The Fund as a Reinsurer
The Illinois Mine Subsidence statute requires all Illinois Class 3 property insurers to make mine subsidence coverage available. The Fund is not a Class 3 property insurer. The Fund provides reinsurance for the property insurers who pay mine subsidence losses.
As a reinsurer, the Fund has a contractual relationship with the primary insurers, not with the consumers who purchase mine subsidence coverage. This is a very important distinction, particularly with respect to the handling of mine subsidence claims.
Once the Fund has determined whether or not a property has been damaged by mine subsidence, the primary insurance company is responsible for administering and supervising the claim in its entirety. The primary insurer may request the Fund to provide technical assistance to identify methods of repairing the damaged property, and to estimate the cost of those repairs. When requested, the Fund provides those services to the primary insurer. The primary insurer may accept, modify or reject the results of that technical assistance. The primary insurer controls the claim valuation and settlement process.