SB1781 EngrossedLRB099 07859 MLM 27995 b

1    AN ACT concerning insurance.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Insurance Code is amended by
5changing Section 537.2 as follows:
 
6    (215 ILCS 5/537.2)  (from Ch. 73, par. 1065.87-2)
7    Sec. 537.2. Obligation of Fund. The Fund shall be obligated
8to the extent of the covered claims existing prior to the entry
9of an Order of Liquidation against an insolvent company and
10arising within 30 days after the entry of such Order, or before
11the policy expiration date if less than 30 days after the entry
12of such Order, or before the insured replaces the policy or on
13request effects cancellation, if he does so within 30 days
14after the entry of such Order. If the entry of an Order of
15Liquidation occurs on or after October 1, 1975 and before
16October 1, 1977, such obligations shall not: (i) exceed
17$100,000, or (ii) include any obligation to refund the first
18$100 of any unearned premium claim; and if the entry of an
19Order of Liquidation occurs on or after October 1, 1977 and
20before January 1, 1988, such obligations shall not: (i) exceed
21$150,000, except that this limitation shall not apply to any
22workers compensation claims, or (ii) include any obligation to
23refund the first $100 of any unearned premium claim; and if the

 

 

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1entry of an Order of Liquidation occurs on or after January 1,
21988 and before January 1, 2011, such obligations shall not:
3(i) exceed $300,000, except that this limitation shall not
4apply to any workers compensation claims, or (ii) include any
5obligation to refund the first $100 of any unearned premium
6claim or to refund any unearned premium over $10,000 under any
7one policy. If the entry of an Order of Liquidation occurs on
8or after January 1, 2011, then such obligations shall not: (i)
9exceed $500,000, except that this limitation shall not apply to
10any workers compensation claims or (ii) include any obligation
11to refund the first $100 of any unearned premium claim or
12refund any unearned premium over $10,000 under any one policy.
13In no event shall the Fund be obligated to a policyholder or
14claimant in an amount in excess of the face amount of the
15policy from which the claim arises. For purposes of this Act,
16obligations arising under an insurance policy written to
17indemnify a permissibly self-insured employer under subsection
18(a) of Section 4 of the Workers' Compensation Act for its
19liability to pay workers' compensation benefits in excess of a
20specific or aggregate retention shall be subject to the
21applicable per-claim limits set forth in this Section.
22    In no event shall the Fund be liable for any interest on
23any judgment entered against the insured or the insolvent
24company, or for any other interest claim against the insured or
25the insolvent company, regardless of whether the insolvent
26company would have been obligated to pay such interest under

 

 

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1the terms of its policy. The Fund shall be liable for interest
2at the statutory rate on money judgments entered against the
3Fund until the judgment is satisfied.
4    Any obligation of the Fund to defend an insured shall cease
5upon the Fund's payment or tender of an amount equal to the
6lesser of the Fund's covered claim obligation limit or the
7applicable policy limit.
8(Source: P.A. 96-1450, eff. 8-20-10.)
 
9    Section 99. Effective date. This Act takes effect upon
10becoming law.