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| 1 | AN ACT concerning insurance.
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| 2 | Be it enacted by the People of the State of Illinois,
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| 3 | represented in the General Assembly:
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| 4 | Section 5. The Service Contract Act is amended by changing | ||||||
| 5 | Section 5 as follows:
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| 6 | (215 ILCS 152/5)
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| 7 | Sec. 5. Definitions.
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| 8 | "Department" means the Department of Insurance.
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| 9 | "Director" means the Director of Insurance.
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| 10 | "Road hazard" means a hazard that is encountered while | ||||||
| 11 | driving a motor vehicle, including, but not limited to, | ||||||
| 12 | potholes, rocks, wood debris, metal parts, glass, plastic, | ||||||
| 13 | curbs, and composite scraps. | ||||||
| 14 | "Service Contract" means a contract or agreement whereby a | ||||||
| 15 | service
contract provider
undertakes for a specified period of | ||||||
| 16 | time, for separate and identifiable
consideration, to
perform | ||||||
| 17 | the repair, replacement, or maintenance, or indemnification | ||||||
| 18 | for such
services, of
any automobile, system, or consumer | ||||||
| 19 | product in connection with the operational
or
structural | ||||||
| 20 | failure due to a defect in materials or workmanship, or normal | ||||||
| 21 | wear
and tear,
with or without additional provision for | ||||||
| 22 | incidental payment or indemnity under
limited
circumstances, | ||||||
| 23 | for related expenses, including, but not limited to, towing,
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| 1 | rental, and
emergency road service. Service contracts may | ||||||
| 2 | provide for: | ||||||
| 3 | (1) the repair,
replacement, or
maintenance of such | ||||||
| 4 | property for damage resulting from power surges and
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| 5 | accidental
damage from handling; . | ||||||
| 6 | (2) the repair or replacement of tires or wheels, or | ||||||
| 7 | both, on a motor vehicle damaged as the result of coming | ||||||
| 8 | into contact with road hazards; | ||||||
| 9 | (3) the removal of dents, dings, or creases on a motor | ||||||
| 10 | vehicle that can be repaired using the process of paintless | ||||||
| 11 | dent removal without affecting the existing paint finish | ||||||
| 12 | and without replacing vehicle body panels, sanding, | ||||||
| 13 | bonding, or painting; | ||||||
| 14 | (4) the repair of chips or cracks in or the replacement | ||||||
| 15 | of motor vehicle windshields as a result of damage caused | ||||||
| 16 | by road hazards; | ||||||
| 17 | (5) the replacement of a motor vehicle key or key-fob | ||||||
| 18 | in the event that the key or key-fob becomes inoperable or | ||||||
| 19 | is lost or stolen; | ||||||
| 20 | (6) a protective chemical, substance, device, or | ||||||
| 21 | system that (A) is installed on or applied to a motor | ||||||
| 22 | vehicle, (B) is designed to prevent loss or damage to a | ||||||
| 23 | motor vehicle from a specific cause, and (C) includes a | ||||||
| 24 | written product warranty providing for payment to or on | ||||||
| 25 | behalf of the warranty holder's incidental costs in the | ||||||
| 26 | event that the product fails to prevent loss or damage as | ||||||
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| 1 | specified; the reimbursement of incidental costs under the | ||||||
| 2 | warranty must be tied to the purchase of a physical product | ||||||
| 3 | that is formulated or designed to make the specified loss | ||||||
| 4 | or damage less likely to occur; or | ||||||
| 5 | (7) other services that may be approved by the | ||||||
| 6 | Director, if not inconsistent with other provisions of this | ||||||
| 7 | Act. | ||||||
| 8 | Service contracts shall not include: | ||||||
| 9 | (i) contracts of limited
duration
that provide for | ||||||
| 10 | scheduled maintenance only; .
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| 11 | (ii) fuel additives, oil additives, or other chemical | ||||||
| 12 | products applied to the engine, transmission, or fuel | ||||||
| 13 | system of a motor vehicle; | ||||||
| 14 | (iii) coverage for the repair or replacement, or both, | ||||||
| 15 | of damage to the interior surfaces of a vehicle, or for | ||||||
| 16 | repair or replacement, or both, of damage to the exterior | ||||||
| 17 | paint or finish of a vehicle; however, such coverage may be | ||||||
| 18 | offered in connection with the sale of a protective | ||||||
| 19 | chemical, device, or system described in item (6) of this | ||||||
| 20 | definition. | ||||||
| 21 | "Service contract holder" means the person who purchases a | ||||||
| 22 | service
contract or a
permitted transferee.
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| 23 | "Service contract provider" means a person who is | ||||||
| 24 | contractually
obligated to the
service contract holder under | ||||||
| 25 | the terms of the service contract. A service
contract
provider | ||||||
| 26 | does not include an insurer.
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| 1 | "Service contract reimbursement insurance policy" means a | ||||||
| 2 | policy of
insurance that
is issued to the service contract | ||||||
| 3 | provider to provide reimbursement to the
service
contract | ||||||
| 4 | provider or to pay on behalf of the service contract provider | ||||||
| 5 | all
covered
contractual obligations incurred by the service | ||||||
| 6 | contract provider under the
terms and
conditions of the insured | ||||||
| 7 | service contracts issued or sold by the service
contract
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| 8 | provider.
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| 9 | "System" means the heating, cooling, plumbing, electrical, | ||||||
| 10 | ventilation,
or any other similar
system of a home.
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| 11 | (Source: P.A. 90-711, eff. 8-7-98.)
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