SB3243 Summary

• Creates Article IIB of the Illinois Insurance Code establishing a framework for domestic stock companies to divide into 2 or more resulting companies pursuant to an approved plan of division.

• Requires plan of division to include specified information about resulting companies, allocation of assets and liabilities between companies, distribution of shares, and evidence that policyholder interests will be protected.

• Establishes Director of Insurance approval process for divisions, including requirements that resulting companies be solvent, assets be reasonably adequate, and divisions not violate fraudulent transfer laws or harm policyholders or creditors.

• Provides that upon division effectiveness, each resulting company automatically assumes only the liabilities allocated to it by the plan, with unallocated liabilities remaining the joint and several liability of all resulting companies.

• Grants objecting shareholders of dividing companies that do not survive appraisal rights to obtain fair value of their shares, and permits Director to allow temporary domestic stock companies to merge with existing companies simultaneously with a division.