Full Text of SB2771 99th General Assembly
SB2771sam001 99TH GENERAL ASSEMBLY | Sen. Michael E. Hastings Filed: 3/9/2016
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| 1 | | AMENDMENT TO SENATE BILL 2771
| 2 | | AMENDMENT NO. ______. Amend Senate Bill 2771 by replacing | 3 | | everything after the enacting clause with the following:
| 4 | | "Section 5. The Illinois Insurance Code is amended by | 5 | | changing Section 155.39 as follows:
| 6 | | (215 ILCS 5/155.39)
| 7 | | Sec. 155.39. Vehicle protection products.
| 8 | | (a) As used in this Section:
| 9 | | "Administrator" means a third party other than the | 10 | | warrantor who is
designated by the warrantor to be responsible | 11 | | for the administration of
vehicle protection product | 12 | | warranties.
| 13 | | "Incidental costs" means expenses specified in the vehicle | 14 | | protection
product warranty incurred by the warranty holder | 15 | | related to the failure of the
vehicle protection product to | 16 | | perform as provided in the warranty.
Incidental costs may |
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| 1 | | include, without limitation, insurance policy
deductibles, | 2 | | rental vehicle charges, the difference between the actual value
| 3 | | of the stolen vehicle at the time of theft and the cost of a | 4 | | replacement
vehicle, sales taxes, registration fees, | 5 | | transaction fees, and mechanical
inspection fees.
| 6 | | "Vehicle protection product" means a vehicle protection | 7 | | device,
system, or service that is (i) installed on or applied | 8 | | to a vehicle, (ii) is
designed to prevent loss or damage to a | 9 | | vehicle from a specific cause, (iii)
includes a written | 10 | | warranty by a warrantor that provides if the vehicle
protection | 11 | | product fails to prevent theft of loss or damage to a vehicle | 12 | | from a
specific cause, that the warranty holder shall be paid | 13 | | specified incidental
costs by the warrantor as a result of the | 14 | | failure of the vehicle protection
product to perform pursuant | 15 | | to the terms of the warranty, and (iv) the
warrantor's | 16 | | liability is covered by a warranty reimbursement insurance
| 17 | | policy. The term "vehicle protection product"
shall include, | 18 | | without limitation, alarm systems, body part marking products,
| 19 | | steering locks, window etch products, pedal and ignition locks, | 20 | | fuel and
ignition kill switches, and electronic, radio, and | 21 | | satellite tracking devices. "Vehicle protection product" does | 22 | | not include fuel additives, oil additives, or other chemical | 23 | | products applied to the engine, transmission, or fuel system of | 24 | | a motor vehicle.
| 25 | | "Vehicle protection product warrantor" or "warrantor"
| 26 | | means a person who is contractually obligated to the
warranty |
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| 1 | | holder under the terms of the vehicle protection product.
| 2 | | Warrantor does not include an authorized insurer.
| 3 | | "Warranty reimbursement insurance policy" means a policy | 4 | | of
insurance
issued to the vehicle protection product warrantor
| 5 | | to pay on behalf of the warrantor
all covered contractual | 6 | | obligations incurred by the warrantor under the terms
and | 7 | | conditions of the insured vehicle protection product | 8 | | warranties sold by
the warrantor. The warranty reimbursement | 9 | | insurance policy shall be issued by
an insurer authorized to do | 10 | | business in this State that has filed its policy
form with the | 11 | | Department.
| 12 | | (b) No vehicle protection product sold or offered for sale | 13 | | in this State
in compliance with this Section shall be subject | 14 | | to the provisions of this Code or the Service Contract Act | 15 | | unless it is offered as a service contract as defined in | 16 | | Section 5 of the Service Contract Act .
| 17 | | Vehicle protection product warrantors and related vehicle | 18 | | protection
product sellers and warranty administrators | 19 | | complying with this Section are
not required to comply with and | 20 | | are not subject to any other provision of this
Code or the | 21 | | Service Contract Act unless it is offered as a service contract | 22 | | as defined in Section 5 of the Service Contract Act . The | 23 | | vehicle protection products' written warranties are express
| 24 | | warranties and not insurance.
| 25 | | (c) This Section applies to all vehicle protection products | 26 | | sold or
offered for sale prior to, on, or after the effective |
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| 1 | | date of this amendatory
Act
of the 93rd General Assembly. The | 2 | | enactment of this Section does not
imply that vehicle | 3 | | protection products should have been subject to regulation
| 4 | | under this Code prior to the enactment of this Section. The | 5 | | changes made to this Section by this amendatory Act of the 99th | 6 | | General Assembly do not imply that vehicle protection products | 7 | | should have been subject to regulation under this Code or the | 8 | | Service Contract Act prior to this amendatory Act.
| 9 | | (Source: P.A. 95-331, eff. 8-21-07.)
| 10 | | Section 10. The Service Contract Act is amended by changing | 11 | | Sections 5 and 35 as follows:
| 12 | | (215 ILCS 152/5)
| 13 | | Sec. 5. Definitions.
| 14 | | "Department" means the Department of Insurance.
| 15 | | "Director" means the Director of Insurance.
| 16 | | "Road hazard" means a hazard that is encountered while | 17 | | driving a motor vehicle, including, but not limited to, | 18 | | potholes, rocks, wood debris, metal parts, glass, plastic, | 19 | | curbs, and composite scraps. | 20 | | "Service contract" means a contract or agreement whereby a | 21 | | service
contract provider
undertakes for a specified period of | 22 | | time, for separate and identifiable
consideration, to
perform | 23 | | the repair, replacement, or maintenance, or indemnification | 24 | | for such
services, of
any automobile, system, or consumer |
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| 1 | | product in connection with the operational
or
structural | 2 | | failure due to a defect in materials or workmanship, or normal | 3 | | wear
and tear,
with or without additional provision for | 4 | | incidental payment or indemnity under
limited
circumstances, | 5 | | for related expenses, including, but not limited to, towing,
| 6 | | rental, and
emergency road service. Service contracts may | 7 | | provide for: | 8 | | (1) the repair,
replacement, or
maintenance of such | 9 | | property for damage resulting from power surges and
| 10 | | accidental
damage from handling; | 11 | | (2) the repair or replacement of tires or wheels, or | 12 | | both, on a motor vehicle damaged as the result of coming | 13 | | into contact with road hazards; | 14 | | (3) the removal of dents, dings, or creases on a motor | 15 | | vehicle that can be repaired using the process of paintless | 16 | | dent removal without affecting the existing paint finish | 17 | | and without replacing vehicle body panels, sanding, | 18 | | bonding, or painting; | 19 | | (4) the repair of chips or cracks in or the replacement | 20 | | of motor vehicle windshields as a result of damage caused | 21 | | by road hazards; | 22 | | (5) the replacement of a motor vehicle key or key-fob | 23 | | in the event that the key or key-fob becomes inoperable or | 24 | | is lost or stolen; | 25 | | (6) the payment of specified incidental costs in the | 26 | | event that a protective chemical, substance, device, or |
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| 1 | | system , or service that (A) is installed on or applied to a | 2 | | motor vehicle , (B) and is designed to prevent the theft of | 3 | | loss or damage to a motor vehicle from a specific cause , | 4 | | and (C) includes a written product warranty providing for | 5 | | payment to or on behalf of the warranty holder's incidental | 6 | | costs in the event that the product fails to prevent theft | 7 | | loss or damage as specified; the reimbursement of | 8 | | incidental costs under the warranty must be tied to the | 9 | | purchase of a physical product that is formulated or | 10 | | designed to make the specified loss or damage less likely | 11 | | to occur; however, a device, system, or service that is | 12 | | offered in compliance with and meets the definition of | 13 | | "vehicle protection product" as defined in subsection (a) | 14 | | of Section 155.39 of the Illinois Insurance Code shall not | 15 | | be required to comply with this Act; or | 16 | | (7) other services that may be approved by the | 17 | | Director, if not inconsistent with other provisions of this | 18 | | Act. | 19 | | Service contracts shall not include: | 20 | | (i) contracts of limited
duration
that provide for | 21 | | scheduled maintenance only;
| 22 | | (ii) fuel additives, oil additives, or other chemical | 23 | | products applied to the engine, transmission, or fuel | 24 | | system of a motor vehicle; | 25 | | (iii) coverage for the repair or replacement, or both, | 26 | | of damage to the interior surfaces of a vehicle, or for |
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| 1 | | repair or replacement, or both, of damage to the exterior | 2 | | paint or finish of a vehicle; however, such coverage may be | 3 | | offered in connection with the sale of a protective | 4 | | chemical, device, or system described in item (6) of this | 5 | | definition. | 6 | | "Service contract holder" means the person who purchases a | 7 | | service
contract or a
permitted transferee.
| 8 | | "Service contract provider" means a person who is | 9 | | contractually
obligated to the
service contract holder under | 10 | | the terms of the service contract. A service
contract
provider | 11 | | does not include an insurer.
| 12 | | "Service contract reimbursement insurance policy" means a | 13 | | policy of
insurance that
is issued to the service contract | 14 | | provider to provide reimbursement to the
service
contract | 15 | | provider or to pay on behalf of the service contract provider | 16 | | all
covered
contractual obligations incurred by the service | 17 | | contract provider under the
terms and
conditions of the insured | 18 | | service contracts issued or sold by the service
contract
| 19 | | provider.
| 20 | | "System" means the heating, cooling, plumbing, electrical, | 21 | | ventilation,
or any other similar
system of a home.
| 22 | | (Source: P.A. 98-222, eff. 1-1-14.)
| 23 | | (215 ILCS 152/35)
| 24 | | Sec. 35. Cancellation and refunds. | 25 | | (a) No service contract may be issued, sold, or offered for |
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| 1 | | sale in this State
unless the service
contract clearly states | 2 | | that the service contract holder is allowed to cancel
the | 3 | | service
contract. If the service contract holder elects | 4 | | cancellation, the service
contract provider may
retain a | 5 | | cancellation fee not to exceed the lesser of 10% of the service
| 6 | | contract price or
$50. The service contract cancellation | 7 | | provision must provide that the service
contract may be | 8 | | cancelled:
| 9 | | (1) within 30 days after its purchase if no service has | 10 | | been provided
and that a full
refund of the service | 11 | | contract consideration, less any cancellation fee stated
| 12 | | in the service
contract will be paid to the service | 13 | | contract holder; or
| 14 | | (2) at any other time and a pro rata refund of the | 15 | | service contract
consideration for
the unexpired term of | 16 | | the service contract, based on the number of elapsed
| 17 | | months, miles,
hours, or such other reasonably applicable | 18 | | measure which is clearly disclosed
in
the service
contract, | 19 | | less the value of any service received, and any | 20 | | cancellation fee
stated in the
service contract will be | 21 | | paid to the service contract holder.
| 22 | | (b) In the event that a service contract includes the | 23 | | coverage described in paragraph (6) of the definition of | 24 | | "service contract" in Section 5 of this Act, the service | 25 | | contract provider must refund the service contract purchase | 26 | | price in accordance with this Section but is not required to |
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| 1 | | refund the purchase price of the device, system, or service; | 2 | | however, the service contract provider may elect to refund the | 3 | | purchase price of the device, system, or service if the terms | 4 | | of that refund are clearly stated in the service contract. The | 5 | | coverage described in paragraph (6) of the definition of | 6 | | "service contract" in Section 5 of this Act may not be offered | 7 | | as, or within, a service contract unless the service contract | 8 | | clearly states whether or not the service contract holder is | 9 | | entitled to a refund of the purchase price of the device, | 10 | | system, or service and, if applicable, the terms of such | 11 | | refund. | 12 | | (Source: P.A. 90-711, eff. 8-7-98.)".
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