Public Act 100-1190
 
SB3174 EnrolledLRB100 19698 XWW 34972 b


  
    AN ACT concerning regulation.
  
 
    Be it enacted by the People of the State of Illinois,
 
represented in the General Assembly:
  


 
    Section 5. If and only if Senate Bill 1737 of the 100th 
General Assembly becomes law in the form in which it passed 
both houses on May 31, 2018, then the Illinois Insurance Code 
is amended  by changing Sections 534.3 and 534.4 as follows:
 



    (215 ILCS 5/534.3)  (from Ch. 73, par. 1065.84-3)



    Sec. 534.3. Covered claim; unearned premium defined. 

    (a) "Covered claim" means an unpaid claim for a loss

arising out of and within the
coverage of an insurance policy 
to which this Article applies and which
is in force at the time 
of the occurrence giving rise to the unpaid
claim, including 
claims presented during any extended discovery period
which was 
purchased from the company before the entry of a liquidation

order or which is purchased or obtained from the liquidator 
after the entry
of a liquidation order, made by a person 
insured under such policy or by a
person
suffering injury or 
damage for which a person insured under such policy
is legally 
liable, and for unearned premium, if:


        (i) The company issuing, assuming, or being allocated 
    the policy becomes an insolvent
company as defined in 
    Section 534.4
after the effective date of this Article; and


        (ii) The claimant or insured is a resident of this 
    State at the time
of the insured occurrence, or the 
    property from which a first party
claim for damage to 
    property arises is
permanently located in this State or, in 
    the case of an unearned premium
claim, the policyholder is 
    a resident of this State at the time the policy
was issued; 
    provided, that for entities other than an individual, the

    residence of a claimant, insured, or policyholder is the 
    state
in which its principal
place of business is located 
    at the time of the insured event.

    (b) "Covered claim" does not include:


        (i) any amount in excess of the applicable limits of 
    liability
provided by an insurance policy to which this 
    Article applies; nor


        (ii) any claim for punitive or exemplary damages; nor


        (iii) any first party claim by an insured who is an 
    affiliate of the
insolvent company; nor


        (iv) any first party or third party claim by or against 
    an insured
whose net worth on December 31
of the year next 
    preceding the date the insurer becomes an insolvent
insurer 
    exceeds $25,000,000; provided that an insured's net
worth 
    on such
date shall be deemed to include the aggregate net 
    worth of the insured and
all of its affiliates as 
    calculated on a consolidated basis.  However, this

    exclusion shall not apply to third party claims against the 
    insured where the
insured has applied for or consented to 
    the appointment of a receiver, trustee,
or liquidator for 
    all or a substantial part of its assets, filed a voluntary

    petition in bankruptcy, filed a petition or an answer 
    seeking a reorganization
or arrangement with creditors or 
    to take advantage of any insolvency law, or
if an order, 
    judgment, or decree is entered by a court of competent

    jurisdiction, on the application of a creditor, 
    adjudicating the insured
bankrupt or insolvent or 
    approving a petition seeking reorganization of the
insured 
    or of all or substantial part of its assets; nor


        (v) any claim for any amount due any reinsurer, 
    insurer,
insurance pool, or underwriting association as 
    subrogated
recoveries, reinsurance recoverables, 
    contribution, indemnification or
otherwise. No such claim 
    held by a reinsurer,
insurer, insurance pool, or 
    underwriting association may be asserted in any
legal 
    action
against a person insured under a policy issued by an 
    insolvent
company other than to the extent such claim 
    exceeds the Fund
obligation limitations set forth in 
    Section 537.2 of this Code.

    (c) "Unearned Premium" means the premium for the unexpired 
period of a
policy which has been terminated prior to the 
expiration of the period for
which premium has been paid and 
does not mean premium which is returnable
to the insured for 
any other reason.

(Source: P.A. 89-97, eff. 7-7-95; 90-499, eff. 8-19-97.)

 



    (215 ILCS 5/534.4)  (from Ch. 73, par. 1065.84-4)



    Sec. 534.4. 
"Insolvent company" means a company
organized 
as a stock company, mutual company, reciprocal or Lloyds (a)

which holds a certificate of authority to transact insurance
in 
this State either at the time the policy was issued or when
the 
insured event occurred, or any company which has assumed or has 
been allocated
such policy obligation through merger, 
division, consolidation, or
reinsurance, whether or not such 
assuming company held a
certificate of authority to transact 
insurance in this State
at the time such policy was issued or 
when the insured event occurred; and (b)
against which a final 
Order of Liquidation with a finding of
insolvency to which 
there is no further right of appeal has been entered by
a court 
of competent jurisdiction in the company's State of domicile 
after the
effective date of this Article.

(Source: P.A. 90-499, eff. 8-19-97.)

 

    Section 99. Effective date. This Act takes effect upon 
becoming law or on the date Senate Bill 1737 of the 100th 
General Assembly becomes law, whichever is later.