Illinois Compiled Statutes 215 ILCS 5/1107 – Trust – Coverage Grants – Payment of Claims
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(1) No risk retention trust created under this Article may issue coverage grants until it has procured 100 bonafide applications for coverage with the first premium contribution in cash for each kind of coverage which the trust undertakes to write, and has a contingency reserve fund of at least $2,500,000. Every trust subject to this Article must have, and at all times maintain a pool retention fund at least equal to its unpaid liabilities and an unimpaired minimum contingency reserve fund of $1,500,000. The contingency reserve fund requirements shall be deemed satisfied if the required contribution into such fund by any participating member bank is obtained by a certificate of deposit redeemable by the trust in an amount not greater than the amount insured by the Federal Deposit Insurance Corporation.
(2) Every coverage grant issued or delivered in this State by any trust subject to this Article shall provide for the liability of trust members to the extent that funds are needed to pay a member’s share of the depleted contingency reserve fund needed to maintain the reserves required by this Section.
(3) The Director may after notice and hearing suspend or revoke the license of any trust that fails to maintain the minimum reserves required by this Section.
(4) All claims shall first be paid from the pool retention fund. If that fund becomes depleted, any additional claims shall be paid from the contingency reserve fund.
(5) On the basis of an annual independent certified audit, the Director may require the risk retention trust to purchase insurance in amounts required to provide additional protection to member banks in excess of the contingency reserve fund.
(2) Every coverage grant issued or delivered in this State by any trust subject to this Article shall provide for the liability of trust members to the extent that funds are needed to pay a member’s share of the depleted contingency reserve fund needed to maintain the reserves required by this Section.
Terms Used In Illinois Compiled Statutes 215 ILCS 5/1107
- Contingency reserve fund: means a separate fund maintained for payment of claims in excess of the pool retention fund amount. See Illinois Compiled Statutes 215 ILCS 5/1102
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Coverage grant: means the document describing specific coverages and terms of coverage which are provided by a risk retention trust created under this Article. See Illinois Compiled Statutes 215 ILCS 5/1102
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Pool retention fund: means a separate fund maintained for payment of first dollar claims, up to a specific amount per claim ("specific retention") and up to an aggregate amount for a 12-month period ("aggregate retention"). See Illinois Compiled Statutes 215 ILCS 5/1102
- State: when applied to different parts of the United States, may be construed to include the District of Columbia and the several territories, and the words "United States" may be construed to include the said district and territories. See Illinois Compiled Statutes 5 ILCS 70/1.14
(3) The Director may after notice and hearing suspend or revoke the license of any trust that fails to maintain the minimum reserves required by this Section.
(4) All claims shall first be paid from the pool retention fund. If that fund becomes depleted, any additional claims shall be paid from the contingency reserve fund.
(5) On the basis of an annual independent certified audit, the Director may require the risk retention trust to purchase insurance in amounts required to provide additional protection to member banks in excess of the contingency reserve fund.