(215 ILCS 5/537.7)
(from Ch. 73, par. 1065.87-7)
Investigation of claims; disposition.
(a) The Fund shall investigate claims brought against the
Fund and adjust, compromise, settle, and pay covered claims to the extent of
obligation and deny all other claims.
(b) The Fund shall not be bound by a settlement, release, compromise,
waiver, or final judgment executed or entered within 12 months prior to an
order of liquidation and shall have the right to assert all defenses available
to the Fund including, but not limited to, defenses applicable to determining
and enforcing its statutory rights and obligations to any claim. The Fund
shall be bound by a settlement, release, compromise, waiver, or final judgment
executed or entered more than 12 months prior to an order of liquidation,
claim is a covered claim and the settlement, release, compromise, waiver, or final judgment was not a result of
fraud, collusion, default, or failure to defend. In addition, with respect to
claims arising from a judgment under a decision, verdict, or finding based on
the default of the insolvent insurer or its failure to defend, upon application
by the Fund, either on its own behalf or on behalf of an insured, the court
shall set aside the judgment, order, decision, verdict,
or finding, and the Fund shall be permitted to defend against the claim on the
merits. The same criteria determining whether the Fund will be bound, as specified in this subsection (b), shall apply to any settlement, release, compromise, waiver, or final judgment entered into by a high net worth insured before the date on which claims by or against that insured became non-exempt for reasons specified in paragraph (iv) of subsection (b) of Section 534.3.
(c) The Fund shall have the right to appoint or
approve and to direct legal counsel
retained under liability insurance policies for the defense
of covered claims.
(Source: P.A. 101-60, eff. 7-12-19.)