Sen. Linda Holmes

Filed: 5/5/2017

 

 


 

 


 
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1
AMENDMENT TO HOUSE BILL 1954

2    AMENDMENT NO. ______. Amend House Bill 1954 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Illinois Insurance Code is amended by
5changing Sections 143.14, 143.15, 143.17, and 143.17a as
6follows:
 
7    (215 ILCS 5/143.14)  (from Ch. 73, par. 755.14)
8    Sec. 143.14. Notice of cancellation.
9    (a) No notice of cancellation of any policy of insurance,
10to which Section 143.11 applies, shall be effective unless
11mailed by the company to the named insured and the mortgage or
12lien holder, at the last mailing address known by the company.
13The company shall maintain proof of mailing of such notice on a
14recognized U.S. Post Office form or a form acceptable to the U.
15S. Post Office or other commercial mail delivery service.
16Notification A copy of all such notices shall also be sent to

 

 

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1the insured's broker if known, or the agent of record, if
2known, and to the mortgagee or lien holder listed on the policy
3at the last mailing address known to the company. For purposes
4of this Section, the mortgage or lien holder, insured's broker,
5if known, or the agent of record may opt to accept notification
6electronically.
7    (b) Whenever a financed insurance contract is cancelled,
8the insurer shall return whatever gross unearned premiums are
9due under the insurance contract or contracts not to exceed the
10unpaid balance due the premium finance company directly to the
11premium finance company effecting the cancellation for the
12account of the named insured. The return premium must be mailed
13to the premium finance company within 60 days. The request for
14the unearned premium by the premium finance company shall be in
15the manner of a monthly account, current accounting by
16producer, policy number, unpaid balance and name of insured for
17each cancelled amount. In the event the insurance contract or
18contracts are subject to audit, the insurer shall retain the
19right to withhold the return of the portion of premium that can
20be identified to the contract or contracts until the audit is
21completed. Within 30 days of the completion of the audit, if a
22premium retained by the insurer after crediting the earned
23premium would result in a surplus, the insurer shall return the
24surplus directly to the premium finance company. If the audit
25should result in an additional premium due the insurer, the
26obligation for the collection of this premium shall fall upon

 

 

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1the insurer and not affect any other contract or contracts
2currently being financed by the premium finance company for the
3named insured.
4    (c) Whenever a premium finance agreement contains a power
5of attorney enabling the premium finance company to cancel any
6insurance contract or contracts in the agreement, the insurer
7shall honor the date of cancellation as set forth in the
8request from the premium finance company without requiring the
9return of the insurance contract or contracts. The insurer may
10mail to the named insured an acknowledgment of the notice of
11cancellation from the premium finance company but the named
12insured shall not incur any additional premium charge for any
13extension of coverage. The insurer need not maintain proof of
14mailing of this notice.
15    (d) All statutory regulatory and contractual restrictions
16providing that the insurance contract may not be cancelled
17unless the required notice is mailed to a governmental agency,
18mortgagee, lienholder, or other third party shall apply where
19cancellation is effected under a power of attorney under a
20premium finance agreement. The insurer shall have the right for
21a premium charge for this extension of coverage.
22(Source: P.A. 93-713, eff. 1-1-05.)
 
23    (215 ILCS 5/143.15)  (from Ch. 73, par. 755.15)
24    Sec. 143.15. Mailing of cancellation notice. All notices of
25cancellation of insurance as defined in subsections (a), (b)

 

 

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1and (c) of Section 143.13 must be mailed at least 30 days prior
2to the effective date of cancellation to the named insured and
3mortgagee or lien holder, if known, at the last mailing address
4known to the company. All notices of cancellation to the named
5insured shall include a specific explanation of the reason or
6reasons for cancellation. However, where cancellation is for
7nonpayment of premium, the notice of cancellation must be
8mailed at least 10 days before the effective date of the
9cancellation. For purposes of this Section, the mortgagee or
10lien holder, if known, may opt to accept notification
11electronically.
12(Source: P.A. 93-713, eff. 1-1-05.)
 
13    (215 ILCS 5/143.17)  (from Ch. 73, par. 755.17)
14    Sec. 143.17. Notice of intention not to renew.
15    a. No company shall fail to renew any policy of insurance,
16as defined in subsections (a), (b), (c), and (h) of Section
17143.13, to which Section 143.11 applies, unless it shall send
18by mail to the named insured at least 30 days advance notice of
19its intention not to renew. The company shall maintain proof of
20mailing of such notice on a recognized U.S. Post Office form or
21a form acceptable to the U. S. Post Office or other commercial
22mail delivery service. The nonrenewal shall not become
23effective until at least 30 days from the proof of mailing date
24of the notice to the name insured. Notification An exact and
25unaltered copy of such notice shall also be sent to the

 

 

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1insured's broker, if known, or the agent of record and to any
2the mortgagee or lien holder listed on the policy at the last
3mailing address known by the company. For purposes of this
4Section, the mortgagee or lien holder, insured's broker, or the
5agent of record may opt to accept notification electronically.
6However, where cancellation is for nonpayment of premium, the
7notice of cancellation must be mailed at least 10 days before
8the effective date of the cancellation.
9    b. This Section does not apply if the company has
10manifested its willingness to renew directly to the named
11insured. Such written notice shall specify the premium amount
12payable, including any premium payment plan available, and the
13name of any person or persons, if any, authorized to receive
14payment on behalf of the company. If no person is so
15authorized, the premium notice shall so state. The notice of
16nonrenewal and the proof of mailing shall be effected on the
17same date.
18    b-5. This Section does not apply if the company manifested
19its willingness to renew directly to the named insured.
20However, no company may impose changes in deductibles or
21coverage for any policy forms applicable to an entire line of
22business enumerated in subsections (a), (b), (c), and (h) of
23Section 143.13 to which Section 143.11 applies unless the
24company mails to the named insured written notice of the change
25in deductible or coverage at least 60 days prior to the renewal
26or anniversary date. Notice An exact and unaltered copy of the

 

 

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1notice shall also be sent to the insured's broker, if known, or
2the agent of record.
3    c. Should a company fail to comply with (a) or (b) of this
4Section, the policy shall terminate only on the effective date
5of any similar insurance procured by the insured with respect
6to the same subject or location designated in both policies.
7    d. Renewal of a policy does not constitute a waiver or
8estoppel with respect to grounds for cancellation which existed
9before the effective date of such renewal.
10    e. In all notices of intention not to renew any policy of
11insurance, as defined in Section 143.11 the company shall
12provide the named insured a specific explanation of the reasons
13for nonrenewal.
14    f. For purposes of this Section, the insured's broker, if
15known, or the agent of record and the mortgagee or lien holder
16may opt to accept notification electronically.
17(Source: P.A. 93-713, eff. 1-1-05.)
 
18    (215 ILCS 5/143.17a)  (from Ch. 73, par. 755.17a)
19    Sec. 143.17a. Notice of intention not to renew.
20    (a) A company intending to nonrenew any policy of insurance
21to which Section 143.11 applies, except for those defined in
22subsections (a), (b), (c), and (h) of Section 143.13, must mail
23written notice to the named insured at least 60 days prior to
24the expiration date of the current policy. The notice to the
25name insured shall provide a specific explanation of the

 

 

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1reasons for nonrenewal. In all notices of intention not to
2renew any policy of insurance, as defined in Section 143.11,
3the company shall provide a specific explanation of the reasons
4for nonrenewal. A company may not extend the current policy
5period for purposes of providing notice of its intention not to
6renew required under this subsection (a).
7    (b) A company intending to renew any policy of insurance to
8which Section 143.11 applies, except for those defined in
9subsections (a), (b), (c), and (h) of Section 143.13, with an
10increase in premium of 30% or more or with changes in
11deductibles or coverage that materially alter the policy must
12mail or deliver to the named insured written notice of such
13increase or change in deductible or coverage at least 60 days
14prior to the renewal or anniversary date. If a company has
15failed to provide notice of intention to renew required under
16this subsection (b) at least 60 days prior to the renewal or
17anniversary date, but does so no less than 31 days prior to the
18renewal or anniversary date, the company may extend the current
19policy at the current terms and conditions for the period of
20time needed to equal the 60 day time period required to provide
21notice of intention to renew by this subsection (b). The
22increase in premium shall be the renewal premium based on the
23known exposure as of the date of the quotation compared to the
24premium as of the last day of coverage for the current year's
25policy, annualized. The premium on the renewal policy may be
26subsequently amended to reflect any change in exposure or

 

 

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1reinsurance costs not considered in the quotation.
2    (c) A company that has failed to provide notice of
3intention to nonrenew under subsection (a) of this Section and
4has failed to provide notice of intention to renew as
5prescribed under subsection (b) of this Section must renew the
6expiring policy under the same terms and conditions for an
7additional year or until the effective date of any similar
8insurance is procured by the insured, whichever is earlier. The
9company may increase the renewal premium. However, such
10increase must be less than 30% of the expiring term's premium
11and notice of such increase must be delivered to the named
12insured on or before the date of expiration of the current
13policy period.
14    (d) Under subsection (a), the company shall maintain proof
15of mailing of the notice of intention not to renew to the named
16insured on one of the following forms: a recognized U.S. Post
17Office form or a form acceptable to the U.S. Post Office or
18other commercial mail delivery service. Under subsections (b)
19and (c), proof of mailing or proof of receipt of the notice of
20intention to renew to the named insured may be proven by a
21sworn affidavit by the company as to the usual and customary
22business practices of mailing notice pursuant to this Section
23or may be proven consistent with Illinois Supreme Court Rule
24236. For all notice requirements under this Section, an exact
25and unaltered copy of the notice to the named insured shall
26also be sent to the named insured's producer, if known, or the

 

 

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1producer of record. Notification For notices of intention to
2not renew, an exact and unaltered copy of the notice to the
3named insured shall also be sent to the mortgagee or lien
4holder listed on the policy at the last mailing address known
5by the company.
6    (e) Renewal of a policy does not constitute a waiver or
7estoppel with respect to grounds for cancellation that existed
8before the effective date of such renewal.
9    (f) For purposes of this Section, the named insured's
10producer, if known, or the producer of record and the mortgagee
11or lien holder may opt to accept notification electronically.
12(Source: P.A. 95-533, eff. 6-1-08.)
 
13    Section 99. Effective date. This Act takes effect January
141, 2018.".