SB 1377

Abstract

Amends the Illinois Insurance Guaranty Fund Article of the Illinois Insurance Code. Provides that a "covered claim" does not include a claim for fines and penalties paid to government authorities. Provides that the board of directors of the Illinois Insurance Guaranty Fund has the authority to assess to pay off a loan necessary to pay covered claims. Provides that if the loan is projected to be outstanding for 3 years or more, the board of directors has the authority to increase the assessment to 3% of net direct written premiums for the previous year until the loan has been paid in full. Makes changes in provisions that specify conditions under which the Fund is bound by certain settlements, releases, compromises, waivers, and final judgments. Provides that the Fund may also take legal action to recover from insurers and insureds in certain circumstances. Provides that the Fund may bring an action against certain third-party representatives of an insolvent insurer to obtain custody and control of all claim information related to the insolvent company. Provides that any person recovering under the Article and any insured whose liabilities are satisfied under the Article shall be deemed to have assigned the person's or insured's rights under the policy to the Fund to the extent of his or her recovery or satisfaction obtained from the Fund's payments. Provides that the Fund may also pay certain workers' compensation claims or any other third-party claims covered by a policy of an insolvent company on behalf of a high net worth insured and may recover from the high net worth insured through any action necessary to collect the full amount to the Fund's reimbursement. Effective immediately. Senate Committee Amendment No. 1 In provisions concerning actions regarding insolvent company records, provides that the Illinois Insurance Guaranty Fund has the absolute right through emergency equitable relief to obtain custody and control of certain claims information in possession of certain third-party administrators, agents, attorneys, or other representatives of an insolvent insurer (rather than the absolute right through emergency equitable relief to obtain custody and control of certain third-party administrators, agents, attorneys, or other representatives of an insolvent insurer). Senate Floor Amendment No. 2 Provides that the Illinois Insurance Guaranty Fund shall recover (rather than may recover) from the high net worth insured for all amounts paid on its behalf, all allocated claim adjusted expenses related to such claims, the Fund's attorney's fees, and all court costs in any action necessary to collect the full amount to the Fund's reimbursement. Makes a grammatical change. House Floor Amendment No. 1 Deletes reference to: 215 ILCS 5/534.3 215 ILCS 5/537.6 215 ILCS 5/537.7 215 ILCS 5/538.3 215 ILCS 5/538.4 215 ILCS 5/538.9 new 215 ILCS 5/545 Adds reference to: 215 ILCS 5/35B-25 Replaces everything after the enacting clause. Amends the Illinois Insurance Code. Provides that the Director of Insurance shall approve a plan of division unless he or she finds that each new company created by the proposed division, except a new company that is a nonsurviving party to certain mergers, that will be a member insurer of the Illinois Life and Health Insurance Guaranty Association and that will have policy liabilities allocated to it will not be licensed to do insurance business in each state where such policies were written by the dividing company.