Sen. Bill Brady
Filed: 5/11/2004
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1 | AMENDMENT TO HOUSE BILL 1075
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2 | AMENDMENT NO. ______. Amend House Bill 1075, AS AMENDED, | ||||||
3 | with reference to page and line numbers of Senate Amendment No. | ||||||
4 | 1, on page 1, line 4, after "amended by", by inserting | ||||||
5 | "changing Section 209 and"; and | ||||||
6 | on page 1, immediately below line 15, by inserting the | ||||||
7 | following:
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8 | "(215 ILCS 5/209) (from Ch. 73, par. 821)
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9 | Sec. 209. Proof and allowance of claims.
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10 | (1) A proof of claim shall consist of a written statement | ||||||
11 | signed
under oath setting forth the claim, the consideration
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12 | for it, whether the claim is secured
and, if
so, how, what | ||||||
13 | payments have been made on the
claim, if any, and that
the sum | ||||||
14 | claimed is justly owing from the company. Whenever
a claim is | ||||||
15 | based upon a document, the document, unless
lost or destroyed, | ||||||
16 | shall be filed with the proof of claim. If the document is
lost | ||||||
17 | or destroyed, a statement of that fact and of
the
circumstances | ||||||
18 | of the loss or destruction shall be included in
the proof of | ||||||
19 | claim.
A claim may be allowed even if contingent or | ||||||
20 | unliquidated as of the date
fixed by the court
pursuant to | ||||||
21 | subsection (a) of Section 194 if it is filed in accordance with
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22 | this subsection. Except as otherwise provided in subsection | ||||||
23 | (7), a proof of
claim required under this Section must identify | ||||||
24 | a known loss or occurrence
particular claim .
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1 | (2) At any time, the Director may require the claimant to | ||||||
2 | present
information or evidence supplementary to that required | ||||||
3 | under subsection (l)
and
may take testimony under oath, require | ||||||
4 | production of affidavits or depositions,
or otherwise obtain | ||||||
5 | additional information or evidence.
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6 | (3) Upon the liquidation, rehabilitation, or conservation | ||||||
7 | of
any
company which has issued policies insuring the lives of | ||||||
8 | persons, the
Director shall, within a reasonable time, after | ||||||
9 | the last day set for the
filing of claims, make a list of the | ||||||
10 | persons who have not filed proofs of
claim with him and whose | ||||||
11 | rights have not been reinsured, to whom it appears
from the | ||||||
12 | books of the company, there are owing amounts on such policies | ||||||
13 | and
he shall set opposite the name of each person such amount | ||||||
14 | so owing to such
person. The Director shall incur no personal | ||||||
15 | liability by reason of any
mistake in such list. Each person | ||||||
16 | whose name shall appear upon said list
shall be deemed to have | ||||||
17 | duly filed prior to the last day set for filing of
claims a | ||||||
18 | proof of claim for the amount set opposite his name on said | ||||||
19 | list.
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20 | (4)(a) When a Liquidation, Rehabilitation, or
Conservation | ||||||
21 | Order has been entered in a proceeding against an insurer under
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22 | this Code, any insured under an insurance policy shall have
the | ||||||
23 | right to file a contingent claim. The Court at the time of the | ||||||
24 | entry of
the Order of Liquidation, Rehabilitation or | ||||||
25 | Conservation shall fix the final
date for the liquidation of | ||||||
26 | insureds' contingent claims, but
in no event
shall said date be | ||||||
27 | more than 3 years after the last day fixed for the filing of
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28 | claims, provided, such date may be extended by the Court on | ||||||
29 | petition of the
Director should the Director determine that | ||||||
30 | such extension will not delay
distribution of assets under | ||||||
31 | Section 210. Such a contingent claim
shall be allowed if such | ||||||
32 | claim is liquidated and the insured
claimant presents evidence | ||||||
33 | of payment of such claim to the Director on or
before the last | ||||||
34 | day fixed by the Court.
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1 | (b) When an insured has been unable to liquidate its claim | ||||||
2 | under paragraph
(a) of this subsection (4), the insured may | ||||||
3 | have its claim allowed by
estimation if (i) it may be | ||||||
4 | reasonably inferred from the proof presented upon
the claim | ||||||
5 | that a claim exists under the policy; (ii) the insured has | ||||||
6 | furnished
suitable proof, unless the court for good cause shown | ||||||
7 | shall otherwise direct,
that no further valid claims against | ||||||
8 | the insurer arising out of the cause of
action other than those | ||||||
9 | already presented can be made, and (iii) the total
liability of | ||||||
10 | the insurer to all claimants arising out of the same act shall | ||||||
11 | be
no greater than its total liability would be were it not in | ||||||
12 | liquidation,
rehabilitation, or conservation.
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13 | (5) The obligation of the insurer, if any, to defend or | ||||||
14 | continue the
defense
of any claim or suit under a liability | ||||||
15 | insurance policy shall terminate on
the entry of the Order of | ||||||
16 | Liquidation, Rehabilitation or Conservation,
except during the | ||||||
17 | appeal of an Order of Liquidation as provided by Section
190.1 | ||||||
18 | or, unless upon the petition of the Director, the court directs
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19 | otherwise. Insureds may include in contingent claims | ||||||
20 | reasonable attorneys
fees for services rendered subsequent to | ||||||
21 | the date of Liquidation,
Rehabilitation or Conservation in | ||||||
22 | defense of claims or suits covered by the
insured's policy | ||||||
23 | provided such attorneys fees have actually been paid by the
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24 | assured and evidence of payment presented in the manner | ||||||
25 | required for insured's
contingent claims.
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26 | (6) When a liquidation, rehabilitation, or
conservation | ||||||
27 | order has been
entered in a proceeding against
an insurer under | ||||||
28 | this Code, any person who has a cause of action against an
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29 | insured of the insurer under an insurance
policy issued by the | ||||||
30 | insurer shall have the right to file a
claim in the proceeding, | ||||||
31 | regardless of the fact that the claim
may be contingent, and | ||||||
32 | the claim may be allowed by estimation (a) if it may be
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33 | reasonably, inferred from proof presented upon the claim
that | ||||||
34 | the claimant would be able to obtain a judgment upon
the cause |
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1 | of action against the insured; and (b) if
the person has | ||||||
2 | furnished
suitable proof, unless the court for
good cause shown | ||||||
3 | shall otherwise direct, that no further valid claims
against | ||||||
4 | the insurer arising out of the cause of
action other than those
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5 | already presented can be made, and (c) the total liability of
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6 | the
insurer to all claimants arising out of the same act shall
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7 | be no greater than its total liability would be were it not in | ||||||
8 | liquidation,
rehabilitation, or
conservation.
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9 | (7) Contingent or unliquidated general creditors' and | ||||||
10 | ceding insurers'
claims that are not made absolute and | ||||||
11 | liquidated by the last day fixed by the
court pursuant to | ||||||
12 | subsection (4) may
shall be determined and allowed by | ||||||
13 | estimation.
Any such estimate shall be based upon an actuarial | ||||||
14 | evaluation made
with reasonable actuarial certainty or upon | ||||||
15 | another accepted method of valuing
claims with reasonable | ||||||
16 | certainty and, with respect to ceding insurers' claims,
may | ||||||
17 | include an estimate of incurred but not reported losses.
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18 | (7.5) (a) The estimation and allowance of the loss | ||||||
19 | development on a known loss or occurrence shall trigger a | ||||||
20 | reinsurer's obligation to pay pursuant to its reinsurance | ||||||
21 | contract with the insolvent company, provided that the | ||||||
22 | allowance is made in accordance with paragraph (b) of | ||||||
23 | subsection (4) or subsection (6). The Director shall have the | ||||||
24 | authority to exercise all available remedies on behalf of the | ||||||
25 | insolvent company to marshal these reinsurance recoverables. | ||||||
26 | (b) That portion of any estimated and allowed contingent | ||||||
27 | claim that is attributable to claims incurred but not reported | ||||||
28 | to the insolvent company's reinsured shall not be billable to | ||||||
29 | the insolvent company's reinsurers, except to the extent that | ||||||
30 | (A) such claims develop into known losses or occurrences and | ||||||
31 | become billable under paragraph (a) of this subsection or (B) | ||||||
32 | the reinsurance contract specifically provides for the payment | ||||||
33 | of such losses or reserves. | ||||||
34 | (c) Notwithstanding any other provision of this Code, the |
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1 | liquidator may negotiate a voluntary commutation and release of | ||||||
2 | all obligations arising from reinsurance contracts or other | ||||||
3 | agreements.
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4 | (8) No judgment against such an insured or an
insurer taken | ||||||
5 | after the date of the entry of the liquidation,
rehabilitation, | ||||||
6 | or conservation order shall be considered in the
proceedings
as | ||||||
7 | evidence of liability, or of the amount of damages, and no | ||||||
8 | judgment
against an insured or an insurer taken by default, or | ||||||
9 | by collusion prior to
the entry of the liquidation order shall | ||||||
10 | be considered as conclusive
evidence in the proceeding either | ||||||
11 | of the liability of such insured to such
person upon such cause | ||||||
12 | of action or of the amount of damages to which such
person is | ||||||
13 | therein entitled.
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14 | (9) The value of securities held by secured creditors shall | ||||||
15 | be
determined by converting the same into money according to | ||||||
16 | the terms of the
agreement pursuant to which such securities | ||||||
17 | were delivered to such
creditors, or by such creditors and the | ||||||
18 | Director by agreement, or by the
court, and the amount of such | ||||||
19 | value shall be credited upon the claims of
such secured | ||||||
20 | creditors and their claims allowed only for the balance.
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21 | (10) Claims of creditors or policyholders who have received
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22 | preferences
voidable under Section 204 or to whom conveyances | ||||||
23 | or transfers,
assignments or incumbrances have been made or | ||||||
24 | given which are void under
Section 204, shall not be allowed | ||||||
25 | unless such creditors or policyholders
shall surrender such | ||||||
26 | preferences, conveyances, transfers, assignments or
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27 | incumbrances.
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28 | (11)(a) When the Director denies a claim or allows a claim | ||||||
29 | for less than
the amount requested by the claimant, written | ||||||
30 | notice of the determination and
of the right to object shall be | ||||||
31 | given promptly to the claimant or the
claimant's representative | ||||||
32 | by first class mail at the address shown on the
proof of claim. | ||||||
33 | Within 60 days from the mailing of the notice, the claimant
may
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34 | file his written objections with the Director. If no such |
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1 | filing is made on a
timely basis, the claimant may not further | ||||||
2 | object to the determination.
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3 | (b) Whenever objections are filed with the Director and he | ||||||
4 | does not alter
his determination as a result of the objection | ||||||
5 | and the claimant continues to
object, the Director shall | ||||||
6 | petition the court for a hearing as soon as
practicable and | ||||||
7 | give notice of the hearing by first class mail to the claimant
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8 | or his representative and to any other persons known by the | ||||||
9 | Director to be
directly affected, not less than 10 days before | ||||||
10 | the date of the hearing.
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11 | (12) The Director shall review all claims duly filed in the | ||||||
12 | liquidation,
rehabilitation, or conservation proceeding, | ||||||
13 | unless otherwise directed by the
court, and shall make such | ||||||
14 | further investigation as he considers necessary.
The Director | ||||||
15 | may compound, compromise, or in any other manner negotiate the
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16 | amount for which claims will be recommended to the court. | ||||||
17 | Unresolved disputes
shall be determined under subsection (11).
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18 | (13)(a) The Director shall present to the court reports of | ||||||
19 | claims reviewed
under subsection (12) with his recommendations | ||||||
20 | as to each claim.
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21 | (b) The court may approve or disapprove any recommendations | ||||||
22 | contained in the
reports of claims filed by the Director, | ||||||
23 | except that the Director's agreements
with claimants shall be | ||||||
24 | accepted as final by the court on claims settled for
$10,000 or | ||||||
25 | less.
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26 | (14) The changes made in this Section by this amendatory | ||||||
27 | Act of 1993
apply to
all
liquidation, rehabilitation, or
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28 | conservation proceedings that are pending on the effective date | ||||||
29 | of this
amendatory Act of 1993 and to all future liquidation, | ||||||
30 | rehabilitation, or
conservation proceedings,
except that the | ||||||
31 | changes made to the provisions of
this Section by this | ||||||
32 | amendatory Act of 1993 shall not apply to any company
ordered | ||||||
33 | into liquidation on or before January 1, 1982.
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34 | (15) The changes made in this Section by this amendatory |
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1 | Act of the 93rd General Assembly do not apply to any company | ||||||
2 | ordered into liquidation on or before January 1, 2004.
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3 | (Source: P.A. 91-357, eff. 7-29-99.)".
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