(215 ILCS 5/537.7) (from Ch. 73, par. 1065.87-7)
Sec. 537.7. Investigation of claims; disposition.
(a) The Fund shall investigate claims brought against the Fund and adjust, compromise, settle, and pay covered claims to the extent of the Fund's obligation and deny all other claims.
(b) The Fund shall not be bound by a settlement, release, compromise, waiver, or final judgment executed or entered within 12 months prior to an order of liquidation and shall have the right to assert all defenses available to the Fund including, but not limited to, defenses applicable to determining and enforcing its statutory rights and obligations to any claim. The Fund shall be bound by a settlement, release, compromise, waiver, or final judgment executed or entered more than 12 months prior to an order of liquidation, however, if the claim is a covered claim and the settlement or judgment was not a result of fraud, collusion, default, or failure to defend. In addition, with respect to covered claims arising from a judgment under a decision, verdict, or finding based on the default of the insolvent insurer or its failure to defend, upon application by the Fund, either on its own behalf or on behalf of an insured, the court shall set aside the judgment, order, decision, verdict, or finding, and the Fund shall be permitted to defend against the claim on the merits.
(c) The Fund shall have the right to appoint or approve and to direct legal counsel retained under liability insurance policies for the defense of covered claims.
(Source: P.A. 92-77, eff. 7-12-01.)
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Last modified: February 18, 2015