215 ILCS 5/537.2
Obligation of Fund
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(215 ILCS 5/537.2)
(from Ch. 73, par. 1065.87-2)
Sec. 537.2. Obligation of Fund. The Fund shall be obligated to the
extent of the covered
claims existing prior to the entry of an Order of Liquidation against
an insolvent company and arising within
30 days after the entry of such
Order, or before the policy expiration date if less than 30 days after
the entry of such Order, or before the insured replaces the policy or on
request effects cancellation, if he does so within 30 days after the entry
of such Order. If the entry of an Order of Liquidation occurs on or after
October 1, 1975 and before October 1, 1977, such obligations shall not:
(i) exceed $100,000, or (ii)
include any obligation to refund the first $100 of any unearned premium
claim; and if the entry of an Order of Liquidation occurs on or after October
1, 1977 and before January 1, 1988, such obligations shall
not: (i) exceed
$150,000, except that this limitation shall not apply to any workers compensation
claims, or (ii)
include any obligation to refund the first
$100 of any unearned premium claim; and if the entry of an Order of
Liquidation occurs on or after January 1, 1988 and before January 1, 2011, such obligations shall not:
(i) exceed $300,000, except that this limitation shall not apply to any
workers compensation claims, or (ii) include any obligation to refund the
first $100 of any unearned premium claim or to refund any unearned premium
over $10,000 under any one policy. If the entry of an Order of Liquidation occurs on or after January 1, 2011, then such obligations shall not: (i) exceed $500,000, except that this limitation shall not apply to any workers compensation claims or (ii) include any obligation to refund the first $100 of any unearned premium claim or refund any unearned premium over $10,000 under any one policy. If the entry of an Order of Liquidation occurs on or after January 1, 2023, then such obligations shall not: (i) exceed $500,000, except that this limitation shall not apply to any workers compensation claims, or (ii) exceed without any deduction $50,000 for any unearned premium claim or refund under any one policy. In no event shall the Fund be
obligated to a policyholder or claimant in an amount in excess
of the face amount of the policy from which the claim arises, including, but not limited to, any applicable specific or aggregate limits. For purposes of this Article, obligations arising under an insurance policy written to indemnify a permissibly self-insured employer under subsection (a) of Section 4 of the Workers' Compensation Act for its liability to pay workers' compensation benefits in excess of a specific or aggregate retention shall be subject to the applicable per-claim limits set forth in this Section. In no event shall the Fund be obligated to pay an amount in excess of $500,000 in the aggregate for all first-party and third-party claims under a policy or endorsement providing cybersecurity insurance as defined in Section 534.9 and arising out of or related to a single insured event, regardless of the number of claims made or number of claimants.
In no event
shall the Fund be liable for any interest on
any
judgment entered against the insured or the insolvent company, or for any
other
interest claim against the insured or the insolvent company, regardless of
whether the insolvent company would have been obligated to pay such interest
under the terms of its policy. The Fund shall be liable for interest at the
statutory rate on money judgments entered against the Fund until the judgment
is satisfied.
Any obligation of the Fund to defend an insured shall cease upon the
Fund's payment or tender of an amount equal to the lesser of the Fund's
covered claim obligation limit or the applicable policy limit.
(Source: P.A. 103-113, eff. 6-30-23.)
Notes of Decisions
Cited in 18
cases, 1995–2013 · leading case: Skokie Castings, Inc. v. Illinois Insurance Guaranty Fund
Skokie Castings, Inc. v. Illinois Insurance Guaranty Fund (2013)
“” 215 ILCS 5/537.2 (West 2010). ¶2 There is no dispute that claims under policies purchased by employers to provide primary coverage for awards granted to their injured employees under the Workers’ Compensation Act (820 ILCS 305/1 et seq.”
Skokie Castings, Inc. v. Illinois Insurance Guaranty Fund (2013)
“” 215 ILCS 5/537.2 (West 2010). ¶2 There is no dispute that claims under policies purchased by employers to provide primary coverage for awards granted to their injured employees under the Workers’ Compensation Act (820 ILCS 305/1 et seq.”
Skokie Castings v. Illinois Insurance Guaranty Fund (2012)
“On May 13, 2005, the Fund notified Wells that the $300,000 cap on covered claims under the statute (215 ILCS 5/537.2 (West 2004)) applied and the claim was nearing exhaustion.”
Roth v. Illinois Insurance Guaranty Fund (2006)
“2 of the Act (215 ILCS 5/537.2 (West 2004)); and (2) the “covered claim” definition in section 534.”
Hasemann v. White (1997)
“215 ILCS 5/537.2 (West 1994). Before a claimant possessing a "covered claim” can recover from the Fund, he must "exhaust” his rights under any other insurance policy applicable to the loss.”
Guzman v. 7513 West Madison Street, Inc. (2013)
“” 215 ILCS 5/537.2 (West 2008). ¶ 24 The definition of a covered claim is also found in the statute: “Covered claim; unearned premium defined.”
Community Unit School District 200 v. Illinois Insurance Guaranty Fund (2005)
“215 ILCS 5/537.2 (West 2002). A covered claim is “an unpaid claim for a loss arising out of and within the coverage of an insurance policy” to which the statute applies and that is in force at the time of the occurrence giving rise to the claim.”
Illinois Insurance Guaranty Fund v. Farmland Mutual Insurance (1995)
“Those limitations include a $300,000 limit on the Fund’s liability regardless of the insolvent insurer’s policy limit (215 ILCS 5/537.2 (West 1992)) and a precise definition of "covered claim” under section 534.”
Illinois Insurance Guaranty Fund v. Santucci (2008)
“) 215 ILCS 5/537.2 (West 2004). Section 534.”
Rogers v. Imeri (2013)
“” 215 ILCS 5/537.2 (West 2012). Section 534.”
Barbee v. Illinois Insurance Guaranty Fund (2009)
“215 ILCS 5/537.2 (West 2006). The Fund essentially steps into the shoes of the insolvent insurer by assuming the insurer’s obligations, but only with regard to “covered claims.”
Ill. Ins. Guar. Fund v. FARMLAND MUT. INS. (1995)
“(b) `Covered claim' does not include * * * (v) any claim for any amount due any reinsurer, insurer * * * as subrogated recoveries, reinsurance coverables, contribution, indemnification or otherwise.”
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