215 ILCS 5/ Illinois Insurance Code.

(215 ILCS 5/531.16) (from Ch. 73, par. 1065.80-16)

Sec. 531.16. Tax Exemptions.) The Association is exempt from payment of all fees and all taxes levied by this State or any of its subdivisions, except taxes levied on real property.

(Source: P.A. 81-899.)

(215 ILCS 5/531.17) (from Ch. 73, par. 1065.80-17)

Sec. 531.17. Immunity.) There is no liability on the part of and no cause of action of any nature may arise against any member insurer or its agents or employees, the Association or its agents or employees, members of the board of directors, or the Director or his representatives, for any action taken by them in the performance of their powers and duties under this Article.

(Source: P.A. 81-899.)

(215 ILCS 5/531.18) (from Ch. 73, par. 1065.80-18)

Sec. 531.18. Stay of Proceedings - Reopening Default Judgments.) All proceedings in which the insolvent insurer is a party in any court in this State shall be stayed 180 days from the date an order of liquidation, rehabilitation, or conservation is final to permit proper legal action by the Association on any matters germane to its powers or duties. As to a judgment under any decision, order, verdict, or finding based on default the Association may apply to have such judgment set aside by the same court that made such judgment and must be permitted to defend against such suit on the merits.

(Source: P.A. 96-1450, eff. 8-20-10.)

(215 ILCS 5/531.19) (from Ch. 73, par. 1065.80-19)

Sec. 531.19. Prohibited advertisement of action of the Insurance Guaranty Association in sale of insurance.

(a) No person, including a member insurer, agent or affiliate of a member insurer shall make, publish, disseminate, circulate, or place before the public, or cause directly or indirectly, to be made, published, disseminated, circulated or placed before the public, in any newspaper, magazine or other publication, or in the form of a notice, circular, pamphlet, letter or poster, or over any radio station or television station, or in any other way, any advertisement, announcement or statement, written or oral, which uses the existence of the Insurance Guaranty Association of this State for the purpose of sales, solicitation or inducement to purchase any form of insurance or other coverage covered by this Article; provided, however, that this Section shall not apply to the Illinois Life and Health Guaranty Association or any other entity which does not sell or solicit insurance or coverage by a health maintenance organization.

(b) Within 180 days of August 16, 1993, the Association shall prepare a summary document describing the general purposes and current limitations of this Article and complying with subsection (c). This document shall be submitted to the Director for approval. Sixty days after receiving approval, no member insurer may deliver a policy or contract described in subparagraph (a) of paragraph (2) of Section 531.03 and not excluded under subparagraph (b) of that Section to a policy owner, contract owner, certificate holder, or enrollee unless the document is delivered to the policy owner, contract owner, certificate holder, or enrollee prior to or at the time of delivery of the policy or contract. The document should also be available upon request by a policy owner, contract owner, certificate holder, or enrollee. The distribution, delivery, or contents or interpretation of this document shall not mean that either the policy or the contract or the policy owner, contract owner, certificate holder, or enrollee thereof would be covered in the event of the impairment or insolvency of a member insurer. The description document shall be revised by the Association as amendments to this Article may require. Failure to receive this document does not give the policy owner, contract owner, certificate holder, enrollee, or insured any greater rights than those stated in this Article.

(c) The document prepared under subsection (b) shall contain a clear and conspicuous disclaimer on its face. The Director shall promulgate a rule establishing the form and content of the disclaimer. The disclaimer shall:

(1) State the name and address of the Life and Health Insurance Guaranty Association and of the Department.

(2) Prominently warn the policy owner, contract owner, certificate holder, or enrollee that the Life and Health Insurance Guaranty Association may not cover the policy or contract or, if coverage is available, it will be subject to substantial limitations and exclusions and conditioned on continued residence in the State.

(3) State that the member insurer and its agents are prohibited by law from using the existence of the Life and Health Insurance Guaranty Association for the purpose of sales, solicitation, or inducement to purchase any form of insurance or health maintenance organization coverage.

(4) Emphasize that the policy owner, contract owner, certificate holder, or enrollee should not rely on coverage under the Life and Health Insurance Guaranty Association when selecting an insurer or health maintenance organization.

(5) Provide other information as directed by the Director.

(d) (Blank).

(Source: P.A. 100-687, eff. 8-3-18.)

(215 ILCS 5/531.20)

Sec. 531.20. Merger of Illinois Health Maintenance Organization Guaranty Association with and into the Illinois Life and Health Insurance Guaranty Association. In order to provide for the merger of the Illinois Health Maintenance Organization Guaranty Association with and into the Illinois Life and Health Insurance Guaranty Association, the following shall apply:

(1) The Illinois Health Maintenance Organization Guaranty Association is merged with and into the Illinois Life and Health Insurance Guaranty Association, which shall then continue to be known as the Illinois Life and Health Insurance Guaranty Association.

(2) All premerger rights, powers, privileges, assets, property, duties, debts, obligations, and liabilities of each association related to a liquidated member shall remain with the members of the respective association prior to merger and subject to the laws in effect at the time the order of liquidation was entered with respect to the liquidated member, but shall be administered by the Illinois Life and Health Insurance Guaranty Association. The Illinois Life and Health Insurance Guaranty Association shall adopt changes to its plan of operation which reasonably accomplish this.

(3) Subject to paragraph (2), the Illinois Life and Health Insurance Guaranty Association shall succeed, without other transfer, to all the rights, powers, privileges, assets, and property of the Illinois Health Maintenance Organization Guaranty Association and shall be subject to all duties, debts, obligations, and liabilities of the Illinois Health Maintenance Organization that exist as of the date of the merger of the Illinois Health Maintenance Organization Guaranty Association into the Illinois Life and Health Insurance Guaranty Association. Without limiting the generality of the foregoing, the Illinois Life and Health Insurance Guaranty Association shall succeed to (A) all collected, uncollected, or unbilled assessments of the Illinois Health Maintenance Organization Guaranty Association, (B) all cash, bank accounts, accrued interest, and tangible property of the Illinois Health Maintenance Organization Guaranty Association, (C) all rights, powers, privileges, duties, and obligations of the Illinois Health Maintenance Organization Guaranty Association under any of its contracts or commitments, and (D) all subrogations, assignments, and creditor rights and interests of the Illinois Health Maintenance Organization Guaranty Association.

(4) All rights of creditors and all liens upon the property of the Illinois Health Maintenance Organization Guaranty Association shall be preserved unimpaired, provided that the liens upon property of the Illinois Health Maintenance Organization Guaranty Association shall be limited to the property affected thereby immediately prior to the effective date of this amendatory Act of the 100th General Assembly.

(5) Any action or proceeding pending by or against the Illinois Health Maintenance Organization Guaranty Association may be prosecuted to judgment.

(6) Notwithstanding any other provision to the contrary in this Article:

(A) It is the intent of this Section to preserve only the rights, powers, privileges, assets, property, debts, obligations, and liabilities of the Illinois Health Maintenance Organization Guaranty Association as they existed on the date of its merger into the Illinois Life and Health Insurance Guaranty Association, and not to provide contract owners, certificate holders, enrollees and policy owners, or their respective payees, beneficiaries, or assignees, with duplicative or new rights, powers, privileges, assets, or property.

(B) Accordingly, no contract owner, certificate holder, enrollee and policy owner, and no contract owner's, certificate holder's, enrollee's or policy owner's payee, beneficiary, or assignee, shall be entitled to (i) a recovery from the Illinois Life and Health Insurance Guaranty Association that is duplicative of a previous recovery from the Illinois Health Maintenance Organization Guaranty Association or (ii) a recovery from the Illinois Life and Health Insurance Guaranty Association on account of a claim against the Illinois Health Maintenance Organization Guaranty Association where the Illinois Life and Health Insurance Guaranty Association is liable with respect to a claim under the same policy or contract under this Article.

(Source: P.A. 100-687, eff. 8-3-18.)

(215 ILCS 5/Art. XXXIV heading) ARTICLE XXXIV. ILLINOIS INSURANCE GUARANTY FUND

(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, 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. 103-113, eff. 6-30-23.)