Full Text of SB2404 93rd General Assembly
SB2404ham002 93RD GENERAL ASSEMBLY
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Rep. Frank J. Mautino
Filed: 5/27/2004
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LRB093 20536 AMC 51807 a |
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| AMENDMENT TO SENATE BILL 2404
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| AMENDMENT NO. ______. Amend Senate Bill 2404, AS AMENDED, | 3 |
| with reference to page and line numbers of House Amendment No. | 4 |
| 1, on page 1, line 5, after "204,", by inserting "209,"; and | 5 |
| on page 10, immediately below line 31, by inserting the | 6 |
| following:
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| "(215 ILCS 5/209) (from Ch. 73, par. 821)
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| Sec. 209. Proof and allowance of claims.
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| (1) A proof of claim shall consist of a written statement | 10 |
| signed
under oath setting forth the claim, the consideration
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| for it, whether the claim is secured
and, if
so, how, what | 12 |
| payments have been made on the
claim, if any, and that
the sum | 13 |
| claimed is justly owing from the company. Whenever
a claim is | 14 |
| based upon a document, the document, unless
lost or destroyed, | 15 |
| shall be filed with the proof of claim. If the document is
lost | 16 |
| or destroyed, a statement of that fact and of
the
circumstances | 17 |
| of the loss or destruction shall be included in
the proof of | 18 |
| claim.
A claim may be allowed even if contingent or | 19 |
| unliquidated as of the date
fixed by the court
pursuant to | 20 |
| subsection (a) of Section 194 if it is filed in accordance with
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| this subsection. Except as otherwise provided in subsection | 22 |
| (7), a proof of
claim required under this Section must identify | 23 |
| a known loss or occurrence
particular claim .
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| (2) At any time, the Director may require the claimant to |
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| present
information or evidence supplementary to that required | 2 |
| under subsection (l)
and
may take testimony under oath, require | 3 |
| production of affidavits or depositions,
or otherwise obtain | 4 |
| additional information or evidence.
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| (3) Upon the liquidation, rehabilitation, or conservation | 6 |
| of
any
company which has issued policies insuring the lives of | 7 |
| persons, the
Director shall, within a reasonable time, after | 8 |
| the last day set for the
filing of claims, make a list of the | 9 |
| persons who have not filed proofs of
claim with him and whose | 10 |
| rights have not been reinsured, to whom it appears
from the | 11 |
| books of the company, there are owing amounts on such policies | 12 |
| and
he shall set opposite the name of each person such amount | 13 |
| so owing to such
person. The Director shall incur no personal | 14 |
| liability by reason of any
mistake in such list. Each person | 15 |
| whose name shall appear upon said list
shall be deemed to have | 16 |
| duly filed prior to the last day set for filing of
claims a | 17 |
| proof of claim for the amount set opposite his name on said | 18 |
| list.
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| (4)(a) When a Liquidation, Rehabilitation, or
Conservation | 20 |
| Order has been entered in a proceeding against an insurer under
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| this Code, any insured under an insurance policy shall have
the | 22 |
| right to file a contingent claim. The Court at the time of the | 23 |
| entry of
the Order of Liquidation, Rehabilitation or | 24 |
| Conservation shall fix the final
date for the liquidation of | 25 |
| insureds' contingent claims, but
in no event
shall said date be | 26 |
| more than 3 years after the last day fixed for the filing of
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| claims, provided, such date may be extended by the Court on | 28 |
| petition of the
Director should the Director determine that | 29 |
| such extension will not delay
distribution of assets under | 30 |
| Section 210. Such a contingent claim
shall be allowed if such | 31 |
| claim is liquidated and the insured
claimant presents evidence | 32 |
| of payment of such claim to the Director on or
before the last | 33 |
| day fixed by the Court.
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| (b) When an insured has been unable to liquidate its claim |
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| under paragraph
(a) of this subsection (4), the insured may | 2 |
| have its claim allowed by
estimation if (i) it may be | 3 |
| reasonably inferred from the proof presented upon
the claim | 4 |
| that a claim exists under the policy; (ii) the insured has | 5 |
| furnished
suitable proof, unless the court for good cause shown | 6 |
| shall otherwise direct,
that no further valid claims against | 7 |
| the insurer arising out of the cause of
action other than those | 8 |
| already presented can be made, and (iii) the total
liability of | 9 |
| the insurer to all claimants arising out of the same act shall | 10 |
| be
no greater than its total liability would be were it not in | 11 |
| liquidation,
rehabilitation, or conservation.
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| (5) The obligation of the insurer, if any, to defend or | 13 |
| continue the
defense
of any claim or suit under a liability | 14 |
| insurance policy shall terminate on
the entry of the Order of | 15 |
| Liquidation, Rehabilitation or Conservation,
except during the | 16 |
| appeal of an Order of Liquidation as provided by Section
190.1 | 17 |
| or, unless upon the petition of the Director, the court directs
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| otherwise. Insureds may include in contingent claims | 19 |
| reasonable attorneys
fees for services rendered subsequent to | 20 |
| the date of Liquidation,
Rehabilitation or Conservation in | 21 |
| defense of claims or suits covered by the
insured's policy | 22 |
| provided such attorneys fees have actually been paid by the
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| assured and evidence of payment presented in the manner | 24 |
| required for insured's
contingent claims.
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| (6) When a liquidation, rehabilitation, or
conservation | 26 |
| order has been
entered in a proceeding against
an insurer under | 27 |
| this Code, any person who has a cause of action against an
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| insured of the insurer under an insurance
policy issued by the | 29 |
| insurer shall have the right to file a
claim in the proceeding, | 30 |
| regardless of the fact that the claim
may be contingent, and | 31 |
| the claim may be allowed by estimation (a) if it may be
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| reasonably, inferred from proof presented upon the claim
that | 33 |
| the claimant would be able to obtain a judgment upon
the cause | 34 |
| of action against the insured; and (b) if
the person has |
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| furnished
suitable proof, unless the court for
good cause shown | 2 |
| shall otherwise direct, that no further valid claims
against | 3 |
| the insurer arising out of the cause of
action other than those
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| already presented can be made, and (c) the total liability of
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| the
insurer to all claimants arising out of the same act shall
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| be no greater than its total liability would be were it not in | 7 |
| liquidation,
rehabilitation, or
conservation.
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| (7) Contingent or unliquidated general creditors' and | 9 |
| ceding insurers'
claims that are not made absolute and | 10 |
| liquidated by the last day fixed by the
court pursuant to | 11 |
| subsection (4) may
shall be determined and allowed by | 12 |
| estimation.
Any such estimate shall be based upon an actuarial | 13 |
| evaluation made
with reasonable actuarial certainty or upon | 14 |
| another accepted method of valuing
claims with reasonable | 15 |
| certainty and, with respect to ceding insurers' claims,
may | 16 |
| include an estimate of incurred but not reported losses.
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| (7.5) (a) The estimation and allowance of the loss | 18 |
| development on a known loss or occurrence shall trigger a | 19 |
| reinsurer's obligation to pay pursuant to its reinsurance | 20 |
| contract with the insolvent company, provided that the | 21 |
| allowance is made in accordance with paragraph (b) of | 22 |
| subsection (4) or subsection (6). The Director shall have the | 23 |
| authority to exercise all available remedies on behalf of the | 24 |
| insolvent company to marshal these reinsurance recoverables. | 25 |
| (b) That portion of any estimated and allowed contingent | 26 |
| claim that is attributable to claims incurred but not reported | 27 |
| to the insolvent company's reinsured shall not be billable to | 28 |
| the insolvent company's reinsurers, except to the extent that | 29 |
| (A) such claims develop into known losses or occurrences and | 30 |
| become billable under paragraph (a) of this subsection or (B) | 31 |
| the reinsurance contract specifically provides for the payment | 32 |
| of such losses or reserves. | 33 |
| (c) Notwithstanding any other provision of this Code, the | 34 |
| liquidator may negotiate a voluntary commutation and release of |
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| all obligations arising from reinsurance contracts or other | 2 |
| agreements.
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| (8) No judgment against such an insured or an
insurer taken | 4 |
| after the date of the entry of the liquidation,
rehabilitation, | 5 |
| or conservation order shall be considered in the
proceedings
as | 6 |
| evidence of liability, or of the amount of damages, and no | 7 |
| judgment
against an insured or an insurer taken by default, or | 8 |
| by collusion prior to
the entry of the liquidation order shall | 9 |
| be considered as conclusive
evidence in the proceeding either | 10 |
| of the liability of such insured to such
person upon such cause | 11 |
| of action or of the amount of damages to which such
person is | 12 |
| therein entitled.
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| (9) The value of securities held by secured creditors shall | 14 |
| be
determined by converting the same into money according to | 15 |
| the terms of the
agreement pursuant to which such securities | 16 |
| were delivered to such
creditors, or by such creditors and the | 17 |
| Director by agreement, or by the
court, and the amount of such | 18 |
| value shall be credited upon the claims of
such secured | 19 |
| creditors and their claims allowed only for the balance.
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| (10) Claims of creditors or policyholders who have received
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| preferences
voidable under Section 204 or to whom conveyances | 22 |
| or transfers,
assignments or incumbrances have been made or | 23 |
| given which are void under
Section 204, shall not be allowed | 24 |
| unless such creditors or policyholders
shall surrender such | 25 |
| preferences, conveyances, transfers, assignments or
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| incumbrances.
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| (11)(a) When the Director denies a claim or allows a claim | 28 |
| for less than
the amount requested by the claimant, written | 29 |
| notice of the determination and
of the right to object shall be | 30 |
| given promptly to the claimant or the
claimant's representative | 31 |
| by first class mail at the address shown on the
proof of claim. | 32 |
| Within 60 days from the mailing of the notice, the claimant
may
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| file his written objections with the Director. If no such | 34 |
| filing is made on a
timely basis, the claimant may not further |
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| object to the determination.
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| (b) Whenever objections are filed with the Director and he | 3 |
| does not alter
his determination as a result of the objection | 4 |
| and the claimant continues to
object, the Director shall | 5 |
| petition the court for a hearing as soon as
practicable and | 6 |
| give notice of the hearing by first class mail to the claimant
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| or his representative and to any other persons known by the | 8 |
| Director to be
directly affected, not less than 10 days before | 9 |
| the date of the hearing.
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| (12) The Director shall review all claims duly filed in the | 11 |
| liquidation,
rehabilitation, or conservation proceeding, | 12 |
| unless otherwise directed by the
court, and shall make such | 13 |
| further investigation as he considers necessary.
The Director | 14 |
| may compound, compromise, or in any other manner negotiate the
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| amount for which claims will be recommended to the court. | 16 |
| Unresolved disputes
shall be determined under subsection (11).
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| (13)(a) The Director shall present to the court reports of | 18 |
| claims reviewed
under subsection (12) with his recommendations | 19 |
| as to each claim.
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| (b) The court may approve or disapprove any recommendations | 21 |
| contained in the
reports of claims filed by the Director, | 22 |
| except that the Director's agreements
with claimants shall be | 23 |
| accepted as final by the court on claims settled for
$10,000 or | 24 |
| less.
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| (14) The changes made in this Section by this amendatory | 26 |
| Act of 1993
apply to
all
liquidation, rehabilitation, or
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| conservation proceedings that are pending on the effective date | 28 |
| of this
amendatory Act of 1993 and to all future liquidation, | 29 |
| rehabilitation, or
conservation proceedings,
except that the | 30 |
| changes made to the provisions of
this Section by this | 31 |
| amendatory Act of 1993 shall not apply to any company
ordered | 32 |
| into liquidation on or before January 1, 1982.
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| (15) The changes made in this Section by this amendatory | 34 |
| Act of the 93rd General Assembly do not apply to any company |
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| ordered into liquidation on or before January 1, 2004.
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| (Source: P.A. 91-357, eff. 7-29-99.)".
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