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| Public Act 100-1190 | ||||
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AN ACT concerning regulation.
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Be it enacted by the People of the State of Illinois,
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represented in the General Assembly:
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Section 5. If and only if Senate Bill 1737 of the 100th | ||||
General Assembly becomes law in the form in which it passed | ||||
both houses on May 31, 2018, then the Illinois Insurance Code | ||||
is amended by changing Sections 534.3 and 534.4 as follows:
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(215 ILCS 5/534.3) (from Ch. 73, par. 1065.84-3)
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Sec. 534.3. Covered claim; unearned premium defined.
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(a) "Covered claim" means an unpaid claim for a loss
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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
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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:
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(i) The company issuing, assuming, or being allocated | ||||
the policy becomes an insolvent
company as defined in | ||||
Section 534.4
after the effective date of this Article; and
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(ii) The claimant or insured is a resident of this | ||
State at the time
of the insured occurrence, or the | ||
property from which a first party
claim for damage to | ||
property arises is
permanently located in this State or, in | ||
the case of an unearned premium
claim, the policyholder is | ||
a resident of this State at the time the policy
was issued; | ||
provided, that for entities other than an individual, the
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residence of a claimant, insured, or policyholder is the | ||
state
in which its principal
place of business is located | ||
at the time of the insured event.
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(b) "Covered claim" does not include:
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(i) any amount in excess of the applicable limits of | ||
liability
provided by an insurance policy to which this | ||
Article applies; nor
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(ii) any claim for punitive or exemplary damages; nor
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(iii) any first party claim by an insured who is an | ||
affiliate of the
insolvent company; nor
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(iv) any first party or third party claim by or against | ||
an insured
whose net worth on December 31
of the year next | ||
preceding the date the insurer becomes an insolvent
insurer | ||
exceeds $25,000,000; provided that an insured's net
worth | ||
on such
date shall be deemed to include the aggregate net | ||
worth of the insured and
all of its affiliates as | ||
calculated on a consolidated basis. However, this
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exclusion shall not apply to third party claims against the | ||
insured where the
insured has applied for or consented to | ||
the appointment of a receiver, trustee,
or liquidator for | ||
all or a substantial part of its assets, filed a voluntary
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petition in bankruptcy, filed a petition or an answer | ||
seeking a reorganization
or arrangement with creditors or | ||
to take advantage of any insolvency law, or
if an order, | ||
judgment, or decree is entered by a court of competent
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jurisdiction, on the application of a creditor, | ||
adjudicating the insured
bankrupt or insolvent or | ||
approving a petition seeking reorganization of the
insured | ||
or of all or substantial part of its assets; nor
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(v) any claim for any amount due any reinsurer, | ||
insurer,
insurance pool, or underwriting association as | ||
subrogated
recoveries, reinsurance recoverables, | ||
contribution, indemnification or
otherwise. No such claim | ||
held by a reinsurer,
insurer, insurance pool, or | ||
underwriting association may be asserted in any
legal | ||
action
against a person insured under a policy issued by an | ||
insolvent
company other than to the extent such claim | ||
exceeds the Fund
obligation limitations set forth in | ||
Section 537.2 of this Code.
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(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.
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(Source: P.A. 89-97, eff. 7-7-95; 90-499, eff. 8-19-97.)
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(215 ILCS 5/534.4) (from Ch. 73, par. 1065.84-4)
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Sec. 534.4.
"Insolvent company" means a company
organized | ||
as a stock company, mutual company, reciprocal or Lloyds (a)
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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.
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(Source: P.A. 90-499, eff. 8-19-97.)
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Section 99. Effective date. This Act takes effect upon | ||
becoming law or on the date Senate Bill 1737 of the 100th | ||
General Assembly becomes law, whichever is later.
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