Illinois 2023-2024 Regular Session

Illinois House Bill HB0047 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	Public Act 103-0113
2	1		HB0047 EnrolledLRB103 00158 BMS 45163 b HB0047 Enrolled LRB103 00158 BMS 45163 b
3	2		HB0047 Enrolled LRB103 00158 BMS 45163 b
4		-	AN ACT concerning regulation.
5		-	Be it enacted by the People of the State of Illinois,
6		-	represented in the General Assembly:
7		-	Section 5. The Illinois Insurance Code is amended by
8		-	changing Sections 533, 534, 537.2, 537.7, 538.2, and 545 and
9		-	by adding Section 534.9 as follows:
10		-	(215 ILCS 5/533) (from Ch. 73, par. 1065.83)
11		-	Sec. 533. Scope. This Article applies to all of the kinds
12		-	of insurance written on a direct basis which are included in
13		-	Class 2 and Class 3 of Section 4 of this Code as they appear
14		-	and are defined in those clauses as of January 1, 1985, except
15		-	that it shall not apply to:
16		-	(a) accident and health insurance written under clause (a)
17		-	of Class 2, or
18		-	(b) mortgage guaranty or other financial guaranty written
19		-	as suretyship obligations or insurance under clause (g),
20		-	clause (h) or clause (i) of Class 2 or otherwise, or
21		-	(c) fidelity or surety bonds, or any other bonding
22		-	obligations other than employee fidelity bonds, or
23		-	(d) marine insurance other than inland marine insurance,
24		-	written under clause (d) of Class 3, or
25		-	(e) insurance of warranties or service contracts,
26		-	including insurance that provides for the repair, replacement,
	3	+	1 AN ACT concerning regulation.
	4	+	2 Be it enacted by the People of the State of Illinois,
	5	+	3 represented in the General Assembly:
	6	+	4 Section 5. The Illinois Insurance Code is amended by
	7	+	5 changing Sections 533, 534, 537.2, 537.7, 538.2, and 545 and
	8	+	6 by adding Section 534.9 as follows:
	9	+	7 (215 ILCS 5/533) (from Ch. 73, par. 1065.83)
	10	+	8 Sec. 533. Scope. This Article applies to all of the kinds
	11	+	9 of insurance written on a direct basis which are included in
	12	+	10 Class 2 and Class 3 of Section 4 of this Code as they appear
	13	+	11 and are defined in those clauses as of January 1, 1985, except
	14	+	12 that it shall not apply to:
	15	+	13 (a) accident and health insurance written under clause (a)
	16	+	14 of Class 2, or
	17	+	15 (b) mortgage guaranty or other financial guaranty written
	18	+	16 as suretyship obligations or insurance under clause (g),
	19	+	17 clause (h) or clause (i) of Class 2 or otherwise, or
	20	+	18 (c) fidelity or surety bonds, or any other bonding
	21	+	19 obligations other than employee fidelity bonds, or
	22	+	20 (d) marine insurance other than inland marine insurance,
	23	+	21 written under clause (d) of Class 3, or
	24	+	22 (e) insurance of warranties or service contracts,
	25	+	23 including insurance that provides for the repair, replacement,
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33		-	or service of goods or property or indemnification for repair,
34		-	replacement, or service for the operational or structural
35		-	failure of the goods or property due to a defect in materials,
36		-	workmanship, or normal wear and tear or provides reimbursement
37		-	for the liability incurred by the issuer of agreements or
38		-	service contracts that provide these benefits, or
39		-	(f) any claim servicing agreement or insurance policy
40		-	which contains a retrospective rating or other premium
41		-	adjustment agreement under which premiums are substantially
42		-	equal to the losses and loss expenses covered under the policy
43		-	or any policy providing retroactive insurance of known loss,
44		-	or
45		-	(g) any insurance which is provided, guaranteed or
46		-	reinsured pursuant to the Federal Crop Insurance Program or
47		-	the National Flood Insurance Program, including flood
48		-	insurance written by National Flood Insurance Program Write
49		-	Your Own Companies.
50		-	(Source: P.A. 89-97, eff. 7-7-95.)
51		-	(215 ILCS 5/534) (from Ch. 73, par. 1065.84)
52		-	Sec. 534. Definitions. For the purposes of this Article,
53		-	unless the context requires otherwise, the words and phrases
54		-	defined in Sections 534.1 through 534.9 534.8 have the
55		-	meanings set forth in those Sections.
56		-	(Source: P.A. 85-576.)
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	34	+	1 or service of goods or property or indemnification for repair,
	35	+	2 replacement, or service for the operational or structural
	36	+	3 failure of the goods or property due to a defect in materials,
	37	+	4 workmanship, or normal wear and tear or provides reimbursement
	38	+	5 for the liability incurred by the issuer of agreements or
	39	+	6 service contracts that provide these benefits, or
	40	+	7 (f) any claim servicing agreement or insurance policy
	41	+	8 which contains a retrospective rating or other premium
	42	+	9 adjustment agreement under which premiums are substantially
	43	+	10 equal to the losses and loss expenses covered under the policy
	44	+	11 or any policy providing retroactive insurance of known loss,
	45	+	12 or
	46	+	13 (g) any insurance which is provided, guaranteed or
	47	+	14 reinsured pursuant to the Federal Crop Insurance Program or
	48	+	15 the National Flood Insurance Program, including flood
	49	+	16 insurance written by National Flood Insurance Program Write
	50	+	17 Your Own Companies.
	51	+	18 (Source: P.A. 89-97, eff. 7-7-95.)
	52	+	19 (215 ILCS 5/534) (from Ch. 73, par. 1065.84)
	53	+	20 Sec. 534. Definitions. For the purposes of this Article,
	54	+	21 unless the context requires otherwise, the words and phrases
	55	+	22 defined in Sections 534.1 through 534.9 534.8 have the
	56	+	23 meanings set forth in those Sections.
	57	+	24 (Source: P.A. 85-576.)
57	58
58	59
59		-	(215 ILCS 5/534.9 new)
60		-	Sec. 534.9. Cybersecurity insurance. "Cybersecurity
61		-	insurance" means a type of insurance under Class 2 of Section 4
62		-	of this Code that involves first-party and third-party
63		-	coverage, in a policy or endorsement, written on a direct,
64		-	admitted basis to cover losses and loss mitigation arising out
65		-	of or relating to data privacy breaches, unauthorized
66		-	information network security intrusions, computer viruses,
67		-	ransomware, cyber extortion, identity theft, and similar
68		-	exposures.
69		-	(215 ILCS 5/537.2) (from Ch. 73, par. 1065.87-2)
70		-	Sec. 537.2. Obligation of Fund. The Fund shall be
71		-	obligated to the extent of the covered claims existing prior
72		-	to the entry of an Order of Liquidation against an insolvent
73		-	company and arising within 30 days after the entry of such
74		-	Order, or before the policy expiration date if less than 30
75		-	days after the entry of such Order, or before the insured
76		-	replaces the policy or on request effects cancellation, if he
77		-	does so within 30 days after the entry of such Order. If the
78		-	entry of an Order of Liquidation occurs on or after October 1,
79		-	1975 and before October 1, 1977, such obligations shall not:
80		-	(i) exceed $100,000, or (ii) include any obligation to refund
81		-	the first $100 of any unearned premium claim; and if the entry
82		-	of an Order of Liquidation occurs on or after October 1, 1977
83		-	and before January 1, 1988, such obligations shall not: (i)
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85	61
86		-	exceed $150,000, except that this limitation shall not apply
87		-	to any workers compensation claims, or (ii) include any
88		-	obligation to refund the first $100 of any unearned premium
89		-	claim; and if the entry of an Order of Liquidation occurs on or
90		-	after January 1, 1988 and before January 1, 2011, such
91		-	obligations shall not: (i) exceed $300,000, except that this
92		-	limitation shall not apply to any workers compensation claims,
93		-	or (ii) include any obligation to refund the first $100 of any
94		-	unearned premium claim or to refund any unearned premium over
95		-	$10,000 under any one policy. If the entry of an Order of
96		-	Liquidation occurs on or after January 1, 2011, then such
97		-	obligations shall not: (i) exceed $500,000, except that this
98		-	limitation shall not apply to any workers compensation claims
99		-	or (ii) include any obligation to refund the first $100 of any
100		-	unearned premium claim or refund any unearned premium over
101		-	$10,000 under any one policy. If the entry of an Order of
102		-	Liquidation occurs on or after January 1, 2023, then such
103		-	obligations shall not: (i) exceed $500,000, except that this
104		-	limitation shall not apply to any workers compensation claims,
105		-	or (ii) exceed without any deduction $50,000 for any unearned
106		-	premium claim or refund under any one policy. In no event shall
107		-	the Fund be obligated to a policyholder or claimant in an
108		-	amount in excess of the face amount of the policy from which
109		-	the claim arises, including, but not limited to, any
110		-	applicable specific or aggregate limits. For purposes of this
111		-	Article Act, obligations arising under an insurance policy
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114		-	written to indemnify a permissibly self-insured employer under
115		-	subsection (a) of Section 4 of the Workers' Compensation Act
116		-	for its liability to pay workers' compensation benefits in
117		-	excess of a specific or aggregate retention shall be subject
118		-	to the applicable per-claim limits set forth in this Section.
119		-	In no event shall the Fund be obligated to pay an amount in
120		-	excess of $500,000 in the aggregate for all first-party and
121		-	third-party claims under a policy or endorsement providing
122		-	cybersecurity insurance as defined in Section 534.9 and
123		-	arising out of or related to a single insured event,
124		-	regardless of the number of claims made or number of
125		-	claimants.
126		-	In no event shall the Fund be liable for any interest on
127		-	any judgment entered against the insured or the insolvent
128		-	company, or for any other interest claim against the insured
129		-	or the insolvent company, regardless of whether the insolvent
130		-	company would have been obligated to pay such interest under
131		-	the terms of its policy. The Fund shall be liable for interest
132		-	at the statutory rate on money judgments entered against the
133		-	Fund until the judgment is satisfied.
134		-	Any obligation of the Fund to defend an insured shall
135		-	cease upon the Fund's payment or tender of an amount equal to
136		-	the lesser of the Fund's covered claim obligation limit or the
137		-	applicable policy limit.
138		-	(Source: P.A. 99-368, eff. 8-14-15.)
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	68	+	1 (215 ILCS 5/534.9 new)
	69	+	2 Sec. 534.9. Cybersecurity insurance. "Cybersecurity
	70	+	3 insurance" means a type of insurance under Class 2 of Section 4
	71	+	4 of this Code that involves first-party and third-party
	72	+	5 coverage, in a policy or endorsement, written on a direct,
	73	+	6 admitted basis to cover losses and loss mitigation arising out
	74	+	7 of or relating to data privacy breaches, unauthorized
	75	+	8 information network security intrusions, computer viruses,
	76	+	9 ransomware, cyber extortion, identity theft, and similar
	77	+	10 exposures.
	78	+	11 (215 ILCS 5/537.2) (from Ch. 73, par. 1065.87-2)
	79	+	12 Sec. 537.2. Obligation of Fund. The Fund shall be
	80	+	13 obligated to the extent of the covered claims existing prior
	81	+	14 to the entry of an Order of Liquidation against an insolvent
	82	+	15 company and arising within 30 days after the entry of such
	83	+	16 Order, or before the policy expiration date if less than 30
	84	+	17 days after the entry of such Order, or before the insured
	85	+	18 replaces the policy or on request effects cancellation, if he
	86	+	19 does so within 30 days after the entry of such Order. If the
	87	+	20 entry of an Order of Liquidation occurs on or after October 1,
	88	+	21 1975 and before October 1, 1977, such obligations shall not:
	89	+	22 (i) exceed $100,000, or (ii) include any obligation to refund
	90	+	23 the first $100 of any unearned premium claim; and if the entry
	91	+	24 of an Order of Liquidation occurs on or after October 1, 1977
	92	+	25 and before January 1, 1988, such obligations shall not: (i)
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141		-	(215 ILCS 5/537.7) (from Ch. 73, par. 1065.87-7)
142		-	Sec. 537.7. Investigation of claims; disposition.
143		-	(a) The Fund shall investigate claims brought against the
144		-	Fund and adjust, compromise, settle, and pay covered claims to
145		-	the extent of the Fund's obligation and deny all other claims.
146		-	(b) The Fund shall not be bound by a settlement, release,
147		-	compromise, waiver, or final judgment executed or entered
148		-	within 12 months prior to an order of liquidation and shall
149		-	have the right to assert all defenses available to the Fund
150		-	including, but not limited to, defenses applicable to
151		-	determining and enforcing its statutory rights and obligations
152		-	to any claim. The Fund shall be bound by a settlement, release,
153		-	compromise, waiver, or final judgment executed or entered more
154		-	than 12 months prior to an order of liquidation, but only if
155		-	the claim is a covered claim and the settlement, release,
156		-	compromise, waiver, or final judgment was not a result of
157		-	fraud, collusion, default, or failure to defend. In addition,
158		-	with respect to covered claims arising from a judgment under a
159		-	decision, verdict, or finding based on the default of the
160		-	insolvent insurer or its failure to defend, upon application
161		-	by the Fund, either on its own behalf or on behalf of an
162		-	insured, the court shall set aside the judgment, order,
163		-	decision, verdict, or finding, and the Fund shall be permitted
164		-	to defend against the claim on the merits. The same criteria
165		-	determining whether the Fund will be bound, as specified in
166		-	this subsection (b), shall apply to any settlement, release,
167	95
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169		-	compromise, waiver, or final judgment entered into by a high
170		-	net worth insured before the date on which claims by or against
171		-	that insured became non-exempt for reasons specified in
172		-	paragraph (iv) of subsection (b) of Section 534.3.
173		-	(c) The Fund shall have the right to appoint or approve and
174		-	to direct legal counsel retained under liability insurance
175		-	policies for the defense of covered claims as well as the right
176		-	to appoint or approve and to direct legal counsel and other
177		-	service providers under any other insurance policies subject
178		-	to this Article, regardless of any limitations in the policy.
179		-	(Source: P.A. 101-60, eff. 7-12-19.)
180		-	(215 ILCS 5/538.2) (from Ch. 73, par. 1065.88-2)
181		-	Sec. 538.2. The Fund may employ or retain such persons as
182		-	are necessary to handle claims, provide policy benefits and
183		-	services, and perform other duties of the Fund.
184		-	(Source: P.A. 77-305.)
185		-	(215 ILCS 5/545) (from Ch. 73, par. 1065.95)
186		-	Sec. 545. Effect of paid claims.
187		-	(a) Every insured or claimant seeking the protection of
188		-	this Article shall cooperate with the Fund to the same extent
189		-	as such person would have been required to cooperate with the
190		-	insolvent company. The Fund shall have all the rights, duties
191		-	and obligations under the policy to the extent of the covered
192		-	claim payment, provided the Fund shall have no cause of action
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194	100
195		-	against the insured of the insolvent company for any sums it
196		-	has paid out except such causes of action as the insolvent
197		-	company would have had if such sums had been paid by the
198		-	insolvent company and except as provided in subsection (d) of
199		-	this Section. Any person recovering under this Article and any
200		-	insured whose liabilities are satisfied under this Article
201		-	shall be deemed to have assigned the person's or insured's
202		-	rights under the policy to the Fund to the extent of his or her
203		-	recovery or satisfaction obtained from the Fund's payments.
204		-	(b) The Fund and any similar organization in another state
205		-	shall be recognized as claimants in the liquidation of an
206		-	insolvent company for any amounts paid by them on covered
207		-	claims obligations as determined under this Article or similar
208		-	laws in other states and shall receive dividends at the
209		-	priority set forth in paragraph (d) of subsection (1) of
210		-	Section 205 of this Code; provided that if, at the time that
211		-	the liquidator issues a cut-off notice to the Fund in
212		-	anticipation of closing the estate, a reserve has been
213		-	established by the Fund, or any similar organization in
214		-	another state, for the amount of their future administrative
215		-	expenses and loss development associated with unpaid reported
216		-	pending claims, these reserves will be deemed to have been
217		-	paid as of the date of the notice and payment shall be made
218		-	accordingly. The liquidator of an insolvent company shall be
219		-	bound by determinations of covered claim eligibility under the
220		-	Act and by settlements of claims made by the Fund or a similar
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	103	+	1 exceed $150,000, except that this limitation shall not apply
	104	+	2 to any workers compensation claims, or (ii) include any
	105	+	3 obligation to refund the first $100 of any unearned premium
	106	+	4 claim; and if the entry of an Order of Liquidation occurs on or
	107	+	5 after January 1, 1988 and before January 1, 2011, such
	108	+	6 obligations shall not: (i) exceed $300,000, except that this
	109	+	7 limitation shall not apply to any workers compensation claims,
	110	+	8 or (ii) include any obligation to refund the first $100 of any
	111	+	9 unearned premium claim or to refund any unearned premium over
	112	+	10 $10,000 under any one policy. If the entry of an Order of
	113	+	11 Liquidation occurs on or after January 1, 2011, then such
	114	+	12 obligations shall not: (i) exceed $500,000, except that this
	115	+	13 limitation shall not apply to any workers compensation claims
	116	+	14 or (ii) include any obligation to refund the first $100 of any
	117	+	15 unearned premium claim or refund any unearned premium over
	118	+	16 $10,000 under any one policy. If the entry of an Order of
	119	+	17 Liquidation occurs on or after January 1, 2023, then such
	120	+	18 obligations shall not: (i) exceed $500,000, except that this
	121	+	19 limitation shall not apply to any workers compensation claims,
	122	+	20 or (ii) exceed without any deduction $50,000 for any unearned
	123	+	21 premium claim or refund under any one policy. In no event shall
	124	+	22 the Fund be obligated to a policyholder or claimant in an
	125	+	23 amount in excess of the face amount of the policy from which
	126	+	24 the claim arises, including, but not limited to, any
	127	+	25 applicable specific or aggregate limits. For purposes of this
	128	+	26 Article Act, obligations arising under an insurance policy
221	129
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223		-	organization in another state on the receipt of certification
224		-	of such payments, to the extent those determinations or
225		-	settlements satisfy obligations of the Fund, but the receiver
226		-	shall not be bound in any way by those determinations or
227		-	settlements to the extent that there remains a claim in the
228		-	estate for amounts in excess of the payments by the Fund. In
229		-	submitting their claim for covered claim payments the Fund and
230		-	any similar organization in another state shall not be subject
231		-	to the requirements of Sections 208 and 209 of this Code and
232		-	shall not be affected by the failure of the person receiving a
233		-	covered claim payment to file a proof of claim.
234		-	(c) The expenses of the Fund and of any similar
235		-	organization in any other state, other than expenses incurred
236		-	in the performance of duties under Section 547 or similar
237		-	duties under the statute governing a similar organization in
238		-	another state, shall be accorded priority over all claims
239		-	against the estate, except as provided for in paragraph (a) of
240		-	subsection (1) of Section 205 of this Code. The liquidator
241		-	shall make prompt reimbursement to the Fund and any similar
242		-	organization for such expense payments.
243		-	(d) The Fund has the right to recover from the following
244		-	persons the amount of any covered claims (as determined
245		-	without regard to the exemption in paragraph (iv) of
246		-	subsection (b) of Section 534.3) and allocated claims expenses
247		-	which the Fund paid or incurred on behalf of such person in
248		-	satisfaction, in whole or in part, of liability obligations of
249	131
250	132
251		-	such person to any other person:
252		-	(i) any insured whose net worth on December 31 of the
253		-	year next preceding the date the company becomes an
254		-	insolvent company exceeds $25,000,000; provided that an
255		-	insured's net worth on such date shall be deemed to
256		-	include the aggregate net worth of the insured and all of
257		-	its affiliates as calculated on a consolidated basis.
258		-	(ii) any insured who is an affiliate of the insolvent
259		-	company.
260		-	The Fund may also, at its sole discretion and without
261		-	assumption of any ongoing duty to do so, pay any workers
262		-	compensation claims or any other third-party claims or any
263		-	cybersecurity insurance obligations covered by a policy of an
264		-	insolvent company on behalf of a high net worth insured as
265		-	defined in paragraph (iv) of subsection (b) of Section 534.3.
266		-	In that case, the Fund shall recover from the high net worth
267		-	insured under this Section for all amounts paid on its behalf,
268		-	all allocated claim adjusted expenses related to such claims,
269		-	the Fund's attorney's fees, and all court costs in any action
270		-	necessary to collect the full amount to the Fund's
271		-	reimbursement under this Section.
272		-	(Source: P.A. 100-410, eff. 8-25-17; 101-60, eff. 7-12-19.)
273		-	Section 99. Effective date. This Act takes effect upon
274		-	becoming law.
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	139	+	1 written to indemnify a permissibly self-insured employer under
	140	+	2 subsection (a) of Section 4 of the Workers' Compensation Act
	141	+	3 for its liability to pay workers' compensation benefits in
	142	+	4 excess of a specific or aggregate retention shall be subject
	143	+	5 to the applicable per-claim limits set forth in this Section.
	144	+	6 In no event shall the Fund be obligated to pay an amount in
	145	+	7 excess of $500,000 in the aggregate for all first-party and
	146	+	8 third-party claims under a policy or endorsement providing
	147	+	9 cybersecurity insurance as defined in Section 534.9 and
	148	+	10 arising out of or related to a single insured event,
	149	+	11 regardless of the number of claims made or number of
	150	+	12 claimants.
	151	+	13 In no event shall the Fund be liable for any interest on
	152	+	14 any judgment entered against the insured or the insolvent
	153	+	15 company, or for any other interest claim against the insured
	154	+	16 or the insolvent company, regardless of whether the insolvent
	155	+	17 company would have been obligated to pay such interest under
	156	+	18 the terms of its policy. The Fund shall be liable for interest
	157	+	19 at the statutory rate on money judgments entered against the
	158	+	20 Fund until the judgment is satisfied.
	159	+	21 Any obligation of the Fund to defend an insured shall
	160	+	22 cease upon the Fund's payment or tender of an amount equal to
	161	+	23 the lesser of the Fund's covered claim obligation limit or the
	162	+	24 applicable policy limit.
	163	+	25 (Source: P.A. 99-368, eff. 8-14-15.)
	164	+
	165	+
	166	+
	167	+
	168	+
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	171	+
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	174	+	1 (215 ILCS 5/537.7) (from Ch. 73, par. 1065.87-7)
	175	+	2 Sec. 537.7. Investigation of claims; disposition.
	176	+	3 (a) The Fund shall investigate claims brought against the
	177	+	4 Fund and adjust, compromise, settle, and pay covered claims to
	178	+	5 the extent of the Fund's obligation and deny all other claims.
	179	+	6 (b) The Fund shall not be bound by a settlement, release,
	180	+	7 compromise, waiver, or final judgment executed or entered
	181	+	8 within 12 months prior to an order of liquidation and shall
	182	+	9 have the right to assert all defenses available to the Fund
	183	+	10 including, but not limited to, defenses applicable to
	184	+	11 determining and enforcing its statutory rights and obligations
	185	+	12 to any claim. The Fund shall be bound by a settlement, release,
	186	+	13 compromise, waiver, or final judgment executed or entered more
	187	+	14 than 12 months prior to an order of liquidation, but only if
	188	+	15 the claim is a covered claim and the settlement, release,
	189	+	16 compromise, waiver, or final judgment was not a result of
	190	+	17 fraud, collusion, default, or failure to defend. In addition,
	191	+	18 with respect to covered claims arising from a judgment under a
	192	+	19 decision, verdict, or finding based on the default of the
	193	+	20 insolvent insurer or its failure to defend, upon application
	194	+	21 by the Fund, either on its own behalf or on behalf of an
	195	+	22 insured, the court shall set aside the judgment, order,
	196	+	23 decision, verdict, or finding, and the Fund shall be permitted
	197	+	24 to defend against the claim on the merits. The same criteria
	198	+	25 determining whether the Fund will be bound, as specified in
	199	+	26 this subsection (b), shall apply to any settlement, release,
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	210	+	1 compromise, waiver, or final judgment entered into by a high
	211	+	2 net worth insured before the date on which claims by or against
	212	+	3 that insured became non-exempt for reasons specified in
	213	+	4 paragraph (iv) of subsection (b) of Section 534.3.
	214	+	5 (c) The Fund shall have the right to appoint or approve and
	215	+	6 to direct legal counsel retained under liability insurance
	216	+	7 policies for the defense of covered claims as well as the right
	217	+	8 to appoint or approve and to direct legal counsel and other
	218	+	9 service providers under any other insurance policies subject
	219	+	10 to this Article, regardless of any limitations in the policy.
	220	+	11 (Source: P.A. 101-60, eff. 7-12-19.)
	221	+	12 (215 ILCS 5/538.2) (from Ch. 73, par. 1065.88-2)
	222	+	13 Sec. 538.2. The Fund may employ or retain such persons as
	223	+	14 are necessary to handle claims, provide policy benefits and
	224	+	15 services, and perform other duties of the Fund.
	225	+	16 (Source: P.A. 77-305.)
	226	+	17 (215 ILCS 5/545) (from Ch. 73, par. 1065.95)
	227	+	18 Sec. 545. Effect of paid claims.
	228	+	19 (a) Every insured or claimant seeking the protection of
	229	+	20 this Article shall cooperate with the Fund to the same extent
	230	+	21 as such person would have been required to cooperate with the
	231	+	22 insolvent company. The Fund shall have all the rights, duties
	232	+	23 and obligations under the policy to the extent of the covered
	233	+	24 claim payment, provided the Fund shall have no cause of action
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	244	+	1 against the insured of the insolvent company for any sums it
	245	+	2 has paid out except such causes of action as the insolvent
	246	+	3 company would have had if such sums had been paid by the
	247	+	4 insolvent company and except as provided in subsection (d) of
	248	+	5 this Section. Any person recovering under this Article and any
	249	+	6 insured whose liabilities are satisfied under this Article
	250	+	7 shall be deemed to have assigned the person's or insured's
	251	+	8 rights under the policy to the Fund to the extent of his or her
	252	+	9 recovery or satisfaction obtained from the Fund's payments.
	253	+	10 (b) The Fund and any similar organization in another state
	254	+	11 shall be recognized as claimants in the liquidation of an
	255	+	12 insolvent company for any amounts paid by them on covered
	256	+	13 claims obligations as determined under this Article or similar
	257	+	14 laws in other states and shall receive dividends at the
	258	+	15 priority set forth in paragraph (d) of subsection (1) of
	259	+	16 Section 205 of this Code; provided that if, at the time that
	260	+	17 the liquidator issues a cut-off notice to the Fund in
	261	+	18 anticipation of closing the estate, a reserve has been
	262	+	19 established by the Fund, or any similar organization in
	263	+	20 another state, for the amount of their future administrative
	264	+	21 expenses and loss development associated with unpaid reported
	265	+	22 pending claims, these reserves will be deemed to have been
	266	+	23 paid as of the date of the notice and payment shall be made
	267	+	24 accordingly. The liquidator of an insolvent company shall be
	268	+	25 bound by determinations of covered claim eligibility under the
	269	+	26 Act and by settlements of claims made by the Fund or a similar
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	280	+	1 organization in another state on the receipt of certification
	281	+	2 of such payments, to the extent those determinations or
	282	+	3 settlements satisfy obligations of the Fund, but the receiver
	283	+	4 shall not be bound in any way by those determinations or
	284	+	5 settlements to the extent that there remains a claim in the
	285	+	6 estate for amounts in excess of the payments by the Fund. In
	286	+	7 submitting their claim for covered claim payments the Fund and
	287	+	8 any similar organization in another state shall not be subject
	288	+	9 to the requirements of Sections 208 and 209 of this Code and
	289	+	10 shall not be affected by the failure of the person receiving a
	290	+	11 covered claim payment to file a proof of claim.
	291	+	12 (c) The expenses of the Fund and of any similar
	292	+	13 organization in any other state, other than expenses incurred
	293	+	14 in the performance of duties under Section 547 or similar
	294	+	15 duties under the statute governing a similar organization in
	295	+	16 another state, shall be accorded priority over all claims
	296	+	17 against the estate, except as provided for in paragraph (a) of
	297	+	18 subsection (1) of Section 205 of this Code. The liquidator
	298	+	19 shall make prompt reimbursement to the Fund and any similar
	299	+	20 organization for such expense payments.
	300	+	21 (d) The Fund has the right to recover from the following
	301	+	22 persons the amount of any covered claims (as determined
	302	+	23 without regard to the exemption in paragraph (iv) of
	303	+	24 subsection (b) of Section 534.3) and allocated claims expenses
	304	+	25 which the Fund paid or incurred on behalf of such person in
	305	+	26 satisfaction, in whole or in part, of liability obligations of
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	316	+	1 such person to any other person:
	317	+	2 (i) any insured whose net worth on December 31 of the
	318	+	3 year next preceding the date the company becomes an
	319	+	4 insolvent company exceeds $25,000,000; provided that an
	320	+	5 insured's net worth on such date shall be deemed to
	321	+	6 include the aggregate net worth of the insured and all of
	322	+	7 its affiliates as calculated on a consolidated basis.
	323	+	8 (ii) any insured who is an affiliate of the insolvent
	324	+	9 company.
	325	+	10 The Fund may also, at its sole discretion and without
	326	+	11 assumption of any ongoing duty to do so, pay any workers
	327	+	12 compensation claims or any other third-party claims or any
	328	+	13 cybersecurity insurance obligations covered by a policy of an
	329	+	14 insolvent company on behalf of a high net worth insured as
	330	+	15 defined in paragraph (iv) of subsection (b) of Section 534.3.
	331	+	16 In that case, the Fund shall recover from the high net worth
	332	+	17 insured under this Section for all amounts paid on its behalf,
	333	+	18 all allocated claim adjusted expenses related to such claims,
	334	+	19 the Fund's attorney's fees, and all court costs in any action
	335	+	20 necessary to collect the full amount to the Fund's
	336	+	21 reimbursement under this Section.
	337	+	22 (Source: P.A. 100-410, eff. 8-25-17; 101-60, eff. 7-12-19.)
	338	+	23 Section 99. Effective date. This Act takes effect upon
	339	+	24 becoming law.
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