215 ILCS 5/531.14
2021 Illinois Compiled Statutes|Chapter 215 - INSURANCE|215 ILCS 5/ - Illinois Insurance Code.|Article XXXIII 1/2 - Life and Health Insurance Guaranty Association

 (from Ch. 73, par. 1065.80-14)Sec. 531.14. Miscellaneous provisions.(1)  Nothing in this  Article may be construed to reduce the liability for unpaid assessments of the insured  of an impaired or insolvent insurer operating under a plan with assessment liability.(2) Records must be kept of all negotiations and meetings in which  the Association or its representatives are involved to discuss the activities of the  Association in carrying out its powers and duties under Section 531.08.  Records of such  negotiations or meetings may be made public only upon the termination of a  liquidation, rehabilitation, or conservation proceeding involving the impaired  or insolvent insurer, upon the termination of the impairment or insolvency  of the insurer, or  upon the order  of a court of competent jurisdiction.  Nothing in this paragraph (2) limits the  duty of the Association to render a report of its activities under Section  531.15.(3) For the purpose of carrying out its obligations under this Article,  the Association is deemed to be a creditor of the impaired or insolvent  insurer to the extent of assets attributable to covered policies or contracts reduced by any  amounts to which the Association is entitled as subrogee (under subsection (m)   of Section 531.08).  All assets of the impaired or insolvent insurer  attributable to covered policies or contracts must be used to continue all covered policies  and pay all contractual obligations of the impaired insurer as required by this  Article.  "Assets attributable to covered policies or contracts", as used in this paragraph  (3), is that proportion of the  assets which the reserves that should have been established  for such policies or contracts bear to the reserve that should have been  established for all policies of  insurance or health benefit plans written by the impaired or insolvent insurer.(4) (a) Prior to the termination of any liquidation, rehabilitation,  or conservation proceeding, the court may take into consideration the contributions  of the respective parties, including the Association, the shareholders, contract owners, certificate holders, enrollees, and policy owners   of the impaired or insolvent insurer, and any other party with  a bona fide interest,  in making an equitable distribution of the ownership rights of such impaired  or insolvent  insurer.  In such a determination, consideration must be given to the welfare of the  policy owners, contract owners, certificate holders, and enrollees of the continuing or successor insurer.(b) No distribution to stockholders, if any, of an impaired or insolvent insurer  may be made until and unless the total  amount of valid claims of the Association for funds expended with interest in carrying  out its powers and duties under Section 531.08, with respect to such member insurer  have been fully recovered by the Association.(5) (a) If an order for liquidation or rehabilitation of  a member insurer  domiciled in this State has been entered, the receiver appointed under such  order has a right to recover on behalf of the member insurer, from any affiliate that  controlled it, the amount of distributions, other than stock dividends paid by  the member insurer on its capital stock, made at any time during the 5 years preceding  the petition for liquidation or rehabilitation subject to the limitations of  paragraphs (b) to (d).(b) No such dividend is recoverable if the member insurer shows that when  paid the distribution was lawful and reasonable, and that the member insurer did not  know and could not reasonably have known that the distribution might adversely affect  the ability of the member insurer to fulfill its contractual obligations.(c) Any person who as an affiliate that controlled the member insurer at  the time the distributions were paid is liable up to the amount of distributions  he received.  Any person who was an affiliate that controlled the member insurer at the  time the distributions were declared, is liable up to the amount of distributions  he would have received if they had been paid immediately.  If 2 persons are  liable with respect to the same distributions, they are jointly and severally liable.(d) The maximum amount recoverable under subsection (5) of this Section is  the amount needed in excess of all other available assets of the insolvent insurer  to pay the contractual obligations of the insolvent insurer.(e) If any person liable under paragraph (c) of subsection (5) of this  Section is insolvent, all its  affiliates that controlled it at the time the dividend was paid are jointly and  severally liable for any resulting deficiency in the amount recovered from  the insolvent affiliate.(6)  As a creditor of the impaired or insolvent insurer as established in subsection (3) of this Section and consistent with subsection (2) of Section 205 of this Code, the Association and other similar associations shall be entitled to receive a disbursement of assets out of the marshaled assets, from time to time as the assets become available to reimburse it, as a credit against contractual obligations under this Article. If the liquidator has not, within 120 days after a final determination of insolvency of a member insurer by the receivership court, made an application to the court for the approval of a proposal to disburse assets out of marshaled assets to guaranty associations having obligations because of the insolvency, then the Association shall be entitled to make application to the receivership court for approval of its own proposal to disburse these assets. (Source: P.A. 100-687, eff. 8-3-18.)