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does insolvency of a company, even if established, discharge the company
from its liabilities then existent or which may thereafter accrue.
People ex rel. Barrett v. Bank of Peoria, 295 Ill. App. 543, 15 N.E.2d 333 (Ill. App.
1938). The court held that the receiver stands in place of insolvent insurer and
is clothed with no greater powers than those represented by the company, as
of the date of the order directing the liquidation.
People ex rel. Baylor v. Multi‐State Inter‐Insurance Exchange, 12 Ill. App.3d
1058, 299 N.E.2d 482 (Ill. App. 1973). The liquidator of insurance reciprocal
exchange had power to fix compensation for collector of assessments from
policyholders, but the liquidator's determination was subject to supervisory
power of court. Further, awarding quantum merit to collector was not
contrary to statute providing that compensation is to be "fixed" by the
liquidator.
People ex rel. Shapo v. Agora Syndicate, Inc., 323 Ill.App.3d 543, 752 N.E.2d 1186
(2001) – Director of Insurance brought liquidation action against insurance
syndicate. Based on custodial accounts held in compliance with 215 Ill. Comp.
Stat. 5/107.27 and 107.26(b), syndicate was insolvent on a cash flow basis.
Syndicate argued that adherence to the sections’ requirements precluding a
finding of insolvency. Because funds in custodial accounts that were not readily
accessible to syndicate, syndicate was insolvent. Where Director finds that
insurer is insolvent, the Director has the discretion under the express language
of § 192(4) to request an order of liquidation, rather than seek rehabilitation.
People v. Chicago Lloyds, 391 Ill. 492, 63 N.E.2d 479 (1945), reversed, Morris v.
Jones, 329 U.S. 545, rehearing denied, 330 U.S. 854. A liquidator appointed in
liquidation proceedings under the Insurance Code takes title to all assets of the
insolvent insurance company wherever situated and such title must be
recognized in all states. A judgment obtained in another state subsequent to
appointment of Director of Insurance as liquidator cannot be enforced against
the liquidator under the full faith and credit clause.
People v. Peoria Life Ins. Co., 357 Ill. 486, 192 N.E. 420 (1934). The Illinois
Supreme Court held that under the 1925 Insurance Liquidation Act the
insolvent insurance company was vested in the receiver appointed by the
Director of Insurance and to enable the receiver to perform that duty, the
statutory receiver was vested with title to all of the property of the insolvent
company. The administration of the company was subject to the supervision
of the court.
People v. Peoria Life Ins. co., 376 Ill. 517, 34 N.E.2d 829 (1941). At the moment
the decree for liquidation is entered, the title to all of the property of an
insolvent insurer passes to the liquidator by virtue of the insurance liquidation
law, and from that moment, the insurer is without corporate power.
Reiter v. Illinois National Casualty Co., 328 Ill. App. 234, 65 N.E.2d 830, rev'd 397
Ill. 141, 73 N.E.2d 412, cert. denied, 332 U.S. 791, (1946). The insurance
department's examination of a company found that although the company
settled its claims promptly and equitably, it had paid the adjuster $17,465.50 in
excess of the amount due and the company failed to produce certain securities
disclosed in its annual statement. As a result, the insurance commissioner
acted to conserve the income and assets of the company for the benefit of its
policyholders. However, the court held that neither the Emergency Act nor the
insurance code provided the insurance commissioner with the authority