Rep. Jay Hoffman

Filed: 11/20/2018





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2    AMENDMENT NO. ______. Amend Senate Bill 3174 by replacing
3everything after the enacting clause with the following:
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



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1after the entry of a liquidation order, made by a person
2insured under such policy or by a person suffering injury or
3damage for which a person insured under such policy is legally
4liable, and for unearned premium, if:
5        (i) The company issuing, assuming, or being allocated
6    the policy becomes an insolvent company as defined in
7    Section 534.4 after the effective date of this Article; and
8        (ii) The claimant or insured is a resident of this
9    State at the time of the insured occurrence, or the
10    property from which a first party claim for damage to
11    property arises is permanently located in this State or, in
12    the case of an unearned premium claim, the policyholder is
13    a resident of this State at the time the policy was issued;
14    provided, that for entities other than an individual, the
15    residence of a claimant, insured, or policyholder is the
16    state in which its principal place of business is located
17    at the time of the insured event.
18    (b) "Covered claim" does not include:
19        (i) any amount in excess of the applicable limits of
20    liability provided by an insurance policy to which this
21    Article applies; nor
22        (ii) any claim for punitive or exemplary damages; nor
23        (iii) any first party claim by an insured who is an
24    affiliate of the insolvent company; nor
25        (iv) any first party or third party claim by or against
26    an insured whose net worth on December 31 of the year next



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1    preceding the date the insurer becomes an insolvent insurer
2    exceeds $25,000,000; provided that an insured's net worth
3    on such date shall be deemed to include the aggregate net
4    worth of the insured and all of its affiliates as
5    calculated on a consolidated basis. However, this
6    exclusion shall not apply to third party claims against the
7    insured where the insured has applied for or consented to
8    the appointment of a receiver, trustee, or liquidator for
9    all or a substantial part of its assets, filed a voluntary
10    petition in bankruptcy, filed a petition or an answer
11    seeking a reorganization or arrangement with creditors or
12    to take advantage of any insolvency law, or if an order,
13    judgment, or decree is entered by a court of competent
14    jurisdiction, on the application of a creditor,
15    adjudicating the insured bankrupt or insolvent or
16    approving a petition seeking reorganization of the insured
17    or of all or substantial part of its assets; nor
18        (v) any claim for any amount due any reinsurer,
19    insurer, insurance pool, or underwriting association as
20    subrogated recoveries, reinsurance recoverables,
21    contribution, indemnification or otherwise. No such claim
22    held by a reinsurer, insurer, insurance pool, or
23    underwriting association may be asserted in any legal
24    action against a person insured under a policy issued by an
25    insolvent company other than to the extent such claim
26    exceeds the Fund obligation limitations set forth in



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1    Section 537.2 of this Code.
2    (c) "Unearned Premium" means the premium for the unexpired
3period of a policy which has been terminated prior to the
4expiration of the period for which premium has been paid and
5does not mean premium which is returnable to the insured for
6any other reason.
7(Source: P.A. 89-97, eff. 7-7-95; 90-499, eff. 8-19-97.)
8    (215 ILCS 5/534.4)  (from Ch. 73, par. 1065.84-4)
9    Sec. 534.4. "Insolvent company" means a company organized
10as a stock company, mutual company, reciprocal or Lloyds (a)
11which holds a certificate of authority to transact insurance in
12this State either at the time the policy was issued or when the
13insured event occurred, or any company which has assumed or has
14been allocated such policy obligation through merger,
15division, consolidation, or reinsurance, whether or not such
16assuming company held a certificate of authority to transact
17insurance in this State at the time such policy was issued or
18when the insured event occurred; and (b) against which a final
19Order of Liquidation with a finding of insolvency to which
20there is no further right of appeal has been entered by a court
21of competent jurisdiction in the company's State of domicile
22after the effective date of this Article.
23(Source: P.A. 90-499, eff. 8-19-97.)
24    Section 99. Effective date. This Act takes effect upon



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1becoming law or on the date Senate Bill 1737 of the 100th
2General Assembly becomes law, whichever is later.".