Illinois Compiled Statutes
215 ILCS 5/537.4 (2026)
Fund assumes obligations of insolvent companies
✓ current as of May 2026
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(215 ILCS 5/537.4)
(from Ch. 73, par. 1065.87-4)
Sec. 537.4. Fund assumes obligations of insolvent companies. The Fund
shall be deemed the insolvent company to the extent
of the Fund's obligation for covered claims and to such extent
shall have all
rights, duties, and obligations of the insolvent company, subject to the
limitations provided in this Article, as if the company had not become
insolvent, with the
exception that the liquidator shall retain the sole right
to recover any reinsurance proceeds.
The Fund's rights under this Section include, but are not limited to, the
right to pursue and retain salvage and subrogation recoveries on paid covered
claim obligations to the extent paid by the Fund. The extent of the Fund's subrogation rights and any other rights of reimbursement with respect to its covered claims payments shall not be limited as if the Fund were the insolvent company, but shall be determined independently by taking into account the Fund's rights under Section 546 of this Article.
(Source: P.A. 99-387, eff. 8-17-15.)
Notes of Decisions
Cited in 5
cases, 1995–2013 · leading case: Skokie Castings, Inc. v. Illinois Ins. Guar. Fund, 2013 IL 113873 (Ill. 2013).
Skokie Castings, Inc. v. Illinois Ins. Guar. Fund, 2013 IL 113873 (Ill. 2013). “¶ 31 Because the Fund serves as a substitute for the defunct insurer, an insured party can never recover more from the Fund than it would have been entitled to receive under the policy it originally purchased from its defunct insurer.”
Skokie Castings, Inc. v. Illinois Ins. Guar. Fund, 2013 IL 113873 (Ill. 2013). “¶ 31 Because the Fund serves as a substitute for the defunct insurer, an insured party can never recover more from the Fund than it would have been entitled to receive under the policy it originally purchased from its defunct insurer.”
Illinois Ins. Guar. Fund v. Farmland Mut. Ins., 653 N.E.2d 856 (Ill. App. Ct. 1995). “” 215 ILCS 5/537.4 (West 1992). We believe Farmland’s readings of its policy language and the Act are contrary to the intent of the legislature in creating the Fund and the law in Illinois holding that the Fund is a source of last resort (see Urban v.”
Barbee v. Illinois Ins. Guar. Fund, 915 N.E.2d 871 (Ill. App. Ct. 2009). “” 215 ILCS 5/537.4 (West 2006). The statute further indicates that a “covered claim” is a “claim which appears on the books and records of the insolvent company as of the date of the Order of Liquidation or a claim for which notice is given in writing to the liquidator of the…”
Ill. Ins. Guar. Fund v. Farmland Mut. Ins., 653 N.E.2d 856 (Ill. App. Ct. 1995). “4 reads: "The Fund shall be deemed the insolvent company to the extent of its obligation for covered claims and to such extent shall have all rights, duties, and obligations of the insolvent company, subject to the limitations provided in this Article, as if the company had not…”
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