Illinois General Assembly - Full Text of SB1782
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Full Text of SB1782  99th General Assembly




SB1782 EnrolledLRB099 07860 MLM 27996 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 Sections 537.4 and 546 as follows:
6    (215 ILCS 5/537.4)  (from Ch. 73, par. 1065.87-4)
7    Sec. 537.4. Fund assumes obligations of insolvent
8companies. The Fund shall be deemed the insolvent company to
9the extent of the Fund's obligation for covered claims and to
10such extent shall have all rights, duties, and obligations of
11the insolvent company, subject to the limitations provided in
12this Article, as if the company had not become insolvent, with
13the exception that the liquidator shall retain the sole right
14to recover any reinsurance proceeds. The Fund's rights under
15this Section include, but are not limited to, the right to
16pursue and retain salvage and subrogation recoveries on paid
17covered claim obligations to the extent paid by the Fund. The
18extent of the Fund's subrogation rights and any other rights of
19reimbursement with respect to its covered claims payments shall
20not be limited as if the Fund were the insolvent company, but
21shall be determined independently by taking into account the
22Fund's rights under Section 546 of this Article.
23(Source: P.A. 89-97, eff. 7-7-95.)



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1    (215 ILCS 5/546)  (from Ch. 73, par. 1065.96)
2    Sec. 546. Other insurance.
3    (a) An insured or claimant shall be required first to
4exhaust all coverage provided by any other insurance policy,
5regardless of whether or not such other insurance policy was
6written by a member company, if the claim under such other
7policy arises from the same facts, injury, or loss that gave
8rise to the covered claim against the Fund. The Fund's
9obligation under Section 537.2 shall be reduced by the amount
10recovered or recoverable, whichever is greater, under such
11other insurance policy. Where such other insurance policy
12provides uninsured or underinsured motorist coverage, the
13amount recoverable shall be deemed to be the full applicable
14limits of such coverage. To the extent that the Fund's
15obligation under Section 537.2 is reduced by application of
16this Section, the liability of the person insured by the
17insolvent insurer's policy for the claim shall be reduced in
18the same amount. If the Fund pays a covered claim without the
19exhaustion of all other coverage that could have been exhausted
20under this Section, the Fund shall have an independent right of
21recovery against each insurer whose coverage was not exhausted
22in the amount the Fund would not have had to pay if that
23insurer's coverage had been exhausted first.
24    (b) Any insured or claimant having a claim which may be
25recovered under more than one insurance guaranty fund or its



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1equivalent shall seek recovery first from the Fund of the place
2of residence of the insured except that if it is a first party
3claim for damage to property with a permanent location, he
4shall first seek recovery from the Fund of the location of the
5property; if it is a workers' compensation claim, he shall
6first seek recovery from the Fund of the residence of the
7claimant. Any recovery under this Article shall be reduced by
8the amount of the recovery from any other insurance guaranty
9fund or its equivalent.
10(Source: P.A. 89-97, eff. 7-7-95; 90-499, eff. 8-19-97.)
11    Section 98. Applicability. This amendatory Act applies to
12pending actions as well as actions commenced on or after the
13effective date of this amendatory Act of the 99th General
15    Section 99. Effective date. This Act takes effect upon
16becoming law.