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1    AN ACT concerning regulation.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 5. If and only if Senate Bill 1737 of the 100th
5General Assembly becomes law in the form in which it passed
6both houses on May 31, 2018, then the Illinois Insurance Code
7is amended by changing Sections 534.3 and 534.4 as follows:
8    (215 ILCS 5/534.3)  (from Ch. 73, par. 1065.84-3)
9    Sec. 534.3. Covered claim; unearned premium defined.
10    (a) "Covered claim" means an unpaid claim for a loss
11arising out of and within the coverage of an insurance policy
12to which this Article applies and which is in force at the time
13of the occurrence giving rise to the unpaid claim, including
14claims presented during any extended discovery period which was
15purchased from the company before the entry of a liquidation
16order or which is purchased or obtained from the liquidator
17after the entry of a liquidation order, made by a person
18insured under such policy or by a person suffering injury or
19damage for which a person insured under such policy is legally
20liable, and for unearned premium, if:
21        (i) The company issuing, assuming, or being allocated
22    the policy becomes an insolvent company as defined in
23    Section 534.4 after the effective date of this Article; and



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1        (ii) The claimant or insured is a resident of this
2    State at the time of the insured occurrence, or the
3    property from which a first party claim for damage to
4    property arises is permanently located in this State or, in
5    the case of an unearned premium claim, the policyholder is
6    a resident of this State at the time the policy was issued;
7    provided, that for entities other than an individual, the
8    residence of a claimant, insured, or policyholder is the
9    state in which its principal place of business is located
10    at the time of the insured event.
11    (b) "Covered claim" does not include:
12        (i) any amount in excess of the applicable limits of
13    liability provided by an insurance policy to which this
14    Article applies; nor
15        (ii) any claim for punitive or exemplary damages; nor
16        (iii) any first party claim by an insured who is an
17    affiliate of the insolvent company; nor
18        (iv) any first party or third party claim by or against
19    an insured whose net worth on December 31 of the year next
20    preceding the date the insurer becomes an insolvent insurer
21    exceeds $25,000,000; provided that an insured's net worth
22    on such date shall be deemed to include the aggregate net
23    worth of the insured and all of its affiliates as
24    calculated on a consolidated basis. However, this
25    exclusion shall not apply to third party claims against the
26    insured where the insured has applied for or consented to



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1    the appointment of a receiver, trustee, or liquidator for
2    all or a substantial part of its assets, filed a voluntary
3    petition in bankruptcy, filed a petition or an answer
4    seeking a reorganization or arrangement with creditors or
5    to take advantage of any insolvency law, or if an order,
6    judgment, or decree is entered by a court of competent
7    jurisdiction, on the application of a creditor,
8    adjudicating the insured bankrupt or insolvent or
9    approving a petition seeking reorganization of the insured
10    or of all or substantial part of its assets; nor
11        (v) any claim for any amount due any reinsurer,
12    insurer, insurance pool, or underwriting association as
13    subrogated recoveries, reinsurance recoverables,
14    contribution, indemnification or otherwise. No such claim
15    held by a reinsurer, insurer, insurance pool, or
16    underwriting association may be asserted in any legal
17    action against a person insured under a policy issued by an
18    insolvent company other than to the extent such claim
19    exceeds the Fund obligation limitations set forth in
20    Section 537.2 of this Code.
21    (c) "Unearned Premium" means the premium for the unexpired
22period of a policy which has been terminated prior to the
23expiration of the period for which premium has been paid and
24does not mean premium which is returnable to the insured for
25any other reason.
26(Source: P.A. 89-97, eff. 7-7-95; 90-499, eff. 8-19-97.)



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1    (215 ILCS 5/534.4)  (from Ch. 73, par. 1065.84-4)
2    Sec. 534.4. "Insolvent company" means a company organized
3as a stock company, mutual company, reciprocal or Lloyds (a)
4which holds a certificate of authority to transact insurance in
5this State either at the time the policy was issued or when the
6insured event occurred, or any company which has assumed or has
7been allocated such policy obligation through merger,
8division, consolidation, or reinsurance, whether or not such
9assuming company held a certificate of authority to transact
10insurance in this State at the time such policy was issued or
11when the insured event occurred; and (b) against which a final
12Order of Liquidation with a finding of insolvency to which
13there is no further right of appeal has been entered by a court
14of competent jurisdiction in the company's State of domicile
15after the effective date of this Article.
16(Source: P.A. 90-499, eff. 8-19-97.)
17    Section 99. Effective date. This Act takes effect upon
18becoming law or on the date Senate Bill 1737 of the 100th
19General Assembly becomes law, whichever is later.