HB1870 EngrossedLRB097 08603 RPM 48730 b

1    AN ACT concerning insurance.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Insurance Code is amended by
5changing Sections 531.03, 531.05, 531.07, 531.08, 531.09, and
6531.14 as follows:
 
7    (215 ILCS 5/531.03)  (from Ch. 73, par. 1065.80-3)
8    Sec. 531.03. Coverage and limitations.
9    (1) This Article shall provide coverage for the policies
10and contracts specified in paragraph (2) of this Section:
11        (a) to persons who, regardless of where they reside
12    (except for non-resident certificate holders under group
13    policies or contracts), are the beneficiaries, assignees
14    or payees of the persons covered under subparagraph (1)(b),
15    and
16        (b) to persons who are owners of or certificate holders
17    under the policies or contracts (other than unallocated
18    annuity contracts and structured settlement annuities) and
19    in each case who:
20            (i) are residents; or
21            (ii) are not residents, but only under all of the
22        following conditions:
23                (A) the insurer that issued the policies or

 

 

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1            contracts is domiciled in this State;
2                (B) the states in which the persons reside have
3            associations similar to the Association created by
4            this Article;
5                (C) the persons are not eligible for coverage
6            by an association in any other state due to the
7            fact that the insurer was not licensed in that
8            state at the time specified in that state's
9            guaranty association law.
10        (c) For unallocated annuity contracts specified in
11    subsection (2), paragraphs (a) and (b) of this subsection
12    (1) shall not apply and this Article shall (except as
13    provided in paragraphs (e) and (f) of this subsection)
14    provide coverage to:
15            (i) persons who are the owners of the unallocated
16        annuity contracts if the contracts are issued to or in
17        connection with a specific benefit plan whose plan
18        sponsor has its principal place of business in this
19        State; and
20            (ii) persons who are owners of unallocated annuity
21        contracts issued to or in connection with government
22        lotteries if the owners are residents.
23        (d) For structured settlement annuities specified in
24    subsection (2), paragraphs (a) and (b) of this subsection
25    (1) shall not apply and this Article shall (except as
26    provided in paragraphs (e) and (f) of this subsection)

 

 

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1    provide coverage to a person who is a payee under a
2    structured settlement annuity (or beneficiary of a payee if
3    the payee is deceased), if the payee:
4            (i) is a resident, regardless of where the contract
5        owner resides; or
6            (ii) is not a resident, but only under both of the
7        following conditions:
8                (A) with regard to residency:
9                    (I) the contract owner of the structured
10                settlement annuity is a resident; or
11                    (II) the contract owner of the structured
12                settlement annuity is not a resident but the
13                insurer that issued the structured settlement
14                annuity is domiciled in this State and the
15                state in which the contract owner resides has
16                an association similar to the Association
17                created by this Article; and
18                (B) neither the payee or beneficiary nor the
19            contract owner is eligible for coverage by the
20            association of the state in which the payee or
21            contract owner resides.
22        (e) This Article shall not provide coverage to:
23            (i) a person who is a payee or beneficiary of a
24        contract owner resident of this State if the payee or
25        beneficiary is afforded any coverage by the
26        association of another state; or

 

 

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1            (ii) a person covered under paragraph (c) of this
2        subsection (1), if any coverage is provided by the
3        association of another state to that person.
4        (f) This Article is intended to provide coverage to a
5    person who is a resident of this State and, in special
6    circumstances, to a nonresident. In order to avoid
7    duplicate coverage, if a person who would otherwise receive
8    coverage under this Article is provided coverage under the
9    laws of any other state, then the person shall not be
10    provided coverage under this Article. In determining the
11    application of the provisions of this paragraph in
12    situations where a person could be covered by the
13    association of more than one state, whether as an owner,
14    payee, beneficiary, or assignee, this Article shall be
15    construed in conjunction with other state laws to result in
16    coverage by only one association.
17    (2)(a) This Article shall provide coverage to the persons
18specified in paragraph (l) of this Section for direct, (i)
19nongroup life, health, annuity and supplemental policies, or
20contracts, (ii) for certificates under direct group policies or
21contracts, (iii) for unallocated annuity contracts and (iv) for
22contracts to furnish health care services and subscription
23certificates for medical or health care services issued by
24persons licensed to transact insurance business in this State
25under the Illinois Insurance Code. Annuity contracts and
26certificates under group annuity contracts include but are not

 

 

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1limited to guaranteed investment contracts, deposit
2administration contracts, unallocated funding agreements,
3allocated funding agreements, structured settlement
4agreements, lottery contracts and any immediate or deferred
5annuity contracts.
6    (b) This Article shall not provide coverage for:
7        (i) that portion of a policy or contract not guaranteed
8    by the insurer, or under which the risk is borne by the
9    policy or contract owner;
10        (ii) any such policy or contract or part thereof
11    assumed by the impaired or insolvent insurer under a
12    contract of reinsurance, other than reinsurance for which
13    assumption certificates have been issued;
14        (iii) any portion of a policy or contract to the extent
15    that the rate of interest on which it is based or the
16    interest rate, crediting rate, or similar factor is
17    determined by use of an index or other external reference
18    stated in the policy or contract employed in calculating
19    returns or changes in value:
20            (A) averaged over the period of 4 years prior to
21        the date on which the member insurer becomes an
22        impaired or insolvent insurer under this Article,
23        whichever is earlier, exceeds the rate of interest
24        determined by subtracting 2 percentage points from
25        Moody's Corporate Bond Yield Average averaged for that
26        same 4-year period or for such lesser period if the

 

 

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1        policy or contract was issued less than 4 years before
2        the member insurer becomes an impaired or insolvent
3        insurer under this Article, whichever is earlier; and
4            (B) on and after the date on which the member
5        insurer becomes an impaired or insolvent insurer under
6        this Article, whichever is earlier, exceeds the rate of
7        interest determined by subtracting 3 percentage points
8        from Moody's Corporate Bond Yield Average as most
9        recently available;
10        (iv) any unallocated annuity contract issued to or in
11    connection with a benefit plan protected under the federal
12    Pension Benefit Guaranty Corporation, regardless of
13    whether the federal Pension Benefit Guaranty Corporation
14    has yet become liable to make any payments with respect to
15    the benefit plan;
16        (v) any portion of any unallocated annuity contract
17    which is not issued to or in connection with a specific
18    employee, union or association of natural persons benefit
19    plan or a government lottery;
20        (vi) an obligation that does not arise under the
21    express written terms of the policy or contract issued by
22    the insurer to the contract owner or policy owner,
23    including without limitation:
24            (A) a claim based on marketing materials;
25            (B) a claim based on side letters, riders, or other
26        documents that were issued by the insurer without

 

 

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1        meeting applicable policy form filing or approval
2        requirements;
3            (C) a misrepresentation of or regarding policy
4        benefits;
5            (D) an extra-contractual claim; or
6            (E) a claim for penalties or consequential or
7        incidental damages;
8        (vii) any stop-loss insurance, as defined in clause (b)
9    of Class 1 or clause (a) of Class 2 of Section 4, and
10    further defined in subsection (d) of Section 352;
11        (viii) any policy or contract providing any hospital,
12    medical, prescription drug, or other health care benefits
13    pursuant to Part C or Part D of Subchapter XVIII, Chapter 7
14    of Title 42 of the United States Code (commonly known as
15    Medicare Part C & D) or any regulations issued pursuant
16    thereto;
17        (ix) any portion of a policy or contract to the extent
18    that the assessments required by Section 531.09 of this
19    Code with respect to the policy or contract are preempted
20    or otherwise not permitted by federal or State law;
21        (x) any portion of a policy or contract issued to a
22    plan or program of an employer, association, or other
23    person to provide life, health, or annuity benefits to its
24    employees, members, or others to the extent that the plan
25    or program is self-funded or uninsured, including, but not
26    limited to, benefits payable by an employer, association,

 

 

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1    or other person under:
2            (A) a multiple employer welfare arrangement as
3        defined in 29 U.S.C. Section 1002 29 U.S.C. Section
4        1144;
5            (B) a minimum premium group insurance plan;
6            (C) a stop-loss group insurance plan; or
7            (D) an administrative services only contract;
8        (xi) any portion of a policy or contract to the extent
9    that it provides for:
10            (A) dividends or experience rating credits;
11            (B) voting rights; or
12            (C) payment of any fees or allowances to any
13        person, including the policy or contract owner, in
14        connection with the service to or administration of the
15        policy or contract;
16        (xii) any policy or contract issued in this State by a
17    member insurer at a time when it was not licensed or did
18    not have a certificate of authority to issue the policy or
19    contract in this State;
20        (xiii) any contractual agreement that establishes the
21    member insurer's obligations to provide a book value
22    accounting guaranty for defined contribution benefit plan
23    participants by reference to a portfolio of assets that is
24    owned by the benefit plan or its trustee, which in each
25    case is not an affiliate of the member insurer;
26        (xiv) any portion of a policy or contract to the extent

 

 

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1    that it provides for interest or other changes in value to
2    be determined by the use of an index or other external
3    reference stated in the policy or contract, but which have
4    not been credited to the policy or contract, or as to which
5    the policy or contract owner's rights are subject to
6    forfeiture, as of the date the member insurer becomes an
7    impaired or insolvent insurer under this Code, whichever is
8    earlier. If a policy's or contract's interest or changes in
9    value are credited less frequently than annually, then for
10    purposes of determining the values that have been credited
11    and are not subject to forfeiture under this Section, the
12    interest or change in value determined by using the
13    procedures defined in the policy or contract will be
14    credited as if the contractual date of crediting interest
15    or changing values was the date of impairment or
16    insolvency, whichever is earlier, and will not be subject
17    to forfeiture; or
18        (xv) that portion or part of a variable life insurance
19    or variable annuity contract not guaranteed by an insurer.
20    (3) The benefits for which the Association may become
21liable shall in no event exceed the lesser of:
22        (a) the contractual obligations for which the insurer
23    is liable or would have been liable if it were not an
24    impaired or insolvent insurer, or
25        (b)(i) with respect to any one life, regardless of the
26    number of policies or contracts:

 

 

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1            (A) $300,000 in life insurance death benefits, but
2        not more than $100,000 in net cash surrender and net
3        cash withdrawal values for life insurance;
4            (B) in health insurance benefits:
5                (I) $100,000 for coverages not defined as
6            disability insurance or basic hospital, medical,
7            and surgical insurance or major medical insurance
8            or long-term care insurance, including any net
9            cash surrender and net cash withdrawal values;
10                (II) $300,000 for disability insurance and
11            $300,000 for long-term care insurance as defined
12            in Section 351A-1 of this Code; and
13                (III) $500,000 for basic hospital medical and
14            surgical insurance or major medical insurance;
15            (C) $250,000 in the present value of annuity
16        benefits, including net cash surrender and net cash
17        withdrawal values;
18        (ii) with respect to each individual participating in a
19    governmental retirement benefit plan established under
20    Sections 401, 403(b), or 457 of the U.S. Internal Revenue
21    Code covered by an unallocated annuity contract or the
22    beneficiaries of each such individual if deceased, in the
23    aggregate, $250,000 in present value annuity benefits,
24    including net cash surrender and net cash withdrawal
25    values;
26        (iii) with respect to each payee of a structured

 

 

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1    settlement annuity or beneficiary or beneficiaries of the
2    payee if deceased, $250,000 in present value annuity
3    benefits, in the aggregate, including net cash surrender
4    and net cash withdrawal values, if any; or
5        (iv) with respect to either (1) one contract owner
6    provided coverage under subparagraph (ii) of paragraph (c)
7    of subsection (1) of this Section or (2) one plan sponsor
8    whose plans own directly or in trust one or more
9    unallocated annuity contracts not included in subparagraph
10    (ii) of paragraph (b) of this subsection, $5,000,000 in
11    benefits, irrespective of the number of contracts with
12    respect to the contract owner or plan sponsor. However, in
13    the case where one or more unallocated annuity contracts
14    are covered contracts under this Article and are owned by a
15    trust or other entity for the benefit of 2 or more plan
16    sponsors, coverage shall be afforded by the Association if
17    the largest interest in the trust or entity owning the
18    contract or contracts is held by a plan sponsor whose
19    principal place of business is in this State. In no event
20    shall the Association be obligated to cover more than
21    $5,000,000 in benefits with respect to all these
22    unallocated contracts.
23    In no event shall the Association be obligated to cover
24more than (1) an aggregate of $300,000 in benefits with respect
25to any one life under subparagraphs (i), (ii), and (iii) of
26this paragraph (b) except with respect to benefits for basic

 

 

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1hospital, medical, and surgical insurance and major medical
2insurance under item (B) of subparagraph (i) of this paragraph
3(b), in which case the aggregate liability of the Association
4shall not exceed $500,000 with respect to any one individual or
5(2) with respect to one owner of multiple nongroup policies of
6life insurance, whether the policy owner is an individual,
7firm, corporation, or other person and whether the persons
8insured are officers, managers, employees, or other persons,
9$5,000,000 in benefits, regardless of the number of policies
10and contracts held by the owner.
11    The limitations set forth in this subsection are
12limitations on the benefits for which the Association is
13obligated before taking into account either its subrogation and
14assignment rights or the extent to which those benefits could
15be provided out of the assets of the impaired or insolvent
16insurer attributable to covered policies. The costs of the
17Association's obligations under this Article may be met by the
18use of assets attributable to covered policies or reimbursed to
19the Association pursuant to its subrogation and assignment
20rights.
21    (4) In performing its obligations to provide coverage under
22Section 531.08 of this Code, the Association shall not be
23required to guarantee, assume, reinsure, or perform or cause to
24be guaranteed, assumed, reinsured, or performed the
25contractual obligations of the insolvent or impaired insurer
26under a covered policy or contract that do not materially

 

 

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1affect the economic values or economic benefits of the covered
2policy or contract.
3(Source: P.A. 96-1450, eff. 8-20-10.)
 
4    (215 ILCS 5/531.05)  (from Ch. 73, par. 1065.80-5)
5    Sec. 531.05. Definitions. As used in this Act:
6    "Account" means either of the 2 3 accounts created under
7Section 531.06.
8    "Association" means the Illinois Life and Health Insurance
9Guaranty Association created under Section 531.06.
10    "Authorized assessment" or the term "authorized" when used
11in the context of assessments means a resolution by the Board
12of Directors has been passed whereby an assessment shall be
13called immediately or in the future from member insurers for a
14specified amount. An assessment is authorized when the
15resolution is passed.
16    "Benefit plan" means a specific employee, union, or
17association of natural persons benefit plan.
18    "Called assessment" or the term "called" when used in the
19context of assessments means that a notice has been issued by
20the Association to member insurers requiring that an authorized
21assessment be paid within the time frame set forth within the
22notice. An authorized assessment becomes a called assessment
23when notice is mailed by the Association to member insurers.
24    "Director" means the Director of Insurance of this State.
25    "Contractual obligation" means any obligation under a

 

 

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1policy or contract or certificate under a group policy or
2contract, or portion thereof for which coverage is provided
3under Section 531.03.
4    "Covered person" means any person who is entitled to the
5protection of the Association as described in Section 531.02.
6    "Covered policy" means any policy or contract within the
7scope of this Article under Section 531.03.
8    "Extra-contractual claims" shall include, for example,
9claims relating to bad faith in the payment of claims, punitive
10or exemplary damages, or attorneys' fees and costs.
11    "Impaired insurer" means (A) a member insurer which, after
12the effective date of this amendatory Act of the 97th General
13Assembly amendatory Act of the 96th General Assembly, is not an
14insolvent insurer, and is placed under an order of
15rehabilitation or conservation by a court of competent
16jurisdiction or (B) a member insurer deemed by the Director
17after the effective date of this amendatory Act of the 96th
18General Assembly to be potentially unable to fulfill its
19contractual obligations and not an insolvent insurer.
20    "Insolvent insurer" means a member insurer that, after the
21effective date of this amendatory Act of the 96th General
22Assembly, is placed under a final order of liquidation by a
23court of competent jurisdiction with a finding of insolvency.
24    "Member insurer" means an insurer licensed or holding a
25certificate of authority to transact in this State any kind of
26insurance for which coverage is provided under Section 531.03

 

 

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1of this Code and includes an insurer whose license or
2certificate of authority in this State may have been suspended,
3revoked, not renewed, or voluntarily withdrawn or whose
4certificate of authority may have been suspended pursuant to
5Section 119 of this Code, but does not include:
6        (1) a hospital or medical service organization,
7    whether profit or nonprofit;
8        (2) a health maintenance organization;
9        (3) any burial society organized under Article XIX of
10    this Code, any fraternal benefit society organized under
11    Article XVII of this Code, any mutual benefit association
12    organized under Article XVIII of this Code, and any foreign
13    fraternal benefit society licensed under Article VI of this
14    Code or a fraternal benefit society;
15        (4) a mandatory State pooling plan;
16        (5) a mutual assessment company or other person that
17    operates on an assessment basis;
18        (6) an insurance exchange;
19        (7) an organization that is permitted to issue
20    charitable gift annuities pursuant to Section 121-2.10 of
21    this Code;
22        (8) any health services plan corporation established
23    pursuant to the Voluntary Health Services Plans Act;
24        (9) any dental service plan corporation established
25    pursuant to the Dental Service Plan Act; or
26        (10) an entity similar to any of the above.

 

 

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1    "Moody's Corporate Bond Yield Average" means the Monthly
2Average Corporates as published by Moody's Investors Service,
3Inc., or any successor thereto.
4    "Owner" of a policy or contract and "policy owner" and
5"contract owner" mean the person who is identified as the legal
6owner under the terms of the policy or contract or who is
7otherwise vested with legal title to the policy or contract
8through a valid assignment completed in accordance with the
9terms of the policy or contract and properly recorded as the
10owner on the books of the insurer. The terms owner, contract
11owner, and policy owner do not include persons with a mere
12beneficial interest in a policy or contract.
13    "Person" means an individual, corporation, limited
14liability company, partnership, association, governmental body
15or entity, or voluntary organization.
16    "Plan sponsor" means:
17        (1) the employer in the case of a benefit plan
18    established or maintained by a single employer;
19        (2) the employee organization in the case of a benefit
20    plan established or maintained by an employee
21    organization; or
22        (3) in a case of a benefit plan established or
23    maintained by 2 or more employers or jointly by one or more
24    employers and one or more employee organizations, the
25    association, committee, joint board of trustees, or other
26    similar group of representatives of the parties who

 

 

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1    establish or maintain the benefit plan.
2    "Premiums" mean amounts or considerations, by whatever
3name called, received on covered policies or contracts less
4returned premiums, considerations, and deposits and less
5dividends and experience credits.
6    "Premiums" does not include:
7        (A) amounts or considerations received for policies or
8    contracts or for the portions of policies or contracts for
9    which coverage is not provided under Section 531.03 of this
10    Code except that assessable premium shall not be reduced on
11    account of the provisions of subparagraph (iii) of
12    paragraph (b) of subsection (a) of Section 531.03 of this
13    Code relating to interest limitations and the provisions of
14    paragraph (b) of subsection (3) of Section 531.03 relating
15    to limitations with respect to one individual, one
16    participant, and one contract owner;
17        (B) premiums in excess of $5,000,000 on an unallocated
18    annuity contract not issued under a governmental
19    retirement benefit plan (or its trustee) established under
20    Section 401, 403(b) or 457 of the United States Internal
21    Revenue Code; or
22        (C) with respect to multiple nongroup policies of life
23    insurance owned by one owner, whether the policy owner is
24    an individual, firm, corporation, or other person, and
25    whether the persons insured are officers, managers,
26    employees, or other persons, premiums in excess of

 

 

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1    $5,000,000 with respect to these policies or contracts,
2    regardless of the number of policies or contracts held by
3    the owner.
4    "Principal place of business" of a plan sponsor or a person
5other than a natural person means the single state in which the
6natural persons who establish policy for the direction,
7control, and coordination of the operations of the entity as a
8whole primarily exercise that function, determined by the
9Association in its reasonable judgment by considering the
10following factors:
11        (A) the state in which the primary executive and
12    administrative headquarters of the entity is located;
13        (B) the state in which the principal office of the
14    chief executive officer of the entity is located;
15        (C) the state in which the board of directors (or
16    similar governing person or persons) of the entity conducts
17    the majority of its meetings;
18        (D) the state in which the executive or management
19    committee of the board of directors (or similar governing
20    person or persons) of the entity conducts the majority of
21    its meetings;
22        (E) the state from which the management of the overall
23    operations of the entity is directed; and
24        (F) in the case of a benefit plan sponsored by
25    affiliated companies comprising a consolidated
26    corporation, the state in which the holding company or

 

 

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1    controlling affiliate has its principal place of business
2    as determined using the above factors. However, in the case
3    of a plan sponsor, if more than 50% of the participants in
4    the benefit plan are employed in a single state, that state
5    shall be deemed to be the principal place of business of
6    the plan sponsor.
7    The principal place of business of a plan sponsor of a
8benefit plan described in paragraph (3) of the definition of
9"plan sponsor" this Section shall be deemed to be the principal
10place of business of the association, committee, joint board of
11trustees, or other similar group of representatives of the
12parties who establish or maintain the benefit plan that, in
13lieu of a specific or clear designation of a principal place of
14business, shall be deemed to be the principal place of business
15of the employer or employee organization that has the largest
16investment in the benefit plan in question.
17    "Receivership court" means the court in the insolvent or
18impaired insurer's state having jurisdiction over the
19conservation, rehabilitation, or liquidation of the insurer.
20    "Resident" means a person to whom a contractual obligation
21is owed and who resides in this State on the date of entry of a
22court order that determines a member insurer to be an impaired
23insurer or a court order that determines a member insurer to be
24an insolvent insurer. A person may be a resident of only one
25state, which in the case of a person other than a natural
26person shall be its principal place of business. Citizens of

 

 

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1the United States that are either (i) residents of foreign
2countries or (ii) residents of United States possessions,
3territories, or protectorates that do not have an association
4similar to the Association created by this Article, shall be
5deemed residents of the state of domicile of the insurer that
6issued the policies or contracts.
7    "Structured settlement annuity" means an annuity purchased
8in order to fund periodic payments for a plaintiff or other
9claimant in payment for or with respect to personal injury
10suffered by the plaintiff or other claimant.
11    "State" means a state, the District of Columbia, Puerto
12Rico, and a United States possession, territory, or
13protectorate.
14    "Supplemental contract" means a written agreement entered
15into for the distribution of proceeds under a life, health, or
16annuity policy or a life, health, or annuity contract.
17    "Unallocated annuity contract" means any annuity contract
18or group annuity certificate which is not issued to and owned
19by an individual, except to the extent of any annuity benefits
20guaranteed to an individual by an insurer under such contract
21or certificate.
22(Source: P.A. 96-1450, eff. 8-20-10.)
 
23    (215 ILCS 5/531.07)  (from Ch. 73, par. 1065.80-7)
24    Sec. 531.07. Board of Directors.) The board of directors
25of the Association consists of not less than 7 nor more than 11

 

 

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1members serving terms as established in the plan of operation.
2The insurer members insurers of the board are to be selected by
3member insurers subject to the approval of the Director. In
4addition, 2 persons who must be public representatives may be
5appointed by the Director to the board of directors. A public
6representative may not be an officer, director, or employee of
7an insurance company or any person engaged in the business of
8insurance. Vacancies on the board must be filled for the
9remaining period of the term in the manner described in the
10plan of operation.
11    In approving selections or in appointing members to the
12board, the Director must consider, whether all member insurers
13are fairly represented.
14    Members of the board may be reimbursed from the assets of
15the Association for expenses incurred by them as members of the
16board of directors but members of the board may not otherwise
17be compensated by the Association for their services.
18(Source: P.A. 96-1450, eff. 8-20-10.)
 
19    (215 ILCS 5/531.08)  (from Ch. 73, par. 1065.80-8)
20    Sec. 531.08. Powers and duties of the Association.
21    (a) In addition to the powers and duties enumerated in
22other Sections of this Article:
23        (1) If a member insurer is an impaired insurer, then
24    the Association may, in its discretion and subject to any
25    conditions imposed by the Association that do not impair

 

 

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1    the contractual obligations of the impaired insurer and
2    that are approved by the Director:
3            (A) guarantee, assume, or reinsure or cause to be
4        guaranteed, assumed, or reinsured, any or all of the
5        policies or contracts of the impaired insurer; or
6            (B) provide such money, pledges, loans, notes,
7        guarantees, or other means as are proper to effectuate
8        paragraph (A) and assure payment of the contractual
9        obligations of the impaired insurer pending action
10        under paragraph (A).
11        (2) If a member insurer is an insolvent insurer, then
12    the Association shall, in its discretion, either:
13            (A) guaranty, assume, or reinsure or cause to be
14        guaranteed, assumed, or reinsured the policies or
15        contracts of the insolvent insurer or assure payment of
16        the contractual obligations of the insolvent insurer
17        and provide money, pledges, loans, notes, guarantees,
18        or other means reasonably necessary to discharge the
19        Association's duties; or
20            (B) provide benefits and coverages in accordance
21        with the following provisions:
22                (i) with respect to life and health insurance
23            policies and annuities, ensure payment of benefits
24            for premiums identical to the premiums and
25            benefits (except for terms of conversion and
26            renewability) that would have been payable under

 

 

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1            the policies or contracts of the insolvent insurer
2            for claims incurred:
3                    (a) with respect to group policies and
4                contracts, not later than the earlier of the
5                next renewal date under those policies or
6                contracts or 45 days, but in no event less than
7                30 days, after the date on which the
8                Association becomes obligated with respect to
9                the policies and contracts;
10                    (b) with respect to nongroup policies,
11                contracts, and annuities not later than the
12                earlier of the next renewal date (if any) under
13                the policies or contracts or one year, but in
14                no event less than 30 days, from the date on
15                which the Association becomes obligated with
16                respect to the policies or contracts;
17                (ii) make diligent efforts to provide all
18            known insureds or annuitants (for nongroup
19            policies and contracts), or group policy owners
20            with respect to group policies and contracts, 30
21            days notice of the termination (pursuant to
22            subparagraph (i) of this paragraph (B)) of the
23            benefits provided;
24                (iii) with respect to nongroup life and health
25            insurance policies and annuities covered by the
26            Association, make available to each known insured

 

 

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1            or annuitant, or owner if other than the insured or
2            annuitant, and with respect to an individual
3            formerly insured or formerly an annuitant under a
4            group policy who is not eligible for replacement
5            group coverage, make available substitute coverage
6            on an individual basis in accordance with the
7            provisions of paragraph (3), if the insureds or
8            annuitants had a right under law or the terminated
9            policy or annuity to convert coverage to
10            individual coverage or to continue an individual
11            policy or annuity in force until a specified age or
12            for a specified time, during which the insurer had
13            no right unilaterally to make changes in any
14            provision of the policy or annuity or had a right
15            only to make changes in premium by class.
16    (b) In providing the substitute coverage required under
17subparagraph (iii) of paragraph (B) of item (2) of subsection
18(a) of this Section, the Association may offer either to
19reissue the terminated coverage or to issue an alternative
20policy.
21    Alternative or reissued policies shall be offered without
22requiring evidence of insurability, and shall not provide for
23any waiting period or exclusion that would not have applied
24under the terminated policy.
25    The Association may reinsure any alternative or reissued
26policy.

 

 

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1    Alternative policies adopted by the Association shall be
2subject to the approval of the Director. The Association may
3adopt alternative policies of various types for future
4insurance without regard to any particular impairment or
5insolvency.
6    Alternative policies shall contain at least the minimum
7statutory provisions required in this State and provide
8benefits that shall not be unreasonable in relation to the
9premium charged. The Association shall set the premium in
10accordance with a table of rates which it shall adopt. The
11premium shall reflect the amount of insurance to be provided
12and the age and class of risk of each insured, but shall not
13reflect any changes in the health of the insured after the
14original policy was last underwritten.
15    Any alternative policy issued by the Association shall
16provide coverage of a type similar to that of the policy issued
17by the impaired or insolvent insurer, as determined by the
18Association.
19    (c) If the Association elects to reissue terminated
20coverage at a premium rate different from that charged under
21the terminated policy, the premium shall be set by the
22Association in accordance with the amount of insurance provided
23and the age and class of risk, subject to approval of the
24Director or by a court of competent jurisdiction.
25    (d) The Association's obligations with respect to coverage
26under any policy of the impaired or insolvent insurer or under

 

 

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1any reissued or alternative policy shall cease on the date such
2coverage or policy is replaced by another similar policy by the
3policyholder, the insured, or the Association.
4    (e) When proceeding under this Section with respect to any
5policy or contract carrying guaranteed minimum interest rates,
6the Association shall assure the payment or crediting of a rate
7of interest consistent with subparagraph (2)(b)(iii)(B) of
8Section 531.03.
9    (f) Nonpayment of premiums thirty-one days after the date
10required under the terms of any guaranteed, assumed,
11alternative or reissued policy or contract or substitute
12coverage shall terminate the Association's obligations under
13such policy or coverage under this Act with respect to such
14policy or coverage, except with respect to any claims incurred
15or any net cash surrender value which may be due in accordance
16with the provisions of this Act.
17    (g) Premiums due for coverage after entry of an order of
18liquidation of an insolvent insurer shall belong to and be
19payable at the direction of the Association, and the
20Association shall be liable for unearned premiums due to policy
21or contract owners arising after the entry of such order.
22    (h) In carrying out its duties under paragraph (2) of
23subsection (a) of this Section, the Association may:
24        (1) subject to approval by a court in this State,
25    impose permanent policy or contract liens in connection
26    with a guarantee, assumption, or reinsurance agreement if

 

 

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1    the Association finds that the amounts which can be
2    assessed under this Article are less than the amounts
3    needed to assure full and prompt performance of the
4    Association's duties under this Article or that the
5    economic or financial conditions as they affect member
6    insurers are sufficiently adverse to render the imposition
7    of such permanent policy or contract liens to be in the
8    public interest; or
9        (2) subject to approval by a court in this State,
10    impose temporary moratoriums or liens on payments of cash
11    values and policy loans or any other right to withdraw
12    funds held in conjunction with policies or contracts in
13    addition to any contractual provisions for deferral of cash
14    or policy loan value. In addition, in the event of a
15    temporary moratorium or moratorium charge imposed by the
16    receivership court on payment of cash values or policy
17    loans or on any other right to withdraw funds held in
18    conjunction with policies or contracts, out of the assets
19    of the impaired or insolvent insurer, the Association may
20    defer the payment of cash values, policy loans, or other
21    rights by the Association for the period of the moratorium
22    or moratorium charge imposed by the receivership court,
23    except for claims covered by the Association to be paid in
24    accordance with a hardship procedure established by the
25    liquidator or rehabilitator and approved by the
26    receivership court.

 

 

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1    (i) There shall be no liability on the part of and no cause
2of action shall arise against the Association or against any
3transferee from the Association in connection with the transfer
4by reinsurance or otherwise of all or any part of an impaired
5or insolvent insurer's business by reason of any action taken
6or any failure to take any action by the impaired or insolvent
7insurer at any time.
8    (j) If the Association fails to act within a reasonable
9period of time as provided in subsection (2) of this Section
10with respect to an insolvent insurer, the Director shall have
11the powers and duties of the Association under this Act with
12regard to such insolvent insurers.
13    (k) The Association or its designated representatives may
14render assistance and advice to the Director, upon his request,
15concerning rehabilitation, payment of claims, continuations of
16coverage, or the performance of other contractual obligations
17of any impaired or insolvent insurer.
18    (l) The Association shall have standing to appear or
19intervene before a court or agency in this State with
20jurisdiction over an impaired or insolvent insurer concerning
21which the Association is or may become obligated under this
22Article or with jurisdiction over any person or property
23against which the Association may have rights through
24subrogation or otherwise. Standing shall extend to all matters
25germane to the powers and duties of the Association, including,
26but not limited to, proposals for reinsuring, modifying, or

 

 

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1guaranteeing the policies or contracts of the impaired or
2insolvent insurer and the determination of the policies or
3contracts and contractual obligations. The Association shall
4also have the right to appear or intervene before a court or
5agency in another state with jurisdiction over an impaired or
6insolvent insurer for which the Association is or may become
7obligated or with jurisdiction over any person or property
8against whom the Association may have rights through
9subrogation or otherwise.
10    (m)(1) A person receiving benefits under this Article shall
11be deemed to have assigned the rights under and any causes of
12action against any person for losses arising under, resulting
13from, or otherwise relating to the covered policy or contract
14to the Association to the extent of the benefits received
15because of this Article, whether the benefits are payments of
16or on account of contractual obligations, continuation of
17coverage, or provision of substitute or alternative coverages.
18The Association may require an assignment to it of such rights
19and cause of action by any payee, policy, or contract owner,
20beneficiary, insured, or annuitant as a condition precedent to
21the receipt of any right or benefits conferred by this Article
22upon the person.
23    (2) The subrogation rights of the Association under this
24subsection have the same priority against the assets of the
25impaired or insolvent insurer as that possessed by the person
26entitled to receive benefits under this Article.

 

 

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1    (3) In addition to paragraphs (1) and (2), the Association
2shall have all common law rights of subrogation and any other
3equitable or legal remedy that would have been available to the
4impaired or insolvent insurer or owner, beneficiary, or payee
5of a policy or contract with respect to the policy or
6contracts, including without limitation, in the case of a
7structured settlement annuity, any rights of the owner,
8beneficiary, or payee of the annuity to the extent of benefits
9received pursuant to this Article, against a person originally
10or by succession responsible for the losses arising from the
11personal injury relating to the annuity or payment therefor,
12excepting any such person responsible solely by reason of
13serving as an assignee in respect of a qualified assignment
14under Internal Revenue Code Section 130.
15    (4) If the preceding provisions of this subsection (l) are
16invalid or ineffective with respect to any person or claim for
17any reason, then the amount payable by the Association with
18respect to the related covered obligations shall be reduced by
19the amount realized by any other person with respect to the
20person or claim that is attributable to the policies, or
21portion thereof, covered by the Association.
22    (5) If the Association has provided benefits with respect
23to a covered obligation and a person recovers amounts as to
24which the Association has rights as described in the preceding
25paragraphs of this subsection (10), then the person shall pay
26to the Association the portion of the recovery attributable to

 

 

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1the policies, or portion thereof, covered by the Association.
2    (n) The Association may:
3         (1) Enter into such contracts as are necessary or
4    proper to carry out the provisions and purposes of this
5    Article. ;
6         (2) Sue or be sued, including taking any legal actions
7    necessary or proper for recovery of any unpaid assessments
8    under Section 531.09. The Association shall not be liable
9    for punitive or exemplary damages. ;
10         (3) Borrow money to effect the purposes of this
11    Article. Any notes or other evidence of indebtedness of the
12    Association not in default are legal investments for
13    domestic insurers and may be carried as admitted assets.
14         (4) Employ or retain such persons as are necessary to
15    handle the financial transactions of the Association, and
16    to perform such other functions as become necessary or
17    proper under this Article.
18         (5) Negotiate and contract with any liquidator,
19    rehabilitator, conservator, or ancillary receiver to carry
20    out the powers and duties of the Association.
21         (6) Take such legal action as may be necessary to
22    avoid payment of improper claims.
23         (7) Exercise, for the purposes of this Article and to
24    the extent approved by the Director, the powers of a
25    domestic life or health insurer, but in no case may the
26    Association issue insurance policies or annuity contracts

 

 

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1    other than those issued to perform the contractual
2    obligations of the impaired or insolvent insurer.
3         (8) Exercise all the rights of the Director under
4    Section 193(4) of this Code with respect to covered
5    policies after the association becomes obligated by
6    statute.
7        (9) Request information from a person seeking coverage
8    from the Association in order to aid the Association in
9    determining its obligations under this Article with
10    respect to the person, and the person shall promptly comply
11    with the request.
12        (10) Take other necessary or appropriate action to
13    discharge its duties and obligations under this Article or
14    to exercise its powers under this Article.
15    (o) With respect to covered policies for which the
16Association becomes obligated after an entry of an order of
17liquidation or rehabilitation, the Association may elect to
18succeed to the rights of the insolvent insurer arising after
19the date of the order of liquidation or rehabilitation under
20any contract of reinsurance to which the insolvent insurer was
21a party, to the extent that such contract provides coverage for
22losses occurring after the date of the order of liquidation or
23rehabilitation. As a condition to making this election, the
24Association must pay all unpaid premiums due under the contract
25for coverage relating to periods before and after the date of
26the order of liquidation or rehabilitation.

 

 

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1    (p) A deposit in this State, held pursuant to law or
2required by the Director for the benefit of creditors,
3including policy owners, not turned over to the domiciliary
4liquidator upon the entry of a final order of liquidation or
5order approving a rehabilitation plan of an insurer domiciled
6in this State or in a reciprocal state, pursuant to Article
7XIII 1/2 of this Code, shall be promptly paid to the
8Association. The Association shall be entitled to retain a
9portion of any amount so paid to it equal to the percentage
10determined by dividing the aggregate amount of policy owners'
11claims related to that insolvency for which the Association has
12provided statutory benefits by the aggregate amount of all
13policy owners' claims in this State related to that insolvency
14and shall remit to the domiciliary receiver the amount so paid
15to the Association less the amount retained pursuant to this
16subsection (13). Any amount so paid to the Association and
17retained by it shall be treated as a distribution of estate
18assets pursuant to applicable State receivership law dealing
19with early access disbursements.
20    (q) The Board of Directors of the Association shall have
21discretion and may exercise reasonable business judgment to
22determine the means by which the Association is to provide the
23benefits of this Article in an economical and efficient manner.
24    (r) Where the Association has arranged or offered to
25provide the benefits of this Article to a covered person under
26a plan or arrangement that fulfills the Association's

 

 

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1obligations under this Article, the person shall not be
2entitled to benefits from the Association in addition to or
3other than those provided under the plan or arrangement.
4    (s) Venue in a suit against the Association arising under
5the Article shall be in Cook County. The Association shall not
6be required to give any appeal bond in an appeal that relates
7to a cause of action arising under this Article.
8    (t) The Association may join an organization of one or more
9other State associations of similar purposes to further the
10purposes and administer the powers and duties of the
11Association.
12    (u) In carrying out its duties in connection with
13guaranteeing, assuming, or reinsuring policies or contracts
14under subsections (1) or (2), the Association may, subject to
15approval of the receivership court, issue substitute coverage
16for a policy or contract that provides an interest rate,
17crediting rate, or similar factor determined by use of an index
18or other external reference stated in the policy or contract
19employed in calculating returns or changes in value by issuing
20an alternative policy or contract in accordance with the
21following provisions:
22        (1) in lieu of the index or other external reference
23    provided for in the original policy or contract, the
24    alternative policy or contract provides for (i) a fixed
25    interest rate, or (ii) payment of dividends with minimum
26    guarantees, or (iii) a different method for calculating

 

 

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1    interest or changes in value;
2        (2) there is no requirement for evidence of
3    insurability, waiting period, or other exclusion that
4    would not have applied under the replaced policy or
5    contract; and
6        (3) the alternative policy or contract is
7    substantially similar to the replaced policy or contract in
8    all other material terms.
9(Source: P.A. 96-1450, eff. 8-20-10; revised 9-16-10.)
 
10    (215 ILCS 5/531.09)  (from Ch. 73, par. 1065.80-9)
11    Sec. 531.09. Assessments.
12    (1) For the purpose of providing the funds necessary to
13carry out the powers and duties of the Association, the board
14of directors shall assess the member insurers, separately for
15each account, at such times and for such amounts as the board
16finds necessary. Assessments shall be due not less than 30 days
17after written notice to the member insurers and shall accrue
18interest from the due date at such adjusted rate as is
19established under Section 6621 of Chapter 26 of the United
20States Code and such interest shall be compounded daily.
21    (2) There shall be 2 classes of assessments, as follows:
22        (a) Class A assessments shall be made for the purpose
23    of meeting administrative costs and other general expenses
24    and examinations conducted under the authority of the
25    Director under subsection (5) of Section 531.12.

 

 

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1        (b) Class B assessments shall be made to the extent
2    necessary to carry out the powers and duties of the
3    Association under Section 531.08 with regard to an impaired
4    or insolvent domestic insurer or insolvent foreign or alien
5    insurers.
6    (3)(a) The amount of any Class A assessment shall be
7determined at the discretion of the board of directors and such
8assessments shall be authorized and called on a non-pro rata
9basis. The amount of any Class B assessment shall be allocated
10for assessment purposes among the accounts and subaccounts
11pursuant to an allocation formula which may be based on the
12premiums or reserves of the impaired or insolvent insurer or
13any other standard deemed by the board in its sole discretion
14as being fair and reasonable under the circumstances.
15    (b) Class B assessments against member insurers for each
16account and subaccount shall be in the proportion that the
17premiums received on business in this State by each assessed
18member insurer on policies or contracts covered by each account
19or subaccount for the three most recent calendar years for
20which information is available preceding the year in which the
21insurer became impaired or insolvent, as the case may be, bears
22to such premiums received on business in this State for such
23calendar years by all assessed member insurers.
24    (c) Assessments for funds to meet the requirements of the
25Association with respect to an impaired or insolvent insurer
26shall not be made until necessary to implement the purposes of

 

 

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1this Article. Classification of assessments under subsection
2(2) and computations of assessments under this subsection shall
3be made with a reasonable degree of accuracy, recognizing that
4exact determinations may not always be possible.
5    (4) The Association may abate or defer, in whole or in
6part, the assessment of a member insurer if, in the opinion of
7the board, payment of the assessment would endanger the ability
8of the member insurer to fulfill its contractual obligations.
9In the event an assessment against a member insurer is abated
10or deferred in whole or in part the amount by which the
11assessment is abated or deferred may be assessed against the
12other member insurers in a manner consistent with the basis for
13assessments set forth in this Section. Once the conditions that
14caused a deferral have been removed or rectified, the member
15insurer shall pay all assessments that were deferred pursuant
16to a repayment plan approved by the Association.
17    (5) (a) (i) Subject to the provisions of subparagraph (ii)
18of this paragraph, the total of all assessments authorized by
19the Association with respect to a member insurer for each
20subaccount of the life insurance and annuity account and for
21the health account shall not in one calendar year exceed 2% of
22that member insurer's average annual premiums received in this
23State on the policies and contracts covered by the subaccount
24or account during the 3 calendar years preceding the year in
25which the insurer became an impaired or insolvent insurer.
26    (ii) If 2 or more assessments are authorized in one

 

 

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1calendar year with respect to insurers that become impaired or
2insolvent in different calendar years, the average annual
3premiums for purposes of the aggregate assessment percentage
4limitation referenced in subparagraph (a) of this paragraph
5shall be equal and limited to the higher of the 3-year average
6annual premiums for the applicable subaccount or account as
7calculated pursuant to this Section.
8    (iii) If the maximum assessment, together with the other
9assets of the Association in an account, does not provide in
10one year in either account an amount sufficient to carry out
11the responsibilities of the Association, the necessary
12additional funds shall be assessed as soon thereafter as
13permitted by this Article.
14    (b) The board may provide in the plan of operation a method
15of allocating funds among claims, whether relating to one or
16more impaired or insolvent insurers, when the maximum
17assessment will be insufficient to cover anticipated claims.
18    (c) If the maximum assessment for a subaccount of the life
19insurance and annuity account in one year does not provide an
20amount sufficient to carry out the responsibilities of the
21Association, then pursuant to paragraph (b) of subsection (3),
22the board shall assess the other subaccounts of the life and
23annuity account for the necessary additional amount, subject to
24the maximum stated in paragraph (a) of this subsection.
25    (6) The board may, by an equitable method as established in
26the plan of operation, refund to member insurers, in proportion

 

 

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1to the contribution of each insurer to that account, the amount
2by which the assets of the account exceed the amount the board
3finds is necessary to carry out during the coming year the
4obligations of the Association with regard to that account,
5including assets accruing from net realized gains and income
6from investments. A reasonable amount may be retained in any
7account to provide funds for the continuing expenses of the
8Association and for future losses.
9    (7) An assessment is deemed to occur on the date upon which
10the board votes such assessment. The board may defer calling
11the payment of the assessment or may call for payment in one or
12more installments.
13    (8) It is proper for any member insurer, in determining its
14premium rates and policyowner dividends as to any kind of
15insurance within the scope of this Article, to consider the
16amount reasonably necessary to meet its assessment obligations
17under this Article.
18    (9) The Association must issue to each insurer paying a
19Class B assessment under this Article a certificate of
20contribution, in a form acceptable to the Director, for the
21amount of the assessment so paid. All outstanding certificates
22are of equal dignity and priority without reference to amounts
23or dates of issue. A certificate of contribution may be shown
24by the insurer in its financial statement as an asset in such
25form and for such amount, if any, and period of time as the
26Director may approve, provided the insurer shall in any event

 

 

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1at its option have the right to show a certificate of
2contribution as an admitted asset at percentages of the
3original face amount for calendar years as follows:
4    100% for the calendar year after the year of issuance;
5    80% for the second calendar year after the year of
6issuance;
7    60% for the third calendar year after the year of issuance;
8    40% for the fourth calendar year after the year of
9issuance;
10    20% for the fifth calendar year after the year of issuance.
11    (10) The Association may request information of member
12insurers in order to aid in the exercise of its power under
13this Section and member insurers shall promptly comply with a
14request.
15(Source: P.A. 95-86, eff. 9-25-07 (changed from 1-1-08 by P.A.
1695-632); 96-1450, eff. 8-20-10.)
 
17    (215 ILCS 5/531.14)  (from Ch. 73, par. 1065.80-14)
18    Sec. 531.14. Miscellaneous Provisions.
19    (1) Nothing in this Article may be construed to reduce the
20liability for unpaid assessments of the insured of an impaired
21or insolvent insurer operating under a plan with assessment
22liability.
23    (2) Records must be kept of all negotiations and meetings
24in which the Association or its representatives are involved to
25discuss the activities of the Association in carrying out its

 

 

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1powers and duties under Section 531.08. Records of such
2negotiations or meetings may be made public only upon the
3termination of a liquidation, rehabilitation, or conservation
4proceeding involving the impaired or insolvent insurer, upon
5the termination of the impairment or insolvency of the insurer,
6or upon the order of a court of competent jurisdiction. Nothing
7in this paragraph (2) limits the duty of the Association to
8render a report of its activities under Section 531.15.
9    (3) For the purpose of carrying out its obligations under
10this Article, the Association is deemed to be a creditor of the
11impaired or insolvent insurer to the extent of assets
12attributable to covered policies reduced by any amounts to
13which the Association is entitled as subrogee (under paragraph
14(8) of Section 531.08). All assets of the impaired or insolvent
15insurer attributable to covered policies must be used to
16continue all covered policies and pay all contractual
17obligations of the impaired insurer as required by this
18Article. "Assets attributable to covered policies", as used in
19this paragraph (3), is that proportion of the assets which the
20reserves that should have been established for such policies
21bear to the reserve that should have been established for all
22policies of insurance written by the impaired or insolvent
23insurer.
24    (4) (a) Prior to the termination of any liquidation,
25rehabilitation, or conservation proceeding, the court may take
26into consideration the contributions of the respective

 

 

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1parties, including the Association, the shareholders and
2policyowners of the impaired or insolvent insurer, and any
3other party with a bona fide interest, in making an equitable
4distribution of the ownership rights of such impaired or
5insolvent insurer. In such a determination, consideration must
6be given to the welfare of the policyholders of the continuing
7or successor insurer.
8    (b) No distribution to stockholders, if any, of an impaired
9or insolvent insurer may be made until and unless the total
10amount of valid claims of the Association for funds expended,
11with interest, in carrying out its powers and duties under
12Section 531.08, with respect to such insurer have been fully
13recovered by the Association.
14    (5) (a) If an order for liquidation or rehabilitation of an
15insurer domiciled in this State has been entered, the receiver
16appointed under such order has a right to recover on behalf of
17the insurer, from any affiliate that controlled it, the amount
18of distributions, other than stock dividends paid by the
19insurer on its capital stock, made at any time during the 5
20years preceding the petition for liquidation or rehabilitation
21subject to the limitations of paragraphs (b) to (d).
22    (b) No such dividend is recoverable if the insurer shows
23that when paid the distribution was lawful and reasonable, and
24that the insurer did not know and could not reasonably have
25known that the distribution might adversely affect the ability
26of the insurer to fulfill its contractual obligations.

 

 

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1    (c) Any person who as an affiliate that controlled the
2insurer at the time the distributions were paid is liable up to
3the amount of distributions he received. Any person who was an
4affiliate that controlled the insurer at the time the
5distributions were declared, is liable up to the amount of
6distributions he would have received if they had been paid
7immediately. If 2 persons are liable with respect to the same
8distributions, they are jointly and severally liable.
9    (d) The maximum amount recoverable under subsection (5) of
10this Section is the amount needed in excess of all other
11available assets of the insolvent insurer to pay the
12contractual obligations of the insolvent insurer.
13    (e) If any person liable under paragraph (c) of subsection
14(5) of this Section is insolvent, all its affiliates that
15controlled it at the time the dividend was paid are jointly and
16severally liable for any resulting deficiency in the amount
17recovered from the insolvent affiliate.
18    (6) As a creditor of the impaired or insolvent insurer as
19established in subsection (3) of this Section and consistent
20with subsection (2) of Section 205 of this Code, the
21Association and other similar associations shall be entitled to
22receive a disbursement of assets out of the marshaled assets,
23from time to time as the assets become available to reimburse
24it, as a credit against contractual obligations under this
25Article. If the liquidator has not, within 120 days after a
26final determination of insolvency of an insurer by the

 

 

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1receivership court, made an application to the court for the
2approval of a proposal to disburse assets out of marshaled
3assets to guaranty associations having obligations because of
4the insolvency, then the Association shall be entitled to make
5application to the receivership court for approval of its own
6proposal to disburse these assets.
7(Source: P.A. 96-1450, eff. 8-20-10.)