215 ILCS 5/123
2021 Illinois Compiled Statutes|Chapter 215 - INSURANCE|215 ILCS 5/ - Illinois Insurance Code.|Article VII - Unauthorized Companies

 (from Ch. 73, par. 735)Sec. 123.         Service of process upon an unauthorized foreign or alien  company.(1) The purpose of this Section is to subject unauthorized  foreign and alien companies to the jurisdiction of courts of this State in  actions by or on behalf of insureds, reinsureds, or beneficiaries under  insurance  or reinsurance contracts. The Legislature declares that it is a subject of  concern that  many residents of this State or corporations authorized to do business in  this State hold policies of insurance or reinsurance issued by companies  not authorized to do business in this State, thus presenting to such  residents or corporations authorized to do business in this State the often  insuperable obstacle of  resorting to distant forums for  the purpose of asserting legal rights under such policies. In furtherance  of such State interest, the Legislature herein provides a method of  substituted service of process upon such companies and declares that in so  doing it exercises its power to protect its residents and corporations  authorized to do business in this State and to define, for  the purpose of this statute, what constitutes doing business in this State,  and also exercises powers and  privileges available to the State by virtue of Public Law 15, 79th Congress  of the United States, Chapter 20, 1st. Sess., S. 340, as amended, which  declares that the business of insurance and every person engaged therein  shall be subject to the laws of the several states.(2) Any of the following acts in this State, effected by mail or  otherwise, by an unauthorized foreign or alien company: (a) the issuance or  delivery of contracts of insurance or reinsurance to residents of  this State or to corporations authorized to do business therein, (b) the  solicitation of applications for such contracts, (c) the collection of  premiums, membership fees, assessments or other considerations for such  contracts, or (d) any other transaction of business, is equivalent to and  shall constitute an appointment by such company, of the Director and his or her  successor or successors in office, to be its true and lawful attorney upon  whom may be served all lawful process in any action or proceeding against  it, arising out of such policy or contract of insurance or reinsurance, and  the acts  shall be a signification of its agreement that any such process against it  which is so served shall be of the same legal force and validity as if  served upon the company.(3) Service of such process shall be made by delivering and leaving with  the Director a copy thereof and the payment to the Director of the fee  prescribed by this Code. The Director shall keep a record of all process so  served upon him or her. Such process shall be sufficient service upon such  foreign or alien company provided notice of such service and a copy of the  process are, within 10 days thereafter, sent by certified or registered  mail by the plaintiff's attorney of record to the defendant at the last  known principal place of business of the defendant, and the defendant's  receipt and the plaintiff's attorney's affidavit of compliance herewith are  filed with the Clerk of the Court in which such action is pending on or  before the return date of the process or within such further time as the court may allow.(4) Service of process in any such action against any such company shall  in addition to the mode hereinabove described be valid and legal if served  upon any person within this State who, in this State on behalf of such  company, is(a) soliciting insurance or reinsurance, or(b) making, issuing, or delivering any policies or     contracts of insurance or reinsurance, or(c) collecting or receiving any premium, membership     fee, assessment or other consideration for insurance or reinsurance, or(d) in any manner aiding or assisting in doing any of     the things enumerated in clauses (a), (b), or (c) of this subsection; and a copy of such process is within 10 days thereafter sent by certified or registered mail by the plaintiff's attorney of record to the defendant at the last known principal place of business of the defendant and the defendant's receipt and the plaintiff's attorney's affidavit of compliance herewith are filed with the clerk of the court in which such action is pending on or before the return date of the process or within such further time as the court may allow.(5) Before any unauthorized foreign or alien company shall file or cause  to be filed any pleading in any action or proceeding, including any  arbitration, instituted  against it, such unauthorized company shall either (1) deposit with the  clerk of the court in which such action or proceeding is pending or with the  clerk of the court in the jurisdiction in which the arbitration is pending  cash  or securities or file with such clerk a bond with good and sufficient  sureties, to be approved by the court, in an amount to be fixed by the  court sufficient to secure the payment of any final judgment which may be  rendered in such action, proceeding, or arbitration; or (2) where the  unauthorized company continues to transact the business of insurance by issuing  new contracts of insurance or reinsurance, procure a certificate of authority  to  transact the business of insurance in this State.The court in any action or proceeding, in which service is made  in the manner provided in subsections (3) or (4) may, in its discretion,  order such postponement as may be necessary to afford the defendant  reasonable opportunity to comply with the provisions of this subsection and  to defend such action.Nothing in this Section is to be construed to prevent an unauthorized  foreign or alien company from filing a motion to quash process or to set  aside service thereof made in the manner provided in subsections (3) or (4)  on the ground either (a) that such unauthorized company has not done any of  the acts enumerated in subsection (2) or (b) that the person on whom  service was made pursuant to subsection (4) was not doing any of the acts  therein enumerated.(6) In any action against an unauthorized foreign or alien company upon  a contract of insurance or reinsurance issued or delivered in this State to  a resident  thereof or to a corporation authorized to do business therein, if the  company has failed for 30 days after demand prior to the commencement  of the action to make payment in accordance with the terms of the contract,  and it appears to the court that such refusal was vexatious and without  reasonable cause, the court may allow to the plaintiff a reasonable  attorney fee and include such fee in any judgment that may be rendered in  such action. Such fee shall not exceed 12-1/2 per cent of the  amount which the court or jury finds the plaintiff is entitled to recover  against the insurer, but in no event shall such fee be less than $25.  Failure of a company to defend any such action shall  be deemed prima facie evidence that its failure to make payment was  vexatious and without reasonable cause.(7) No plaintiff shall be entitled to a judgment by  default under this Section until the expiration of 30 days from the  date of the filing of the affidavit of compliance.(8) The provisions of this Section shall not apply to any action  or proceeding against any unauthorized foreign or alien company arising out  of any contract of direct insurance(a) effected in accordance with Section 445, or(b) covering ocean marine, aircraft, railway     insurance risks, or(c) against legal liability arising out of the     ownership, operation or maintenance of any property having a permanent situs outside this State, or(d) against loss of or damage to any property having     a permanent situs outside this State,    where such contract of insurance contains a provision designating the  Director and his or her successor or successors in office or a bona fide  resident of Illinois to be the true and lawful attorney of such  non-admitted insurer upon whom may be served all lawful process in any  action or proceeding arising out of any such contract of insurance or where  the insurer enters a general appearance in any such action or proceeding.(9) Nothing in this Section contained shall limit or affect the right to  serve any process, notice or demand required or permitted by law to be  served upon any company in any other manner now or hereafter permitted by  law.    (Source: P.A. 90-53, eff. 7-3-97.)