Full Text of SB2109 095th General Assembly
SB2109 95TH GENERAL ASSEMBLY
|
|
|
95TH GENERAL ASSEMBLY
State of Illinois
2007 and 2008 SB2109
Introduced 2/14/2008, by Sen. John J. Cullerton SYNOPSIS AS INTRODUCED: |
|
215 ILCS 5/154.6 |
from Ch. 73, par. 766.6 |
215 ILCS 5/155 |
from Ch. 73, par. 767 |
720 ILCS 5/46-5 |
|
|
Amends the Illinois Insurance Code. Provides that a company that commits an improper claim practice may be subject to civil penalties pursuant to the Code or a private cause of action, or both. Removes the $60,000 damage cap in an action by or against a company wherein
there is in issue the liability of a company on a policy or policies of
insurance or the amount of the loss payable thereunder, or for an unreasonable
delay in settling a claim, and it appears to the court that such action
or delay is vexatious and unreasonable. Amends the Criminal Code of 1961. Provides that an insurance company or self-insured entity that brings an action
against a person for insurance fraud or fraud on a governmental
entity in bad faith shall be liable to that person for
3 times (rather than twice) the value of the property claimed, plus reasonable attorneys fees.
|
| |
|
|
A BILL FOR
|
|
|
|
|
SB2109 |
|
LRB095 19301 AMC 45593 b |
|
| 1 |
| AN ACT concerning regulation.
| 2 |
| Be it enacted by the People of the State of Illinois,
| 3 |
| represented in the General Assembly:
| 4 |
| Section 5. The Illinois Insurance Code is amended by | 5 |
| changing Sections 154.6 and 155 as follows:
| 6 |
| (215 ILCS 5/154.6) (from Ch. 73, par. 766.6)
| 7 |
| Sec. 154.6. Acts constituting improper claims practice. | 8 |
| Any of the
following acts by a company, if committed without | 9 |
| just cause and in
violation of Section 154.5, constitutes an | 10 |
| improper claims practice:
| 11 |
| (a) Knowingly misrepresenting to claimants and | 12 |
| insureds relevant
facts or policy provisions relating to | 13 |
| coverages at issue;
| 14 |
| (b) Failing to acknowledge with reasonable promptness | 15 |
| pertinent
communications with respect to claims arising | 16 |
| under its policies;
| 17 |
| (c) Failing to adopt and implement reasonable | 18 |
| standards for the
prompt investigations and settlement of | 19 |
| claims arising under its policies;
| 20 |
| (d) Not attempting in good faith to effectuate prompt, | 21 |
| fair and
equitable settlement of claims submitted in which | 22 |
| liability has become
reasonably clear;
| 23 |
| (e) Compelling policyholders to institute suits to |
|
|
|
SB2109 |
- 2 - |
LRB095 19301 AMC 45593 b |
|
| 1 |
| recover amounts
due under its policies by offering | 2 |
| substantially less than the amounts
ultimately recovered | 3 |
| in suits brought by them;
| 4 |
| (f) Engaging in activity which results in a | 5 |
| disproportionate number
of meritorious complaints against | 6 |
| the insurer received by the Insurance
Department;
| 7 |
| (g) Engaging in activity which results in a | 8 |
| disproportionate number
of lawsuits to be filed against the | 9 |
| insurer or its insureds by
claimants;
| 10 |
| (h) Refusing to pay claims without conducting a | 11 |
| reasonable
investigation based on all available | 12 |
| information;
| 13 |
| (i) Failing to affirm or deny coverage of claims within | 14 |
| a reasonable
time after proof of loss statements have been | 15 |
| completed;
| 16 |
| (j) Attempting to settle a claim for less than the | 17 |
| amount to which a
reasonable person would believe the | 18 |
| claimant was entitled, by reference
to written or printed | 19 |
| advertising material accompanying or made part of
an | 20 |
| application or establishing unreasonable caps or limits on | 21 |
| paint
or materials
when estimating vehicle repairs;
| 22 |
| (k) Attempting to settle claims on the basis of an | 23 |
| application which
was altered without notice to, or | 24 |
| knowledge or consent of, the insured;
| 25 |
| (l) Making a claims payment to a policyholder or | 26 |
| beneficiary
omitting the coverage under which each payment |
|
|
|
SB2109 |
- 3 - |
LRB095 19301 AMC 45593 b |
|
| 1 |
| is being made;
| 2 |
| (m) Delaying the investigation or payment of claims by | 3 |
| requiring an
insured, a claimant, or the physicians of | 4 |
| either to submit a preliminary
claim report and then | 5 |
| requiring subsequent submission of formal proof of
loss | 6 |
| forms, resulting in the duplication of verification;
| 7 |
| (n) Failing in the case of the denial of a claim or the | 8 |
| offer of a
compromise settlement to promptly provide a | 9 |
| reasonable and accurate
explanation of the basis in the | 10 |
| insurance policy or applicable law for
such denial or | 11 |
| compromise settlement;
| 12 |
| (o) Failing to provide forms necessary to present | 13 |
| claims within 15
working days of a request with such | 14 |
| explanations as are necessary to use
them effectively;
| 15 |
| (p) Failing to adopt and implement reasonable | 16 |
| standards to verify that
a repairer designated by the | 17 |
| insurance company to provide an estimate,
perform repairs, | 18 |
| or engage in any other service in connection with an
| 19 |
| insured loss on a vehicle is duly licensed under Section | 20 |
| 5-301 of the
Illinois Vehicle Code;
| 21 |
| (q) Failing to provide as a persistent tendency a | 22 |
| notification on any
written estimate prepared by an | 23 |
| insurance company in connection with an
insured loss that | 24 |
| Illinois law requires that vehicle repairers must be
| 25 |
| licensed in accordance with Section 5-301 of the Illinois | 26 |
| Vehicle Code;
|
|
|
|
SB2109 |
- 4 - |
LRB095 19301 AMC 45593 b |
|
| 1 |
| (r) Engaging in any other acts which are in substance | 2 |
| equivalent to
any of the foregoing.
| 3 |
| A company that commits an improper claim practice described | 4 |
| in this Section may be subject to civil penalties pursuant to | 5 |
| this Code or a private cause of action, or both. | 6 |
| (Source: P.A. 90-340, eff. 8-8-97.)
| 7 |
| (215 ILCS 5/155) (from Ch. 73, par. 767)
| 8 |
| Sec. 155. Attorney fees.
| 9 |
| (1) In any action by or against a company wherein
there is | 10 |
| in issue the liability of a company on a policy or policies of
| 11 |
| insurance or the amount of the loss payable thereunder, or for | 12 |
| an unreasonable
delay in settling a claim, and it appears to | 13 |
| the court that such action
or delay is vexatious and | 14 |
| unreasonable, the court may allow as part of the
taxable costs | 15 |
| in the action reasonable attorney fees, other costs, plus
an | 16 |
| amount not to exceed any one of the following amounts:
| 17 |
| (a) 60% of the amount which the court or jury finds | 18 |
| such party
is entitled to recover against the company, | 19 |
| exclusive of all costs . ;
| 20 |
| (b) (Blank). $60,000;
| 21 |
| (c) The the excess of the amount which the court or | 22 |
| jury finds such party is
entitled to recover, exclusive of | 23 |
| costs, over the amount, if any, which
the company offered | 24 |
| to pay in settlement of the claim prior to the action.
| 25 |
| (2) Where there are several policies insuring the same |
|
|
|
SB2109 |
- 5 - |
LRB095 19301 AMC 45593 b |
|
| 1 |
| insured
against the same loss whether issued by the same or by | 2 |
| different
companies, the court may fix the amount of the | 3 |
| allowance so that the
total attorney fees on account of one | 4 |
| loss shall not be increased by
reason of the fact that the | 5 |
| insured brings separate suits on such policies.
| 6 |
| (Source: P.A. 93-485, eff. 1-1-04.)
| 7 |
| Section 10. The Criminal Code of 1961 is amended by | 8 |
| changing Section 46-5 as follows:
| 9 |
| (720 ILCS 5/46-5)
| 10 |
| Sec. 46-5. Civil damages for insurance fraud or fraud on a | 11 |
| governmental
entity. | 12 |
| (a) A person who knowingly obtains, attempts to obtain, or | 13 |
| causes to be
obtained, by deception, control over the property | 14 |
| of any insurance company by
the making of a false claim or by | 15 |
| causing a false claim to be made on a
policy of insurance | 16 |
| issued by an insurance
company, or by the making of a false | 17 |
| claim or by causing a false claim to be
made to a self-insured | 18 |
| entity
intending to deprive an insurance company
or | 19 |
| self-insured entity permanently of the use and
benefit of that | 20 |
| property, shall be civilly liable to the insurance company or
| 21 |
| self-insured entity that
paid the claim or against whom the | 22 |
| claim was made or to the subrogee of that
insurance company or | 23 |
| self-insured entity in an amount equal to either 3
times the | 24 |
| value of the property
wrongfully obtained or, if no property |
|
|
|
SB2109 |
- 6 - |
LRB095 19301 AMC 45593 b |
|
| 1 |
| was wrongfully obtained, twice the
value of the property | 2 |
| attempted to be
obtained, whichever amount is greater, plus | 3 |
| reasonable attorneys fees. A
person who knowingly obtains, | 4 |
| attempts to obtain, or causes to be obtained, by
deception, | 5 |
| control over the property of a governmental entity by the | 6 |
| making of
a
false claim of bodily injury or of damage to or | 7 |
| loss or theft of property,
intending to deprive the | 8 |
| governmental entity permanently of the use and benefit
of that | 9 |
| property, shall be civilly liable to the governmental entity | 10 |
| that paid
the claim or against whom the claim was made or to | 11 |
| the subrogee of the
governmental entity in an amount equal to | 12 |
| either 3 times the value of the
property wrongfully obtained | 13 |
| or, if property was not wrongfully obtained, twice
the value of | 14 |
| the property attempted to be obtained, whichever amount is
| 15 |
| greater, plus reasonable attorneys fees.
| 16 |
| (b) An insurance company or self-insured entity that brings | 17 |
| an action
against a person under
subsection (a) of this Section | 18 |
| in bad faith shall be liable to that person for
3 times twice | 19 |
| the value of the property claimed, plus reasonable attorneys | 20 |
| fees. In
determining whether an insurance company or | 21 |
| self-insured entity acted in
bad faith, the court shall
relax | 22 |
| the rules of evidence to allow for the introduction of any | 23 |
| facts or other
information on which the insurance company or | 24 |
| self-insured entity may have
relied in bringing an
action under | 25 |
| subsection (a) of this Section.
| 26 |
| (c) For the purposes of this Section, where the exact value |
|
|
|
SB2109 |
- 7 - |
LRB095 19301 AMC 45593 b |
|
| 1 |
| of the property
attempted to be obtained is either not alleged | 2 |
| by the claimant or not
specifically set by the terms of a | 3 |
| policy of insurance, the value
of the
property shall be the | 4 |
| fair market replacement value of the property claimed to
be | 5 |
| lost, the reasonable costs of reimbursing a vendor or other | 6 |
| claimant for
services to be rendered, or both.
| 7 |
| (Source: P.A. 90-333, eff. 1-1-98; 91-232, eff. 1-1-00.)
|
|