215 ILCS 5/202

Current through Public Act 103-1052

Section 215 ILCS 5/202 - Appointment of special deputies; employees and professional advisors; contracts; qualified immunity

(a) For the purpose of assisting the Director in the performance of the Director's duties under Articles VII, XIII, and XIII 1/2 of this Code, the Director has authority to appoint one or more special deputies as the Director's agent or agents, and clerks, assistants, attorneys, and other personnel as the Director may deem necessary and to delegate to each such person authority to assist the Director as the Director may consider appropriate. The compensation of each special deputy, clerk, assistant, attorney, and other designated personnel shall be fixed and paid by the Director. The Director shall also have the authority to retain and pay attorneys, actuaries, accountants, consultants, and such other persons as the Director may deem necessary and appropriate. The Director shall fix the rate of compensation of these attorneys, actuaries, accountants, consultants, and other persons subject to the approval of the court. The Director, however, has the authority to fix, without the approval of the court, the rate of compensation of attorneys, actuaries, accountants, consultants, and other persons that he considers necessary and appropriate if the Director determines that the projected expenditure for professional fees to each such person will not exceed $20,000 per company in any calendar year.

(b) The special deputies may enter into leases or contracts for the procurement of real or personal property, and on such terms and conditions as the Director may deem necessary or advisable for the purpose of performing the Director's duties under Articles VII, XIII, and XIII 1/2 of this Code. Any such lease or contract that requires an aggregate expenditure in excess of $150,000 shall be subject to the approval of the court before which is pending the delinquency proceeding of the estate of the company on whose behalf the lease or contract is entered into. In the event that the lease or contract is entered into on behalf of 2 or more companies, the delinquency proceedings of the 2 or more companies shall be consolidated for the sole purpose of obtaining approval of the lease or contract from the court before which is pending the delinquency proceeding of the estate of the company that, in the judgment of the Director at the time of application for approval, is to bear the largest portion of the amounts to be expended under the lease or contract under the allocation methods established by the Director under subsection (c)(1) of this Section.

(c)

(1) The compensation of the persons appointed by the Director and the attorneys, actuaries, accountants, consultants, and other persons retained by the Director, the payments under the leases or contracts described in subsection (b) of this Section, and all other expenses of taking possession of the property and the administration of the company and its property shall be paid (i) out of the funds or assets of the company on whose behalf the compensation, payments, or expenses were incurred or (ii) in the event that the compensation, payments, or expenses were, in the judgment of the Director, incurred in behalf of 2 or more companies, out of the assets of those companies on the basis of allocation methods established by the Director.

(2) Notwithstanding the foregoing provisions of this subsection (c), the salary of the special deputies, together with the salaries or fees of those clerks, assistants, attorneys, actuaries, accountants, consultants, or other persons appointed or retained by the Director under this Section, and the other expenses of taking possession of the property and the administration of the company and its property, may be paid out of amounts appropriated to the Department of Insurance. Any amounts paid under this Section from appropriated funds shall be repaid to the State treasury from any available funds or assets of the company on whose behalf the expenses were incurred, subject to the approval of the court before which is pending the delinquency proceeding of the company.

(d)

(1) For each calendar quarter or other period as the court may determine, the Director shall file with the court before which is pending the delinquency proceeding of each company in liquidation or rehabilitation a report for the period reflecting the company's (i) cash and invested assets held by the Director at the beginning of the period, (ii) cash receipts, (iii) cash disbursements for payments of salaries, compensation, professional fees, and all other expenses of administration of the company and its property, (iv) all other cash disbursements, and (v) cash and invested assets held by the Director at the end of the period; provided that the report need not be filed more than once for each calendar year if the cash and invested assets of the company are less than $250,000. For each such period, the Director shall file with the court a similar report for each company in conservation, except that this report shall reflect only those cash disbursements for payments of salaries, compensation, professional fees, and all other expenses of the administration of the company and its property.

(2) No party to the proceedings may object to any aspect of that report unless the basis of the party's objection is set forth in a motion filed with the court not later than 30 days after the filing of the report. In the event that objections to the report are filed, the Director shall have 15 days to file a response to the objections, and a hearing on the matter shall be held at the earliest possible date consistent with the schedule of the court. Any hearing on objections shall be limited solely to the specific objections raised in the original motion.

(e)

(1) For purposes of this subsection (e):

"Receiver" means the Director in his or her capacity as the liquidator, rehabilitator, or conservator of a company in liquidation, rehabilitation, or conservation.

"Director as trustee" means the Director when appointed as trustee under this Article.

"Employees" means all present and former special deputies appointed by the Director and all persons that the Director or special deputies may appoint or employ or may have appointed or employed to assist in the liquidation, rehabilitation, or conservation of a company. "Employees" shall not include any attorneys, accountants, auditors, or other professional persons or firms (or their employees) who are retained as independent contractors by either the Director or by any special deputy appointed under this Section.

"Advisors" means all persons that the Director may appoint or may have appointed under Section 202.1.

(2) If a cause of action is commenced against the receiver, the Director as trustee, employees, or advisors, either personally or in their official capacity, alleging property damage, property loss, personal injury, or other civil liability arising out of any act, error, or omission of the receiver, the Director as trustee, employees, or advisors committed within the scope of their duties or employment involving a company in liquidation, rehabilitation, or conservation, the receiver, the Director as trustee, employees, or advisors shall be indemnified out of the assets of the company for all expenses, attorneys' fees, judgments, settlements, decrees, fines, penalties, or amounts paid in satisfaction of or incurred in the defense of the cause of action unless it is determined upon a final adjudication on the merits that the act, error, or omission of the receiver, the Director as trustee, employees, advisors, or the court giving rise to the claim was not within the scope of his or her duties or employment or was caused by intentional, wilful, or wanton misconduct. Any payments out of the assets of the company under this subsection (e) shall be subject to the prior approval of the court before which is pending the delinquency proceeding of the company.

The court shall be entitled to indemnification under Section 2 of the Representation and Indemnification of State Employees Act.

Attorneys' fees and expenses incurred in defending an action against the receiver, the Director as trustee, employees, or advisors for which indemnity is available under this part (2) may, upon the approval of the receiver and the court before which is pending the delinquency proceeding of the company, be paid from the assets of the company's estate in advance of the final disposition of the action upon receipt of an undertaking by or on behalf of the receiver, the Director as trustee, employees, or advisors to pay that amount, if it shall ultimately be determined upon a final adjudication on the merits that he or she is not entitled to be indemnified under this part (2).

Any indemnification, expense payments, and attorneys' fees from the company's assets for actions against the receiver, the Director as trustee, employees, or advisors under this part (2) shall be considered an administrative expense of the estate.

In the event of actual or threatened litigation against the receiver, the Director as trustee, employees, or advisors for which indemnity is available under this part (2), a reasonable amount of funds, which in the judgment of the Director may be needed to provide indemnity, may be segregated and reserved from the assets of the company as security for the payment of indemnity until all applicable statutes of limitations shall have run and all actual or threatened actions against the receiver, the Director as trustee, employees, or advisors have been completely and finally resolved.

(3) Nothing contained or implied in this subsection (e) shall operate, or be construed or applied, to deprive the Director, receiver, the Director as trustee, the company's estate, any employee, any advisor or the court of any defense, claim, or right of immunity heretofore available.

215 ILCS 5/202

P.A. 88-297; 89-206, eff. 7/21/1995.