102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB0375

 

Introduced 2/19/2021, by Sen. Napoleon Harris, III

 

SYNOPSIS AS INTRODUCED:
 
215 ILCS 5/532  from Ch. 73, par. 1065.82
215 ILCS 5/537.9  from Ch. 73, par. 1065.87-9
215 ILCS 5/538  from Ch. 73, par. 1065.88
215 ILCS 5/538.2  from Ch. 73, par. 1065.88-2
215 ILCS 5/538.7  from Ch. 73, par. 1065.88-7
215 ILCS 5/538.10 new

    Amends the Illinois Insurance Code. Authorizes the Illinois Insurance Guaranty Fund, at the direction of its board of directors and subject to the approval of the Director of Insurance, to form and own a not-for-profit corporation to which the Fund may delegate certain of its powers and duties provided by the Code. Allows the not-for-profit corporation to contract to provide services to the Office of Special Deputy Receiver or any other person or organization authorized by law to carry out the duties of the Director in the capacity of receiver under specified provisions of the Code, the Illinois Life and Health Insurance Guaranty Association, an organizations in another state similar to the Illinois Insurance Guaranty Fund or the Illinois Life and Health Insurance Guaranty Association. Effective immediately.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB0375LRB102 10314 BMS 15641 b

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. The Illinois Insurance Code is amended by
5changing Sections 532, 537.9, 538, 538.2, and 538.7 and by
6adding Section 538.10 as follows:
 
7    (215 ILCS 5/532)  (from Ch. 73, par. 1065.82)
8    Sec. 532. Purpose. The purpose of this Article is to
9provide a mechanism for the payment of covered claims under
10certain insurance policies and the expenses of the Fund in
11handling covered claims and to participate in and facilitate
12the process by which the assets of an insolvent company are
13marshaled and distributed pursuant to Article XIII of this
14Code or similar provisions in other states and jurisdictions
15to, among other things, reimburse the cost of covered claims,
16to avoid excessive delay in payment of covered claims, to
17avoid financial loss to claimants or policyholders because of
18the entry of an Order of Liquidation against an insolvent
19company, and to provide a Fund to assess among member
20companies the costs cost of such protection and maintain the
21continuity and self-sufficient operation of the Fund, and to
22offset the costs associated with maintaining the Fund's
23continuity and self-sufficient operations when practical by

 

 

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1providing assistance and services to the Director in her or
2his capacity as receiver under Article XIII of this Code and
3other State guaranty organizations in the performance of their
4respective statutory and legal functions provided by law among
5member companies.
6(Source: P.A. 85-576.)
 
7    (215 ILCS 5/537.9)  (from Ch. 73, par. 1065.87-9)
8    Sec. 537.9. The Fund shall handle claims through its
9employees or through one or more companies or other persons
10employed as servicing facilities, including a corporation
11formed pursuant to Section 538.10.
12(Source: P.A. 85-576.)
 
13    (215 ILCS 5/538)  (from Ch. 73, par. 1065.88)
14    Sec. 538. Powers of the Fund. The Fund shall have the
15powers enumerated in the Sections following this Section and
16preceding Section 539 538.1 through 538.8.
17(Source: P.A. 77-305.)
 
18    (215 ILCS 5/538.2)  (from Ch. 73, par. 1065.88-2)
19    Sec. 538.2. The Fund may employ or retain such persons as
20are necessary to handle claims and perform other duties of the
21Fund or may delegate such functions to a corporation formed
22pursuant to Section 538.10.
23(Source: P.A. 77-305.)
 

 

 

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1    (215 ILCS 5/538.7)  (from Ch. 73, par. 1065.88-7)
2    Sec. 538.7. (a) The Fund may perform such other acts as are
3necessary or proper to effectuate the purposes of this
4Article.
5    (b) The Fund may contract with the Office of Special
6Deputy Receiver or any other person or organizations
7authorized by law to carry out the duties of the Director in
8her or his capacity as a receiver under Article XIII of this
9Code, the Illinois Life and Health Insurance Guaranty
10Association under Article XXXIII 1/2 of this Code, and
11organizations in another state similar to the Fund or the
12Illinois Life and Health Insurance Guaranty Association. The
13power of the Fund to contract with these persons or entities
14includes, but is not limited to, providing consulting services
15and claims administration services that assist with these
16persons or entities in the performance of their respective
17statutory and legal functions provided by law. The Fund may
18only exercise the authority to contract pursuant to this
19subsection upon the board of director's written determination
20that the provisioning of such services will advance the
21purposes set forth in Section 532. Any contract with
22organizations in another state similar to the Fund or the
23Illinois Life and Health Insurance Guaranty Association shall
24be subject to the prior approval of the Director. Any contract
25the Fund may enter into to provide services pursuant to this

 

 

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1subsection shall be subordinate and subject to the Fund's
2statutory obligations to timely pay covered claims and avoid
3financial loss to claimants or policyholders described in this
4Article.
5(Source: P.A. 82-210.)
 
6    (215 ILCS 5/538.10 new)
7    Sec. 538.10. Formation of a not-for-profit corporation;
8delegation of Fund powers. The Fund may, at the direction of
9its board of directors and subject to the approval of the
10Director, form a not-for-profit corporation under the General
11Not For Profit Corporation Act of 1986. The Fund may delegate
12in its plan of operation any or all powers and duties of the
13Fund, except those provided by Sections 537.6 and 538.3. The
14not-for-profit corporation may contract to provide services to
15any or all of the following types of organizations: (a) the
16Office of Special Deputy Receiver or any other person or
17organization authorized by law to carry out the duties of the
18Director in the capacity as a receiver under Article XIII of
19this Code; (b) the Illinois Life and Health Insurance Guaranty
20Association under Article XXXIII 1/2 of this Code; and (c)
21organizations in another state similar to the Fund or the
22Illinois Life and Health Insurance Guaranty Association. The
23not-for-profit corporation is authorized to contract pursuant
24to this Section upon the board of directors' written
25determination that the provisioning of such services will

 

 

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1advance the purpose set forth in Section 532. Any contract
2with a organization in another state similar to the Fund or the
3Illinois Life and Health Insurance Guaranty Association shall
4be subject to the prior approval of the Director. Any contract
5the not-for-profit corporation may enter into to provide
6services pursuant to this Section shall be subordinate and
7subject to the Fund's statutory obligations to timely pay
8covered claims and avoid financial loss to claimants or
9policyholders described in this Article.
 
10    Section 99. Effective date. This Act takes effect upon
11becoming law.