Full Text of SB1782 99th General Assembly
SB1782 99TH GENERAL ASSEMBLY |
| | 99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016 SB1782 Introduced 2/20/2015, by Sen. William R. Haine SYNOPSIS AS INTRODUCED: |
| 215 ILCS 5/537.4 | from Ch. 73, par. 1065.87-4 | 215 ILCS 5/546 | from Ch. 73, par. 1065.96 |
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Amends the Illinois Insurance Code. Provides that if the Illinois Insurance Guaranty Fund pays a covered claim without the exhaustion of other coverage, the Fund shall have an independent right of recovery against each insurer whose coverage was not exhausted. Provides that the extent of the Fund's subrogation rights and any other rights of reimbursement with respect to its covered claims payments shall be determined independently by taking into account the Fund's independent rights of recovery. Effective immediately.
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| | A BILL FOR |
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| 1 | | AN ACT concerning insurance.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Illinois Insurance Code is amended by | 5 | | changing 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 | 8 | | companies. The Fund
shall be deemed the insolvent company to | 9 | | the extent
of the Fund's obligation for covered claims and to | 10 | | such extent
shall have all
rights, duties, and obligations of | 11 | | the insolvent company, subject to the
limitations provided in | 12 | | this Article, as if the company had not become
insolvent, with | 13 | | the
exception that the liquidator shall retain the sole right
| 14 | | to recover any reinsurance proceeds.
The Fund's rights under | 15 | | this Section include, but are not limited to, the
right to | 16 | | pursue and retain salvage and subrogation recoveries on paid | 17 | | covered
claim obligations to the extent paid by the Fund. The | 18 | | extent of the Fund's subrogation rights and any other rights of | 19 | | reimbursement with respect to its covered claims payments shall | 20 | | not be limited as if the Fund were the insolvent company, but | 21 | | shall be determined independently by taking into account the | 22 | | Fund'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 | 4 | | exhaust all
coverage provided by any other insurance policy, | 5 | | regardless of whether or not
such other insurance policy was | 6 | | written by a member company, if the claim under
such other | 7 | | policy arises from the same facts, injury, or loss that gave | 8 | | rise to
the covered claim against the Fund. The Fund's | 9 | | obligation under Section 537.2
shall be reduced by the amount | 10 | | recovered or recoverable, whichever is greater,
under such | 11 | | other insurance policy. Where such other insurance policy | 12 | | provides
uninsured
or underinsured motorist coverage, the | 13 | | amount recoverable shall be deemed to be
the full applicable | 14 | | limits of such coverage. To the extent that the Fund's
| 15 | | obligation under Section 537.2 is reduced by application of | 16 | | this Section, the
liability of the person insured by the | 17 | | insolvent insurer's policy for the claim
shall be reduced in | 18 | | the same amount. If the Fund pays a covered claim without the | 19 | | exhaustion of all other coverage that could have been exhausted | 20 | | under this Section, the Fund shall have an independent right of | 21 | | recovery against each insurer whose coverage was not exhausted | 22 | | in the amount the Fund would not have had to pay if that | 23 | | insurer's coverage had been exhausted first.
| 24 | | (b) Any insured or claimant having a claim which may be | 25 | | recovered under more
than one insurance guaranty fund or its |
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| 1 | | equivalent shall seek recovery
first from the Fund of the place | 2 | | of residence of the insured except that
if it is a first party | 3 | | claim for damage to property with a permanent
location, he | 4 | | shall first seek recovery from the Fund of the location of
the | 5 | | property; if it is a workers' compensation claim, he shall | 6 | | first
seek recovery from the Fund of the residence of the | 7 | | claimant. Any
recovery under this Article shall be reduced by | 8 | | the amount of the
recovery from any other insurance guaranty | 9 | | fund 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 | 12 | | pending actions as well as actions commenced on or after the | 13 | | effective date of this amendatory Act of the 99th General | 14 | | Assembly.
| 15 | | Section 99. Effective date. This Act takes effect upon | 16 | | becoming law.
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