# 50 Ill. Adm. Code 205.30: Section 205.30 Definitions

> Illinois · Regulations · In force

URL: https://www.frixlaw.com/law-library/statutes/STATE_IL_IAC_T50_P205_S205_30

## Section

- **Citation:** 50 Ill. Adm. Code 205.30
- **Heading:** Section 205.30 Definitions
- **Jurisdiction:** Illinois
- **Kind:** Regulations
- **Status:** In force
- **Text as of:** August 14, 2026
- **Source:** Compiled text
- **Location:** Illinois Administrative Code / Title 50 INSURANCE / CHAPTER I: DEPARTMENT OF INSURANCE / Part 205 MUNICIPAL BOND INSURANCE / Section 205.30 Definitions

## Text

Section 205
Section 205.30  Definitions
a)         Municipal Bond Insurance – insurance or reinsurance against
financial loss by reason of nonpayment of principal, interest or other payment
obligations pursuant to the terms of municipal bonds as defined in subsection
(b) hereof.
b)         Municipal Bond – any security (or other instrument under which
a payment obligation is created) issued by or on behalf of, or payable or
guaranteed by a state, territory or possession of the United States of America,
a municipality, or a political subdivision of any of the foregoing, or by any
public agency or instrumentality thereof.
c)         Contingency Reserve – an additional premium reserve
established for the protection of insureds covered by policies insuring
municipal bonds against the effect of excessive losses occurring during adverse
economic cycles.
d)         Cumulative Net Liability – the insured unpaid principal and
insured unpaid interest due or to become due covered by in-force policies of
municipal bond insurance, reduced by the appropriate allowance for acceptable
reinsurance.
e)         Average Annual Debt Service – in respect to any issue or part
thereof of municipal bonds covered by an in-force policy, the product of the
total insured, unpaid principal and insured, unpaid interest thereon times the
number of such bonds (assuming that each $1,000 of par value represents one
bond), divided by an amount equal to the aggregate life (in years) of such
bonds (assuming that each $1,000 of par value represents one bond); i.e.:
(Unpaid
Principal + Unpaid Interest) x (Number of Bonds)
(Number
of Bond Years)
f)         Industrial Revenue Bonds – municipal bonds issued primarily to
finance property for use in a trade or business and without a substantial
public purpose, and backed by a revenue source other than a governmental unit
described in the definition of municipal bonds above
ar value represents one bond); i.e.:
(Unpaid
Principal + Unpaid Interest) x (Number of Bonds)
(Number
of Bond Years)
f)         Industrial Revenue Bonds – municipal bonds issued primarily to
finance property for use in a trade or business and without a substantial
public purpose, and backed by a revenue source other than a governmental unit
described in the definition of municipal bonds above.
g)         Insurer – includes a company engaged in the reinsurance of
municipal bonds unless the text provides otherwise.

## Nearby sections

- [50 Ill. Adm. Code 205.10 Section 205.10  Authority](https://www.frixlaw.com/law-library/statutes/STATE_IL_IAC_T50_P205_S205_10.md)
- [50 Ill. Adm. Code 205.20 Section 205.20  Purpose](https://www.frixlaw.com/law-library/statutes/STATE_IL_IAC_T50_P205_S205_20.md)
- [50 Ill. Adm. Code 205.30 Section 205.30  Definitions](https://www.frixlaw.com/law-library/statutes/STATE_IL_IAC_T50_P205_S205_30.md)
- [50 Ill. Adm. Code 205.40 Section 205.40  Requirements](https://www.frixlaw.com/law-library/statutes/STATE_IL_IAC_T50_P205_S205_40.md)
- [50 Ill. Adm. Code 205.50 Section 205.50  Limitations and Restrictions](https://www.frixlaw.com/law-library/statutes/STATE_IL_IAC_T50_P205_S205_50.md)
- [50 Ill. Adm. Code 205.60 Section 205.60  Financial Statements](https://www.frixlaw.com/law-library/statutes/STATE_IL_IAC_T50_P205_S205_60.md)
- [50 Ill. Adm. Code 205.70 Section 205.70  Reinsurance](https://www.frixlaw.com/law-library/statutes/STATE_IL_IAC_T50_P205_S205_70.md)
- [50 Ill. Adm. Code 205.80 Section 205.80  Collateral Security](https://www.frixlaw.com/law-library/statutes/STATE_IL_IAC_T50_P205_S205_80.md)
- [50 Ill. Adm. Code 205.90 Section 205.90  Applicability of Other Laws](https://www.frixlaw.com/law-library/statutes/STATE_IL_IAC_T50_P205_S205_90.md)

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Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/STATE_IL_IAC_T50_P205_S205_30. Check the current official text before relying on it. Not legal advice.