SB2920 94TH GENERAL ASSEMBLY

LRB094 17120 LJB 52407 b

94TH GENERAL ASSEMBLY
State of Illinois
2005 and 2006
SB2920

Introduced 1/20/2006, by Sen. William R. Haine

SYNOPSIS AS INTRODUCED:

215 ILCS 5/143.33 new

Amends the Illinois Insurance Code. Provides that in instances where 2 or more commercial liability policies provide coverage for the same claim or loss, a party seeking coverage under one policy must also tender the defense and indemnity of the claim or loss to any other insurer that may also provide coverage. Provides that the allocation of defense costs and indemnity payments shall be determined by the terms of the policies of insurance. Provides that the failure of an insured to comply with the requirements of the Section does not preclude an insurer from seeking contribution from other insurers that also provide coverage for the claim or loss. Effective immediately.

A BILL FOR

AN ACT concerning insurance.

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

Section 5. The Illinois Insurance Code is amended by adding Section 143.33 as follows:

(215 ILCS 5/143.33 new)

Sec. 143.33. Commercial Liability Insurance; multiple policies.

(a) In instances where 2 or more commercial liability policies provide coverage for the same claim or loss, a party seeking coverage under one commercial liability policy must also tender the defense and indemnity of the claim or loss to any other insurer that may also provide coverage for the claim or loss. Any tender shall not be construed to change the rights or obligations of the parties pursuant to the terms of any applicable contract.

(b) The allocation of defense costs and indemnity payments for any insured who may be covered for a claim or loss under 2 or more policies of insurance shall be determined by the terms of the policies of insurance and shall not be determined on the basis of the insured's, additional insured's, or insurer's selection of a particular policy of insurance to respond to the claim or loss.

(c) This Section does not apply to:

(1) a professional design firm or individual practicing architecture, engineering, structural engineering, or land surveying who, by contract, has been named as an additional insured under a commercial liability policy; or

(2) a financial institution, as defined in Section 1402 of this Code, or any other lending institution engaged in the business of making loans secured by real estate if the financial institution or other lending institution is an additional insured on a commercial liability policy solely due to its status as a mortgagee and has not assumed an operational role in the development, maintenance, or use of the property.

(d) Failure of the insured to comply with the requirements of this Section shall not preclude the responding insurer from seeking contribution from any other insurer that also provides coverage for the claim or loss.

Section 99. Effective date. This Act takes effect upon becoming law.