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| [ Introduced ] | [ Senate Amendment 001 ] |
92_SB1839eng SB1839 Engrossed LRB9215873JSpc 1 AN ACT concerning insurance. 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 Section 143a-2 as follows: 6 (215 ILCS 5/143a-2) (from Ch. 73, par. 755a-2) 7 Sec. 143a-2. (1) Additional uninsured motor vehicle 8 coverage. No policy insuring against loss resulting from 9 liability imposed by law for bodily injury or death suffered 10 by any person arising out of the ownership, maintenance or 11 use of a motor vehicle shall be renewed or delivered or 12 issued for delivery in this State with respect to any motor 13 vehicle designed for use on public highways and required to 14 be registered in this State unless uninsured motorist 15 coverage as required in Section 143a of this Code is included 16 in an amount equal to the insured's bodily injury liability 17 limits unless specifically rejected by the insured. Each 18 insurance company providing the coverage must provide 19 applicants with a brief description of the coverage and 20 advise them of their right to reject the coverage in excess 21 of the limits set forth in Section 7-203 of The Illinois 22 Vehicle Code. The provisions of this amendatory Act of 1990 23 apply to policies of insurance applied for after June 30, 24 1991. 25 (2) Right of rejection of additional uninsured motorist 26 coverage. After June 30, 1991, every application for motor 27 vehicle coverage must contain a space for indicating the 28 rejection of additional uninsured motorist coverage. No 29 rejection of that coverage may be effective unless the 30 applicant signs or initials the indication of rejection. The 31 applicant may reject additional uninsured motorist coverage SB1839 Engrossed -2- LRB9215873JSpc 1 in excess of the limits set forth in Section 7-203 of the 2 Illinois Vehicle Code. In those cases, including policies 3 first issued before July 1, 1991, where the insured has 4 elected to purchase limits of uninsured motorist coverage 5 which are less than bodily injury liability limits or to 6 reject limits in excess of those required by law, the insurer 7 need not provide in any renewal, reinstatement, reissuance, 8 substitute, amended, replacement or supplementary policy, 9 coverage in excess of that elected by the insured in 10 connection with a policy previously issued to such insured by 11 the same insurer unless the insured subsequently makes a 12 written request for such coverage. 13 (3) The original application indicating the applicant's 14 selection of uninsured motorist coverage limits shall 15 constitute sufficient evidence of the applicant's selection 16 of uninsured motorist coverage limits and shall be binding on 17 all persons insured under the policy. For purposes of this 18 Section any reproduction of the application by means of 19 photograph, photostat, microfiche, computerized optical 20 imaging process, or other similar process or means of 21 reproduction shall be deemed the equivalent of the original 22 application. 23 (4) For the purpose of this Code the term "underinsured 24 motor vehicle" means a motor vehicle whose ownership, 25 maintenance or use has resulted in bodily injury or death of 26 the insured, as defined in the policy, and for which the sum 27 of the limits of liability under all bodily injury liability 28 insurance policies or under bonds or other security required 29 to be maintained under Illinois law applicable to the driver 30 or to the person or organization legally responsible for such 31 vehicle and applicable to the vehicle, is less than the 32 limits for underinsured coverage provided the insured as 33 defined in the policy at the time of the accident. The 34 limits of liability for an insurer providing underinsured SB1839 Engrossed -3- LRB9215873JSpc 1 motorist coverage shall be the limits of such coverage, less 2 those amounts actually recovered under the applicable bodily 3 injury insurance policies, bonds or other security maintained 4 on the underinsured motor vehicle. However, the maximum 5 amount payable by the underinsured motorist coverage carrier 6 shall not exceed the amount by which the limits of the 7 underinsured motorist coverage exceeds the limits of the 8 bodily injury liability insurance of the owner or operator of 9 the underinsured motor vehicle. 10 On or after July 1, 1983, no policy insuring against 11 loss resulting from liability imposed by law for bodily 12 injury or death suffered by any person arising out of the 13 ownership, maintenance or use of a motor vehicle shall be 14 renewed or delivered or issued for delivery in this State 15 with respect to any motor vehicle designed for use on public 16 highways and required to be registered in this State unless 17 underinsured motorist coverage is included in such policy in 18 an amount equal to the total amount of uninsured motorist 19 coverage provided in that policy where such uninsured 20 motorist coverage exceeds the limits set forth in Section 21 7-203 of the Illinois Vehicle Code. An insurer shall provide 22 to its insureds a brief description of the coverage 23 provided by underinsured motorist coverage. The explanation 24 shall be provided upon the issuance of a policy occurring 25 after the effective date of this amendatory Act of the 92nd 26 General Assembly. 27 (5) Scope. Nothing herein shall prohibit an insurer 28 from setting forth policy terms and conditions which provide 29 that if the insured has coverage available under this Section 30 under more than one policy or provision of coverage, any 31 recovery or benefits may be equal to, but may not exceed, the 32 higher of the applicable limits of the respective coverage, 33 and the limits of liability under this Section shall not be 34 increased because of multiple motor vehicles covered under SB1839 Engrossed -4- LRB9215873JSpc 1 the same policy of insurance. Insurers providing liability 2 coverage on an excess or umbrella basis are neither required 3 to provide, nor are they prohibited from offering or making 4 available coverages conforming to this Section on a 5 supplemental basis. Notwithstanding the provisions of this 6 Section, an insurer shall not be prohibited from solely 7 providing a combination of uninsured and underinsured 8 motorist coverages where the limits of liability under each 9 coverage is in the same amount. 10 (6) Subrogation against underinsured motorists. No 11 insurer shall exercise any right of subrogation under a 12 policy providing additional uninsured motorist coverage 13 against an underinsured motorist where the insurer has been 14 provided with written notice in advance of a settlement 15 between its insured and the underinsured motorist and the 16 insurer fails to advance a payment to the insured, in an 17 amount equal to the tentative settlement, within 30 days 18 following receipt of such notice. 19 (7) A policy which provides underinsured motor vehicle 20 coverage may include a clause which denies payment until the 21 limits of liability or portion thereof under all bodily 22 injury liability insurance policies applicable to the 23 underinsured motor vehicle and its operators have been 24 partially or fully exhausted by payment of judgment or 25 settlement. A judgment or settlement of the bodily injury 26 claim in an amount less than the limits of liability of the 27 bodily injury coverages applicable to the claim shall not 28 preclude the claimant from making an underinsured motorist 29 claim against the underinsured motorist coverage. Any such 30 provision in a policy of insurance shall be inapplicable if 31 the insured, or the legal representative of the insured, and 32 the insurer providing underinsured motor vehicle coverage 33 agree that the insured has suffered bodily injury or death as 34 the result of the negligent operation, maintenance, or use of SB1839 Engrossed -5- LRB9215873JSpc 1 an underinsured motor vehicle and, without arbitration, agree 2 also on the amount of damages that the insured is legally 3 entitled to collect. The maximum amount payable pursuant to 4 such an underinsured motor vehicle insurance settlement 5 agreement shall not exceed the amount by which the limits of 6 the underinsured motorist coverage exceed the limits of the 7 bodily injury liability insurance of the owner or operator of 8 the underinsured motor vehicle. Any such agreement shall be 9 final as to the amount due and shall be binding upon both the 10 insured and the underinsured motorist insurer regardless of 11 the amount of any judgment, or any settlement reached between 12 any insured and the person or persons responsible for the 13 accident. No such settlement agreement shall be concluded 14 unless: (i) the insured has complied with all other 15 applicable policy terms and conditions; and (ii) before the 16 conclusion of the settlement agreement, the insured has filed 17 suit against the underinsured motor vehicle owner or operator 18 and has not abandoned the suit, or settled the suit without 19 preserving the rights of the insurer providing underinsured 20 motor vehicle coverage in the manner described in paragraph 21 (6) of this Section. 22 (Source: P.A. 89-658, eff. 1-1-97.) 23 Section 99. Effective date. This Act takes effect upon 24 becoming law.