2023 Illinois Compiled Statutes › Chapter 45 - INTERSTATE COMPACTS › 45 ILCS 160/ - Interstate Insurance Receivership Compact Act.

(45 ILCS 160/1)
Sec. 1. 
		Short title. 
		This Act may be cited as the Interstate Insurance Receivership Compact Act.
(Source: P.A. 89-247, eff. 1-1-96.)
(45 ILCS 160/5)
Sec. 5. Ratification of Compact. The State of Illinois ratifies and
approves the Interstate Insurance Receivership Compact and enters into that
Compact with all other jurisdictions legally joining in it in substantially the
following form:
ARTICLE I. PURPOSES
The purposes of this Compact are, through means of joint and cooperative
action among the compacting states:
(1) to promote, develop and facilitate orderly, efficient, cost-effective,
and uniform insurer receivership laws and operations;
(2) to coordinate interaction between insurer receivership and Guaranty
Association operations;
(3) to create the Interstate Insurance Receivership Commission; and
(4) to perform these and such other related functions as may be
consistent with the state regulation of the business of insurance pursuant to
the McCarran-Ferguson Act.
ARTICLE II. DEFINITIONS
For the purposes of this Compact:
(1) "By-laws" means those by-laws prescribed by the Commission for its
governance or for directing or controlling the Commission's actions or
conduct.
(2) "Compacting state" means any state which has enacted enabling
legislation for this Compact.
(3) "Commission" means the Interstate Insurance Receivership Commission
established by this Compact.
(4) "Commissioner" means the chief insurance regulatory official of a state.
(5) "Deputy Receiver" means a person appointed or retained by a
Receiver and who is the Receiver's duly authorized representative for
administering one or more estates.
(6) "Domiciliary state" means the state in which an insurer is incorporated
or organized; or, in the case of an alien insurer, its state of entry; or in
the case of an unauthorized insurer not incorporated, organized, or entered in
any state, a state where the insurer is engaged in or doing business.
(7) "Estate" means the assets and liabilities of any insurer in
receivership.
(8) "Guaranty Association" means an insurance guaranty fund or association
or any similar entity now or hereafter created by statute in a compacting
state, other than a receivership, to pay or assume, in whole or in part, the
contractual claim obligations of insolvent insurers.
(9) "Insurer" means any person or entity that has done, purports to do, is
doing, or is licensed to do any insurance or reinsurance business, or is or has
been subject to the authority of, or to liquidation, rehabilitation,
supervision, conservation, or ancillary receivership by, any Commissioner.
(10) "Member" means the Commissioner of a compacting state or his or her
designee, who shall be a person officially connected with the Commissioner
and who is wholly or principally employed by the Commissioner.
(11) "Non-compacting state" means a state which has not enacted enabling
legislation for this Compact.
(12) "Operating procedures" means procedures promulgated by the Commission
implementing a rule, an existing law in a compacting state, or a provision
of this Compact.
(13) "Publication" means the act of publishing in the official state
publication in a compacting state or in such other publication as may be
established by the Commission.
(14) "Receiver" means receiver, liquidator, rehabilitator, conservator, or
ancillary receiver as the context requires.
(15) "Receivership" means any liquidation, rehabilitation, conservation, or
ancillary receivership proceeding as the context requires.
(16) "Rules" means acts of the Commission, duly promulgated pursuant to
Article
VII
of this Compact, substantially affecting interested parties in addition to the
Commission, which shall have the force and effect of law in the compacting
states.
(17) "State" means any state, district or territory of the United States of
America.
ARTICLE III. ESTABLISHMENT OF THE COMMISSION AND VENUE
(1) The compacting states hereby create and establish an entity known as the
Interstate Insurance Receivership Commission.
(2) The Commission is a body corporate of each compacting state.
(3) The Commission is a not-for-profit entity, separate and distinct from
the compacting states.
(4) The Commission is solely responsible for its liabilities except as
otherwise provided in this Compact.
(5) Except as otherwise specifically provided in state or federal law in the
jurisdiction where the Commission's principal office is located or
where the Commission is acting as Receiver, venue is proper and judicial
proceedings by or against the Commission shall be brought in a court of
competent jurisdiction where the Commission's principal office is located.
ARTICLE IV. POWERS OF THE COMMISSION
The Commission shall have all of the following powers:
(1) To promulgate rules which shall have the force and effect of statutory
law and shall be binding in the compacting
states to the extent and in the manner provided in this Compact.
(2) To promulgate operating procedures which shall be binding in the
compacting states to the extent and in the manner provided in this
Compact.
(3) To oversee, supervise, and coordinate the activities of receivers in
compacting states.
(4) To act as Receiver of insurers organized under the laws of, engaged
in, or doing the business of insurance in a compacting state upon
the request of the Commissioner of such state or when grounds for
receivership by the Commission exist under Article IX of this
Compact.
(5) To act as Deputy Receiver of insurers organized under the laws of,
engaged in, or doing the business of insurance in a non-compacting
state in accordance with Article IX of this Compact.
(6) To act as ancillary Receiver in a compacting state of an insurer
domiciled in a non-compacting state.
(7) To monitor the activities and functions of Guaranty
Associations in the compacting states.
(8) To delegate its operating authority or functions; provided, that its
rulemaking authority under Article VII of this Compact shall not
be delegated.
(9) To bring or prosecute legal proceedings or actions in its name as the
Commission, or in the name of the Commission acting as Receiver.
(10) To bring or prosecute legal proceedings or actions as Receiver on
behalf of an
estate or its policyholders and creditors; provided, that any Guaranty
Association's standing to sue or be sued under applicable law shall not be
affected.
(11) To issue subpoenas requiring the attendance and testimony of
witnesses and the production of evidence.
(12) To establish and maintain offices.
(13) To purchase and maintain insurance and bonds.
(14) To borrow, accept, or contract for services of personnel including,
but not limited to, members and their staff.
(15) To elect or appoint such officers, attorneys, employees, or agents,
and to fix their compensation, define their duties, and determine their
qualifications; and to establish the Commission's personnel policies and
programs relating to, among other things, conflicts of interest, rates of
compensation, and qualifications of personnel.
(16) To accept any and all donations and grants of money, equipment,
supplies, materials, and services, and to receive, utilize, and dispose
of the same.
(17) To lease, purchase, accept gifts or donations of, or otherwise to own,
hold, improve or use, any property, real, personal, or mixed.
(18) To sell, convey, mortgage, pledge, lease, exchange, abandon, or
otherwise dispose of any property, real, personal, or mixed.
(19) To enforce compliance with Commission rules, operating
procedures, and by-laws.
(20) To provide for dispute resolution among compacting states and
Receivers.
(21) To represent and advise compacting states on issues relating to
insurers domiciled or doing business in non-compacting jurisdictions,
consistent with the purposes of this compact.
(22) To provide advice and training to receivership personnel of
compacting states, and to be a resource for compacting states by
maintaining a reference library of relevant materials.
(23) To establish a budget and make expenditures.
(24) To borrow money.
(25) To appoint committees including, but not limited to, an industry
advisory committee and an executive committee of members.
(26) To provide and receive information relating to receiverships and
Guaranty Associations and to cooperate with law enforcement agencies.
(27) To adopt and use a corporate seal.
(28) To perform such other functions as may be necessary or appropriate
to achieve the purposes of this Compact as may be consistent
with the state regulation of the business of insurance pursuant
to the McCarran-Ferguson
						
						Act.
ARTICLE V. ORGANIZATION OF THE COMMISSION
Section A. Membership, voting, and by-laws.
(1) A compacting state shall have and be limited to one member.
A member shall be qualified to serve in such capacity under or pursuant to the
applicable law of the compacting state.  A compacting state retains the
discretionary right to determine the due election or appointment
and qualification of its own Commissioner, and to fill all vacancies of its
member.
(2) A member shall be entitled to one vote.
(3) The Commission shall, by a majority of the members, prescribe by-laws
to govern its conduct as may be necessary or appropriate to
carry out the purposes of the Compact, including, but not limited
to:
(a) establishing the fiscal year of the Commission;
(b) providing reasonable standards and procedures:
(i) for the establishment of committees, and (ii) governing any general or
specific delegation of any authority or function of the Commission;
(c) providing reasonable procedures for calling and     conducting meetings of the Commission and for ensuring reasonable notice of each such meeting;
(d) establishing the titles and responsibilities of     the officers of the Commission;
(e) providing reasonable standards and procedures for     the establishment of the personnel policies and programs of the Commission.  Notwithstanding any civil service or other similar laws of any compacting state, the by-laws shall exclusively govern the personnel policies and programs of the Commission; and
(f) providing a mechanism for winding up the     operations of the Commission and the equitable return of any surplus funds that may exist after the dissolution of the Compact after the payment or reserving of all of its debts and obligations, or both.
Section B. Officers and personnel.
(1) The Commission shall, by a majority of the members, elect annually
from among its members a chairperson and a vice chairperson,
each
of whom shall have such authorities and duties as may be
specified
in the by-laws. The chairperson or, in his or her absence or
disability, a member designated in accordance with the by-laws,
shall preside at all meetings of the Commission.  The officers
so elected shall serve without compensation or remuneration from
the Commission; provided, that subject to the availability of
budgeted funds, the officers shall be reimbursed for any actual and
necessary costs and
expenses incurred by them in the performance of their duties and
responsibilities as officers of the Commission.
(2) The Commission may, by a majority of the members, appoint or
retain an executive director for such period, upon such terms and
conditions and for such compensation as the Commission may deem
appropriate. The executive director shall serve as secretary to the
Commission, but shall not be a member of the Commission.  The
executive director shall hire and supervise such other staff as may
be authorized by the Commission.
Section C.  Corporate records of the Commission.
The Commission shall maintain its corporate books and records in
accordance with the by-laws.
Section D. Qualified immunity, defense, and indemnification.
(1) The members, officers, executive director, and employees of the
Commission shall be immune from suit and liability, either personally or in
their official capacity, for any claim for damage to or loss of property or
personal injury or other civil liability caused or arising out of or relating
to any actual or alleged act, error, or omission that occurred, or that such
person had a reasonable basis for believing occurred within
the scope of Commission employment, duties, or responsibilities;
provided, that nothing in this paragraph shall be construed to protect
any such person from suit or liability, or both, for any damage, loss, injury,
or liability caused by the intentional or willful and wanton misconduct
of any such person, or to protect the Commission acting as Receiver
under Article IX of this Compact.
(2) The Commission shall defend any Commissioner of a compacting
state, his or her representatives or employees, or the
Commission's representatives or employees in any civil action
seeking to impose liability against such person arising out of or relating to
any actual
or alleged act, error, or omission that occurred within the scope of Commission
employment, duties, or responsibilities or that such person
had a reasonable basis for believing occurred within the scope of
Commission employment, duties, or responsibilities; provided, that the
actual or alleged act, error, or omission did not result from gross
negligence or intentional wrongdoing on the part of such person.
(3) The Commission shall indemnify and hold the Commissioner of a
compacting state, his or her representatives or employees, or the
Commission's representatives or employees harmless in the amount
of any settlement or judgment obtained against such person
arising
out of or relating to any actual or alleged act, error, or omission that
occurred within the scope of Commission employment, duties, or responsibilities
or that such person had a reasonable basis for believing occurred
within the scope of Commission employment, duties, or
responsibilities; provided, that the actual or alleged act,
error, or
omission did not result from gross negligence or intentional
wrongdoing on the part of such person.
(4) The costs and expenses of defense and indemnification of the Commission
acting as Receiver of an estate shall be paid as administrative expenses from
the assets of that estate unless such costs and expenses are covered by
insurance maintained by the Commission.
ARTICLE VI. MEETINGS AND ACTS OF THE COMMISSION
(1) The Commission shall meet and take such actions as are consistent with
the provisions of this Compact.
(2) Except as otherwise provided in this Compact and unless a greater
percentage is required by the by-laws, in order to constitute an act of the
Commission, such act shall have been taken at a meeting of the
Commission and shall have received an affirmative vote of a majority of the
members.
(3) Each member of the Commission shall have the right and power to cast a
vote to which that compacting state is entitled and to participate in the
business and affairs of the Commission. A member shall vote in person and
shall not delegate his or her vote to another member. The by-laws may
provide for members' participation in meetings by telephone or other means
of telecommunication.
(4) The Commission shall meet at least once during each calendar year. The
chairperson of the Commission may call additional meetings at any time
and, upon the request of a majority of the members, shall call additional
meetings.
(5) The Commission's rules shall establish conditions and procedures under
which the Commission shall make its information and official records
available to the public for inspection or copying. The Commission may
exempt from disclosure any information or official records to the extent
disclosure would adversely affect personal privacy rights or proprietary
interests. In
promulgating such rules, the Commission may consider any special circumstances
pertaining to insurer insolvencies, but shall be guided by the principles
embodied in state and federal freedom of information laws.  The
Commission may promulgate additional rules under which it may make
available to law enforcement agencies records and information otherwise
exempt from disclosure and may enter into agreements with law
enforcement agencies to receive or exchange information or records subject
to nondisclosure and confidentiality provisions.
(6) Public notice shall be given of all meetings, and all meetings shall be
open to the public, except as set forth in the rules or as otherwise provided
in this Compact.  The Commission shall promulgate rules consistent with the
principles contained in the federal Government in Sunshine Act, 5 U.S.C.
Section 552b, as may be amended. The Commission and any of its committees may
close a meeting to the public where it determines by two-thirds vote that an
open meeting would be likely to:
(a) relate solely to the Commission's internal     personnel practices and procedures;
(b) disclose matters specifically exempted from     disclosure by statute;
(c) disclose trade secrets or commercial or financial     information which is privileged or confidential;
(d) involve accusing any person of a crime or     formally censuring any person;
(e) disclose information of a personal nature where     disclosure would constitute a clearly unwarranted invasion of personal privacy;
(f) disclose investigatory records compiled for law     enforcement purposes;
(g) disclose information contained in or related to     examination, operating, or condition reports prepared by, on behalf of, or for the use of the Commission with respect to a regulated entity for the purpose of regulation or supervision of such entity;
(h) disclose information, the premature disclosure of     which would significantly endanger the stability of a regulated entity;
(i) specifically relate to the Commission's issuance     of a subpoena or its participation in a civil action or proceeding.
(7) For every meeting closed pursuant to paragraph (6), the Commission's
chief
legal officer shall publicly certify that, in his or her opinion, the meeting
may be closed to the public and shall reference each relevant exemptive
provision. The Commission shall keep minutes which shall fully and
clearly describe all matters discussed in any meeting and shall provide a
full and accurate summary of any actions taken and the reasons therefor,
including a description of each of the views expressed on any item and the
record of any roll call vote (reflected in the vote of each member on the
question). All documents considered in connection with any action shall be
identified in such minutes.
ARTICLE VII. RULEMAKING FUNCTIONS OF THE COMMISSION
(1) The Commission shall promulgate rules and operating procedures in order
to effectively and efficiently achieve the purposes of this Compact; provided,
that the Commission shall not promulgate any rules: (i) directly relating to
Guaranty
Associations including, but not limited to, rules governing coverage, funding,
or assessment mechanisms, or (ii)
(except pursuant
to rules promulgated under Article VII(3) of this Compact)
altering the statutory priorities for distributing assets out of an estate.
(2) Rulemaking shall occur pursuant to the criteria set forth in this
Article
and
the rules and operating procedures promulgated pursuant thereto. Such
rulemaking shall substantially conform to the principles of the federal
Administrative Procedure Act, 5 U.S.C.S. Section 551 et seq. and the Federal
Advisory
Committee Act, 5 U.S.C.S. app. 2, Section 1 et seq., as may be amended.
(3) Other than the promulgation of such rules as are necessary for the
orderly
operation of the Commission, the first rule to be considered by the
Commission shall be uniform provisions governing insurer receiverships
including, but not limited to, provisions requiring compacting states to
implement, execute, and administer in a fair, just, effective, and efficient
manner rules and operating procedures relating to receiverships.  The
Commission shall within 3 years of the adoption of this Compact by 2
or more states, promulgate such uniform provisions through the rulemaking
process. Such uniform provisions shall become law in all of the compacting
states upon legislative enactment in a majority of the compacting states.
(4) All rules and amendments shall become binding as of the date specified
in each rule or amendment; provided, that if a compacting state expressly
rejects such rule or amendment through legislative enactment as of the
expiration of the second full calendar year after such rule is promulgated,
such rule or amendment shall
have no further force or effect in the rejecting compacting state. If a
majority of compacting states reject a rule, then such rule shall have no
further force or effect in any compacting state.
(5) When promulgating a rule or operating procedure, the Commission shall:
(a) effect publication of the proposed rulemaking,     stating with particularity the text of the rule or operating procedure which is proposed and the reason for the proposed rule or operating procedure;
(b) allow persons to submit written data, facts,     opinions and arguments, which information the Commission shall make publicly available;
(c) provide an opportunity for an informal hearing;     and
(d)  promulgate a final rule or operating procedure     and its effective date, if appropriate, based on the rulemaking record.
(6) Not later than 60 days after a rule or operating procedure is
promulgated, any interested person may file a petition in a court of
competent jurisdiction where the Commission's principal office is located for
judicial review of such rule or operating procedure. If the court finds that
the Commission's action is not supported by substantial evidence in the
rulemaking record, the court shall hold the rule unlawful and set it aside.
ARTICLE VIII. OVERSIGHT AND
DISPUTE RESOLUTION BY THE COMMISSION
Section A. Oversight.
(1) The Commission shall oversee the administration and operations of
receiverships in compacting states and shall monitor receiverships being
administered in
non-compacting
states which may significantly affect compacting states.
(2) To aid its monitoring, oversight, and coordination responsibilities, the
Commission shall establish operating procedures requiring each member
to submit written reports to the Commission as follows:
(a) An initial report to the Commission upon a     finding or other official action by the compacting state that grounds exist for receivership of an insurer doing business in more than one state. Thereafter, reports shall be submitted periodically and as otherwise required pursuant to the Commission's operating procedures. The Commission shall be entitled to receive notice of, and shall have standing to appear in, compacting states' receiverships.
(b) An initial report of the status of an insurer     within a reasonable time after the initiation of a receivership.
(3) The Commission shall promulgate operating procedures requiring Receivers
to submit to the Commission periodic written reports and such additional
information and documentation as the Commission may reasonably request.
Each compacting state's Receivers shall establish the capability to obtain
and provide all such records, data, and information required by the Commission
in accordance with the Commission's operating procedures.
(4) Except as to privileged records, data, and information, the laws of any
compacting state pertaining to confidentiality or nondisclosure shall not
relieve any compacting state Commissioner of the responsibility to disclose
any relevant records, data, or information to the Commission; provided, that
disclosure to the Commission shall not be deemed to waive or otherwise
affect any confidentiality requirement; and further provided, that the
Commission shall be subject to the compacting state's laws pertaining to
confidentiality and nondisclosure with respect to all such records, data, and
information in its possession.
(5) The courts and executive agencies in each compacting state shall enforce
this Compact and shall take all actions necessary and appropriate to
effectuate the Compact's purposes and intent.  In any receivership or other
judicial or administrative proceeding in a compacting state pertaining to the
subject matter of this Compact which may affect the powers, responsibilities,
or actions of the Commission, the Commission shall be entitled to receive
all service of process in any such proceeding and shall have standing to
intervene in the receivership or proceeding for all purposes.
(6) The Commission shall analyze and correlate records, data, information,
and
reports received from Receivers and Guaranty Associations and shall make
recommendations for improving their performance to the compacting
states. The Commission shall include summary information and data
regarding its oversight functions in its annual report.
Section B. Dispute resolution.
(1) The Commission shall attempt, upon the request of a member, to resolve
any disputes or other issues which are subject to this Compact and
which
may arise among compacting states and non-compacting states.
(2) The compacting states shall report to the Commission on issues or
activities of concern to them and cooperate with and support the
Commission in the discharge of its duties and responsibilities.
(3) The Commission shall promulgate an operating procedure providing for
binding dispute resolution for disputes among Receivers.
(4) The Commission shall facilitate voluntary dispute resolution for
disputes
among Guaranty Associations and Receivers.
ARTICLE IX. RECEIVERSHIP FUNCTIONS OF THE COMMISSION
(1) The Commission has authority to act as Receiver of any insurer
domiciled,
engaged in, or doing business in a compacting state upon the request of
the Commissioner of such compacting state or as otherwise provided in
this Compact.
(a) The Commission as Receiver shall have all powers     and duties pursuant to the receivership laws of the domiciliary state.
(b) The Commission  shall maintain accounts of     receipts and disbursements of the estates for which it is acting as Receiver, consistent with the accounting practices and procedures set forth in the by-laws.
(c) The Commission shall cause an annual audit of     each estate for which it is acting as Receiver, to be conducted by an independent certified public accountant.  The costs and expenses of such audit shall be paid as administrative expenses from the assets of the estate.  The Commission shall not cause an audit to be conducted of any estate that lacks sufficient assets to conduct such audit.
(d) The Commission as Receiver is authorized to     delegate its receivership duties and functions and to effectuate such delegation through contracts with others.
(2) The Commission shall act as Receiver of any insurer domiciled or doing
business in a compacting state in the event that the member acting as
Receiver in that compacting state fails to comply with duly promulgated
Commission rules or operating procedures. The Commission shall notify
such member in writing of noncompliance with Commission rules
or operating procedures. If the member acting as Receiver fails to remedy
such noncompliance within 10 days after receipt of such
notification, the Commission may petition the supervising court before which
such receivership is pending for an order substituting and appointing the
Commission as Receiver of the estate.
(3) The Commission shall not act as Receiver of an estate which appears to
lack sufficient assets to fund such receivership unless the compacting
state makes provisions for the payment of the estate's administrative
expenses satisfactory to the Commission.
(4) The Commission may act as Deputy Receiver for any insurer domiciled or
doing business in a non-compacting state in accordance with such state's
laws upon request of that non-compacting state's Commissioner and
approval of the Commission.
(5) With respect to receiverships pending in a compacting state on the
effective date of the enactment of this Compact by the compacting state:
(a) the Commission may act as Receiver of an insurer     upon the request of that compacting state's member and approval of the Commission; and
(b) the Commission shall oversee, monitor, and     coordinate the activities of all receiverships pending in that compacting state regardless whether the Commission is acting as Receiver of estates in such state.
ARTICLE X. FINANCE
(1) The Commission shall pay or provide for the payment of the reasonable
expenses of its establishment and organization.
(2) Except as otherwise provided in this Compact or by act of the
Commission,
the costs and expenses of each compacting state shall be the sole and exclusive
responsibility of the respective compacting state. The Commission may pay
or provide for actual and necessary costs and expenses for attendance of its
members
at official meetings of the Commission or its designated committees.
(3) The Commission shall levy on and collect an annual assessment from each
compacting state and each insurer authorized to do business in a
compacting state, and writing direct insurance, to cover the cost of the
internal operations and activities
of the Commission and its staff in a total amount sufficient to cover the
Commission's annual budget.
(a) The aggregate annual assessment amount shall be     allocated 75% to insurers, hereinafter referred to as the "insurers' portion", and 25% to compacting states, hereinafter referred to as the "compacting states' portion". The insurer portion shall be allocated to each insurer by the percentage derived from a fraction, the numerator of which shall be the gross direct written premium received on that insurer's business in all compacting states and the denominator of which shall be the gross direct written premium received by all insurers on business in all compacting states. The compacting states' portion shall be allocated to each compacting state by the percentage derived from a fraction, the numerator of which shall be the gross direct written premium received by all insurers on business in that compacting state and the denominator shall be the gross direct written premium received on all insurers on business in all compacting states.  A compacting state's portion shall be funded as designated by that state's legislature. In no event shall an insurer's assessment be less than $50 or more than $25,000; provided, that affiliated insurers' combined assessments shall not exceed $50,000. Upon the request of an insurer, the Commission may exempt or defer the assessment of any insurer if such assessment would cause the insurer's financial impairment.
(b) These assessments shall not be used to pay any     costs or expenses incurred by the Commission and its staff acting as Receiver of estates. Such costs and expenses shall be paid as administrative expenses from the assets of the estates as provided by law, except as otherwise provided in this Compact.
(c) An insurer authorized to do business in a     compacting state shall timely pay assessments to the Commission. Failure to pay such assessments shall not be grounds for the revocation, suspension, or denial of an insurer's authority to do business, but shall subject the insurer to suit by the Commission for recovery of any assessment due, attorneys' fees, and costs, together with interest from the date the assessment is due at a rate of 10% per annum, and to civil forfeiture in an amount to be determined by the Commissioner of that compacting state in which the insurer received the greatest premium in the year next preceding the first year for which the insurer shall be delinquent in payment of assessments.
(4) The Commission shall be reimbursed in the following manner for the costs
and expenses incurred by the Commission and its staff acting as Receiver
of estates to the extent that an insurer's assets may be insufficient for the
effective administration of its estate:
(a) if the insurer is domiciled in a compacting     state, the estate shall be closed unless that compacting state makes provisions for reimbursing the Commission; and
(b) if the insurer is unauthorized to do business in     a compacting state or if the insurer is domiciled in a non-compacting state and subject to ancillary receivership, then the Commission and such state shall make provisions for reimbursing the Commission prior to the Commission becoming Receiver of such insurer.
(5) To fund the cost of the initial operations of the Commission until its
first
annual budget is adopted and related assessments have been made,
contributions from compacting states and others may be accepted and a one time
assessment on insurers doing a direct insurance business in the compacting
states may be
made not to exceed $450 per insurer.
(6) The Commission's adopted budget for a fiscal year shall not be approved
until it has been subject to notice and comment as set forth in Article VII of
this Compact. The budget shall determine the amount of the annual
assessment. The Commission may accumulate a net worth not to exceed
30% of its then annual cost of operation to provide for
contingencies and events not contemplated. These accumulated funds
shall
be held separately and shall not be used for any other purpose. The
Commission's budget may include a provision for a contribution to the
Commission's net worth.
(7) The Commission shall be exempt from all taxation in and by the
compacting states.
(8) The Commission shall not pledge the credit of any compacting state,
except by and with the appropriate legal authority of that compacting
state.
(9) The Commission shall keep complete and accurate accounts of all its
internal receipts (including grants and donations) and disbursements
of all
funds, other than receivership assets, under its control.  The
internal
financial accounts of the Commission shall be subject to the accounting
procedures established under its by-laws. The financial accounts and
reports including the system of internal controls and procedures of the
Commission shall be audited annually by an independent certified public
accountant.  Upon the determination of the Commission, but no less frequently
than every 3 years, the review of such independent auditor shall include a
management and performance audit of the Commission. The report of
such
independent audit shall be made available to the public and shall be
included in and become part of the annual report of the Commission to
the
Governors and legislatures of the compacting states.  The
Commission's
internal accounts, any workpapers related to any internal audit, and
any
workpapers related to the independent audit, shall be confidential;
provided,
that such materials shall be made available: (i) in compliance with
the order
of any court of competent jurisdiction; (ii) pursuant to such
reasonable
rules as the Commission shall promulgate; and (iii) to any
Commissioner,
Governor of a compacting state, or their duly authorized
representatives.
(10)  No compacting state shall have any claim to or ownership of any
property
held by or vested in the Commission or the Commission acting as
Receiver
or to any other Commission funds held pursuant to the provisions of
this
Compact.
ARTICLE XI. COMPACTING STATES, EFFECTIVE DATE, AND AMENDMENT
(1) Any state is eligible to become a compacting state.
(2) The Compact shall become effective and binding upon legislative
enactment
of the Compact into law by 2 compacting states.  Thereafter, it
shall
become effective and binding as to any other compacting state upon
enactment of the Compact into law by that state.
(3) Amendments to the Compact may be proposed by the Commission for
enactment by the compacting states.  No amendment shall become
effective and binding upon the Commission and the compacting states
unless and until it is enacted into law by unanimous consent of the
compacting states.
ARTICLE XII. WITHDRAWAL, DEFAULT, AND TERMINATION
Section A. Withdrawal.
(1) Once effective, the Compact shall continue in force and remain
binding upon each and every compacting state; provided, that a
compacting state may withdraw from the Compact ("withdrawing
state") by enacting a statute specifically repealing the statute
which
enacted the Compact into law.
(2) The effective date of withdrawal is the effective date of the repeal;
provided, that the repeal shall not apply to any receiverships,
for
which the Commission is acting as Receiver, pending on the date
of
the repeal except by mutual agreement of the Commission and the
withdrawing state.
(3) The withdrawing state shall immediately notify the Chairperson of
the Commission in writing upon the introduction of legislation
repealing this Compact in the withdrawing state.
(4) The Commission shall notify the other compacting states of the
withdrawing state's intent to withdraw within 60 days of its receipt
thereof.
(5) The withdrawing state is responsible for all assessments, obligations,
and liabilities incurred through the effective date of withdrawal,
including any obligations, the performance of which extend beyond
the effective date of withdrawal, except to the extent those
obligations may have been released or relinquished by mutual
agreement of the Commission and the withdrawing state.
Notwithstanding the foregoing, the withdrawing state is responsible
for the costs and expenses of its estates subject to this Compact pending on
the
date of repeal; the Commission and the other estates subject to this
Compact shall not bear any costs and expenses related to the withdrawing
state's
estates unless otherwise mutually agreed upon between the
Commission and the withdrawing state.
(6) Reinstatement following withdrawal of any compacting state shall
occur upon the withdrawing state reenacting the Compact or upon
such later date as determined by the Commission.
Section B. Default.
(1) If the Commission determines that any compacting state has at any
time defaulted ("defaulting state") in the performance of any of
its
obligations or responsibilities under this Compact, the
by-laws, or duly promulgated
rules, all rights, privileges, and benefits
conferred by
this Compact and any agreements entered into pursuant to this
Compact shall be suspended from the effective date of default as
fixed by the Commission. The grounds for default include, but
are
not limited to, failure of a compacting state to perform such
obligations or responsibilities and any other grounds designated in
Commission rules. The Commission shall immediately notify the
defaulting state in writing of the defaulting state's suspension
pending a cure of the default. The Commission shall stipulate the
conditions and the time period within which the defaulting state must
cure its default. If the defaulting state fails to cure the default within
the time period specified by the Commission, the defaulting state
shall be terminated from the Compact upon an affirmative vote of a
majority of the compacting states and all rights, privileges, and
benefits conferred by this Compact shall be terminated from the
effective date of termination.
(2) Within 60 days of the effective date of termination of a defaulting
state, the Commission shall notify the Governor and the Majority and
Minority Leaders of the defaulting state's legislature of such
termination.
(3) The termination of a defaulting state shall apply to all receiverships,
for which the Commission is acting as Receiver, pending on the
effective date of termination except by mutual agreement of the
Commission and the defaulting state.
(4) The defaulting state is responsible for all assessments, obligations,
and liabilities incurred through the effective date of termination and
is responsible for the costs and expenses relating to its estates subject to
this
Compact pending on the date of the termination. The Commission
and the other estates subject to this Compact shall not bear any
costs or expenses relating the defaulting state's estates unless otherwise
mutually agreed upon between the Commission and the defaulting
state.
(5) Reinstatement following termination of any compacting state
requires both a reenactment of the Compact by the defaulting
state
and the approval of the Commission pursuant to the rules.
Section C. Dissolution of Compact.
(1) The Compact dissolves effective upon the date of the withdrawal or
the termination by default of the compacting state which reduces membership in
the
Compact to one compacting state.
(2) Upon the dissolution of this Compact, the Compact becomes null
and void and shall be of no further force or effect, and the
business
and affairs of the Commission shall be wound up and any surplus
funds shall be distributed in accordance with the by-laws.
ARTICLE XIII. SEVERABILITY AND CONSTRUCTION
(1) The provisions of this Compact shall be severable, and if any phrase,
clause, sentence, or provision is deemed unenforceable, the remaining
provisions of the Compact shall be enforceable.
(2) The provisions of this Compact shall be liberally construed to
effectuate its
purposes.
ARTICLE XIV. BINDING EFFECT OF COMPACT AND OTHER LAWS
Section A. Other laws.
(1) Nothing herein prevents the enforcement of any other law of a
compacting state that is not inconsistent with this Compact.
(2) All compacting states' laws conflicting with this Compact are
superseded to the extent of the conflict.
Section B. Binding effect of this Compact.
(1) All lawful actions of the Commission, including all rules and operating
procedures promulgated by the Commission, are binding upon
the compacting states.
(2) All agreements between the Commission and the compacting states
are binding in accordance with their terms.
(3) Upon the request of a party to a conflict over meaning or
interpretation of Commission actions, and upon a majority vote of the
compacting states, the Commission may issue advisory opinions
regarding such meaning or interpretation.
(4) In the event any provision of this Compact exceeds the constitutional
limits imposed on the legislature of any compacting state, the
obligations, duties, powers, or jurisdiction sought to be conferred by
such provision upon the Commission shall be ineffective and such
obligations, duties, powers or jurisdiction shall remain in the
compacting state and shall be exercised by the agency thereof to
which such obligations, duties, powers, or jurisdiction are
delegated
by law in effect at the time this Compact becomes effective.
(Source: P.A. 95-331, eff. 8-21-07.)