(215 ILCS 5/173.3) (from Ch. 73, par. 785.3)
Sec. 173.3.
Payment by assuming company.
(1) No such credit shall be allowed for reinsurance unless the
reinsurance agreement provides that payments by the assuming company shall
be made directly to the ceding company or to its liquidator, receiver, or
statutory successor, except where the contract specifically provides
another payee of such reinsurance in the event of the insolvency of the
ceding company or where the assuming company with the consent of the direct
insured or insureds has assumed such policy obligations of the ceding
company to the payees under such policies and in substitution for the
obligations of the ceding company to such payees.
(2) Except as provided in this Section, no assuming company may pay or
settle, or agree to pay or settle, any policy claim, or any portion
thereof, directly to or with a policyholder of any ceding company if an
Order of Rehabilitation or Liquidation has been entered against such ceding
company.
(Source: P.A. 77-1329.)
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