SB 683 — INS CD-LIQUIDATION

SB0683 EngrossedEnrolled LRB100 06876 SMS 16925 b AN ACT concerning regulation.

SB0683 EngrossedEnrolled - 2 - LRB100 06876 SMS 16925 b The provisions of this Section shall apply to all contracts entered into after the effective date of this amendatory Act of the 100th General Assembly, and any existing contracts shall have one year to come into compliance with this Section.

For property and casualty insurance guaranty associations that guaranty certain obligations of any member company as defined by SB0683 EngrossedEnrolled - 3 - LRB100 06876 SMS 16925 b Section 534.5, expenses shall include, but not be limited to, loss adjustment expenses, which shall include adjusting and other expenses and defense and cost containment expenses.

and (6) expenses approved by the conservator or rehabilitator of the insurer, if any, incurred in the course of the conservation or rehabilitation that are SB0683 EngrossedEnrolled - 4 - LRB100 06876 SMS 16925 b unpaid at the time of the entry of the order of liquidation.

(c) Claims for wages actually owing to employees for services rendered within 3 months prior to the date of the filing of the complaint, not exceeding $1,000 to each employee unless there are claims due the federal government under paragraph (f), then the claims for wages shall have a priority of distribution immediately following that of SB0683 EngrossedEnrolled - 5 - LRB100 06876 SMS 16925 b federal claims under paragraph (f) and immediately preceding claims of general creditors under paragraph (g).

SB0683 EngrossedEnrolled - 6 - LRB100 06876 SMS 16925 b (e) Claims by policyholders, beneficiaries, and insureds, the allowed values of which were determined by estimation under paragraph (b) of subsection (4) of Section 209.

Every claim under a written agreement, statute, or rule providing that the assets in a separate account are not chargeable with the liabilities arising out of any other business of the insurer shall be satisfied out of the funded assets in the separate account equal to, but not to exceed, the reserves maintained in the separate account under the separate account agreement, and to the extent, if any, the claim is not fully discharged thereby, the remainder of the claim shall be treated as a priority level (d) claim under paragraph (d) of this subsection to the extent that reserves have been SB0683 EngrossedEnrolled - 7 - LRB100 06876 SMS 16925 b established in the insurer's general account pursuant to statute, rule, or the separate account agreement.

(2) Within 120 days after the issuance of an Order of SB0683 EngrossedEnrolled - 8 - LRB100 06876 SMS 16925 b Liquidation with a finding of insolvency against a domestic company, the Director shall make application to the court requesting authority to disburse funds to the Illinois Insurance Guaranty Fund, the Illinois Life and Health Insurance Guaranty Association, the Illinois Health Maintenance Organization Guaranty Association, and similar organizations in other states from time to time out of the company's marshaled assets as funds become available in amounts equal to disbursements made by the Illinois Insurance Guaranty Fund, the Illinois Life and Health Insurance Guaranty Association, the Illinois Health Maintenance Organization Guaranty Association, and similar organizations in other states for covered claims obligations on the presentation of evidence that such disbursements have been made by the Illinois Insurance Guaranty Fund, the Illinois Life and Health Insurance Guaranty Association, the Illinois Health Maintenance Organization Guaranty Association, and similar organizations in other states.

In determining the amounts available for disbursement, the Director shall reserve sufficient assets for the payment of the expenses of administration described in SB0683 EngrossedEnrolled - 9 - LRB100 06876 SMS 16925 b paragraph (1)(a) of this Section.

(a) Every insured or claimant seeking the protection of SB0683 EngrossedEnrolled - 10 - LRB100 06876 SMS 16925 b 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 liquidator of an insolvent company shall be bound by determinations of covered claim eligibility under the Act and SB0683 EngrossedEnrolled - 11 - LRB100 06876 SMS 16925 b 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.

(d) The Fund has the right to recover from the following persons the amount of any covered claims and allocated claims expenses which the Fund paid or incurred on behalf of such person in satisfaction, in whole or in part, of liability SB0683 EngrossedEnrolled - 12 - LRB100 06876 SMS 16925 b obligations of such person to any other person: