2023 Illinois Compiled Statutes › Chapter 215 - INSURANCE › 215 ILCS 5/ - Illinois Insurance Code. › Article XIII 1/2 - Uniform Provisions For Liquidation

(215 ILCS 5/Art. XIII.5 heading)
ARTICLE XIII 1/2.  
		UNIFORM PROVISIONS FOR LIQUIDATION
(215 ILCS 5/221.1) (from Ch. 73, par. 833.1)
Sec. 221.1. 
		Definitions.
For the purposes of Sections 221.1 to 221.10, both inclusive, the
following terms have the following meanings;
(1) "Reciprocal State" means a state wherein:
(a) it is provided by law that the insurance supervisory or other
administrative agency of the state shall conduct or wind up the affairs of
delinquent companies under judicial supervision and shall be vested with
title to all of the assets of any domestic company against which a
delinquency proceeding has been commenced, and
(b) in substance and effect the provisions of Sections 221.1 to 221.10,
both inclusive are in force.
(2) "Insurer" means any person, firm, corporation, association, or
aggregation of persons doing or proposing to do an insurance business and
subject to the insurance supervisory authority of, or to liquidation,
rehabilitation, reorganization or conservation by, the commissioner of
insurance or equivalent insurance supervisory official of the state.
(3) "Delinquency proceeding" means any proceeding commenced against an
insurer for the purpose of liquidating, rehabilitating, reorganizing or
conserving such insurer.
(4) "Domiciliary state" means the state in which an insurer is
incorporated or organized or, in the case of an insurer incorporated or
organized in a foreign country, the state in which such insurer, having
become authorized to do business in such state has, at the commencement of
delinquency proceedings the largest amount of its trusteed assets and
deposits for the benefit of its policy holder or policy holders and
creditors in the United States; and "domiciliary insurer" means an insurer
in its domiciliary state.
(5) "Ancillary state" means any state other than a domiciliary state.
(6) "General Assets" means all property, real or personal, not
specifically mortgaged, pledged, deposited as security or otherwise
encumbered, and as to such specifically encumbered property the term
includes all in excess of the amount necessary to discharge the sum or sums
secured.
(7) "Preferred claim" means any claim with respect to which the law of a
state or of the United States accords priority of payment from the general
assets of the insurer.
(8) "Special deposit claim" means any claims secured generally by a
deposit of a fund or property or bond which deposit has been made to secure
the payment of all claims of a particular description or all claims of
persons resident in a particular state. The term does not include claims
which are secured by deposit for the benefit or protection of all claimants
against the insurer in the United States.
(9) "Secured claim" means any claim secured individually by mortgage,
trust, deed, pledge, deposit as security, escrow or otherwise. The term
also includes claims which prior to the commencement of delinquency
proceedings in the state of the insurer's domicile have become liens upon
specific assets by reason of judicial process.
(10) "State" means any state or territory of the United States, and the
District of Columbia.
(11) "Foreign country" means territory outside of any state, as defined.
(12) "Receiver" means receiver, liquidator, rehabilitator or conservator
as the context may require.
In addition to and notwithstanding any other provisions of law, this
Article shall apply to the administration by the Director of the affairs of
delinquent domestic companies with respect to matters affecting or related
to reciprocal states, and shall also apply to matters affecting or related
to this State in the administration by the Director of the affairs of
delinquent companies domiciled in reciprocal states and authorized to
transact business in this State.
(Source: Laws 1941, vol. 1, p. 832.)
(215 ILCS 5/221.2) (from Ch. 73, par. 833.2)
Sec. 221.2. 
		Ancillary delinquency proceedings.
After the commencement of delinquency proceedings in a reciprocal state
against an insurer domiciliary in such state, a court of competent
jurisdiction in this State shall on the petition of the Director of
Insurance
of this State appoint such Director of Insurance as ancillary receiver in
this State of such insurer. The Director of Insurance shall file such
petition (a) if he finds that there are sufficient assets of such insurer
located in this State to justify the appointment of an ancillary receiver
or (b) if 10 or more persons resident in a state having claims
against
such insurer file a petition or petitions in writing with the Director
requesting the appointment of such ancillary receiver. As ancillary
receiver the Director shall have the right to sue for and reduce to
possession the assets of such insurer in this State, and, subject to the
rights of the domiciliary receiver, he shall have the same powers and be
subject to the same duties with respect to such assets, as are possessed by
a receiver of a domiciliary insurer under the laws of this State.  The
domiciliary receiver of an insurer domiciled in a reciprocal state shall,
except as to special deposits and security on secured claims pursuant to
Section 221.7, be vested by operation of law with the title to all of the
assets, property, contracts, agents' balances, and all of the books, accounts
and other records of the insurer located in this State; and shall have the
immediate right to recover balances due from resident agents and to obtain
possession of any books and records of the insurer found in this State.
(Source: P.A. 89-206, eff. 7-21-95.)
(215 ILCS 5/221.3) (from Ch. 73, par. 833.3)
Sec. 221.3. 
		
		Filing  and proving of claims of non-residents against delinquent domiciliary
insurers.
In any delinquency proceeding begun in this state against a domiciliary
insurer of this state, claimants residing in a reciprocal ancillary state
may file claims either with the ancillary receiver, if any, or with the
domiciliary receiver. All such claims must be filed on or before the last
date fixed for the filing of claims in the domiciliary delinquency
proceedings.
In any such proceeding controverted claims belonging to claimants
residing in ancillary states may either (a) be proved in this state as
provided by law, or (b) if ancillary proceedings have been commenced in
such ancillary state, may be proved in such ancillary proceedings. In the
event a claimant elects to prove his claim in ancillary proceedings, and,
if notice of the claim and opportunity to appear and be heard is afforded
the domiciliary receiver of this state, such claim, when allowed by the
court in the ancillary state, shall be accepted in this state as final and
conclusive as to its amount, and shall also be accepted as final and
conclusive as to its priority, if any, as against special deposits or other
security located within the ancillary state.
(Source: Laws 1941, vol. 1, p. 832.)
(215 ILCS 5/221.4) (from Ch. 73, par. 833.4)
Sec. 221.4. 
		
		Proof of
claims of residents in connection with delinquency proceedings in other
states.
If a delinquency proceeding is commenced in a reciprocal state against
an insurer domiciliary in such state, claimants against such insurer who
reside within this State may file claims either with the ancillary
receiver, if any, appointed in this State or with the domiciliary receiver.
All such claims must be filed on or before the last date fixed for the
filing of claims in the domiciliary delinquency proceeding.
In any such proceeding controverted claims belonging to claimants
residing in this State may either (a) be proved in the domiciliary state as
provided by the law of such state, or (b) if ancillary proceedings have
been commenced in this State, be proved in such ancillary proceedings. In
the event that any such claimant elects to prove his claim in this State,
he shall file his claim with the ancillary receiver in the manner provided
by the law of this State for the proving of claims against domiciliary
insurers, and he shall give, or cause to be given, at least 40 days prior to
the date of hearing, notice to the receiver
in the domiciliary state, either by mail or otherwise in writing that such
claim is being made to such ancillary receiver and the nature and the
amount thereof. The domiciliary receiver shall be entitled to appear or to
be represented in any proceeding in this State involving the adjudication
of the claim. The allowance of the claim by the courts of this State shall
be final and conclusive both as to its amount and also as to its priority,
if any, against special deposits or other security located within this
State.
(Source: P.A. 89-206, eff. 7-21-95.)
(215 ILCS 5/221.5) (from Ch. 73, par. 833.5)
Sec. 221.5. 
		Priority  of preferred claims.
In any delinquency proceeding against a domiciliary insurer of this
state, claims owing to residents of ancillary reciprocal states shall be
deemed preferred claims if, and only if, like claims are preferred under
the laws of this state. All such claims whether owing to residents or
non-residents shall be given equal priority of payment from general assets.
No law of an ancillary state providing for preferred claims against the
general assets of insurers shall be recognized as against the assets of
delinquent domiciliary insurers of this state regardless of where such
assets may be located.
In any delinquency proceeding against an insurer domiciliary in a
reciprocal state, claims owing to residents of this state shall be
preferred if, and only if, like claims are preferred by the laws of such
other state.
(Source: Laws 1941, vol. 1, p. 832.)
(215 ILCS 5/221.6) (from Ch. 73, par. 833.6)
Sec. 221.6. 
		Priority  of special deposit claims.
The owners of special deposit claims against an insurer for which a
receiver has been appointed in a delinquency proceeding in this or any
reciprocal state shall be given priority against their several special
deposits in accordance with the provisions of the statutes requiring the
creation and maintenance of such special deposits. If there be a deficiency
in any such special deposit so that the claims secured thereby are not
fully discharged therefrom, the claimants may share in the general assets,
but such sharing shall be deferred until general creditors, and also
claimants against other special deposits who have received a small
percentage from their respective special deposits, have been paid
percentages of their claims equal to the percentage paid from such special
deposit, it being the purpose and intent of this provision to equalize to
this extent the advantage gained by the security provided by such special
deposits.
(Source: Laws 1941, vol. 1, p. 832.)
(215 ILCS 5/221.7) (from Ch. 73, par. 833.7)
Sec. 221.7. 
		
		Priority
of secured claims.
The owner of a secured claim against an insurer for which a receiver has
been appointed in a delinquency proceeding in this or any reciprocal state
may surrender his security and file his claim as a general creditor, or
such secured claim may be discharged by resort to the security, in which
case the deficiency, if any, shall be treated as a claim against the
general assets of the insurer on the same basis as claims of unsecured
creditors. If the amount of the deficiency has been adjudicated in ancillary
proceedings as provided in this Article, that amount shall be conclusive;
otherwise the amount of such deficiency shall be ascertained and determined in
the delinquency proceeding in the domiciliary state of such insurer.
(Source: P.A. 89-206, eff. 7-21-95.)
(215 ILCS 5/221.8) (from Ch. 73, par. 833.8)
Sec. 221.8. 
		
		Right of
domiciliary receiver to residium of assets of insurers domiciled in
ancillary states.
The ancillary receiver of assets in this State of insurers domiciliary
in reciprocal states and subject to delinquency proceedings therein shall,
as soon as practicable, arrange the liquidation or other disposition of
special deposit claims and secured claims proved in the ancillary
proceedings in this State, and all remaining assets, after payment of
expenses he shall promptly transfer to the domiciliary receiver.
The domiciliary receiver of a reciprocal state may sue the ancillary
receiver of this State in the courts of this State for the purpose of
collecting or obtaining any assets of the insurer to which he or she may be
entitled under the laws of this State,
and, if no
ancillary receiver be appointed in this State, such domiciliary receiver
may collect or reduce to possession, in this State, and may sue in the
courts of this State to obtain, any assets of such delinquent insurer
located in this State, to which he or she may be entitled under the laws of
this State.
(Source: P.A. 89-206, eff. 7-21-95.)
(215 ILCS 5/221.9) (from Ch. 73, par. 833.9)
Sec. 221.9. 
		Attachment and garnishment of assets.
In the event of the commencement of delinquency proceedings in any
reciprocal state no action or proceeding in the nature of an attachment,
garnishment, execution or otherwise, shall be commenced in the courts of
this state against such delinquent insurer or its assets.
(Source: Laws 1941, vol. 1, p. 832.)
(215 ILCS 5/221.10) (from Ch. 73, par. 833.10)
Sec. 221.10. 
		Declaration of purpose.
The purpose of Sections 221.1 to 221.10, both inclusive is to promote
uniformity in the liquidation, rehabilitation, reorganization or
conservation of insurers doing business in more than one state. It is
intended that Sections 221.1 to 221.10, both inclusive shall be liberally
construed to the end that so far as possible the assets of such insurers
shall be equally and uniformly conserved in all states, and that claimants
against such insurers shall receive equal and uniform treatment
irrespective of residence or the place of the acts or contracts upon which
their claims are based. The provisions of Sections 221.1 to 221.10, both
inclusive shall be effective only with respect to this state and other
states in which (a) it is provided by law that only the Insurance
Commissioner or equivalent supervisory official of the State shall be
vested with title to the assets of, and shall wind up the affairs of,
delinquent insurers under judicial supervision; and (b) in substance and
effect the provisions of Sections 221.1 to 221.10, both inclusive, are in
force. The provisions of Sections 221.1 to 221.10, both inclusive, insofar
as applicable to any insurer incorporated or organized in a foreign
country, shall apply only to the assets, liabilities and business of such
insurer within the several states.
(Source: Laws 1941, vol. 1, p. 832.)
(215 ILCS 5/221.11) (from Ch. 73, par. 833.11)
Sec. 221.11. 
		
		Proceedings governed by Civil Practice Law and
Supreme Court Rules.)
The rules of practice, the course and method of procedure in circuit
courts as established by the Civil Practice Law and Supreme
Court Rules and any
amendments thereto are adopted for the purposes of this Article except
where other procedures or rules are in this Article expressly provided.
Appeals may be taken as in other civil cases.
(Source: P.A. 82-783.)
(215 ILCS 5/221.12) (from Ch. 73, par. 833.12)
Sec. 221.12. 
		
		Sections 211, 212, 213, 214, 215, 216, 217, 218, 219 and 220,  each inclusive, are repealed; provided, however, that every proceeding
heretofore commenced under such sections shall be continued as though such
sections had not been repealed.
(Source: Laws 1941, vol. 1, p. 832.)
(215 ILCS 5/221.13) (from Ch. 73, par. 833.13)
Sec. 221.13. 
		Uniformity of interpretation.
Sections 221.1 to 221.12 each inclusive, of this Article shall be so
interpreted and construed as to effectuate their general purpose to make
uniform the law of those states that enact the Uniform Reciprocal
Liquidation Act.
(Source: Laws 1941, vol. 1, p. 832.)