Sec. 12.1. Insurance risk pooling trusts.

444 words·~2 min read·/il/chapter-765/act-605/12-1

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

(a)This Section shall be known and may be cited as the Condominium and Common Interest Community Risk Pooling Trust Act.

(b)The boards of managers or boards of directors, as the case may be, of two or more condominium associations or common interest community associations, are authorized to establish, with the unit owners and the condominium or common interest community associations as the beneficiaries thereof, a trust fund for the purpose of providing protection of the participating condominium and common interest community associations against the risk of financial loss due to damage to, destruction of or loss of property, or the imposition of legal liability as required or authorized under this Act or the declaration of the condominium or common interest community association.

(c)The trust fund shall be established and amended only by a written instrument which shall be filed with and approved by the Director of Insurance prior to its becoming effective.

(d)No association shall be a beneficiary of the trust fund unless it shall be incorporated under the laws of this State.

(e)The trust fund is authorized to indemnify the condominium and common interest community association beneficiaries thereof against the risk of loss due to damage, destruction or loss to property or imposition of legal liability as required or authorized under this Act or the declaration of the condominium or common interest community association.

(f)Risks assumed by the trust fund may be pooled and shared with other trust funds established under this Section.

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(i)No trustee of the trust fund shall be paid a salary or receive other compensation, except that the written trust instrument may provide for reimbursement for actual expenses incurred on behalf of the trust fund.

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(m)Each trust fund shall file annually with the Director of Insurance a full independently audited financial statement.

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(s)The Director of Insurance shall have with respect to trust funds established under this Section the powers of examination conferred upon him relative to insurance companies by Section 132 of the Illinois Insurance Code.

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(v)Trust funds established under and which fully comply with this Section shall not be considered member insurance companies or to be in the business of insurance nor shall the provision of Article XXXIV of the Illinois Insurance Code apply to any such trust fund established under this Section.

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(x)The Director of Insurance shall adopt reasonable rules pertaining to the standards of coverage and administration of trust funds authorized under this Section.