[ Search ] [ Legislation ] [ Bill Summary ]
[ Home ] [ Back ] [ Bottom ]
| [ Introduced ] | [ Engrossed ] | [ Enrolled ] |
90_SB0209sam001
LRB9002200JSgcam02
1 AMENDMENT TO SENATE BILL 209
2 AMENDMENT NO. . Amend Senate Bill 209 by replacing
3 the title with the following:
4 "AN ACT to amend the Collateral Protection Act by
5 changing Sections 5, 15, and 40."; and
6 by replacing everything after the enacting clause with the
7 following:
8 "Section 5. The Collateral Protection Act is amended by
9 changing Sections 5, 15, and 40 as follows:
10 (815 ILCS 180/5)
11 Sec. 5. Definitions. In this Act, unless the context
12 otherwise requires, the following words and phrases shall
13 have the following meanings:
14 "Collateral" means any or all property pledged or
15 otherwise used to secure payment, repayment, or performance
16 under a credit or lease agreement, whether personal property,
17 real property, fixtures, inventory, receivables, rights,
18 privileges, or otherwise.
19 "Collateral protection insurance" means:
20 Insurance coverage that: (1) is purchased unilaterally by
21 a creditor subsequent to the date of a credit agreement; (2)
-2- LRB9002200JSgcam02
1 provides monetary protection against loss of or damage to the
2 collateral or against liability arising out of the ownership
3 or use of the collateral; and (3) is purchased according to
4 the terms of a credit agreement as a result of a debtor's
5 failure to provide evidence of insurance or failure to
6 maintain adequate insurance covering the collateral, with the
7 costs of the collateral protection insurance, including
8 interest and any other charges imposed by the creditor in
9 connection with the placement of the collateral protection
10 insurance, payable by the debtor. Collateral protection
11 insurance includes insurance coverage that is purchased to
12 protect only the interest of the creditor and insurance
13 coverage that is purchased to protect both the interest of
14 the creditor and some or all of the interest of the debtor.
15 The term of a collateral protection insurance policy may, but
16 need not, extend to the full term of the credit transaction.
17 Collateral protection insurance does not include
18 insurance coverage that is: (1) purchased by the creditor for
19 which the debtor is not charged; (2) purchased at the
20 inception of a credit transaction to which the debtor is a
21 party or agrees, whether or not the costs are included in any
22 payment plan under the credit transaction; (3) purchased by
23 the creditor following foreclosure, repossession, or a
24 similar event wherein the creditor gains possession or
25 control over the collateral; (4) maintained by the creditor
26 for the protection of any or all collateral which may come
27 into the possession or control of the creditor through
28 foreclosure, repossession, or a similar event; (5) credit
29 insurance, mortgage protection insurance, insurance issued to
30 cover the life or health of the debtor, or any other
31 insurance maintained to cover the inability or failure of the
32 debtor to make payment under the credit agreement; (6) title
33 insurance; or (7) flood insurance required to be placed by
34 creditors by 42 U.S.C. 4012(a), as amended, pursuant to the
-3- LRB9002200JSgcam02
1 National Flood Insurance Reform Act of 1994.
2 "Credit agreement" means the written document or
3 documents that set forth the terms of the credit transaction.
4 "Credit transaction" means any transaction the terms of
5 which require the payment or repayment of money, goods,
6 services, property, rights, or privileges, which is to be
7 made on one or more future dates, where such obligation is
8 secured by collateral.
9 "Creditor" means any person, corporation, partnership,
10 association, or other venture, which is a lender of money or
11 the vendor or lessor of goods, services, property, rights, or
12 privileges, for which repayment is arranged through a credit
13 transaction, and includes any successor to the rights, title,
14 interest, or liens of such lender, vendor, or lessor.
15 "Debtor" means a borrower of money or a purchaser or
16 lessee of goods, services, property, rights, or privileges,
17 for which payment or repayment is arranged through a credit
18 agreement. Debtor does not include any person who is not the
19 primary obligor under a credit transaction and who is not
20 jointly liable or jointly and severally liable with the
21 debtor for the obligation.
22 (Source: P.A. 89-623, eff. 8-9-96.)
23 (815 ILCS 180/15)
24 Sec. 15. Notice of purchase placement of collateral
25 protection insurance; repayment terms.
26 (a) Within 30 calendar days following the purchase
27 placement of collateral protection insurance, the creditor
28 shall mail to the debtor and to any cosigner, guarantor, or
29 other person liable with the debtor for the obligation, at
30 the last known address on file with the creditor for of any
31 such person, a notice entitled "Notice of Placement of
32 Insurance" in a form substantially similar to the following:
33 "NOTICE OF PLACEMENT OF INSURANCE
-4- LRB9002200JSgcam02
1 Your credit agreement with us requires you to maintain
2 adequate insurance on your collateral until you pay off your
3 loan. You have not given us proof that you have adequate
4 insurance on your collateral. Under the terms of your credit
5 agreement, we have purchased insurance at your expense to
6 protect our interests in your collateral.
7 The insurance we purchased will pay claims made by us as
8 the creditor. The insurance we purchased may not pay any
9 claims made by you or against you in connection with your
10 collateral.
11 You are responsible for the costs of this insurance,
12 including any interest and any other charges that we may
13 impose in connection with the purchase of this insurance.
14 The initial premium payment for this insurance will be
15 (amount), which may or may not include any interest or other
16 charges that we may impose. The costs of this insurance will
17 be added to your payment obligations and may be more than for
18 insurance you can buy on your own.
19 You still may obtain insurance of your own choosing on
20 the collateral. If you provide us with proof that you have
21 obtained adequate insurance on your collateral, we will
22 cancel the insurance that we purchased and refund or credit
23 any unearned premiums to you.
24 If, within 30 days after the date this notice was sent to
25 you, you provide us with proof that you had adequate
26 insurance on your collateral as of the date we also purchased
27 insurance and that you continue to have the insurance that
28 you purchased yourself, we will cancel the insurance that we
29 purchased without charging you any costs, interest, or other
30 charges in connection with the insurance that we purchased."
31 (b) The terms for repayment of the costs of the
32 collateral protection insurance, which shall include interest
33 and any other charges imposed by the creditor in connection
34 with the placement of the collateral protection insurance,
-5- LRB9002200JSgcam02
1 shall include one or more of the following:
2 (1) full payment within 30 days after the date of
3 the Notice of Placement of Insurance;
4 (2) a final balloon payment within 30 days after
5 the last scheduled payment required by the credit
6 agreement; or
7 (3) full amortization over the term of the credit
8 transaction, the term of the collateral protection
9 insurance policy, or the term for which amortization is
10 used by the creditor.
11 (Source: P.A. 89-623, eff. 8-9-96.)
12 (815 ILCS 180/40)
13 Sec. 40. Substantial compliance. A creditor that places
14 collateral protection insurance in substantial compliance
15 with the terms of this Act shall not be directly or
16 indirectly liable in any manner to a debtor, co-signor,
17 guarantor, or any other person, in connection with the
18 placement of the collateral protection insurance. Notices
19 and coupon books required to be mailed to a debtor under this
20 Act are not required to be mailed to any person other than to
21 the debtor and shall be mailed by United States Mail, first
22 class, postage prepaid, to the debtor's last known address on
23 file with the creditor.
24 (Source: P.A. 89-623, eff. 8-9-96.)
25 Section 99. Effective date. This Act takes effect upon
26 becoming law.".