Recently, Interstate Bankers Casualty Company (IBC) in Illinois was placed into liquidation. The Illinois Insurance Guaranty Fund is now responsible for all obligations related to claims against IBC insureds that had been pending. In terms of subrogation, the relevant portion of the Insurance Code states as follows:
(b) “Covered Claim” does not include…
(v) any claim for any amount due any reinsurer, insurer, insurance pool, or underwriting association as subrogated recoveries, reinsurance recoverables, contribution, indemnification or otherwise. No such claim held by a reinsurer, insurer, insurance pool, or underwriting association may be asserted in any legal action against a person insured under a policy issued by an insolvent company other than to the extent such claim exceeds the Fund obligation limitations set forth in Section 537.2 of this Code.
Recover some or all of the insureds deductible
This being the case, any claims against IBC and their insureds that are pending should be dismissed and any claims not filed to date should not be pursued in court. It is possible to recover some or all of the insureds deductible by sending proofs of payment to the Guaranty Fund (as our office has begun to do in winding these suits down). Still, as the fund is created by and for such companies going out of business, and all carriers in the state pay into the Fund, subrogation is barred.
The Illinois Insurance Guaranty Fund is now responsible for all obligations related to claims against IBC insureds that had been pending.
If you have any questions about IBC, liquidation or other pending claims, schedule a consultation with one of our Illinois subrogation attorneys.