(215 ILCS 125/6-14)

(from Ch. 111 1/2, par. 1418.14)

Sec. 6-14.

Miscellaneous Provisions.

(1) Records must be kept of all negotiations and meetings in which the Association or its representatives are involved to discuss the activities of the Association in carrying out its powers and duties under Section 6-8. Records of such negotiations or meetings may be made public only upon the termination of a liquidation, rehabilitation, or conservation proceeding involving the impaired or insolvent organization, upon the termination of the impairment or insolvency of the organization, or upon the order of a court of competent jurisdiction. Nothing in this subsection (1) limits the duty of the Association to submit a report of its activities under Section 6-15.

(2) For the purpose of carrying out its obligations under this Article, the Association is deemed to be a creditor of the impaired or insolvent organization to the extent of assets attributable to covered health care plan certificates reduced by any amounts to which the Association is entitled as subrogee (under subsection (7) of Section 6-8). All assets of the impaired or insolvent organization attributable to covered health care plan certificates must be used to continue all covered health care plan certificates and pay all contractual obligations of the impaired organization as required by this Article. “Assets attributable to covered health care plan certificates”, as used in this subsection (2), is that proportion of the assets which the reserves that should have been established for such health care plan certificates bear to the reserve that should have been established for all health care plan certificates of the impaired or insolvent organization.

(3) (a) Prior to the termination of any liquidation, rehabilitation, or conservation proceeding, the court may take into consideration the contributions of the respective parties, including the Association, the shareholders of the impaired or insolvent organization, and any other party with a bona fide interest, in making an equitable distribution of the ownership rights of such impaired or insolvent organization. In such a determination, consideration must be given to the welfare of the enrollees of the continuing or successor organization.

(b) No distribution to stockholders, if any, of an impaired or insolvent organization may be made until and unless the total amount of valid claims of the Association for funds expended in carrying out its powers and duties under Section 6-8, with respect to such organization have been fully recovered by the Association.

(4) (a) If an order for liquidation or rehabilitation of an organization domiciled in this State has been entered, the receiver appointed under such order has a right to recover on behalf of the organization, from any affiliate that controlled it, the amount of distributions, other than stock dividends paid by the organization on its capital stock, made at any time during the 5 years preceding the petition for liquidation or rehabilitation subject to the limitations of paragraphs (b) to (d).

(b) No such distribution is recoverable if the organization shows that when paid the distribution was lawful and reasonable, and that the organization did not know and could not reasonably have known that the distribution might adversely affect the ability of the organization to fulfill its contractual obligations.

(c) Any person who was an affiliate that controlled the organization at the time the distributions were paid is liable up to the amount of distributions he received. Any person who was an affiliate that controlled the organization at the time the distributions were declared, is liable up to the amount of distributions he would have received if they had been paid immediately. If 2 persons are liable with respect to the same distributions, they are jointly and severally liable.

(d) The maximum amount recoverable under subsection (4) of this Section is the amount needed in excess of all other available assets of the insolvent organization to pay the contractual obligations of the insolvent organization.

(e) If any person liable under paragraph (c) of subsection (4) of this Section is insolvent, all its affiliates that controlled it at the time the distribution was paid are jointly and severally liable for any resulting deficiency in the amount recovered from the insolvent affiliate.

(Source: P.A. 86-620.)