(215 ILCS 5/Art. XXXIV heading)
(215 ILCS 5/532) (from Ch. 73, par. 1065.82)
Sec. 532. Purpose.
(a) The purpose of this Article is to provide a mechanism for the payment of covered claims under certain insurance policies, to avoid excessive delay in payment of covered claims, to avoid financial loss to claimants or policyholders because of the entry of an Order of Liquidation against an insolvent company, including through services offered to the Director in her or his capacity as receiver under Article XIII of this Code that relate to covered claims, to provide a Fund to assess among member companies the costs of such protection and maintain the continuity and self-sufficient operation of the Fund, and to offset the costs associated with maintaining the Fund's continuity and self-sufficient operations when practical by providing assistance and services to the Director in her or his capacity as receiver under Article XIII of this Code as described in this Section.
(b) The purpose of this Article is also to provide a mechanism for the Fund to participate in and facilitate the process by which the assets of an insolvent company are marshaled and distributed pursuant to Article XIII of this Code beyond reimbursing the cost of covered claims. This subsection (b) is inoperative 5 years after the effective date of this amendatory Act of the 102nd General Assembly.
(Source: P.A. 102-396, eff. 8-16-21.)
(215 ILCS 5/533) (from Ch. 73, par. 1065.83)
Sec. 533. Scope. This Article applies to all of the kinds of insurance written on a direct basis which are included in Class 2 and Class 3 of Section 4 of this Code as they appear and are defined in those clauses as of January 1, 1985, except that it shall not apply to:
(a) accident and health insurance written under clause (a) of Class 2, or
(b) mortgage guaranty or other financial guaranty written as suretyship obligations or insurance under clause (g), clause (h) or clause (i) of Class 2 or otherwise, or
(c) fidelity or surety bonds, or any other bonding obligations other than employee fidelity bonds, or
(d) marine insurance other than inland marine insurance, written under clause (d) of Class 3, or
(e) insurance of warranties or service contracts, including insurance that provides for the repair, replacement, or service of goods or property or indemnification for repair, replacement, or service for the operational or structural failure of the goods or property due to a defect in materials, workmanship, or normal wear and tear or provides reimbursement for the liability incurred by the issuer of agreements or service contracts that provide these benefits, or
(f) any claim servicing agreement or insurance policy which contains a retrospective rating or other premium adjustment agreement under which premiums are substantially equal to the losses and loss expenses covered under the policy or any policy providing retroactive insurance of known loss, or
(g) any insurance which is provided, guaranteed or reinsured pursuant to the Federal Crop Insurance Program or the National Flood Insurance Program, including flood insurance written by National Flood Insurance Program Write Your Own Companies.
(Source: P.A. 89-97, eff. 7-7-95.)
(215 ILCS 5/534) (from Ch. 73, par. 1065.84)
Sec. 534. Definitions. For the purposes of this Article, unless the context requires otherwise, the words and phrases defined in Sections 534.1 through 534.8 have the meanings set forth in those Sections.
(Source: P.A. 85-576.)
(215 ILCS 5/534.1) (from Ch. 73, par. 1065.84-1)
Sec. 534.1. "Fund" means the Illinois Insurance Guaranty Fund created by this Article.
(Source: P.A. 77-305.)
(215 ILCS 5/534.2) (from Ch. 73, par. 1065.84-2)
Sec. 534.2. "Director" means the Director of Insurance of the State of Illinois.
(Source: P.A. 77-305.)
(215 ILCS 5/534.3) (from Ch. 73, par. 1065.84-3)
Sec. 534.3. Covered claim; unearned premium defined.
(a) "Covered claim" means an unpaid claim for a loss arising out of and within the coverage of an insurance policy to which this Article applies and which is in force at the time of the occurrence giving rise to the unpaid claim, including claims presented during any extended discovery period which was purchased from the company before the entry of a liquidation order or which is purchased or obtained from the liquidator after the entry of a liquidation order, made by a person insured under such policy or by a person suffering injury or damage for which a person insured under such policy is legally liable, and for unearned premium, if:
(b) "Covered claim" does not include:
(c) "Unearned Premium" means the premium for the unexpired period of a policy which has been terminated prior to the expiration of the period for which premium has been paid and does not mean premium which is returnable to the insured for any other reason.
(Source: P.A. 101-60, eff. 7-12-19; 102-558, eff. 8-20-21.)
(215 ILCS 5/534.4) (from Ch. 73, par. 1065.84-4)
Sec. 534.4. "Insolvent company" means a company organized as a stock company, mutual company, reciprocal or Lloyds (a) which holds a certificate of authority to transact insurance in this State either at the time the policy was issued or when the insured event occurred, or any company which has assumed or has been allocated such policy obligation through merger, division, consolidation, or reinsurance, whether or not such assuming company held a certificate of authority to transact insurance in this State at the time such policy was issued or when the insured event occurred; and (b) against which a final Order of Liquidation with a finding of insolvency to which there is no further right of appeal has been entered by a court of competent jurisdiction in the company's State of domicile after the effective date of this Article.
(Source: P.A. 100-1190, eff. 4-5-19.)
(215 ILCS 5/534.5) (from Ch. 73, par. 1065.84-5)
Sec. 534.5. Member company. "Member Company" means any insurance company organized as a stock company, mutual company, reciprocal or Lloyds, which holds a certificate of authority to transact any kind of insurance in this State to which this Article applies, and which is either:
(a) a domestic insurance company formed before or after the effective date of this Article; or
(b) a foreign or alien insurance company.
An insurance company shall cease to be a member company effective on the day following the termination or expiration of its license to transact the kinds of insurance to which this Article applies; provided, however, that the insurance company shall remain liable as a member company for any and all obligations, including obligations for assessments levied before the termination or expiration of the insurance company's license and assessments levied after the termination or expiration, based on any insolvency as to which the determination of insolvency by a court of competent jurisdiction occurs before the termination or expiration of the insurance company's license.
(Source: P.A. 89-97, eff. 7-7-95.)
(215 ILCS 5/534.6) (from Ch. 73, par. 1065.84-6)
Sec. 534.6. "Net direct written premiums" means direct gross premiums written in this State on insurance policies to which this Article applies, less return premiums thereon and dividends paid or credited to policyholders on such direct business. "Net direct written premiums" does not include premiums on contracts of reinsurance or other contracts between insurers or reinsurers.
(Source: P.A. 85-576.)
(215 ILCS 5/534.7) (from Ch. 73, par. 1065.84-7)
Sec. 534.7. Affiliate. An "affiliate" of a specified person means a person who directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with the specified person on December 31 of the year next preceding the date the insolvent company became an insolvent company.
(Source: P.A. 89-97, eff. 7-7-95.)
(215 ILCS 5/534.8) (from Ch. 73, par. 1065.84-8)
Sec. 534.8. "Control" means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, the holding of proxies, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is solely the result of an official position with or corporate office held by the person. Control shall be presumed to exist if any person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing, 10% or more of the voting securities or voting power of any other person. This presumption may be rebutted by a showing that control does not exist in fact.
(Source: P.A. 85-576.)
(215 ILCS 5/535) (from Ch. 73, par. 1065.85)
Sec. 535. Creation of the Fund. There is created a nonprofit unincorporated legal entity to be known as the Illinois Insurance Guaranty Fund. All member companies as defined in Section 534.5 shall be and remain members of the Fund as a condition of their authority to transact business in this State. The Fund shall perform its functions under a plan of operation established and approved under Section 539 and shall exercise its powers through a board of directors established under Section 536. For purposes of administration and assessment, the Fund shall be divided into 2 separate accounts: (a) the automobile insurance account; and (b) the account for all other insurance to which this Article applies, including Workers' Compensation.
(Source: P.A. 85-576.)
(215 ILCS 5/536) (from Ch. 73, par. 1065.86)
Sec. 536. Board of Directors.
(a) The board of directors of the Fund shall consist of not less than 5 nor more than 10 persons, with one public member appointed by the Director, serving terms as established in the plan of operation. The public member shall be a resident of this State, and he or she shall either (1) be a licensed and certified public accountant under the laws of this State or (2) have earned, and maintain in good standing, the Chartered Property and Casualty Underwriter (CPCU) designation from the American Institute for Chartered Property Casualty Underwriters. The plan of operation shall provide that the board of directors be elected on the basis of one vote for each member company of the Fund. If more than one company of a group of wholly owned or controlled companies is a member company of the Fund only one vote will be allowed for the entire group. The members of the board of directors shall be elected by member companies subject to the approval of the Director. Vacancies on the board of directors shall be filled for the remaining period of the term by the board of directors, subject to the approval of the Director.
(b) In approving elections to the board of directors, the Director shall consider among other things whether all member companies are fairly represented.
(c) Members of the board of directors shall receive no compensation, but may be reimbursed from the assets of the Fund for expenses incurred by them as members of the board of directors.
(Source: P.A. 98-202, eff. 1-1-14.)
(215 ILCS 5/537) (from Ch. 73, par. 1065.87)
Sec. 537. Duties and obligations of the Fund. The Fund shall have the duties and obligations enumerated in Sections 537.1 through 537.9.
(Source: P.A. 82-210.)
(215 ILCS 5/537.1) (from Ch. 73, par. 1065.87-1)
Sec. 537.1. The Fund may provide for an equal annual fee of all member companies on a non-pro rata basis to provide for contingent expenses of the Fund. This fee may not exceed $500 per member company for any one calendar year.
(Source: P.A. 85-576.)
(215 ILCS 5/537.2) (from Ch. 73, par. 1065.87-2)
Sec. 537.2. Obligation of Fund. The Fund shall be obligated to the extent of the covered claims existing prior to the entry of an Order of Liquidation against an insolvent company and arising within 30 days after the entry of such Order, or before the policy expiration date if less than 30 days after the entry of such Order, or before the insured replaces the policy or on request effects cancellation, if he does so within 30 days after the entry of such Order. If the entry of an Order of Liquidation occurs on or after October 1, 1975 and before October 1, 1977, such obligations shall not: (i) exceed $100,000, or (ii) include any obligation to refund the first $100 of any unearned premium claim; and if the entry of an Order of Liquidation occurs on or after October 1, 1977 and before January 1, 1988, such obligations shall not: (i) exceed $150,000, except that this limitation shall not apply to any workers compensation claims, or (ii) include any obligation to refund the first $100 of any unearned premium claim; and if the entry of an Order of Liquidation occurs on or after January 1, 1988 and before January 1, 2011, such obligations shall not: (i) exceed $300,000, except that this limitation shall not apply to any workers compensation claims, or (ii) include any obligation to refund the first $100 of any unearned premium claim or to refund any unearned premium over $10,000 under any one policy. If the entry of an Order of Liquidation occurs on or after January 1, 2011, then such obligations shall not: (i) exceed $500,000, except that this limitation shall not apply to any workers compensation claims or (ii) include any obligation to refund the first $100 of any unearned premium claim or refund any unearned premium over $10,000 under any one policy. In no event shall the Fund be obligated to a policyholder or claimant in an amount in excess of the face amount of the policy from which the claim arises. For purposes of this Act, obligations arising under an insurance policy written to indemnify a permissibly self-insured employer under subsection (a) of Section 4 of the Workers' Compensation Act for its liability to pay workers' compensation benefits in excess of a specific or aggregate retention shall be subject to the applicable per-claim limits set forth in this Section.
In no event shall the Fund be liable for any interest on any judgment entered against the insured or the insolvent company, or for any other interest claim against the insured or the insolvent company, regardless of whether the insolvent company would have been obligated to pay such interest under the terms of its policy. The Fund shall be liable for interest at the statutory rate on money judgments entered against the Fund until the judgment is satisfied.
Any obligation of the Fund to defend an insured shall cease upon the Fund's payment or tender of an amount equal to the lesser of the Fund's covered claim obligation limit or the applicable policy limit.
(Source: P.A. 99-368, eff. 8-14-15.)
(215 ILCS 5/537.3) (from Ch. 73, par. 1065.87-3)
Sec. 537.3. Access to insolvent company records.
The liquidator of an insolvent company shall permit access by the Fund or its authorized representatives, and by any similar organization in another state or its authorized representatives, to such of the insolvent company's records which are necessary for the Fund or such similar organization in carrying out its functions under this Article or similar laws in other states with regard to covered claims. In addition, the liquidator shall provide the Fund or its representative, or such similar organization, with copies of such records upon the request and at the expense of the Fund or such similar organization.
(Source: P.A. 85-576.)
(215 ILCS 5/537.4) (from Ch. 73, par. 1065.87-4)
Sec. 537.4. Fund assumes obligations of insolvent companies. The Fund shall be deemed the insolvent company to the extent of the Fund's obligation for covered claims and to such extent shall have all rights, duties, and obligations of the insolvent company, subject to the limitations provided in this Article, as if the company had not become insolvent, with the exception that the liquidator shall retain the sole right to recover any reinsurance proceeds. The Fund's rights under this Section include, but are not limited to, the right to pursue and retain salvage and subrogation recoveries on paid covered claim obligations to the extent paid by the Fund. The extent of the Fund's subrogation rights and any other rights of reimbursement with respect to its covered claims payments shall not be limited as if the Fund were the insolvent company, but shall be determined independently by taking into account the Fund's rights under Section 546 of this Article.
(Source: P.A. 99-387, eff. 8-17-15.)
(215 ILCS 5/537.6) (from Ch. 73, par. 1065.87-6)
Sec. 537.6. Allocation of claims; assessments. The Fund shall allocate covered claims paid and expenses incurred between the accounts established by Section 535 separately, and assess member companies separately for each account amounts necessary to pay the obligations of the Fund under Section 537.2 subsequent to the entry of an Order of Liquidation against an insolvent company, the expenses of handling covered claims subsequent to such Order of Liquidation and other expenses authorized by this Article. The assessments of each member company shall be in the proportion that the net direct written premiums of the member company for the calendar year immediately preceding the year in which the assessment is levied on the kinds of insurance in the account bears to the net direct written premiums of all member companies for such preceding calendar year on the kinds of insurance in the account. Each member company shall be notified of the assessment not later than 30 days before it is due. Before January 1, 2002, no member company may be assessed in any year on any account an amount greater than 1% of that member company's net direct written premiums on the kinds of insurance in the account for the calendar year preceding the assessment. Beginning January 1, 2002, the amount a member company may be assessed in any year on any account shall be a maximum of 2% of that member company's net direct written premium on the kinds of insurance in the account for the calendar year preceding the assessment. This 2% maximum shall apply regardless of the date of any insolvency that gives rise to the need for the assessment. If the maximum assessment, together with the other assets of the Fund in any account, does not provide, in any one year, in any account, an amount sufficient to make all necessary payments from that account, the funds available shall be paid in the manner determined by the Fund and approved by the Director and the unpaid portion shall be paid as soon thereafter as funds become available. If requested by a member company, the Director may exempt or defer the assessment of any member company, if the assessment would cause the member company's financial impairment.
In addition to the other assessment authority provided in this Section, the board of directors shall also have the assessment authority to pay off a loan as provided in Section 538.3. If a loan is projected to be outstanding for 3 years or more, then the board of directors shall have the authority to increase the assessment to 3% of the net direct written premiums for the previous year until the loan has been paid in full.
(Source: P.A. 101-60, eff. 7-12-19.)
(215 ILCS 5/537.7) (from Ch. 73, par. 1065.87-7)
Sec. 537.7. Investigation of claims; disposition.
(a) The Fund shall investigate claims brought against the Fund and adjust, compromise, settle, and pay covered claims to the extent of the Fund's obligation and deny all other claims.
(b) The Fund shall not be bound by a settlement, release, compromise, waiver, or final judgment executed or entered within 12 months prior to an order of liquidation and shall have the right to assert all defenses available to the Fund including, but not limited to, defenses applicable to determining and enforcing its statutory rights and obligations to any claim. The Fund shall be bound by a settlement, release, compromise, waiver, or final judgment executed or entered more than 12 months prior to an order of liquidation, but only if the claim is a covered claim and the settlement, release, compromise, waiver, or final judgment was not a result of fraud, collusion, default, or failure to defend. In addition, with respect to covered claims arising from a judgment under a decision, verdict, or finding based on the default of the insolvent insurer or its failure to defend, upon application by the Fund, either on its own behalf or on behalf of an insured, the court shall set aside the judgment, order, decision, verdict, or finding, and the Fund shall be permitted to defend against the claim on the merits. The same criteria determining whether the Fund will be bound, as specified in this subsection (b), shall apply to any settlement, release, compromise, waiver, or final judgment entered into by a high net worth insured before the date on which claims by or against that insured became non-exempt for reasons specified in paragraph (iv) of subsection (b) of Section 534.3.
(c) The Fund shall have the right to appoint or approve and to direct legal counsel retained under liability insurance policies for the defense of covered claims.
(Source: P.A. 101-60, eff. 7-12-19.)
(215 ILCS 5/537.9) (from Ch. 73, par. 1065.87-9)
Sec. 537.9. The Fund shall handle claims through its employees or through one or more companies or other persons employed as servicing facilities.
(Source: P.A. 85-576.)
(215 ILCS 5/538) (from Ch. 73, par. 1065.88)
Sec. 538. Powers of the Fund. The Fund shall have the powers enumerated in the Sections following this Section and preceding Section 539.
(Source: P.A. 102-396, eff. 8-16-21.)
(215 ILCS 5/538.1) (from Ch. 73, par. 1065.88-1)
Sec. 538.1. The Fund may appear in, defend and appeal any action on a claim brought against it on a covered claim.
(Source: P.A. 77-305.)
(215 ILCS 5/538.2) (from Ch. 73, par. 1065.88-2)
Sec. 538.2. The Fund may employ or retain such persons as are necessary to handle claims and perform other duties of the Fund.
(Source: P.A. 77-305.)
(215 ILCS 5/538.3) (from Ch. 73, par. 1065.88-3)
Sec. 538.3. The Fund may borrow an amount of money necessary to effect the purposes of this Article in accord with the plan of operation. The board of directors shall have the authority to pledge all or an appropriate portion of future assessments as necessary to secure a loan that may be needed to pay covered claims. Until all loans secured by assessments are fully satisfied, the board of directors shall assess the maximum allowable under Section 537.6.
(Source: P.A. 101-60, eff. 7-12-19.)
(215 ILCS 5/538.4) (from Ch. 73, par. 1065.88-4)
Sec. 538.4. Legal actions by Fund. The Fund may sue or be sued, including, but not limited to, taking any legal actions necessary or proper for recovery of: (i) any unpaid assessments under Section 537.1 or 537.6; (ii) any amounts due to the Fund for salvage and subrogation under Section 537.4 or from insurers described in subsection (a) of Section 546; or (iii) any amounts due from an insured pursuant to subsections (a) and (d) of Section 545. The Fund's power to sue includes, but is not limited to, the power and right to intervene as a party before any court that has jurisdiction over an insolvent insurer when the Fund is a creditor or potential creditor of the insolvent insurer.
(Source: P.A. 101-60, eff. 7-12-19.)
(215 ILCS 5/538.5) (from Ch. 73, par. 1065.88-5)
Sec. 538.5. The Fund may negotiate and become a party to such contracts as are necessary to carry out the purposes of this Article.
(Source: P.A. 82-210.)
(215 ILCS 5/538.7) (from Ch. 73, par. 1065.88-7)
Sec. 538.7. (a) The Fund may perform such other acts as are necessary or proper to effectuate the purposes of this Article.
(b) The Fund may contract with the Office of Special Deputy Receiver or any other person or organizations authorized by law to carry out the duties of the Director in her or his capacity as a receiver under Article XIII of this Code. The power of the Fund to contract with these persons or entities includes, but is not limited to, providing consulting services and claims administration services that assist with these persons or entities in the performance of their respective statutory and legal functions provided by law. The Fund may only exercise the authority to contract pursuant to this subsection upon the board of director's written determination that the provisioning of such services will advance the purposes set forth in Section 532. Any contract the Fund may enter into to provide services pursuant to this subsection shall be subordinate and subject to the Fund's statutory obligations to timely pay covered claims and avoid financial loss to claimants or policyholders described in this Article.
This subsection (b) is inoperative 5 years after the effective date of this amendatory Act of the 102nd General Assembly.
(Source: P.A. 102-396, eff. 8-16-21.)
(215 ILCS 5/538.8) (from Ch. 73, par. 1065.88-8)
Sec. 538.8. (a) If, at any time, the board of directors finds that the assets of the Fund in any account exceed the liabilities and expected costs and expenses of that account, the Fund may refund that amount of assets of the account which exceed such liabilities, expenses and costs to the member companies in such a manner as is determined by the board of directors.
(b) If, at any time, the Fund receives monies as reimbursement from the estate of an insolvent company, the Fund shall distribute those monies in accordance with the procedures established in the plan of operation.
(Source: P.A. 85-576.)
(215 ILCS 5/538.9)
Sec. 538.9. Action regarding insolvent company records.
(a) In this Section, "claims information" includes files, records, and electronic data.
(b) The Fund may bring an action against any third-party administrator, agent, attorney, or other representative of the insolvent insurer to obtain custody and control of all claims information related to an insolvent company that are appropriate or necessary for the Fund or a similar association in other states to carry out its duties under this Article. In such an action, the Fund shall have the absolute right through emergency equitable relief to obtain custody and control of such claims information in possession of such third-party administrator, agent, attorney or other representative of the insolvent insurer, regardless of where that claims information may be physically located. In bringing an action under this Section, the Fund shall not be subject to any defense, lien (possessory or otherwise), or other legal or equitable ground whatsoever for refusal to surrender such claims information that might be asserted against the liquidator of the insolvent insurers. To the extent that litigation is required for the Fund to obtain custody and control of the claims information requested and it results in the relinquishment of claims information to the Fund after refusal to provide that information in response to a written demand, the court shall award the Fund its costs, expenses, and reasonable attorney's fees incurred in bringing the action. This Section shall have the same effect on the rights and remedies that the custodian of such claims information may have against the insolvent insurers, so long as these rights and remedies do not conflict with the rights of the Fund to custody and control of the claims information under this Article.
(Source: P.A. 101-60, eff. 7-12-19.)
(215 ILCS 5/539) (from Ch. 73, par. 1065.89)
Sec. 539. Plan of operation. (a) The Fund shall submit to the Director a plan of operation and any amendments thereto necessary or suitable to assure the fair, reasonable, and equitable administration of the Fund. The plan of operation and any amendments thereto shall become effective upon approval in writing by the Director.
(b) If the Fund fails to submit a suitable plan of operation within 90 days following the effective date of this Article or if at any time thereafter the Fund fails to submit suitable amendments to the plan of operation, the Director shall, after notice and hearing pursuant to Sections 401, 402 and 403 of this Code, adopt and promulgate such reasonable rules as are necessary or advisable to effectuate the provisions of this Article. Such rules shall continue in force until modified by the Director or superseded by a plan of operation submitted by the Fund and approved by the Director.
(c) All member companies must comply with the plan of operation.
(Source: P.A. 82-210.)
(215 ILCS 5/540) (from Ch. 73, par. 1065.90)
Sec. 540. The plan of operation shall do the following as enumerated in Sections 540.1 through 540.9.
(Source: P.A. 77-305.)
(215 ILCS 5/540.1) (from Ch. 73, par. 1065.90-1)
Sec. 540.1. The plan of operation shall establish the procedures whereby all the powers and duties of the Fund under Sections 537.1 through 537.9 will be performed.
(Source: P.A. 82-210.)
(215 ILCS 5/540.2) (from Ch. 73, par. 1065.90-2)
Sec. 540.2. The plan of operation shall establish procedures for handling assets of the Fund.
(Source: P.A. 77-305.)
(215 ILCS 5/540.3) (from Ch. 73, par. 1065.90-3)
Sec. 540.3. The plan of operation shall establish the amount and method of reimbursing members of the board of directors under subsection (c) of Section 536.
(Source: P.A. 82-210.)
(215 ILCS 5/540.5) (from Ch. 73, par. 1065.90-5)
Sec. 540.5. (a) A covered claim, for other than unearned premium, is a claim which appears on the books and records of the insolvent company as of the date of the Order of Liquidation or a claim for which notice is given in writing to the liquidator of the insolvent company's domiciliary state or to an ancillary receiver in this State, if any, or to the Fund or its agents prior to the earlier of the last date fixed for the timely filing of proofs of claim in the domiciliary liquidation proceedings or 18 months after the entry of the order of liquidation. The liquidator or ancillary receiver in this State, if any, shall periodically submit a list of claims to the Fund or similar organization in another state.
(b) The Fund shall establish procedures by which unearned premium claims are to be determined and paid as covered claims.
(Source: P.A. 85-576.)
(215 ILCS 5/540.6) (from Ch. 73, par. 1065.90-6)
Sec. 540.6. The plan of operation shall provide that any member company aggrieved by any final action or decision of the Fund may appeal to the Director within 30 days after the action or decision.
(Source: P.A. 77-305.)
(215 ILCS 5/540.7) (from Ch. 73, par. 1065.90-7)
Sec. 540.7. The plan of operation shall establish the procedures whereby selections for the board of directors will be submitted to the Director.
(Source: P.A. 77-305.)
(215 ILCS 5/540.8) (from Ch. 73, par. 1065.90-8)
Sec. 540.8. The plan of operation shall establish the procedures for disposition of monies reimbursed from the estate of the insolvent company.
(Source: P.A. 85-576.)
(215 ILCS 5/540.9) (from Ch. 73, par. 1065.90-9)
Sec. 540.9. The plan of operation may contain additional provisions necessary or proper for the execution of the powers, duties and obligations of the Fund.
(Source: P.A. 77-305.)
(215 ILCS 5/541) (from Ch. 73, par. 1065.91)
Sec. 541. The plan of operation may provide that any or all powers and duties of the Fund, except those under Sections 537.6 and 538.3 may be delegated to a corporation, association, or other organization which performs or will perform functions similar to those of this Fund, or its equivalent, in 2 or more states. A delegation under this Section shall take effect only with the approval of both the board of directors and the Director, and may be made only to a corporation, association, or organization which extends protection not substantially less favorable and effective than that provided by this Article.
(Source: P.A. 80-827.)
(215 ILCS 5/543) (from Ch. 73, par. 1065.93)
Sec. 543. Duties and obligations of the Director.
The Director shall have the duties and obligations enumerated in Sections 543.1 through 543.3.
(Source: P.A. 77-305.)
(215 ILCS 5/543.1) (from Ch. 73, par. 1065.93-1)
Sec. 543.1. The Director shall serve a copy of the complaint seeking an Order of Liquidation with a finding of insolvency against a domestic member company on the Fund at the same time that such complaint is filed with the circuit court or shall forward to the Fund notice of the filing of such a complaint against a foreign or alien member company promptly upon receipt thereof. The Director also shall serve on the Fund a copy of an Order of Liquidation with a finding of insolvency against a domestic member company immediately after it is entered by the circuit court or shall forward to the Fund a copy of such order against a foreign or alien member company promptly upon receipt thereof.
(Source: P.A. 85-576.)
(215 ILCS 5/543.2) (from Ch. 73, par. 1065.93-2)
Sec. 543.2. The Director shall, upon request of the board of directors, provide the Fund with a statement of the net direct written premiums of each member company for the preceding calendar year for which annual statements have been filed with the Director.
(Source: P.A. 77-305.)
(215 ILCS 5/543.3) (from Ch. 73, par. 1065.93-3)
Sec. 543.3. The liquidator of an insolvent company shall notify the policyholders of the insolvent company who are residents of this State of the entry of an Order of Liquidation against the company and of their rights under this Article. Such notification shall be mailed to the last known address of such policyholders, where available, but if sufficient information for notification by mail is not available, notice by publication in a newspaper of general circulation shall be sufficient. If the insolvent company is domiciled in another state and the liquidator fails to give notice which satisfies the purposes of this Section, such notice shall be given by the Director as ancillary receiver or if the insolvent company is domiciled in another state and there is no ancillary receiver in this State, the Fund shall give such notice provided the necessary information is made available to the Fund by the liquidator. The form of the notice given by the Director as either liquidator or ancillary receiver shall be submitted to the Fund for its approval prior to mailing or publication.
(Source: P.A. 85-576.)
(215 ILCS 5/544) (from Ch. 73, par. 1065.94)
Sec. 544. Powers of the Director. The Director shall either (a) suspend or revoke, after notice and hearing pursuant to Sections 401, 402 and 403 of this Code, the certificate of authority to do business in this State of any member company which fails to pay an assessment when due or fails to comply with the plan of operation, or (b) levy a fine on any member company which fails to pay an assessment when due. Such fine shall not exceed 5% per month of the unpaid assessment, except that no fine shall be less than $200 per month.
(Source: P.A. 93-32, eff. 7-1-03.)
(215 ILCS 5/545) (from Ch. 73, par. 1065.95)
Sec. 545. Effect of paid claims.
(a) Every insured or claimant seeking the protection of this Article shall cooperate with the Fund to the same extent as such person would have been required to cooperate with the insolvent company. The Fund shall have all the rights, duties and obligations under the policy to the extent of the covered claim payment, provided the Fund shall have no cause of action against the insured of the insolvent company for any sums it has paid out except such causes of action as the insolvent company would have had if such sums had been paid by the insolvent company and except as provided in subsection (d) of this Section. Any person recovering under this Article and any insured whose liabilities are satisfied under this Article shall be deemed to have assigned the person's or insured's rights under the policy to the Fund to the extent of his or her recovery or satisfaction obtained from the Fund's payments.
(b) The Fund and any similar organization in another state shall be recognized as claimants in the liquidation of an insolvent company for any amounts paid by them on covered claims obligations as determined under this Article or similar laws in other states and shall receive dividends at the priority set forth in paragraph (d) of subsection (1) of Section 205 of this Code; provided that if, at the time that the liquidator issues a cut-off notice to the Fund in anticipation of closing the estate, a reserve has been established by the Fund, or any similar organization in another state, for the amount of their future administrative expenses and loss development associated with unpaid reported pending claims, these reserves will be deemed to have been paid as of the date of the notice and payment shall be made accordingly. The liquidator of an insolvent company shall be bound by determinations of covered claim eligibility under the Act and by settlements of claims made by the Fund or a similar organization in another state on the receipt of certification of such payments, to the extent those determinations or settlements satisfy obligations of the Fund, but the receiver shall not be bound in any way by those determinations or settlements to the extent that there remains a claim in the estate for amounts in excess of the payments by the Fund. In submitting their claim for covered claim payments the Fund and any similar organization in another state shall not be subject to the requirements of Sections 208 and 209 of this Code and shall not be affected by the failure of the person receiving a covered claim payment to file a proof of claim.
(c) The expenses of the Fund and of any similar organization in any other state, other than expenses incurred in the performance of duties under Section 547 or similar duties under the statute governing a similar organization in another state, shall be accorded priority over all claims against the estate, except as provided for in paragraph (a) of subsection (1) of Section 205 of this Code. The liquidator shall make prompt reimbursement to the Fund and any similar organization for such expense payments.
(d) The Fund has the right to recover from the following persons the amount of any covered claims (as determined without regard to the exemption in paragraph (iv) of subsection (b) of Section 534.3) and allocated claims expenses which the Fund paid or incurred on behalf of such person in satisfaction, in whole or in part, of liability obligations of such person to any other person:
The Fund may also, at its sole discretion and without assumption of any ongoing duty to do so, pay any workers compensation claims or any other third-party claims covered by a policy of an insolvent company on behalf of a high net worth insured as defined in paragraph (iv) of subsection (b) of Section 534.3. In that case, the Fund shall recover from the high net worth insured under this Section for all amounts paid on its behalf, all allocated claim adjusted expenses related to such claims, the Fund's attorney's fees, and all court costs in any action necessary to collect the full amount to the Fund's reimbursement under this Section.
(Source: P.A. 100-410, eff. 8-25-17; 101-60, eff. 7-12-19.)
(215 ILCS 5/546) (from Ch. 73, par. 1065.96)
Sec. 546. Other insurance.
(a) An insured or claimant shall be required first to exhaust all coverage provided by any other insurance policy, regardless of whether or not such other insurance policy was written by a member company, if the claim under such other policy arises from the same facts, injury, or loss that gave rise to the covered claim against the Fund. The Fund's obligation under Section 537.2 shall be reduced by the amount recovered or recoverable, whichever is greater, under such other insurance policy. Where such other insurance policy provides uninsured or underinsured motorist coverage, the amount recoverable shall be deemed to be the full applicable limits of such coverage. To the extent that the Fund's obligation under Section 537.2 is reduced by application of this Section, the liability of the person insured by the insolvent insurer's policy for the claim shall be reduced in the same amount. If the Fund pays a covered claim without the exhaustion of all other coverage that could have been exhausted under this Section, the Fund shall have an independent right of recovery against each insurer whose coverage was not exhausted in the amount the Fund would not have had to pay if that insurer's coverage had been exhausted first.
(b) Any insured or claimant having a claim which may be recovered under more than one insurance guaranty fund or its equivalent shall seek recovery first from the Fund of the place of residence of the insured except that if it is a first party claim for damage to property with a permanent location, he shall first seek recovery from the Fund of the location of the property; if it is a workers' compensation claim, he shall first seek recovery from the Fund of the residence of the claimant. Any recovery under this Article shall be reduced by the amount of the recovery from any other insurance guaranty fund or its equivalent.
(Source: P.A. 99-387, eff. 8-17-15.)
(215 ILCS 5/547) (from Ch. 73, par. 1065.97)
Sec. 547. Prevention of insolvencies. To aid in the detection and prevention of company insolvencies:
(a) The board of directors may, upon majority vote, make recommendations to the Director on matters pertaining to regulation for solvency.
(b) The board of directors may prepare a report on the history and causes of any company insolvency in which the Fund was obligated to pay covered claims, based on the information available to the Fund, and submit such report to the Director.
(Source: P.A. 85-576.)
(215 ILCS 5/548) (from Ch. 73, par. 1065.98)
Sec. 548. Examination of the Fund. The Fund shall be subject to examination and regulation by the Director. The board of directors shall, not later than April 30 of each year, submit a financial report for the preceding calendar year in a form approved by the Director.
(Source: P.A. 99-388, eff. 1-1-16.)
(215 ILCS 5/549) (from Ch. 73, par. 1065.99)
Sec. 549. Tax exemption.
The Fund shall be exempt from payment of all fees and all taxes levied by this State or any of its subdivisions.
(Source: P.A. 77-305.)
(215 ILCS 5/550) (from Ch. 73, par. 1065.100)
Sec. 550. Immunity.
There shall be no liability on the part of and no cause of action of any nature shall arise against any member company, the Fund or their agents or employees, the board of directors, or the Director or his representatives for any action taken or omitted by them in the performance of their powers and duties under this Article.
(Source: P.A. 77-305.)
(215 ILCS 5/551) (from Ch. 73, par. 1065.101)
Sec. 551. Stay of proceedings. All proceedings arising out of a claim under a policy of insurance written by an insolvent company shall be stayed for 120 days from the date of the entry of the Order of Liquidation to permit proper defense by the Fund of all such pending causes of action.
(Source: P.A. 92-77, eff. 7-12-01.)
(215 ILCS 5/552) (from Ch. 73, par. 1065.102)
Sec. 552. All provisions of this Article shall be interpreted in accordance with and pursuant to those Sections of Article XIII of this Code which may be applicable.
(Source: P.A. 85-576.)
(215 ILCS 5/553) (from Ch. 73, par. 1065.103)
Sec. 553. Severability.
If any provision of this Article or the application thereof to any claimant, company or circumstance is held invalid, such invalidity does not affect other provisions or applications of this Article which can be given effect without the invalid application or provision, and to this end the provisions of this Article are declared to be severable.
(Source: P.A. 77-305.)