MINE SUBSIDENCE INSURANCE FUND

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104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
SB3147

Introduced 2/2/2026, by Sen. Christopher Belt

SYNOPSIS AS INTRODUCED:

See Index

Amends the Mine Subsidence Insurance Article of the Illinois
Insurance Code. Makes changes to defined terms. Provides that the moneys
in the Illinois Mine Subsidence Insurance Fund shall be derived primarily
from premiums for mine subsidence insurance ceded by insurers to the Fund
pursuant to the Article and from investment income. In establishing mine
subsidence insurance premium rates, provides that the Fund shall give due
consideration to factors reasonably considered by an insurer when setting
premium rates and to the fact that the Fund does not receive taxpayer
funding or have the ability to issue assessments to the insurance industry
to support its long-term financial viability. Changes terms related to the
appointment of directors in provisions concerning management of the Fund
and establishes 3-year staggered terms for the directors. Provides that
all directors shall be independent and owe a duty of care and duty of
loyalty to the Fund. In provisions concerning mine subsidence coverage,
provides that the loss covered shall be the loss in excess of any
applicable deductible or retention in the policy, subject to the limit of
insurance for mine subsidence damage stated in the policy. For all
policies issued or renewed on or after January 1, 2027, provides that there
shall be no deductible or retention applicable to mine subsidence damage.
For all policies issued or renewed on or after the effective date of the
amendatory Act, provides that the maximum amount of reinsured loss per
residence, per commercial building, and per living unit shall be the
amounts established by the Fund and approved by the Director. Provides
that the residential and living unit coverage provided under the Article
may also cover specified costs of debris removal, moving and storage of
contents, and repair or replacement of landscaping. Makes changes in
provisions concerning division of the Fund; exemptions; rights of insurers
to refuse to provide mine subsidence coverage; arbitration; reinsurance
agreements; distribution of premiums; reporting requirements; right of
recourse and setoffs; subrogation; and powers of the Director of
Insurance.
LRB104 17970 BAB 31407 b

A BILL FOR

SB3147
LRB104 17970 BAB 31407 b
1

AN ACT concerning regulation.

2

Be it enacted by the People of the State of Illinois,
3
represented in the General Assembly:

4

Section 5.
The Illinois Insurance Code is amended by
5
changing Sections 801.1, 802.1, 803.1, 804.1, 805.1, 806.1,
6
807.1, 808.1, 809.1, 810.1, 811.1, 813.1, 814.1, 815.1, and
7
817.1 as follows:

8

(215 ILCS 5/801.1)
9

Sec. 801.1.
Purpose.
The purpose of this Article is to
10
require insurers to make mine subsidence insurance coverage
11
available for residences, living units and commercial
12
buildings located in Illinois; to establish the Illinois Mine
13
Subsidence Insurance Fund; to divide the Fund into separate
14
residential and commercial sub-funds; and to make the Fund
a
15
taxable, private

the
reinsurer for the mine subsidence
16
insurance made available under this Article.
17
(Source: P.A. 88-379.)

18

(215 ILCS 5/802.1)
19

Sec. 802.1.
Definitions.
As used in this Article:
20

(a) "Commercial
building

Building
" means any building
that
21
is classified by the insurer as a commercial building and is

,
22
other than a residence,
permanently affixed to realty located

SB3147
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1
in Illinois, including basements, footings, foundations,
2
septic systems and underground pipes directly servicing the
3
building
. "Commercial building" does not include any other
4
improvements to real property, including, without limitation
,
5
but does not include
sidewalks, driveways, parking lots,
6
living units, land,
landscaping, lawns,
trees, plants, crops
,

7
or agricultural field drainage tile.
8

(b) "Commercial
coverage

Coverage
" means mine subsidence
9
insurance for a commercial building.
10

(b-5) "Director" means the then-appointed, then-acting, or
11
then-interim Director of Insurance.

12

(c) "Insurer" or
"insurers"

"Insurers"
means
an
insurance
13
company or
companies
, farm mutuals,
and reciprocals licensed
14
and authorized to write Class 3 policies of insurance, as
15
defined in this Code, within Illinois.
16

(d) "Living
unit

Unit
"
means

shall mean
that physical
17
portion designated for separate ownership or
exclusive

18
occupancy for residential purposes, of a building or group of
19
buildings, permanently affixed to realty located in Illinois,
20
having elements which are owned or used in common, including a
21
condominium unit, a cooperative unit or any other similar
22
unit.
23

(e) "Living
unit coverage

Unit Coverage
" means mine
24
subsidence insurance for a living unit
covering the losses
25
described in Section 805.1(d)
.
26

(f) "Mine
subsidence

Subsidence
" means lateral or vertical

SB3147
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LRB104 17970 BAB 31407 b
1
ground movement caused by a failure initiated at the mine
2
level, of man-made underground
mineral
mines, including, but
3
not limited to coal mines, clay mines, limestone mines, and
4
fluorspar mines that directly damages residences
, living
5
units,
or commercial buildings. "Mine
subsidence

Subsidence
"
6
does not include lateral or vertical ground movement caused by
7
anything other than a failure initiated at the mine level of
8
man-made underground mineral mines, including, but not limited
9
to, surface mining,
earthquake, landslide, volcanic eruption,
10
soil conditions, soil erosion, soil freezing and thawing,
11
improperly compacted soil, construction defects, roots of
12
trees and shrubs or
collapse of
storm and sewer drains and
13
rapid transit tunnels.
14

(g) "Mine Subsidence Insurance Fund" or "Fund" means the
15
private
fund established by this Article.
16

(h) "Policy" or "policies" means any contract or contracts
17
of insurance providing the coverage of the Standard Fire
18
Policy and Extended Coverage Endorsement
, or substantial
19
equivalent,
on any residence, living unit
,
or commercial
20
building. It does not include those insurance contracts that
21
are referred to as marine or inland marine policies
or that
22
reinsure the liability of another, whether or not those
23
insurance contracts are designated as reinsurance policies
.
24

(i) "Premium" or "premiums" means the gross amount charged
25
to policyholders for the mine subsidence insurance made
26
available under this Article.

SB3147
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LRB104 17970 BAB 31407 b
1

(j) "Rates" or "rate schedules" means the rates by which
2
premiums shall be computed for the mine subsidence insurance
3
made available under this Article.
4

(k) "Residence" means a building
that is classified by the
5
insurer as a residence and

used principally for residential
6
purposes
up to and including a
4-family

four family
dwelling,
7
permanently affixed to realty located in Illinois, including
8
appurtenant structures, driveways, sidewalks, basements,
9
footings, foundations, septic systems and underground pipes
10
directly servicing the dwelling or building
. "Residence" does
11
not include any other improvements to real property,
12
including, without limitation
,
but does not include
living
13
units, land,
landscaping, lawns,
trees, plants, crops or
14
agricultural field drainage tile.
15

(l) "Residential
coverage

Coverage
" means mine subsidence
16
insurance for a residence.
17

(m) "Intergovernmental cooperative" means an
18
intergovernmental cooperative organized pursuant to Article
19
VII, Section 10 of the Illinois Constitution and Section 6 of
20
the Intergovernmental Cooperation Act.
21
(Source: P.A. 90-499, eff. 8-19-97.)

22

(215 ILCS 5/803.1)
23

Sec. 803.1.
Establishment of Fund.
24

(a) There is established a
private
fund to be known as the
25
"
Illinois Mine Subsidence Insurance Fund
"
. The Fund shall

SB3147
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LRB104 17970 BAB 31407 b
1
operate pursuant to this Article. The Fund is authorized to
2
transact business, provide services, enter into contracts
,
and
3
sue or be sued in its own name.
4

(b) The Fund shall provide reinsurance for mine subsidence
5
losses to all insurers writing mine subsidence insurance
6
pursuant to this Article
who have properly executed a
7
reinsurance agreement with the Fund in a form filed with and
8
approved by the Director
.
9

(c) The
moneys

monies
in the Fund shall be derived
10
primarily
from premiums for mine subsidence insurance
ceded by
11
insurers to the Fund

collected on behalf of the Fund
pursuant
12
to this Article
and

,
from investment income
and from receipt
13
of Federal or State funds
. No insurer shall have any liability
14
to the Fund or to any creditor of the Fund, except as may be
15
set forth in this Article, in the Articles of Governance which
16
may be adopted by the Fund, in a reinsurance agreement
17
executed pursuant to Section 810.1, in the Plan of Operation
18
established by the Fund, or in the rules and procedures
19
adopted by the Fund as authorized by the reinsurance
20
agreement.
21

(d) The Fund shall establish its rates, rating schedules,
22
deductibles and retentions,
minimum premiums, classifications,
23
and the maximum amount of reinsurance available per residence,
24
commercial building, and living unit for mine subsidence
25
insurance which the Fund shall file with the Director. The
26
Director shall have 30 days from the date of receipt to approve

SB3147
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LRB104 17970 BAB 31407 b
1
or disapprove a rate filing. If no action is taken by the
2
Director within 30 days
after filing, the filing

, the rate
is
3
deemed to be approved. The Director may, in writing, extend
4
the period for an additional 30 days if the Director
5
determines that additional time is needed.
6

(e) The Fund shall establish its rates, rating schedules,
7
deductibles and retentions,
minimum premiums, classifications,
8
and the maximum amount of reinsurance available per residence,
9
commercial building, and living unit in such a manner as to
10
satisfy all reasonably foreseeable claims and expenses the
11
Fund is likely to incur.
In establishing the mine subsidence
12
insurance premium rates, the

The
Fund shall give due
13
consideration to
factors reasonably considered by an insurer
14
when setting premium rates, including
loss experience and
15
relevant trends, premium and other income and reasonable
16
reserves established for contingencies
; in addition, the Fund
17
shall give due consideration to the fact that it does not
18
receive taxpayer funding or have the ability to issue
19
assessments to the insurance industry to support its long-term
20
financial viability

in establishing the mine subsidence rates
.
21

(f) The Fund shall compile and publish an annual operating
22
report.
23

(g) The Fund shall
maintain or make available

develop
at
24
least 2 consumer information publications to aid the public in
25
understanding mine subsidence and mine subsidence insurance
26
and shall establish a schedule for the distribution of the

SB3147
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LRB104 17970 BAB 31407 b
1
publications pursuant to the reinsurance agreement
. Topics
2
that shall be addressed shall include but are not limited to:

3

(1) Descriptive information about mine subsidence, and
4

what benefits mine subsidence insurance provides to the
5

property owner.

6

(2) Information that will be useful to a policyholder
7

who has filed a mine subsidence claim, such as information
8

that explains the claim investigation process and claim
9

handling procedures.
10

(h) The Fund shall be empowered to
sponsor, fund, or

11
conduct research programs in an effort to improve the
12
administration of the mine subsidence insurance program and
13
help reduce and mitigate mine subsidence losses consistent
14
with the public interest.
15

(i) The Fund may enter into reinsurance agreements with
16
any intergovernmental cooperative that provides joint
17
self-insurance for mine subsidence losses of its members.
18
These reinsurance agreements shall be substantially similar to
19
reinsurance agreements described in Section 810.1.
20
(Source: P.A. 95-92, eff. 1-1-08; 95-334, eff. 1-1-08.)

21

(215 ILCS 5/804.1)
22

Sec. 804.1.
Management of the Fund.
23

(a) The Fund shall be
governed

managed
by an
11-member

11
24
member
Board of Directors, 6 of whom shall be
designated as

25
insurance
industry-elected

industry
directors, 4 of whom shall

SB3147
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LRB104 17970 BAB 31407 b
1
be
designated as public-appointed

public
directors, and one of
2
whom shall be
designated as
an
Illinois-licensed

Illinois
3
licensed
insurance producer
public-appointed director
. The
4
industry directors shall be elected
to 3-year staggered terms

5
annually
in the manner provided in Articles of Governance
6
adopted by the Fund. The public directors shall be appointed
7
to 3-year staggered terms
by the Director, and shall not be
8
employees of or otherwise affiliated with the insurance
9
industry. The
Illinois-licensed

Illinois licensed
insurance
10
producer shall be appointed
to a 3-year term
by the Director.
11
All directors shall be independent and owe a duty of care and
12
duty of loyalty to the Fund.

13

(b)
Each member of the Board of Directors on the effective
14
date of this amendatory Act of the 104th General Assembly
15
shall continue to be a member of the Board of Directors until
16
the conclusion of that Director's existing 3-year term or, in
17
the case of an appointed director, until the Director makes an
18
official appointment, whichever is later.

The members of the
19
Governing Committee of the Illinois Mine Subsidence Insurance
20
Fund established by Article XXXVIII who are members of the
21
Governing Committee as of December 31, 1993 shall become the
22
members of the Board of Directors of the Fund established by
23
this Article on the effective date of this Act, and shall
24
continue to hold office until the next annual meeting of the
25
Fund.
26

(c) No later than the date of the next annual meeting of

SB3147
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LRB104 17970 BAB 31407 b
1
the Fund following the effective date of this Act, the
2
Director shall appoint 4 public directors, one for a one-year
3
term, one for a two-year term and 2 for three-year terms. No
4
later than the date of the next annual meeting of the Fund
5
following the effective date of this amendatory Act of 1994,
6
the Director shall appoint the Illinois licensed insurance
7
producer for a 2-year term. Thereafter, all public directors
8
and the licensed insurance producer shall be appointed for 3
9
year terms.
10

(c) The

(d) As soon as practical after the effective date
11
of this Act, the
Fund shall adopt Articles of Governance,
12
which shall be submitted to the Director for
his
review and
13
approval.
The Board of Directors of the Fund may amend the
14
Articles of Governance, subject to review and approval by the
15
Director.

16
(Source: P.A. 88-379; 88-667, eff. 9-16-94; 89-206, eff.
17
7-21-95.)

18

(215 ILCS 5/805.1)
19

Sec. 805.1.
Mine Subsidence Coverage.
20

(a) Beginning January 1, 1994, every policy issued or
21
renewed insuring a residence on a direct basis shall include,
22
at a separately stated premium, residential coverage unless
23
waived in writing by the insured. Beginning January 1, 1994,
24
every policy issued or renewed insuring a commercial building
25
on a direct basis shall include at a separately stated

SB3147
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LRB104 17970 BAB 31407 b
1
premium, commercial coverage unless waived in writing by the
2
insured. Beginning January 1, 1994, every policy issued or
3
renewed insuring a living unit on a direct basis shall
4
include, at a separately stated premium, living unit coverage
5
unless waived in writing by the insured.
6

(b) If the insured has previously waived mine subsidence
7
coverage in writing, the insurer or agent
shall provide
8
written notice of the availability of

need not offer
mine
9
subsidence coverage in
conjunction with
any renewal or
10
supplementary policy in connection with a policy previously
11
issued to such insured by the same insurer,
but need not obtain
12
an additional written waiver of mine subsidence coverage

13
unless the insured subsequently makes a written request for
14
mine subsidence coverage
.
15

(c) The premium charged for residential, commercial or
16
living unit coverage shall be the premium level set by the
17
Fund. The loss covered shall be the loss in excess of
any
18
applicable

the
deductible or retention
in

established by the
19
Fund and contained in a mine subsidence endorsement to
the
20
policy
, subject to the limit of insurance for mine subsidence
21
damage stated in the policy; however, for all policies issued
22
or renewed on or after January 1, 2027, there shall be no
23
deductible or retention applicable to mine subsidence damage
.
24
For all policies issued or renewed on or after
the effective
25
date of this amendatory Act of the 104th General Assembly

26
January 1, 2008
, the
maximum amount of
reinsured loss per

SB3147
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LRB104 17970 BAB 31407 b
1
residence, per commercial building, and per living unit shall
2
be the amounts established by the Fund and approved by the
3
Director. For all policies issued or renewed on or after
4
January 1, 1996, the amount of reinsurance available from the
5
Fund shall not be less than $200,000 per residence, $200,000
6
per commercial building, or $15,000 per living unit. The Fund
7
may, from time to time, adjust the amount of reinsurance
8
available as long as the minimum set by this Section is met.
9

(d) The residential and living unit coverage provided
10
pursuant to this Article may also cover, as part of the cost of
11
repairs of covered mine subsidence damage to a residence or
12
living unit, the costs of debris removal, moving and storage
13
of contents, and repair or replacement of landscaping, but
14
only if made necessary by the repairs of covered mine
15
subsidence damage to a residence or living unit and only when
16
and to the extent such costs are actually incurred.

17

(e)

(d)
The residential
and living unit
coverage provided
18
pursuant to this Article may also cover the additional living
19
expenses reasonably and necessarily incurred by the owner of a
20
residence who has been temporarily displaced as the direct
21
result of damage to the residence
or living unit
caused by mine
22
subsidence if the underlying policy also covers this type of
23
loss,
except

provided however,
that the
additional living
24
expenses

loss
covered under living unit coverage shall be
25
limited to
those additional living expenses incurred by an
26
owner who has been temporarily displaced as the direct result

SB3147
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LRB104 17970 BAB 31407 b
1
of damage

losses
to improvements and betterments
caused by
2
mine subsidence

, and reimbursement of additional living
3
expenses
and
special
assessments made against the insured on
4
account of mine subsidence loss
and shall be paid within, and
5
not in addition to, the applicable limit for residential or
6
living unit coverage
.
7

(f)

(e)
The total amount of the loss reimbursable to an
8
insurer shall be limited to the amount of insurance reinsured
9
by the Fund in force at the time when the damage first becomes
10
reasonably observable
, as determined by the Fund
. All damage
11
caused by a single mine subsidence event or several subsidence
12
events which are continuous
, as determined by the Fund,
shall
13
constitute one occurrence. As set forth in subsections (a) and
14
(c) of this Section, a policy issued or renewed must provide
15
coverage, unless waived in writing by the insured, and the
16
insurer must continue to charge the premium level set for that
17
coverage by the Fund. If mine subsidence coverage is in force
18
when the mine subsidence damage first becomes reasonably
19
observable,
and the mine subsidence occurrence is still
20
ongoing,
then the insurer shall notify the insured making the
21
mine subsidence claim that continuation of that coverage
22
thereafter may not be necessary and is optional, but that
23
continued coverage on the damaged residence
, living unit,
or
24
commercial building shall terminate only upon written waiver
25
by the insured. The notification shall be made within 60 days
26
after the insurer receives written confirmation from the Fund

SB3147
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LRB104 17970 BAB 31407 b
1
that the cause of loss is active mine subsidence. The
2
notification shall be in the form of a separate mailing to the
3
insured from the insurer
through

via
the United States Postal
4
Service
or other commercial mail delivery service
and shall
5
include notification to the insured that mine subsidence
6
premiums paid for coverage on a damaged residence
, living
7
unit,
or commercial building subsequent to the established
8
date of loss shall be refunded to the insured within 60 days
9
after the insured provides a signed waiver of mine subsidence
10
coverage to the insurer. The notification shall be accompanied
11
by a waiver of coverage form for the insured to sign and return
12
to the insurer.
13

(g)

(f)
No insurer shall be required to offer mine
14
subsidence coverage in excess of the reinsured limits
as
15
established from time to time by the Fund and approved by the
16
Director
.
17
(Source: P.A. 98-1007, eff. 1-1-15
.)

18

(215 ILCS 5/806.1)
19

Sec. 806.1.
Division of Fund Into Separate Residential and
20
Commercial Sub-funds.
21

(a) Effective January 1, 1994, the Fund shall establish 2
22
separate sub-funds, a Residential Fund to provide reinsurance
23
for mine subsidence losses arising from residential and living
24
unit coverage and a Commercial Fund to provide reinsurance for
25
mine subsidence losses arising from commercial coverage. The

SB3147
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LRB104 17970 BAB 31407 b
1
assets and liabilities of the Fund shall be allocated to the
2

2
two
sub-funds in such manner as determined by the Board of
3
Directors, with the approval of the Director. The
2

two

4
sub-funds shall continue to be
governed

managed
by the Board
5
of Directors. Beginning January 1, 1994, all premiums received
6
by the Fund for residential coverage or living unit coverage
7
shall be credited to the Residential Fund, all losses and
8
expenses for residential coverage or living unit coverage
9
shall be charged to the Residential Fund. All premiums
10
received by the Fund for commercial coverage shall be credited
11
to the Commercial Fund, and all losses and expenses for
12
commercial coverage shall be charged to the Commercial Fund.
13
The Fund's overhead expenses shall be allocated between the
14
Residential Fund and the Commercial Fund on the basis of
15
annual written premium credited to each sub-fund. The assets
16
and liabilities of the Residential and Commercial Funds shall
17
be accounted for separately. The assets of the Residential
18
Fund shall not be used to reimburse insurers for losses for
19
Commercial Coverage and the assets of the Commercial Fund
20
shall not be used to reimburse insurers for losses for
21
residential coverage or living unit coverage.
22

(b) No insurer shall be required to pay any claim for any
23
loss reinsured under this Article except to the extent that
24
the amount available in the Residential Fund or the Commercial
25
Fund, as the case may be, is sufficient to reimburse the
26
insurer for such payment.

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1
(Source: P.A. 88-379; 89-206, eff. 7-21-95.)

2

(215 ILCS 5/807.1)
3

Sec. 807.1.
Exemption of Certain Counties by the Director.
4
The Director shall exempt
from the obligations of subsection
5
(a) of Section 805.1
every policy insuring residences, living
6
units or commercial buildings located in any county of
7
1,000,000 or more inhabitants or any county contiguous to any
8
such county, and, upon request of the Fund, may exempt every
9
policy insuring residences, living units or commercial
10
buildings located in any other specified county of this State,
11
from the provisions of
subsection (a) of
Section 805.1 of this
12
Article.
However, in any county exempted by this Section from
13
the obligations of subsection (a) of Section 805.1, an insurer
14
shall make available mine subsidence coverage upon request by
15
a policyholder. The Fund shall maintain and make available to
16
insurers a list of the exempt and non-exempt counties as
17
described in this Section.

18
(Source: P.A. 91-357, eff. 7-29-99.)

19

(215 ILCS 5/808.1)
20

Sec. 808.1.
Right of Insurers to Refuse to Provide Mine
21
Subsidence Coverage. An insurer may refuse to provide mine
22
subsidence coverage on a residence
, living unit,
or commercial
23
building evidencing unrepaired mine subsidence damage until
24
such damage has been repaired.

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(Source: P.A. 88-379.)

2

(215 ILCS 5/809.1)
3

Sec. 809.1.
Arbitration.
In the event of a dispute between
4
a policyholder and an insurer as to whether a residence
,
5
living unit,
or commercial building covered by mine subsidence
6
insurance has been damaged by mine subsidence,
when the damage
7
first became reasonably observable, or whether damage was
8
caused by one occurrence (a single mine subsidence event or
9
several subsidence events that are continuous) or multiple
10
occurrences, both the

a
policyholder
and the insurer
shall
11
each
have the right to submit that dispute to arbitration in
12
accordance with this Section.
Such arbitration, if demanded by
13
either party, shall be mandatory and preclude the policyholder
14
and the insurer from filing, pursuing, or continuing with
15
litigation of the issue in any other forum. The arbitration
16
award shall be binding on both the policyholder and the
17
insurer. Neither the

No
policyholder
nor the insurer
shall
18
have the right under this Section to submit to arbitration any
19
other
issue
regarding the amount of loss or damage caused to a
20
residence or commercial building by mine subsidence
.
21

Arbitration may be initiated only after the insurer has
22
notified the policyholder in writing, accompanied by a notice
23
informing the policyholder of the policyholder's right to
24
arbitration and containing specific reference to this Section,
25
of the Fund's determination of whether a residence, living

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unit, or commercial building covered by mine subsidence
2
insurance has been damaged by mine subsidence, when the damage
3
first became reasonably observable, or whether damage was
4
caused by a single mine subsidence event or several subsidence
5
events that are continuous. Arbitration shall be initiated and
6
conducted

Arbitration may be initiated only after the insurer
7
has made a decision that the residence or commercial building
8
covered by mine subsidence insurance was not damaged by mine
9
subsidence and so notified the policyholder in writing,
10
accompanied by a notice informing the policyholder of the
11
policyholder's right to arbitration and containing specific
12
reference to this Section. Within 60 days after receipt by the
13
policyholder of the notification, the policyholder may
14
initiate arbitration
in accordance with the Commercial
15
Arbitration Rules of the American Arbitration Association, as
16
then in effect
, before a panel of 3 arbitrators, unless the
17
parties mutually agree, after the demand for arbitration is
18
made, to have a single arbitrator
. All costs of the
19
arbitration shall be borne by the losing party. Appeals from
20
the decision of the arbitrators shall be in accordance with
21
the Uniform Arbitration Act as in effect in Illinois.
22
(Source: P.A. 88-379.)

23

(215 ILCS 5/810.1)
24

Sec. 810.1.
Reinsurance Agreements.
To obtain reinsurance
25
from the Fund for mine subsidence coverage offered under this

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Article, an insurer

All insurers
shall
execute and return to
2
the Fund, prior to receipt by the insurer of any mine
3
subsidence claim for which reinsurance is sought,

enter into
a
4
reinsurance agreement with the Fund
in a form updated from
5
time to time by the Board of Directors and

. The reinsurance
6
agreement shall be
filed with and approved by the Director.
7
The agreement
, which may include a specific effective date and
8
expiration date,
shall provide that each insurer shall cede
9
100% of any
mine
subsidence insurance written up to the limits
10
then established and in effect pursuant to subsection (c) of

11
contained in
Section 805.1
(c)
to the Fund and, in
12
consideration of the ceding commission retained by the
13
insurer, agrees to distribute informational publications
14
provided by the Fund
on a schedule set by the Fund
, undertake
15
adjustment of losses, payment of taxes, and all other expenses
16
of the insurer necessary for sale of policies and
17
administration of the mine subsidence insurance coverage. The
18
Fund shall agree to reimburse the insurer for all amounts
19
reasonably and properly paid
to
policyholders from claims
20
resulting from mine subsidence and for expenses specified in
21
the reinsurance agreement.
In addition, the reinsurance
22
agreement may contain, and may authorize the Fund to establish
23
and promulgate deductibles.
The reinsurance agreement may also
24
contain reasonable
provisions, rules, and procedures related
25
to underwriting standards; language that insurers must include
26
or not include in mine subsidence coverage forms used by

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insurers; remitting of premiums to the Fund;

rules and
2
procedures

covering
insurer documentation of losses; insurer
3
reporting of
premiums,
claims,
loss payments, and

reports of

4
litigation
, premiums and loss payments
; loss payment review by
5
the Fund;
determinations of whether claimed damage was caused
6
by mine subsidence, when mine subsidence damage was first
7
reasonably observable, and whether movement was continuous;
8
handling and adjustment of claims for damage caused by mine
9
subsidence; control and direction of litigation or arbitration
10
involving whether claimed damage was caused by mine
11
subsidence, when mine subsidence damage was first reasonably
12
observable, or whether movement was continuous or that may
13
affect the interests of the Fund; subrogation;

remitting of
14
premiums to the Fund; underwriting; and cause and origin
15
investigations;
and procedures for resolving disputes between
16
the
insurers and the Fund.
17
(Source: P.A. 90-655, eff. 7-30-98; 91-357, eff. 7-29-99.)

18

(215 ILCS 5/811.1)
19

Sec. 811.1.
Distribution of Premiums.
The Fund is
20
authorized to establish
, by way of the reinsurance agreement,
21
Plan of Operation, or operating rules and procedures,
the
22
proportion of total mine subsidence insurance premiums
23
collected by each insurer which shall be retained by the
24
insurer as a ceding commission, subject to review of the
25
Director. The remainder of such premiums shall be remitted by

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the insurer to the Fund at times to be determined by the Fund.
2
The ceding
commission rate for residential mine subsidence
3
coverage and commercial mine subsidence coverage may differ,
4
but the commission rates

commission
shall be uniform in all
5
reinsurance agreements entered into pursuant to Section 810.1
6
of this Article and shall be based on reasonable
7
administrative costs to the insurers, including agents'
8
commissions.
9
(Source: P.A. 88-379.)

10

(215 ILCS 5/813.1)
11

Sec. 813.1.
Reporting Requirements.
Every insurer must
12
report, at times designated by the Fund, such information as
13
is reasonably required by the Fund to conduct its affairs,
14
including, without limitation, information regarding losses
15
incurred and paid, premiums written and collected, and
16
exposures insured. Insurers must cooperate with the Fund's
17
periodic examination and audit of the insurer's mine
18
subsidence insurance books and records and with reasonable
19
data requests necessary to evaluate and price the exposure

20
establish claim reserves, and reimburse insurers for losses
21
paid to insureds
.
22
(Source: P.A. 88-379.)

23

(215 ILCS 5/814.1)
24

Sec. 814.1.
Right of Recourse
and Setoff
.

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(a) The Fund shall have no right of recourse against the
2
insurer, once the Fund has reimbursed the insurer for any
3
particular loss, unless the insurer has failed to settle that
4
loss in its customary manner, or in case of fraud by the
5
insurer.
6

(b) The Fund may seek recovery against the policyholder
7
for unjust enrichment if, in the Fund's judgment, the
8
policyholder was not entitled to the amounts paid because of
9
fraud, or a material violation of the policy conditions. The
10
insurer shall provide cooperation to the Fund.
11

(c) Notwithstanding any other provisions in this Article,
12
the insurer's residential coverage, living unit coverage, and
13
commercial coverage forms shall include a provision stating
14
that the amount of insurable loss to a residence, living unit,
15
or commercial building caused by mine subsidence shall be
16
reduced by the amounts received by any current or former owner
17
of that structure from a third party in exchange for a mine
18
subsidence waiver or a release of liability for past or future
19
mine subsidence damage in favor of that third party. If an
20
insurer's residential coverage, living unit coverage, or
21
commercial coverage forms do not include such a provision, the
22
Fund's reinsurance obligation to the insurer shall be limited
23
to the amount that would have been paid by the insurer and
24
reinsured by the Fund had the forms included such a provision.

25
(Source: P.A. 88-379.)

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(215 ILCS 5/815.1)
2

Sec. 815.1.
Subrogation.
3

(a)
The insurer's residential coverage, living unit
4
coverage, and commercial coverage forms shall include a
5
provision stating that the policyholder shall do nothing after
6
a loss to impair the policyholder's rights of recovery against
7
third parties. An insurer issuing residential coverage, living
8
unit coverage, or commercial coverage

All insurers issuing
9
mine subsidence policies
shall retain the right of subrogation
10
and do nothing after the loss to impair that right
.
11

(b) The Fund, on its own behalf, may exercise the right of
12
subrogation
to the extent permitted by law
.
13

(c)
Upon request by the Fund, an insurer with a reinsured
14
claim shall assign to the Fund any rights of subrogation it may
15
have, whether or not the rights of subrogation transfer to the
16
Fund by operation of law

Every insurer shall include in its
17
reports an itemized list of all losses in subrogation and
18
shall remit to the Fund all monies, less expenses, recovered
19
as the result of subrogation actions
.
20
(Source: P.A. 88-379.)

21

(215 ILCS 5/817.1)
22

Sec. 817.1.
Powers of Director.
In addition to any powers
23
conferred upon
the Director

him
by this or any other law, the
24
Director shall have the authority to
regulate

supervise
the
25
operations of the Fund
as set forth in this Article
and shall

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review the Fund's rates once every
3

three
years. In addition
,

2
the Director or any person designated by
the Director

him
has
3
the power:

4

(a) to examine the operation of the Fund through free
5

access to all books, records, files, papers and documents
6

relating to its operation and may summon, qualify and
7

examine as witnesses all persons having knowledge of such
8

operation, including officers, agents or employees
9

thereof;

10

(b) to do all things necessary to enable the State of
11

Illinois and any insurer participating in any program
12

approved by the Director to fully participate in any
13

federal program which may be enacted for purposes similar
14

to the purposes of this Article;

15

(c) to require such reports as the Director may deem
16

necessary.
17
(Source: P.A. 90-655, eff. 7-30-98.)

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INDEX

2

Statutes amended in order of appearance

3

215 ILCS 5/801.1
4

215 ILCS 5/802.1
5

215 ILCS 5/803.1
6

215 ILCS 5/804.1
7

215 ILCS 5/805.1
8

215 ILCS 5/806.1
9

215 ILCS 5/807.1
10

215 ILCS 5/808.1
11

215 ILCS 5/809.1
12

215 ILCS 5/810.1
13

215 ILCS 5/811.1
14

215 ILCS 5/813.1
15

215 ILCS 5/814.1
16

215 ILCS 5/815.1
17

215 ILCS 5/817.1

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