215 ILCS 5/193
2021 Illinois Compiled Statutes|Chapter 215 - INSURANCE|215 ILCS 5/ - Illinois Insurance Code.|Article XIII - Rehabilitation, Liquidation, Conservation And Dissolution Of Companies

 (from Ch. 73, par. 805)Sec. 193.         Duties of  Director as liquidator; sales; reinsurance.(1) Upon the entry of an order directing liquidation, the Director shall  immediately proceed to liquidate the property, business, and affairs of the  company. The Director is hereby authorized to deal with the  property, business, and affairs of  the company in his name as Director, or, if the court shall so order, in  the name of the company.(2) The Director may, subject to the approval of the court, sell  or otherwise  dispose of the real and personal property, or any part thereof, and sell or  compromise all debts or claims owing to  the  company, except that  whenever the value of any real or personal property or the amount of any debt  owing to the  company does not exceed $25,000, the Director may sell, dispose  of,  compromise, or compound the  same upon such terms as the Director deems to  be in the best interest of the company  without obtaining approval of the court.(3) The Director may bring any action, claim, suit, or proceeding  against any director or officer of the company or against any other person  with respect to that person's dealings with the company including, but not  limited to, prosecuting any action, claim, suit, or proceeding on behalf of the  creditors, members, policyholders, or shareholders of  the company. Nothing in this subsection shall be construed to affect the  standing of the Illinois Insurance Guaranty Fund, the Illinois Life and Health  Insurance Guaranty Association, or the Illinois Health Maintenance Organization  Guaranty Association to sue or be sued under applicable law.(4) In order to preserve so far as possible the rights and interests of  the policyholders of the company whose contracts were cancelled by the  liquidation order and of such other creditors as may be possible, the  Director may solicit a contract or contracts whereby a solvent company or  companies will agree to assume in whole, or in part, or upon a modified  basis, the liabilities owing to said former policyholders or creditors. The  Director may, subject to Section 531.08(h) of this Code or Section 6-8 of  the Health Maintenance Organization Act, cede or reinsure  all or so much as may be necessary of the  in-force business to another company using assets of the liquidated company  to pay therefor in preference to satisfying other obligations or creditors.  The Director may assign any rights or interests of the company to receive  reinsurance proceeds for losses to the Illinois Life and Health Insurance  Guaranty Association, the Illinois Health Maintenance Organization Guaranty  Association or  any similar organization in any other state. If,  after a full hearing upon a petition filed by the Director, the court  shall find that the Director endeavored to obtain the best contract for the  benefit of said parties in interest, and if the said Director shall report  to the court that he is ready and willing to enter into a contract and  submit a copy thereof to the court, the court shall examine the procedure  and acts of the Director, and if the court shall find that the best  possible contract in the interests of said parties has been obtained and  that it is best for the interests of said parties that said contract be  entered into, the court shall by written order approve the acts of the  Director and authorize him to execute said contract.(5) In recognition of the rights of policyholders whose "claims  made" contracts were cancelled by the liquidation order, he may, in his  discretion, permit such policyholders to purchase an extended discovery  period which is subject to the limitations in this Article. The  policyholder shall pay to the liquidator a premium which is appropriate for  the rights purchased as determined by the liquidator and approved by the  court. No extended discovery period purchased before or after the entry of  the liquidation order shall extend the time to file claims as set by the  court pursuant to Section 208 of this Code. Claims accruing by virtue of  such extended discovery period shall be treated as any other claim under  Article XXXIV of this Code, and shall be subject to the limitations,  exclusions and conditions in the Illinois Insurance Guaranty Fund Act and  in the laws governing similar organizations in other states.(6) The Director is authorized to cancel policies, bonds, and contracts of  insurance subject to court approval.(7) All persons, companies, and entities shall immediately turn over to  the Director all unearned premium that has been collected by or on behalf of  the company and all earned premium owing the company unless otherwise directed  in writing by the Director or by court order.  Within 30 days of the date of a  written request of  the Director, those persons, companies, and entities shall  submit affidavits verifying amounts collected by, on behalf  of, or due and owing the company and further shall provide copies of all  premium fund trust account information and such other applicable documentation  as requested by the Director.  Nothing in this subsection shall be construed to  affect the rights of (i) the Illinois Life and Health Insurance Guaranty  Association to collect premium under item (6) of Section 531.08 of this Code or  (ii) the Illinois Health Maintenance Organization Guaranty Association to  collect premium under item (11) of Section 6-8 of the Health Maintenance  Organization Act.(8) The amount recoverable by the Director from a reinsurer shall not be  reduced or diminished as a result of the entry of an order of liquidation  notwithstanding any provision in the reinsurance contract or other such  agreement.  Payment made by a reinsurer to or on behalf of an insured of the  company shall not diminish the reinsurer's obligation to the company except  when the reinsurance agreement lawfully provides for payment to or on behalf of  the company's insured by the reinsurer.  All reinsurance contracts to which the  company is a party, which do  not contain the provisions required with respect to the obligation of a  reinsurer in the event of insolvency of the reinsured to obtain credit for  reinsurance or pursuant to other applicable statutes, shall contain or be  construed to contain all of the following provisions:(a) Upon the entry of an order of liquidation and     notwithstanding the Director's failure to pay all or a portion of a claim, the reinsurance obligation shall be due and owing to the Director on the basis of claims allowed in the liquidation proceeding.  The reinsurer shall submit the amounts due and owing directly to the company as ceding insurer or to the Director.(b) The Director shall give written notice or arrange     for the giving of written notice to reinsurers or their agents of the pendency of a claim against the company indicating the policy or bond reinsured within a reasonable time after the claim is filed.  The reinsurer may interpose, at its own expense, in the proceeding where the claim is to be adjudicated, any defenses that it may deem available to the company or the Director.   (Source: P.A. 88-297; 89-206, eff. 7-21-95.)