(215 ILCS 125/6-14)
(from Ch. 111 1/2, par. 1418.14)
(1) Records must be kept of all
negotiations and meetings in which the Association or its representatives
are involved to discuss the activities of the Association in carrying out
its powers and duties under Section 6-8. Records of such
negotiations or meetings may be made public only upon the termination of a
liquidation, rehabilitation, or conservation proceeding involving the impaired
or insolvent organization, upon the termination of the impairment or
insolvency of the organization, or upon the order of a court of competent
jurisdiction. Nothing in this subsection (1) limits the duty of the
Association to submit a report of its activities under Section 6-15.
(2) For the purpose of carrying out its obligations under this Article,
the Association is deemed to be a creditor of the impaired or insolvent
organization to the extent of assets attributable to covered health care plan
certificates reduced by any amounts to which the Association is entitled as
subrogee (under subsection (7) of Section 6-8). All assets of the impaired
or insolvent organization attributable to covered health care plan
certificates must be used to continue all covered health care plan
certificates and pay all contractual obligations of the impaired
organization as required by this Article. "Assets attributable to covered
health care plan certificates", as used in this subsection (2), is that
proportion of the assets which the reserves that should have been
established for such health care plan certificates bear to the reserve that
should have been established for all health care plan certificates of the
impaired or insolvent organization.
(3) (a) Prior to the termination of any liquidation, rehabilitation,
or conservation proceeding, the court may take into consideration the
contributions of the respective parties, including the Association, the
shareholders of the impaired or insolvent organization, and any other party
with a bona fide interest, in making an equitable distribution of the
ownership rights of such impaired or insolvent organization. In such a
determination, consideration must be given to the welfare of the enrollees
of the continuing or successor organization.
(b) No distribution to stockholders, if any, of an impaired or insolvent
organization may be made until and unless the total
amount of valid claims of the Association for funds expended in carrying
out its powers and duties under Section 6-8, with respect to such organization
have been fully recovered by the Association.
(4) (a) If an order for liquidation or rehabilitation of an organization
domiciled in this State has been entered, the receiver appointed under such
order has a right to recover on behalf of the organization, from any
affiliate that controlled it, the amount of distributions, other than stock
dividends paid by the organization on its capital stock, made at any time
during the 5 years preceding the petition for liquidation or rehabilitation
subject to the limitations of paragraphs (b) to (d).
(b) No such distribution is recoverable if the organization shows that when
paid the distribution was lawful and reasonable, and that the organization
did not know and could not reasonably have known that the distribution
might adversely affect the ability of the organization to fulfill its
(c) Any person who was an affiliate that controlled the organization at
the time the distributions were paid is liable up to the amount of
distributions he received. Any person who was an affiliate that controlled
the organization at the time the distributions were declared, is liable up
to the amount of distributions he would have received if they had been paid
immediately. If 2 persons are liable with respect to the same
distributions, they are jointly and severally liable.
(d) The maximum amount recoverable under subsection (4) of this Section is
the amount needed in excess of all other available assets of the insolvent
organization to pay the contractual obligations of the insolvent organization.
(e) If any person liable under paragraph (c) of subsection (4) of this
Section is insolvent, all its affiliates that controlled it at the time the
distribution was paid are jointly and severally liable for any resulting
deficiency in the amount recovered from the insolvent affiliate.
(Source: P.A. 86-620.)