Full Text of SB2491 93rd General Assembly
SB2491enr 93RD GENERAL ASSEMBLY
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LRB093 20569 SAS 46378 b |
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| AN ACT in relation to insurance.
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| Be it enacted by the People of the State of Illinois, | 3 |
| represented in the General Assembly:
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| Section 5. The Illinois Insurance Code is amended by | 5 |
| changing Sections 143.11b, 143.14, 143.15, 143.16, 143.17, | 6 |
| 143.17a, and 513a11 as follows:
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| (215 ILCS 5/143.11b)
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| Sec. 143.11b. Assignment or transfer of property and | 9 |
| casualty policies. An assignment or transfer of a policy of | 10 |
| insurance to which Section 143.11
applies among or between | 11 |
| insurers within an insurance holding company system or
insurers | 12 |
| under common management or control, or as a result of a merger,
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| acquisition,
or restructuring of an insurance company, is not a | 14 |
| nonrenewal
for purposes of the notification requirements under | 15 |
| Sections 143.12 through
143.24. However,
in the event of an | 16 |
| increase in the renewal premium of 30% or more, change in
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| deductibles or change in coverage that materially alters any | 18 |
| policy to which
subsection b of Section 143.17a applies, the | 19 |
| company shall adhere to the
provisions set forth in
subsection | 20 |
| b of Section 143.17a. A company making an assignment or | 21 |
| transfer of
a policy among or between insurers within an | 22 |
| insurance holding company system
or insurers under common | 23 |
| management or control, or as a result of a merger,
acquisition, | 24 |
| or restructuring of an insurance company, shall
have delivered | 25 |
| to the named insured notice of such assignment or transfer at
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| least 60 days prior to the renewal date. An exact and unaltered | 27 |
| copy of the
notice shall also be sent to the insured's | 28 |
| producer, if known, and agent of
record. The assignment or | 29 |
| transfer of a policy or policies of insurance among
or between
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| insurers shall not occur without the producer or agent of | 31 |
| record, or both,
having a signed agency contract with the | 32 |
| entity to
which the policy or policies are to be assigned or |
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| transferred. If there is
not a signed agency contract, all of | 2 |
| the notice requirements of Sections 143.17
and 143.17a shall | 3 |
| apply. Nothing in
this Section shall contravene any existing | 4 |
| producer and company contract
rights. For purposes of this | 5 |
| Section, the insured's producer, if known, and agent of record | 6 |
| may opt to accept notification of assignment or transfer of | 7 |
| policies electronically.
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| (Source: P.A. 91-800, eff. 6-13-00.)
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| (215 ILCS 5/143.14) (from Ch. 73, par. 755.14)
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| Sec. 143.14. Notice of cancellation.
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| (a) No notice of cancellation of any
policy of insurance, | 12 |
| to which
Section 143.11 applies, shall be effective unless | 13 |
| mailed by the company
to the named insured and the mortgage or | 14 |
| lien holder, at the last mailing
address known by the company.
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| The company shall maintain proof of mailing of such notice on a | 16 |
| recognized
U.S. Post Office form or a form acceptable to the U. | 17 |
| S. Post Office or
other commercial mail delivery service. A
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| copy of all such
notices shall be sent to the insured's broker | 19 |
| if known, or the agent of
record , and to the mortgagee or | 20 |
| lienholder , if known, at the last mailing
address
known to the | 21 |
| company. For purposes of this Section, the mortgage or lien | 22 |
| holder, insured's broker, if known, or the agent of record may | 23 |
| opt to accept notification electronically.
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| (b) Whenever a financed insurance contract is cancelled, | 25 |
| the insurer
shall return
whatever gross unearned premiums are | 26 |
| due
under the insurance contract or contracts not to exceed the | 27 |
| unpaid balance
due the premium finance company directly to the | 28 |
| premium finance
company effecting the cancellation for the | 29 |
| account of the named insured.
The return premium must be mailed | 30 |
| to the premium finance company within
60 days.
The request for | 31 |
| the unearned premium by the premium finance company shall
be in | 32 |
| the manner of a monthly account, current accounting by | 33 |
| producer,
policy number, unpaid balance and name of insured for | 34 |
| each cancelled amount.
In the event the insurance contract or | 35 |
| contracts are subject to audit, the
insurer shall retain the |
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| right to withhold the return of the portion of
premium that can | 2 |
| be identified to the contract or contracts until the audit
is | 3 |
| completed. Within 30 days of the completion of the audit, if a | 4 |
| premium
retained by the insurer after crediting the earned | 5 |
| premium would result in
a surplus, the insurer shall return the | 6 |
| surplus directly to the premium
finance company. If the audit | 7 |
| should result in an additional premium due
the insurer, the | 8 |
| obligation for the collection of this premium shall fall
upon | 9 |
| the insurer and not affect any other contract or contracts | 10 |
| currently
being financed by the premium finance company for the | 11 |
| named insured.
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| (c) Whenever a premium finance agreement contains a power | 13 |
| of attorney
enabling the premium finance company to cancel any | 14 |
| insurance contract or contracts
in the agreement, the insurer | 15 |
| shall honor the date of cancellation as set
forth in the | 16 |
| request from the premium finance company without requiring the
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| return of the insurance contract or contracts. The insurer may | 18 |
| mail to the
named insured an acknowledgment of the notice of | 19 |
| cancellation from the
premium finance company but the named | 20 |
| insured shall not incur any
additional premium charge for any | 21 |
| extension of coverage. The insurer need
not maintain proof of | 22 |
| mailing of this notice.
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| (d) All statutory regulatory and contractual restrictions | 24 |
| providing that
the insurance contract may not be cancelled | 25 |
| unless the required notice is
mailed to a governmental agency, | 26 |
| mortgagee, lienholder, or other third
party shall apply where | 27 |
| cancellation is effected under a power of
attorney under a | 28 |
| premium finance agreement. The insurer shall have the
right for | 29 |
| a premium charge for this extension of coverage.
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| (Source: P.A. 86-370; 86-437; 86-1028; 87-811; 87-1123.)
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| (215 ILCS 5/143.15) (from Ch. 73, par. 755.15)
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| Sec. 143.15. Mailing of cancellation notice. All notices of
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| cancellation of insurance as
defined in subsections (a), (b) | 34 |
| and (c) of Section 143.13 must
be mailed at least 30 days prior | 35 |
| to the effective date of
cancellation to the named insured and |
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| mortgagee or lien holder,
if known, at the last mailing address | 2 |
| known to the company. All
notices of cancellation shall include | 3 |
| a specific explanation of
the reason or reasons for | 4 |
| cancellation. However, where cancellation
is for nonpayment of | 5 |
| premium, the notice of
cancellation must be mailed at least 10 | 6 |
| days before the effective date of the
cancellation. For | 7 |
| purposes of this Section, the mortgagee or lien holder, if | 8 |
| known, may opt to accept notification electronically.
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| (Source: P.A. 89-669, eff. 1-1-97.)
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| (215 ILCS 5/143.16) (from Ch. 73, par. 755.16)
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| Sec. 143.16. Mailing of cancellation notice. All notices of
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| cancellation of insurance to which Section
143.11 applies, | 13 |
| except for those defined in subsections (a), (b) and (c) of
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| Section 143.13 must be mailed at least 30 days prior to the | 15 |
| effective date
of cancellation during the first 60 days of | 16 |
| coverage. After the coverage
has been effective for 61 days or | 17 |
| more, all notices must be mailed at least
60 days prior to the | 18 |
| effective date of cancellation. All such notices shall
include | 19 |
| a specific explanation of the reason or reasons for | 20 |
| cancellation
and shall be mailed to the named insured and | 21 |
| mortgagee or lien holder, if
known, at the last mailing address | 22 |
| known to the company. However, where
cancellation is for | 23 |
| nonpayment of premium, the notice
of
cancellation must be | 24 |
| mailed at least 10 days before the
effective date of the | 25 |
| cancellation. For purposes of this Section, the mortgagee or | 26 |
| lien holder, if known, may opt to accept notification | 27 |
| electronically.
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| (Source: P.A. 89-669, eff. 1-1-97.)
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| (215 ILCS 5/143.17) (from Ch. 73, par. 755.17)
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| Sec. 143.17. Notice of intention not to renew.
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| a. No company shall fail
to renew any policy of insurance, | 32 |
| as defined in subsections (a), (b),
(c), and (h) of Section | 33 |
| 143.13, to which Section 143.11 applies, unless it
shall
send | 34 |
| by mail to the named insured at least 30 days advance notice of |
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LRB093 20569 SAS 46378 b |
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| its
intention not to renew. The company shall maintain proof of | 2 |
| mailing of
such notice on a recognized U.S. Post Office form or | 3 |
| a form acceptable to
the U. S. Post Office or other commercial | 4 |
| mail delivery service. An exact
and unaltered copy of such | 5 |
| notice shall also be sent to the insured's
broker, if known, or | 6 |
| the agent of record and to the mortgagee or lien
holder at the | 7 |
| last mailing address known by the company. However, where
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| cancellation is for nonpayment of premium, the notice
of
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| cancellation must be mailed at least 10 days before the
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| effective date of the cancellation.
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| b. This Section does not apply if the company has | 12 |
| manifested its
willingness to renew directly to the named | 13 |
| insured.
Such written notice shall specify the premium amount | 14 |
| payable, including
any premium payment plan available, and the | 15 |
| name of any person or persons,
if any, authorized to receive | 16 |
| payment on behalf of the company. If no
person is so | 17 |
| authorized, the premium notice shall so state. The notice of
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| nonrenewal and the proof of mailing shall be effected on the | 19 |
| same date.
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| b-5. This Section does not apply if the company manifested | 21 |
| its
willingness to renew directly to the named insured. | 22 |
| However, no company may
impose changes in deductibles or | 23 |
| coverage for any policy forms applicable to an
entire line of | 24 |
| business enumerated in subsections (a), (b), (c), and (h) of
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| Section 143.13 to which Section 143.11 applies unless the | 26 |
| company mails to the
named insured written notice of the change | 27 |
| in deductible or coverage at least
60 days prior to the renewal | 28 |
| or anniversary date. An exact and unaltered copy
of the notice | 29 |
| shall also be sent to the insured's broker, if known, or the
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| agent of record.
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| c. Should a company fail to comply with (a) or (b) of this | 32 |
| Section,
the policy shall terminate only on the effective date | 33 |
| of any similar
insurance procured by the insured with respect | 34 |
| to the same subject or
location designated in both policies.
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| d. Renewal of a policy does not constitute a waiver or | 36 |
| estoppel with
respect to grounds for cancellation which existed |
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LRB093 20569 SAS 46378 b |
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| before the effective
date of such renewal.
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| e. In all notices of intention not to renew any policy of | 3 |
| insurance,
as defined in Section 143.11 the company shall | 4 |
| provide a specific
explanation of the reasons for nonrenewal.
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| f. For purposes of this Section, the insured's broker, if | 6 |
| known, or the agent of record and the mortgagee or lien holder | 7 |
| may opt to accept notification electronically.
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| (Source: P.A. 91-597, eff. 1-1-00.)
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| (215 ILCS 5/143.17a) (from Ch. 73, par. 755.17a)
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| Sec. 143.17a. Notice of intention not to renew.
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| a. No company shall fail to renew any policy of insurance,
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| to which
Section 143.11 applies, except for those defined in | 13 |
| subsections (a),
(b), (c), and (h) of Section 143.13, unless it | 14 |
| shall send by
mail
to the named insured at least 60 days | 15 |
| advance
notice of its intention not to renew. The company shall | 16 |
| maintain proof
of mailing of such notice on one of the | 17 |
| following forms: a recognized U.S.
Post Office form or a form | 18 |
| acceptable to the U.S. Post Office or other
commercial mail | 19 |
| delivery service. An exact and unaltered
copy of such notice | 20 |
| shall also be
sent to the insured's broker, if known, or the | 21 |
| agent of record and to
the mortgagee or lien holder at
the
last | 22 |
| mailing address known by the company.
However, where | 23 |
| cancellation is for nonpayment of premium, the notice of | 24 |
| cancellation must be mailed at least 10 days
before the | 25 |
| effective date of the cancellation.
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| b. This Section does not apply if the company has | 27 |
| manifested its
willingness to renew directly to the named | 28 |
| insured.
Provided, however, that no company
may increase the | 29 |
| renewal premium on any policy of insurance to which Section
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| 143.11 applies, except for those defined in subsections (a), | 31 |
| (b), (c), and (h)
of Section
143.13, by 30% or more, nor impose | 32 |
| changes in deductibles or coverage that
materially alter the | 33 |
| policy, unless the company shall have mailed or delivered
to | 34 |
| the named insured written notice of such increase or change in
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| deductible or coverage at least 60 days prior
to the renewal or |
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| anniversary date.
The increase in premium shall be the
renewal | 2 |
| premium based on the known exposure as of the date of the | 3 |
| quotation
compared to the premium
as of the last day of | 4 |
| coverage for the current year's policy, annualized.
The premium | 5 |
| on the renewal policy may be subsequently amended to reflect
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| any change in exposure or reinsurance costs not considered in | 7 |
| the
quotation. An exact and unaltered
copy of such notice shall | 8 |
| also be sent to the insured's broker, if known,
or the agent of | 9 |
| record. If an insurer fails to provide the notice
required by | 10 |
| this subsection, then the company must extend the current | 11 |
| policy
under the same terms, conditions, and premium to allow | 12 |
| 60 days notice of
renewal and provide the actual renewal | 13 |
| premium quotation and any change in
coverage or deductible on | 14 |
| the policy. Proof of mailing or proof of receipt may
be proven | 15 |
| by a sworn affidavit by the insurer as to the usual and | 16 |
| customary
business practices of mailing notice pursuant to this | 17 |
| Section or may be proven
consistent with Illinois Supreme Court | 18 |
| Rule 236.
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| c. Should a company fail to comply with the non-renewal | 20 |
| notice
requirements
of subsection a.,
the policy shall be | 21 |
| extended for an additional year
or until the effective date of | 22 |
| any similar insurance
procured by the insured, whichever is | 23 |
| less,
on the same terms and conditions as the policy sought to | 24 |
| be
terminated, unless the insurer has manifested its intention | 25 |
| to renew at a
different premium that represents an increase not | 26 |
| exceeding 30%.
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| d. Renewal of a policy does not constitute a waiver or | 28 |
| estoppel with
respect to grounds for cancellation which existed | 29 |
| before the effective
date of such renewal.
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| e. In all notices of intention not to renew any policy of | 31 |
| insurance,
as defined in Section 143.11 the company shall | 32 |
| provide a specific
explanation of the reasons for nonrenewal.
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| f. For purposes of this Section, the insured's broker, if | 34 |
| known, or the agent of record and the mortgagee or lien holder | 35 |
| may opt to accept notification electronically.
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| (Source: P.A. 93-477, eff. 8-8-03.)
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| (215 ILCS 5/513a11) (from Ch. 73, par. 1065.60a11)
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| Sec. 513a11. Cancellation requirements upon default.
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| (a) When a premium finance agreement contains a power of | 4 |
| attorney
enabling the premium finance company to cancel any | 5 |
| insurance contract or
contracts listed in the premium finance | 6 |
| agreement, the insurance contract
or contracts shall not be | 7 |
| cancelled by the premium finance company unless
the request for | 8 |
| cancellation is effectuated under this Section.
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| (b) Not less than 10 days written notice shall be mailed to | 10 |
| the named
insured of the intent of the premium finance company | 11 |
| to cancel the
insurance contract unless the default is cured | 12 |
| within the 10 day period.
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| (c) After expiration of the 10 day period, the premium | 14 |
| finance company
may request, in the name of the named insured, | 15 |
| cancellation of the insurance
contract or contracts by mailing | 16 |
| or hand delivering to the insurer a
request for cancellation, | 17 |
| and the insurance contract shall be cancelled as
if the request | 18 |
| for cancellation had been submitted by the named insured,
but | 19 |
| without requiring the return of the insurance contract or | 20 |
| contracts.
The premium finance company shall also mail a copy | 21 |
| of the request for
cancellation to the named insured at his | 22 |
| last known address.
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| (d) All statutory, regulatory, and contractual | 24 |
| restrictions providing
that the insurance contract may not be | 25 |
| cancelled unless notice is given to
a governmental agency, | 26 |
| mortgagee, or other third party shall apply where
cancellation | 27 |
| is effected under provisions of this Section. The insurer
shall | 28 |
| give the notice to any governmental agency, mortgagee, or other
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| third party on or before the fifth business day after it | 30 |
| receives the
notice of cancellation from the premium finance | 31 |
| company. For purposes of this Section, any governmental agency, | 32 |
| mortgagee, or other third party may opt to receive notices | 33 |
| electronically.
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| (e) In the event that the collection of return premiums for | 35 |
| the account of
the named insured results in a surplus over the |
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| amount due from the named
insured, the premium finance company | 2 |
| shall refund the excess to the named
insured; however, no | 3 |
| refund is required if it amounts to less than $5.
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| (f) All cancellation provisions required of the premium | 5 |
| finance company
and insurer are applicable to any policy to | 6 |
| which Section 143.11 applies.
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| (Source: P.A. 87-811.)
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