Sen. Linda Holmes

Filed: 5/24/2017

 

 


 

 


 
10000HB1954sam002LRB100 04579 SMS 26934 a

1
AMENDMENT TO HOUSE BILL 1954

2    AMENDMENT NO. ______. Amend House Bill 1954, AS AMENDED, by
3replacing everything after the enacting clause with the
4following:
 
5    "Section 5. The Illinois Insurance Code is amended by
6changing Sections 132.5, 143.14, 143.15, 143.16, 143.17, and
7143.17a as follows:
 
8    (215 ILCS 5/132.5)  (from Ch. 73, par. 744.5)
9    Sec. 132.5. Examination reports.
10    (a) General description. All examination reports shall be
11comprised of only facts appearing upon the books, records, or
12other documents of the company, its agents, or other persons
13examined or as ascertained from the testimony of its officers,
14agents, or other persons examined concerning its affairs and
15the conclusions and recommendations as the examiners find
16reasonably warranted from those facts.

 

 

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1    (b) Filing of examination report. No later than 60 days
2following completion of the examination, the examiner in charge
3shall file with the Department a verified written report of
4examination under oath. Upon receipt of the verified report,
5the Department shall transmit the report to the company
6examined, together with a notice that affords the company
7examined a reasonable opportunity of not more than 30 days to
8make a written submission or rebuttal with respect to any
9matters contained in the examination report.
10    (c) Adoption of the report on examination. Within 30 days
11of the end of the period allowed for the receipt of written
12submissions or rebuttals, the Director shall fully consider and
13review the report, together with any written submissions or
14rebuttals and any relevant portions of the examiners work
15papers and enter an order:
16        (1) Adopting the examination report as filed or with
17    modification or corrections. If the examination report
18    reveals that the company is operating in violation of any
19    law, regulation, or prior order of the Director, the
20    Director may order the company to take any action the
21    Director considers necessary and appropriate to cure the
22    violation.
23        (2) Rejecting the examination report with directions
24    to the examiners to reopen the examination for purposes of
25    obtaining additional data, documentation, or information
26    and refiling under subsection (b).

 

 

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1        (3) Calling for an investigatory hearing with no less
2    than 20 days notice to the company for purposes of
3    obtaining additional documentation, data, information, and
4    testimony.
5    (d) Order and procedures. All orders entered under
6paragraph (1) of subsection (c) shall be accompanied by
7findings and conclusions resulting from the Director's
8consideration and review of the examination report, relevant
9examiner work papers, and any written submissions or rebuttals.
10The order shall be considered a final administrative decision
11and may be appealed in accordance with the Administrative
12Review Law. The order shall be served upon the company by
13certified mail, together with a copy of the adopted examination
14report. Within 30 days of the issuance of the adopted report,
15the company shall file affidavits executed by each of its
16directors stating under oath that they have received a copy of
17the adopted report and related orders.
18    Any hearing conducted under paragraph (3) of subsection (c)
19by the Director or an authorized representative shall be
20conducted as a nonadversarial confidential investigatory
21proceeding as necessary for the resolution of any
22inconsistencies, discrepancies, or disputed issues apparent
23upon the face of the filed examination report or raised by or
24as a result of the Director's review of relevant work papers or
25by the written submission or rebuttal of the company. Within 20
26days of the conclusion of any hearing, the Director shall enter

 

 

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1an order under paragraph (1) of subsection (c).
2    The Director shall not appoint an examiner as an authorized
3representative to conduct the hearing. The hearing shall
4proceed expeditiously with discovery by the company limited to
5the examiner's work papers that tend to substantiate any
6assertions set forth in any written submission or rebuttal. The
7Director or his representative may issue subpoenas for the
8attendance of any witnesses or the production of any documents
9deemed relevant to the investigation, whether under the control
10of the Department, the company, or other persons. The documents
11produced shall be included in the record, and testimony taken
12by the Director or his representative shall be under oath and
13preserved for the record. Nothing contained in this Section
14shall require the Department to disclose any information or
15records that would indicate or show the existence or content of
16any investigation or activity of a criminal justice agency.
17    The hearing shall proceed with the Director or his
18representative posing questions to the persons subpoenaed.
19Thereafter the company and the Department may present testimony
20relevant to the investigation. Cross-examination shall be
21conducted only by the Director or his representative. The
22company and the Department shall be permitted to make closing
23statements and may be represented by counsel of their choice.
24    (e) Publication and use. Upon the adoption of the
25examination report under paragraph (1) of subsection (c), the
26Director shall continue to hold the content of the examination

 

 

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1report as private and confidential information for a period of
235 days, except to the extent provided in subsection (b).
3Thereafter, the Director may open the report for public
4inspection so long as no court of competent jurisdiction has
5stayed its publication.
6    Nothing contained in this Code shall prevent or be
7construed as prohibiting the Director from disclosing the
8content of an examination report, preliminary examination
9report or results, or any matter relating thereto, to the
10insurance department of any other state or country or to law
11enforcement officials of this or any other state or agency of
12the federal government at any time, so long as the agency or
13office receiving the report or matters relating thereto agrees
14in writing to hold it confidential and in a manner consistent
15with this Code.
16    In the event the Director determines that regulatory action
17is appropriate as a result of any examination, he may initiate
18any proceedings or actions as provided by law.
19    (f) Confidentiality of ancillary information. All working
20papers, recorded information, documents, and copies thereof
21produced by, obtained by, or disclosed to the Director or any
22other person in the course of any examination must be given
23confidential treatment, are not subject to subpoena, and may
24not be made public by the Director or any other persons, except
25to the extent provided in subsection (e). Access may also be
26granted to the National Association of Insurance

 

 

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1Commissioners. Those parties must agree in writing before
2receiving the information to provide to it the same
3confidential treatment as required by this Section, unless the
4prior written consent of the company to which it pertains has
5been obtained.
6    This subsection (f) applies to market conduct examinations
7described in Section 132 of this Code.
8(Source: P.A. 87-108.)
 
9    (215 ILCS 5/143.14)  (from Ch. 73, par. 755.14)
10    Sec. 143.14. Notice of cancellation.
11    (a) No notice of cancellation of any policy of insurance,
12to which Section 143.11 applies, shall be effective unless
13mailed by the company to the named insured and the mortgage or
14lien holder, at the last mailing address known by the company.
15The company shall maintain proof of mailing of such notice on a
16recognized U.S. Post Office form or a form acceptable to the U.
17S. Post Office or other commercial mail delivery service.
18Notification A copy of all such notices shall also be sent to
19the insured's broker if known, or the agent of record, if
20known, and to the mortgagee or lien holder listed on the policy
21at the last mailing address known to the company. For purposes
22of this Section, the mortgage or lien holder, insured's broker,
23if known, or the agent of record may opt to accept notification
24electronically.
25    (b) Whenever a financed insurance contract is cancelled,

 

 

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1the insurer shall return whatever gross unearned premiums are
2due under the insurance contract or contracts not to exceed the
3unpaid balance due the premium finance company directly to the
4premium finance company effecting the cancellation for the
5account of the named insured. The return premium must be mailed
6to the premium finance company within 60 days. The request for
7the unearned premium by the premium finance company shall be in
8the manner of a monthly account, current accounting by
9producer, policy number, unpaid balance and name of insured for
10each cancelled amount. In the event the insurance contract or
11contracts are subject to audit, the insurer shall retain the
12right to withhold the return of the portion of premium that can
13be identified to the contract or contracts until the audit is
14completed. Within 30 days of the completion of the audit, if a
15premium retained by the insurer after crediting the earned
16premium would result in a surplus, the insurer shall return the
17surplus directly to the premium finance company. If the audit
18should result in an additional premium due the insurer, the
19obligation for the collection of this premium shall fall upon
20the insurer and not affect any other contract or contracts
21currently being financed by the premium finance company for the
22named insured.
23    (c) Whenever a premium finance agreement contains a power
24of attorney enabling the premium finance company to cancel any
25insurance contract or contracts in the agreement, the insurer
26shall honor the date of cancellation as set forth in the

 

 

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1request from the premium finance company without requiring the
2return of the insurance contract or contracts. The insurer may
3mail to the named insured an acknowledgment of the notice of
4cancellation from the premium finance company but the named
5insured shall not incur any additional premium charge for any
6extension of coverage. The insurer need not maintain proof of
7mailing of this notice.
8    (d) All statutory regulatory and contractual restrictions
9providing that the insurance contract may not be cancelled
10unless the required notice is mailed to a governmental agency,
11mortgagee, lienholder, or other third party shall apply where
12cancellation is effected under a power of attorney under a
13premium finance agreement. The insurer shall have the right for
14a premium charge for this extension of coverage.
15(Source: P.A. 93-713, eff. 1-1-05.)
 
16    (215 ILCS 5/143.15)  (from Ch. 73, par. 755.15)
17    Sec. 143.15. Mailing of cancellation notice. All notices of
18cancellation of insurance as defined in subsections (a), (b)
19and (c) of Section 143.13 must be mailed at least 30 days prior
20to the effective date of cancellation to the named insured;
21however, if cancellation is for nonpayment of premium, the
22notice of cancellation must be mailed at least 10 days before
23the effective date of the cancellation to and mortgagee or lien
24holder, if known, at the last mailing address known to the
25company. All notices of cancellation to the named insured shall

 

 

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1include a specific explanation of the reason or reasons for
2cancellation. However, where cancellation is for nonpayment of
3premium, the notice of cancellation must be mailed at least 10
4days before the effective date of the cancellation. For
5purposes of this Section, the mortgagee or lien holder, if
6known, may opt to accept notification electronically.
7(Source: P.A. 93-713, eff. 1-1-05.)
 
8    (215 ILCS 5/143.16)  (from Ch. 73, par. 755.16)
9    Sec. 143.16. Mailing of cancellation notice. All notices of
10cancellation of insurance to which Section 143.11 applies,
11except for those defined in subsections (a), (b) and (c) of
12Section 143.13 must be mailed at least 30 days prior to the
13effective date of cancellation during the first 60 days of
14coverage. After the coverage has been effective for 61 days or
15more, all notices must be mailed at least 60 days prior to the
16effective date of cancellation. However, where cancellation is
17for nonpayment of premium, the notice of cancellation must be
18mailed at least 10 days before the effective date of the
19cancellation. All such notices shall include a specific
20explanation of the reason or reasons for cancellation and shall
21be mailed to the named insured and mortgagee or lien holder, if
22known, at the last mailing address known to the company.
23However, where cancellation is for nonpayment of premium, the
24notice of cancellation must be mailed at least 10 days before
25the effective date of the cancellation. For purposes of this

 

 

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1Section, the mortgagee or lien holder, if known, may opt to
2accept notification electronically.
3(Source: P.A. 93-713, eff. 1-1-05.)
 
4    (215 ILCS 5/143.17)  (from Ch. 73, par. 755.17)
5    Sec. 143.17. Notice of intention not to renew.
6    a. No company shall fail to renew any policy of insurance,
7as defined in subsections (a), (b), (c), and (h) of Section
8143.13, to which Section 143.11 applies, unless it shall send
9by mail to the named insured at least 30 days advance notice of
10its intention not to renew. The company shall maintain proof of
11mailing of such notice on a recognized U.S. Post Office form or
12a form acceptable to the U. S. Post Office or other commercial
13mail delivery service. The nonrenewal shall not become
14effective until at least 30 days from the proof of mailing date
15of the notice to the name insured. Notification An exact and
16unaltered copy of such notice shall also be sent to the
17insured's broker, if known, or the agent of record,if known,
18and to the last known mortgagee or lien holder at the last
19mailing address known by the company. For purposes of this
20Section, the mortgagee or lien holder, insured's broker, or the
21agent of record may opt to accept notification electronically.
22However, where cancellation is for nonpayment of premium, the
23notice of cancellation must be mailed at least 10 days before
24the effective date of the cancellation.
25    b. This Section does not apply if the company has

 

 

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1manifested its willingness to renew directly to the named
2insured. Such written notice shall specify the premium amount
3payable, including any premium payment plan available, and the
4name of any person or persons, if any, authorized to receive
5payment on behalf of the company. If no person is so
6authorized, the premium notice shall so state. The notice of
7nonrenewal and the proof of mailing shall be effected on the
8same date.
9    b-5. This Section does not apply if the company manifested
10its willingness to renew directly to the named insured.
11However, no company may impose changes in deductibles or
12coverage for any policy forms applicable to an entire line of
13business enumerated in subsections (a), (b), (c), and (h) of
14Section 143.13 to which Section 143.11 applies unless the
15company mails to the named insured written notice of the change
16in deductible or coverage at least 60 days prior to the renewal
17or anniversary date. Notice An exact and unaltered copy of the
18notice shall also be sent to the insured's broker, if known, or
19the agent of record.
20    c. Should a company fail to comply with (a) or (b) of this
21Section, the policy shall terminate only on the effective date
22of any similar insurance procured by the insured with respect
23to the same subject or location designated in both policies.
24    d. Renewal of a policy does not constitute a waiver or
25estoppel with respect to grounds for cancellation which existed
26before the effective date of such renewal.

 

 

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1    e. In all notices of intention not to renew any policy of
2insurance, as defined in Section 143.11 the company shall
3provide the named insured a specific explanation of the reasons
4for nonrenewal.
5    f. For purposes of this Section, the insured's broker, if
6known, or the agent of record and the mortgagee or lien holder
7may opt to accept notification electronically.
8(Source: P.A. 93-713, eff. 1-1-05.)
 
9    (215 ILCS 5/143.17a)  (from Ch. 73, par. 755.17a)
10    Sec. 143.17a. Notice of intention not to renew.
11    (a) A company intending to nonrenew any policy of insurance
12to which Section 143.11 applies, except for those defined in
13subsections (a), (b), (c), and (h) of Section 143.13, must mail
14written notice to the named insured at least 60 days prior to
15the expiration date of the current policy. The notice to the
16named insured shall provide a specific explanation of the
17reasons for nonrenewal. In all notices of intention not to
18renew any policy of insurance, as defined in Section 143.11,
19the company shall provide a specific explanation of the reasons
20for nonrenewal. A company may not extend the current policy
21period for purposes of providing notice of its intention not to
22renew required under this subsection (a).
23    (b) A company intending to renew any policy of insurance to
24which Section 143.11 applies, except for those defined in
25subsections (a), (b), (c), and (h) of Section 143.13, with an

 

 

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1increase in premium of 30% or more or with changes in
2deductibles or coverage that materially alter the policy must
3mail or deliver to the named insured written notice of such
4increase or change in deductible or coverage at least 60 days
5prior to the renewal or anniversary date. If a company has
6failed to provide notice of intention to renew required under
7this subsection (b) at least 60 days prior to the renewal or
8anniversary date, but does so no less than 31 days prior to the
9renewal or anniversary date, the company may extend the current
10policy at the current terms and conditions for the period of
11time needed to equal the 60 day time period required to provide
12notice of intention to renew by this subsection (b). The
13increase in premium shall be the renewal premium based on the
14known exposure as of the date of the quotation compared to the
15premium as of the last day of coverage for the current year's
16policy, annualized. The premium on the renewal policy may be
17subsequently amended to reflect any change in exposure or
18reinsurance costs not considered in the quotation.
19    (c) A company that has failed to provide notice of
20intention to nonrenew under subsection (a) of this Section and
21has failed to provide notice of intention to renew as
22prescribed under subsection (b) of this Section must renew the
23expiring policy under the same terms and conditions for an
24additional year or until the effective date of any similar
25insurance is procured by the insured, whichever is earlier. The
26company may increase the renewal premium. However, such

 

 

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1increase must be less than 30% of the expiring term's premium
2and notice of such increase must be delivered to the named
3insured on or before the date of expiration of the current
4policy period.
5    (d) Under subsection (a), the company shall maintain proof
6of mailing of the notice of intention not to renew to the named
7insured on one of the following forms: a recognized U.S. Post
8Office form or a form acceptable to the U.S. Post Office or
9other commercial mail delivery service. Under subsections (b)
10and (c), proof of mailing or proof of receipt of the notice of
11intention to renew to the named insured may be proven by a
12sworn affidavit by the company as to the usual and customary
13business practices of mailing notice pursuant to this Section
14or may be proven consistent with Illinois Supreme Court Rule
15236. For all notice requirements under this Section, an exact
16and unaltered copy of the notice to the named insured shall
17also be sent to the named insured's producer, if known, or the
18producer of record. Notification For notices of intention to
19not renew, an exact and unaltered copy of the notice to the
20named insured shall also be sent to the mortgagee or lien
21holder listed on the policy at the last mailing address known
22by the company.
23    (e) Renewal of a policy does not constitute a waiver or
24estoppel with respect to grounds for cancellation that existed
25before the effective date of such renewal.
26    (f) For purposes of this Section, the named insured's

 

 

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1producer, if known, or the producer of record and the mortgagee
2or lien holder may opt to accept notification electronically.
3(Source: P.A. 95-533, eff. 6-1-08.)
 
4    Section 99. Effective date. This Act takes effect January
51, 2018.".