or consolidation     transaction approved by the Director if the assets constitute admissible investments for the ceding, merged or consolidated companies.D. An investment or portion of an investment acquired by an insurer under  subsection C of this Section shall become a nonadmitted asset 3 years  (or 5 years in the case of mortgage loans and real estate) from the date of  its acquisition, unless within that period the investment has become a  qualified investment under a Section of this Article other than subsection C of  this Section, but an investment acquired under an agreement of bulk  reinsurance, merger or consolidation may be qualified for a longer period if so  provided in the plan for reinsurance, merger or consolidation as approved by  the Director. Upon application by the insurer and a showing that the  nonadmission of an asset held under subsection C of this Section would injure  the interests of the insurer, the Director may extend the period for  admissibility for an additional reasonable period of time.E. Except as provided in subsections F and H of this Section, an investment  shall qualify under this Article if, on the date the insurer committed to  acquire the investment or on the date of its acquisition, it would have  qualified under this Article. For the purposes of determining limitations  contained in this Article, an insurer shall give appropriate recognition to any  commitments to acquire investments.F.  (1) An investment held as an admitted asset by an     insurer on the effective date of this amendatory Act of 1997 which  qualified  immediately prior to  the  effective  date of this amendatory Act of 1997 shall remain qualified as an admitted asset under this Article.(2) Each specific transaction constituting an     investment practice of the type described in this Article immediately prior to the effective date of this amendatory Act of 1997 that was lawfully entered into by an insurer and was in effect on the effective date of this amendatory Act of 1997 shall continue to be permitted under this Article until its expiration or termination under its terms.G. Unless otherwise specified, an investment limitation computed on the  basis of an  insurer's admitted assets or capital and surplus shall relate to the amount  required to be shown on the statutory balance sheet of the insurer most  recently required to be filed (annual or last quarter) with the Director.  Solely for purposes of  computing any limitation under this Article based upon admitted assets, the  insurer shall deduct from the amount of its admitted assets the amount of the  liability recorded on such statutory balance sheet for:(1) The return of acceptable collateral received in a     reverse repurchase transaction or a securities lending transaction;(2) Cash received in a dollar roll transaction; and(3) The amount reported as borrowed money in such     statutory balance sheet to the extent not included in paragraphs (1) and (2) of this subsection.H. An investment qualified, in whole or in part, for acquisition or holding  as an admitted asset may be qualified or requalified at the time of acquisition  or a later date, in whole or in part, under any other Section, if the relevant  conditions contained in the other Section are satisfied at the time of  qualification or requalification.I. An insurer shall maintain documentation demonstrating that investments  were acquired in accordance with this Article, and specifying the Section of  this Article under which they were acquired.J. An insurer shall not enter into an agreement to purchase securities in  advance of their issuance for resale to the public as part of a distribution of  the securities by  the issuer or otherwise guarantee the distribution, except that an insurer may  acquire privately placed securities with registration rights.K. Notwithstanding the provisions of this Article, the Director, for good  cause, may  order an insurer to nonadmit, limit, dispose of, withdraw from or discontinue  an investment or investment practice in accordance with Article XXIV. The  authority of the Director under this subsection is in addition to any other  authority of the Director.    (Source: P.A. 90-418, eff. 8-15-97.)