215 ILCS 5/123B-2
2021 Illinois Compiled Statutes|Chapter 215 - INSURANCE|215 ILCS 5/ - Illinois Insurance Code.|Article VIIB - Risk Retention Companies

 (from Ch. 73, par. 735B-2)(Section scheduled to be repealed on January 1, 2027)Sec. 123B-2. Definitions. As used in this Article:(1) "Director" means the Director of the Department of Insurance.(2) "Completed operations liability" means liability  arising out of the installation,  maintenance, or repair of any product at a site  which is not owned or controlled by:(a) any person who performs that work; or(b) any person who hires an independent contractor to     perform that work; but shall include liability for activities which are completed or abandoned before the date of the occurrence giving rise to the liability.(3) "Domicile", for purposes of determining the state  in which a purchasing group is domiciled, means:(a) for a corporation, the state in which the     purchasing group is incorporated; and(b) for an unincorporated entity, the state of its     principal place of business.(4) "Hazardous financial condition" means that, based  on its present or reasonably anticipated financial condition,  a risk retention group, although not yet financially  impaired or insolvent, is unlikely to be able:(a) to meet obligations to policyholders with respect     to known claims and reasonably anticipated claims; or(b) to pay other obligations in the normal course of     business.(5) "Insurance" means primary insurance, excess insurance,  reinsurance, surplus lines insurance, and any other  arrangement for shifting and distributing risk which  is determined to be insurance under the laws of Illinois.(6) "Liability" means:(a) legal liability for damages (including costs of     defense, legal costs and fees, and other claims expenses) because of injuries to other persons, damage to their property, or other damage or loss to such other persons resulting from or arising out of:(i) any business (whether for profit or not for         profit), trade, product, services (including professional services), premises, or operations; or(ii) any activity of any state or local         government, or any agency or political subdivision thereof; but(b) does not include personal risk liability and an     employer's liability with respect to its employees other than legal liability under the Federal Employers' Liability Act (45 U.S.C. 51 et seq.).(7) "Personal risk liability" means liability for  damage because of injury to any person, damage to property,  or other loss or damage resulting from any personal,  familial, or household responsibilities or activities,  rather than from responsibilities or activities referred  to in paragraph (a) of subsection (6) of this Section;(8) "Plan of operation or a feasibility study" means  an analysis which presents the expected activities and  results of a risk retention group including, at a minimum:(a) information sufficient to verify that its members     are engaged in businesses or activities similar or related with respect to the liability to which such members are exposed by virtue of any related, similar, or common business, trade, product, services, premises or operations;(b) for each state in which it intends to operate,     the coverages, deductibles, coverage limits, rates, and rating classification systems for each line of insurance the group intends to offer;(c) historical and expected loss experience of the     proposed members and national experience of similar exposures to the extent this experience is reasonably available;(d) pro forma financial statements and projections;(e) appropriate opinions by a qualified, independent     casualty actuary, including a determination of minimum premium or participation levels required to commence operations and to prevent a hazardous financial condition;(f) identification of management, underwriting and     claims procedures, marketing methods, managerial oversight methods, investment policies and reinsurance agreements;(f-5)   identification of each state in which the     risk retention group has obtained, or sought to obtain, a charter and license and a description of its status in each such state; and(g) such other matters as may be prescribed by the     commissioner of the state in which the group is chartered for liability insurance companies authorized by the insurance laws of such state.(9) "Product liability" means liability for damages  because of any personal injury, death, emotional harm,  consequential economic damage, or property damage (including  damages resulting from the loss of use of property)  arising out of the manufacture, design, importation,  distribution, packaging, labeling, lease, or sale of  a product, but does not include the liability of any  person for those damages if the product involved was  in the possession of such a person when the incident  giving rise to the claim occurred.(10) "Purchasing group" means any group which:(a) has as one of its purposes the purchase of     liability insurance on a group basis;(b) purchases such insurance only for its group     members and only to cover their similar or related liability exposure, as described in paragraph (c) of this subsection (10);(c) is composed of members whose businesses or     activities are similar or related with respect to the liability to which members are exposed by virtue of any related, similar, or common business, trade, product, services, premises, or operations; and(d) is domiciled in any State.(11) "Risk retention group" means any corporation  or other limited liability association:(a) whose primary activity consists of assuming and     spreading all, or any portion, of the liability exposure of its group members;(b) which is organized for the primary purpose of     conducting the activity described under paragraph (a) of this subsection (11);(c) which:(i) is organized and licensed as a liability         insurance company and authorized to engage in the business of insurance under the laws of any state; or(ii) before January 1, 1985 was organized or         licensed and authorized to engage in the business of insurance under the laws of Bermuda or the Cayman Islands and, before such date, had certified to the insurance commissioner of at least one state that it satisfied the capitalization requirements of such state, except that any such group shall be considered to be a risk retention group only if it has been engaged in business continuously since such date and only for the purposes of continuing to provide insurance to cover product liability or completed operations liability (as such terms were defined in the Product Liability Risk Retention Act of 1981 before the date of the enactment of the Risk Retention Act of 1986);(d) which does not exclude any person from membership     in the group solely to provide for members of such a group a competitive advantage over such a person;(e) which:(i) has as its owners (directly or indirectly)         only persons who comprise the membership of the risk retention group and who are provided insurance by such group; or(ii) has as its sole owner (directly or         indirectly) an organization which:(I) has as its members only persons who             comprise the membership of the risk retention group; and(II) has as its owners only persons who             comprise the membership of the risk retention group and who are provided insurance by such group;(f) whose members are engaged in businesses or     activities similar or related with respect to the liability of which such members are exposed by virtue of any related, similar, or common business, trade, product, services, premises, or operations;(g) whose activities do not include the provision of     insurance other than:(i) liability insurance for assuming and         spreading all or any portion of the liability of its group members; and(ii) reinsurance with respect to the liability of         any other risk retention group (or any members of such other group) which is engaged in businesses or activities so that such group or member meets the requirement described in paragraph (f) of this subsection (11) for membership in the risk retention group which provides such reinsurance; and(h) the name of which includes the phrase "Risk     Retention Group".(12) "State" means any state of the United States  or the District of Columbia.(13)   "NAIC" means the National Association of Insurance Commissioners.(Source: P.A. 99-512, eff. 1-1-17.)