HB1381 95TH GENERAL ASSEMBLY

LRB095 09978 DRH 30191 b

95TH GENERAL ASSEMBLY
State of Illinois
2007 and 2008
HB1381

Introduced 2/21/2007, by Rep. William B. Black

SYNOPSIS AS INTRODUCED:

625 ILCS 5/7-604.3 new
625 ILCS 5/7-604.5 new
625 ILCS 5/7-604.7 new

Amends the Illinois Vehicle Code. Requires an insurer to notify the Secretary of State if an insurer issues a new or replacement policy, terminates a policy, either by cancellation or failure to renew, unless the same insurer issues a replacement policy complying with this Act at the same time the insurer terminates the old policy and no lapse in coverage results, or reinstates a policy after the insurer has notified the Secretary of a cancellation or termination. Provides that the Director of the Division of Insurance may assess a civil penalty of $200 against an insurer that fails to notify the Secretary of the required information. Provides for notice by the Secretary, when the Secretary receives evidence, by a notice of termination of a motor vehicle liability policy or otherwise, that the owner of a motor vehicle registered or required to be registered in this State does not have the mandatory insurance coverage for the operation of the vehicle. Requires the owner to respond to the letter within 10 days of the date on the letter and explain how the owner has met the duty to have continuous insurance coverage for the vehicle. Provides for penalties for a lapse in the mandatory insurance coverage. Provides that any person whose vehicle registration or license plates have been revoked for a lapse in the mandatory insurance coverage may request a hearing.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning vehicles.

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

Section 5. The Illinois Vehicle Code is amended by adding Sections 7-604.3, 7-604.5, and 7-604.7 as follows:

(625 ILCS 5/7-604.3 new)

Sec. 7-604.3. Notice of insurance.

(a) An insurer shall notify the Secretary upon any of the following with regard to a motor vehicle liability policy:

(1) Issues a new or replacement policy.

(2) Terminates a policy, either by cancellation or failure to renew, unless the same insurer issues a replacement policy complying with this Act at the same time the insurer terminates the old policy and no lapse in coverage results.

(3) Reinstates a policy after the insurer has notified the Secretary of a cancellation or termination.

(b) An insurer shall notify the Secretary as required by subsection (a) of this Section within 20 business days of the change in the policy.

(c) Any insurer with $25,000,000 or more in annual vehicle insurance premium volume shall submit the notices required under this Section by electronic means. All other insurers may submit the notices required under this Section by either paper or electronic means.

(d) The names of insured and the beginning date and termination date of insurance coverage provided to the Secretary by an insurer under this Section constitute a trade secret under the Illinois Trade Secrets Act.

(e) The Director of the Division of Insurance may assess a civil penalty of $200 against an insurer that fails to notify the Secretary as required by this Section. The Director may waive the penalty if the insurer establishes good cause for the failure.

(625 ILCS 5/7-604.5 new)

Sec. 7-604.5. Action by the Secretary; notice of lapse of insurance.

(a) When the Secretary receives evidence, by a notice of termination of a motor vehicle liability policy or otherwise, that the owner of a motor vehicle registered or required to be registered in this State does not have the mandatory insurance coverage for the operation of the vehicle, the Secretary shall send the owner a letter. The letter shall notify the owner of the evidence and inform the owner that the owner shall respond to the letter within 10 days of the date on the letter and explain how the owner has met the duty to have continuous insurance coverage for the vehicle. Based on the owner's response, the Secretary shall take the appropriate action listed:

(1) If the owner responds within the required time and the response establishes that the owner has not had a lapse in the mandatory insurance coverage, the Secretary shall correct its records.

(2) If the owner responds within the required time and the response establishes all of the following, the Secretary shall assess the owner a penalty in the amount set in subsection (b) of this Section:

(A) The owner had a lapse in the mandatory insurance, but the owner now has the mandatory insurance coverage.

(B) The vehicle was not involved in an accident during the lapse in the mandatory insurance coverage.

(C) The owner did not operate the vehicle during the lapse with knowledge that the owner had no mandatory insurance coverage for the vehicle.

(3) If the owner responds within the required time and the response establishes any of the following, the Secretary shall assess the owner a penalty in the amount set in subsection (b) of this Section and revoke the registration of the owner's vehicle for the period set in subsection (c) of this Section:

(A) The owner had a lapse in the mandatory insurance coverage and still does not have the mandatory insurance coverage.

(B) The owner now has the mandatory insurance coverage even though the owner had a lapse, but the vehicle was involved in an accident during the lapse, the owner operated the vehicle during the lapse with knowledge that the owner had no mandatory insurance coverage for the vehicle, or both.

(4) If the owner does not respond within the required time, the Secretary shall revoke the registration of the owner's vehicle for the period set in subsection (c) of this Section. When the owner responds, the Secretary shall take the appropriate action listed in items (1) through (3) of this subsection as if the response had been timely.

(b) The amount of a penalty payable under this Section by an owner who has had a lapse in the mandatory insurance coverage shall be based upon the number of times the owner has been assessed a penalty under this Section during the 3-year period before the date the owner's current lapse began. For the first lapse, the penalty shall be $50; for a second lapse, the penalty shall be $100; and for a third or subsequent lapse, the penalty shall be $150.

(c) The revocation period for a revocation of vehicle registration based on a response that establishes that a vehicle owner does not have the mandatory insurance coverage is indefinite and ends when the owner obtains the mandatory insurance coverage or transfers the vehicle to an owner who has the mandatory insurance coverage. The revocation period for a revocation of vehicle registration based on a response that establishes the occurrence of an accident during a lapse in the mandatory insurance coverage or the knowing operation of a vehicle without the mandatory insurance coverage is 30 days. The revocation period for a revocation or vehicle registration based on failure of a vehicle owner to respond is indefinite and ends when the owner responds.

(d) When the Secretary revokes the registration of an owner's vehicle, it shall notify the owner of the revocation. The notice shall inform the owner of the following:

(1) That the owner shall return the vehicle's license plates and registration card to the Secretary, if the owner has not done so already, and that failure to do so is a Class A misdemeanor.

(2) That the vehicle's license plates and registration card are subject to seizure by a law enforcement officer.

(3) That the registration of the vehicle cannot be renewed while the registration is revoked.

(4) That the owner shall pay any penalties assessed, a restoration fee, and the fee for a license plates when the owner applies to the Secretary to register a vehicle whose registration was revoked.

(e) A vehicle whose registration has been revoked may not be registered during the revocation period in the name of the owner, a child of the owner, the owner's spouse, or a child of the owner's spouse. This restriction does not apply to a spouse who is living separate and apart from the owner. At the end of a revocation period, a vehicle owner who has financial responsibility may apply to register a vehicle whose registration was revoked. The owner shall pay any penalty assessed, a restoration fee of $50, and the fee for the license plates and registration.

(625 ILCS 5/7-604.7 new)

Sec. 7-604.7. Hearings upon lapse of mandatory insurance coverage. Any person whose vehicle registration or license plates have been revoked under Section 7-604.5 of this Act may request a hearing. Upon receipt of such request, the Secretary shall, as early as practical, afford an opportunity for a hearing. At the hearing the duly authorized agents of the Secretary may administer oaths and issue subpoenas for the attendance of witnesses and the production of relevant books and documents. If it appears that continuous the mandatory insurance coverage existed for the vehicle involved, or if it appears the lapse of the mandatory insurance coverage is not reasonably attributable to the neglect or fault of the person whose registration card and license plates were revoked, the Secretary shall withdraw its order of revocation and such person may retain the registration card and license plates. Otherwise, the order of revocation shall be affirmed and the registration card and license plates surrendered.