(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:

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.

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.

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.

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.

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.

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.