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Illinois Compiled Statutes

Information maintained by the Legislative Reference Bureau
Updating the database of the Illinois Compiled Statutes (ILCS) is an ongoing process. Recent laws may not yet be included in the ILCS database, but they are found on this site as Public Acts soon after they become law. For information concerning the relationship between statutes and Public Acts, refer to the Guide.

Because the statute database is maintained primarily for legislative drafting purposes, statutory changes are sometimes included in the statute database before they take effect. If the source note at the end of a Section of the statutes includes a Public Act that has not yet taken effect, the version of the law that is currently in effect may have already been removed from the database and you should refer to that Public Act to see the changes made to the current law.

(215 ILCS 5/) Illinois Insurance Code.

215 ILCS 5/540.8

    (215 ILCS 5/540.8) (from Ch. 73, par. 1065.90-8)
    Sec. 540.8. The plan of operation shall establish the procedures for disposition of monies reimbursed from the estate of the insolvent company.
(Source: P.A. 85-576.)

215 ILCS 5/540.9

    (215 ILCS 5/540.9) (from Ch. 73, par. 1065.90-9)
    Sec. 540.9. The plan of operation may contain additional provisions necessary or proper for the execution of the powers, duties and obligations of the Fund.
(Source: P.A. 77-305.)

215 ILCS 5/541

    (215 ILCS 5/541) (from Ch. 73, par. 1065.91)
    Sec. 541. The plan of operation may provide that any or all powers and duties of the Fund, except those under Sections 537.6 and 538.3 may be delegated to a corporation, association, or other organization which performs or will perform functions similar to those of this Fund, or its equivalent, in 2 or more states. A delegation under this Section shall take effect only with the approval of both the board of directors and the Director, and may be made only to a corporation, association, or organization which extends protection not substantially less favorable and effective than that provided by this Article.
(Source: P.A. 80-827.)

215 ILCS 5/543

    (215 ILCS 5/543) (from Ch. 73, par. 1065.93)
    Sec. 543. Duties and obligations of the Director.
    The Director shall have the duties and obligations enumerated in Sections 543.1 through 543.3.
(Source: P.A. 77-305.)

215 ILCS 5/543.1

    (215 ILCS 5/543.1) (from Ch. 73, par. 1065.93-1)
    Sec. 543.1. The Director shall serve a copy of the complaint seeking an Order of Liquidation with a finding of insolvency against a domestic member company on the Fund at the same time that such complaint is filed with the circuit court or shall forward to the Fund notice of the filing of such a complaint against a foreign or alien member company promptly upon receipt thereof. The Director also shall serve on the Fund a copy of an Order of Liquidation with a finding of insolvency against a domestic member company immediately after it is entered by the circuit court or shall forward to the Fund a copy of such order against a foreign or alien member company promptly upon receipt thereof.
(Source: P.A. 85-576.)

215 ILCS 5/543.2

    (215 ILCS 5/543.2) (from Ch. 73, par. 1065.93-2)
    Sec. 543.2. The Director shall, upon request of the board of directors, provide the Fund with a statement of the net direct written premiums of each member company for the preceding calendar year for which annual statements have been filed with the Director.
(Source: P.A. 77-305.)

215 ILCS 5/543.3

    (215 ILCS 5/543.3) (from Ch. 73, par. 1065.93-3)
    Sec. 543.3. The liquidator of an insolvent company shall notify the policyholders of the insolvent company who are residents of this State of the entry of an Order of Liquidation against the company and of their rights under this Article. Such notification shall be mailed to the last known address of such policyholders, where available, but if sufficient information for notification by mail is not available, notice by publication in a newspaper of general circulation shall be sufficient. If the insolvent company is domiciled in another state and the liquidator fails to give notice which satisfies the purposes of this Section, such notice shall be given by the Director as ancillary receiver or if the insolvent company is domiciled in another state and there is no ancillary receiver in this State, the Fund shall give such notice provided the necessary information is made available to the Fund by the liquidator. The form of the notice given by the Director as either liquidator or ancillary receiver shall be submitted to the Fund for its approval prior to mailing or publication.
(Source: P.A. 85-576.)

215 ILCS 5/544

    (215 ILCS 5/544) (from Ch. 73, par. 1065.94)
    Sec. 544. Powers of the Director. The Director shall either (a) suspend or revoke, after notice and hearing pursuant to Sections 401, 402 and 403 of this Code, the certificate of authority to do business in this State of any member company which fails to pay an assessment when due or fails to comply with the plan of operation, or (b) levy a fine on any member company which fails to pay an assessment when due. Such fine shall not exceed 5% per month of the unpaid assessment, except that no fine shall be less than $200 per month.
(Source: P.A. 93-32, eff. 7-1-03.)

215 ILCS 5/545

    (215 ILCS 5/545) (from Ch. 73, par. 1065.95)
    Sec. 545. Effect of paid claims.
    (a) Every insured or claimant seeking the protection of this Article shall cooperate with the Fund to the same extent as such person would have been required to cooperate with the insolvent company. The Fund shall have all the rights, duties and obligations under the policy to the extent of the covered claim payment, provided the Fund shall have no cause of action against the insured of the insolvent company for any sums it has paid out except such causes of action as the insolvent company would have had if such sums had been paid by the insolvent company and except as provided in subsection (d) of this Section. Any person recovering under this Article and any insured whose liabilities are satisfied under this Article shall be deemed to have assigned the person's or insured's rights under the policy to the Fund to the extent of his or her recovery or satisfaction obtained from the Fund's payments.
    (b) The Fund and any similar organization in another state shall be recognized as claimants in the liquidation of an insolvent company for any amounts paid by them on covered claims obligations as determined under this Article or similar laws in other states and shall receive dividends at the priority set forth in paragraph (d) of subsection (1) of Section 205 of this Code; provided that if, at the time that the liquidator issues a cut-off notice to the Fund in anticipation of closing the estate, a reserve has been established by the Fund, or any similar organization in another state, for the amount of their future administrative expenses and loss development associated with unpaid reported pending claims, these reserves will be deemed to have been paid as of the date of the notice and payment shall be made accordingly. The liquidator of an insolvent company shall be bound by determinations of covered claim eligibility under the Act and by settlements of claims made by the Fund or a similar organization in another state on the receipt of certification of such payments, to the extent those determinations or settlements satisfy obligations of the Fund, but the receiver shall not be bound in any way by those determinations or settlements to the extent that there remains a claim in the estate for amounts in excess of the payments by the Fund. In submitting their claim for covered claim payments the Fund and any similar organization in another state shall not be subject to the requirements of Sections 208 and 209 of this Code and shall not be affected by the failure of the person receiving a covered claim payment to file a proof of claim.
    (c) The expenses of the Fund and of any similar organization in any other state, other than expenses incurred in the performance of duties under Section 547 or similar duties under the statute governing a similar organization in another state, shall be accorded priority over all claims against the estate, except as provided for in paragraph (a) of subsection (1) of Section 205 of this Code. The liquidator shall make prompt reimbursement to the Fund and any similar organization for such expense payments.
    (d) The Fund has the right to recover from the following persons the amount of any covered claims (as determined without regard to the exemption in paragraph (iv) of subsection (b) of Section 534.3) and allocated claims expenses which the Fund paid or incurred on behalf of such person in satisfaction, in whole or in part, of liability obligations of such person to any other person:
        (i) any insured whose net worth on December 31 of the
year next preceding the date the company becomes an insolvent company exceeds $25,000,000; provided that an insured's net worth on such date shall be deemed to include the aggregate net worth of the insured and all of its affiliates as calculated on a consolidated basis.
        (ii) any insured who is an affiliate of the insolvent
    The Fund may also, at its sole discretion and without assumption of any ongoing duty to do so, pay any workers compensation claims or any other third-party claims or any cybersecurity insurance obligations covered by a policy of an insolvent company on behalf of a high net worth insured as defined in paragraph (iv) of subsection (b) of Section 534.3. In that case, the Fund shall recover from the high net worth insured under this Section for all amounts paid on its behalf, all allocated claim adjusted expenses related to such claims, the Fund's attorney's fees, and all court costs in any action necessary to collect the full amount to the Fund's reimbursement under this Section.
(Source: P.A. 103-113, eff. 6-30-23.)

215 ILCS 5/546

    (215 ILCS 5/546) (from Ch. 73, par. 1065.96)
    Sec. 546. Other insurance.
    (a) An insured or claimant shall be required first to exhaust all coverage provided by any other insurance policy, regardless of whether or not such other insurance policy was written by a member company, if the claim under such other policy arises from the same facts, injury, or loss that gave rise to the covered claim against the Fund. The Fund's obligation under Section 537.2 shall be reduced by the amount recovered or recoverable, whichever is greater, under such other insurance policy. Where such other insurance policy provides uninsured or underinsured motorist coverage, the amount recoverable shall be deemed to be the full applicable limits of such coverage. To the extent that the Fund's obligation under Section 537.2 is reduced by application of this Section, the liability of the person insured by the insolvent insurer's policy for the claim shall be reduced in the same amount. If the Fund pays a covered claim without the exhaustion of all other coverage that could have been exhausted under this Section, the Fund shall have an independent right of recovery against each insurer whose coverage was not exhausted in the amount the Fund would not have had to pay if that insurer's coverage had been exhausted first.
    (b) Any insured or claimant having a claim which may be recovered under more than one insurance guaranty fund or its equivalent shall seek recovery first from the Fund of the place of residence of the insured except that if it is a first party claim for damage to property with a permanent location, he shall first seek recovery from the Fund of the location of the property; if it is a workers' compensation claim, he shall first seek recovery from the Fund of the residence of the claimant. Any recovery under this Article shall be reduced by the amount of the recovery from any other insurance guaranty fund or its equivalent.
(Source: P.A. 99-387, eff. 8-17-15.)

215 ILCS 5/547

    (215 ILCS 5/547) (from Ch. 73, par. 1065.97)
    Sec. 547. Prevention of insolvencies. To aid in the detection and prevention of company insolvencies:
        (a) The board of directors may, upon majority vote,
make recommendations to the Director on matters pertaining to regulation for solvency.
        (b) The board of directors may prepare a report on
the history and causes of any company insolvency in which the Fund was obligated to pay covered claims, based on the information available to the Fund, and submit such report to the Director.
        (c) The Director may disclose to the Fund the
information described in subsection (g) of Section 132.5 as well as the information described in subsection (c) of Section 131.22, and the Fund may use that information to prepare for the possible liquidation of a member company subject to the requirements and restrictions set forth in Section 132.5.
(Source: P.A. 102-929, eff. 5-27-22.)

215 ILCS 5/548

    (215 ILCS 5/548) (from Ch. 73, par. 1065.98)
    Sec. 548. Examination of the Fund. The Fund shall be subject to examination and regulation by the Director. The board of directors shall, not later than April 30 of each year, submit a financial report for the preceding calendar year in a form approved by the Director.
(Source: P.A. 99-388, eff. 1-1-16.)

215 ILCS 5/549

    (215 ILCS 5/549) (from Ch. 73, par. 1065.99)
    Sec. 549. Tax exemption.
    The Fund shall be exempt from payment of all fees and all taxes levied by this State or any of its subdivisions.
(Source: P.A. 77-305.)

215 ILCS 5/550

    (215 ILCS 5/550) (from Ch. 73, par. 1065.100)
    Sec. 550. Immunity.
    There shall be no liability on the part of and no cause of action of any nature shall arise against any member company, the Fund or their agents or employees, the board of directors, or the Director or his representatives for any action taken or omitted by them in the performance of their powers and duties under this Article.
(Source: P.A. 77-305.)

215 ILCS 5/551

    (215 ILCS 5/551) (from Ch. 73, par. 1065.101)
    Sec. 551. Stay of proceedings. All proceedings arising out of a claim under a policy of insurance written by an insolvent company shall be stayed for 120 days from the date of the entry of the Order of Liquidation to permit proper defense by the Fund of all such pending causes of action.
(Source: P.A. 92-77, eff. 7-12-01.)

215 ILCS 5/552

    (215 ILCS 5/552) (from Ch. 73, par. 1065.102)
    Sec. 552. All provisions of this Article shall be interpreted in accordance with and pursuant to those Sections of Article XIII of this Code which may be applicable.
(Source: P.A. 85-576.)

215 ILCS 5/553

    (215 ILCS 5/553) (from Ch. 73, par. 1065.103)
    Sec. 553. Severability.
    If any provision of this Article or the application thereof to any claimant, company or circumstance is held invalid, such invalidity does not affect other provisions or applications of this Article which can be given effect without the invalid application or provision, and to this end the provisions of this Article are declared to be severable.
(Source: P.A. 77-305.)