Illinois § 35

§ 35.

Investments; reserves; deficiencies. (a) The funds of any dental service plan corporation may be invested only in accordance with the requirements provided by law for the investment of funds of life insurance companies. (b) As an allocation of net worth, each dental service plan corporation shall maintain a special contingent reserve. The special contingent reserve for a corporation that is beginning operations shall be equal to 5% of its net earned subscription revenue for dental care services through December 31st of the year in which it is certified, but in no event less than $100,000. In subsequent years, unless waived by the Director, the corporation shall accumulate additions to the contingent reserve in an amount which is equal to 2% of its net earned subscription revenue for each calendar year. For purposes of this Section, "net earned subscription revenue" means premium minus reinsurance expenses. Maintenance of the contingent reserve requires that net worth equals or exceeds the contingent reserve at any balance sheet date. The special contingent reserve shall be provided in cash and securities in combination and form acceptable to the Director. (c) Additional accumulations under Section 35(b) will no longer be required when the total special contingent reserve required by Section 35(b) is equal to or greater than 5% of the corporation's average annual net earned subscription revenue for the corporation's preceding 2 calendar years. Additional accumulations under subsection (b) of this Section shall no longer be required when the total special contingent reserve required by subsection (b) of this Section is equal to $1,500,000. (d) A deficiency in meeting amounts required in subsection (b) or (c) of this Section will require, upon notice from the Director, (1) filing of a plan for correction of the deficiency, acceptable to the Director, within 20 days from receipt of notice, and (2) correction of the deficiency within a reasonable time, not to exceed 60 days from receipt of notice unless an extension of time is granted by the Director. Such a deficiency will be deemed an impairment, and failure to correct the deficiency in the prescribed time shall be grounds for rehabilitation, liquidation, conservation, or dissolution pursuant to Section 38. (Source: P.A. 90-794, eff. 8-14-98.)