Rep. Robert Martwick

Filed: 4/26/2017

 

 


 

 


 
10000HB3072ham001LRB100 10497 SMS 25524 a

1
AMENDMENT TO HOUSE BILL 3072

2    AMENDMENT NO. ______. Amend House Bill 3072 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Illinois Insurance Code is amended by
5changing 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
10warrantor who is designated by the warrantor to be responsible
11for the administration of vehicle protection product
12warranties.
13    "Incidental costs" means expenses specified in the vehicle
14protection product warranty incurred by the warranty holder
15related to the failure of the vehicle protection product to
16perform as provided in the warranty. Incidental costs may

 

 

10000HB3072ham001- 2 -LRB100 10497 SMS 25524 a

1include, without limitation, insurance policy deductibles,
2rental vehicle charges, the difference between the actual value
3of the stolen vehicle at the time of theft and the cost of a
4replacement vehicle, sales taxes, registration fees,
5transaction fees, and mechanical inspection fees.
6    "Vehicle protection product" means a protective chemical,
7substance, vehicle protection device, system, or service that
8is (i) installed on or applied to a vehicle, and (ii) is
9designed to prevent loss or damage to a vehicle from a specific
10cause, (iii) includes a written warranty by a warrantor that
11provides if the vehicle protection product fails to prevent
12loss or damage to a vehicle from a specific cause, that the
13warranty holder shall be paid specified incidental costs by the
14warrantor as a result of the failure of the vehicle protection
15product to perform pursuant to the terms of the warranty, and
16(iv) the warrantor's liability is covered by a warranty
17reimbursement insurance policy. The term "vehicle protection
18product" shall include, without limitation, protective
19chemicals, alarm systems, body part marking products, steering
20locks, window etch products, pedal and ignition locks, fuel and
21ignition kill switches, and electronic, radio, and satellite
22tracking devices. "Vehicle protection product" does not
23include fuel additives, oil additives, or other chemical
24products applied to the engine, transmission, or fuel system of
25a motor vehicle.
26    "Vehicle protection product warrantor" or "warrantor"

 

 

10000HB3072ham001- 3 -LRB100 10497 SMS 25524 a

1means a person who is contractually obligated to the warranty
2holder under the terms of a the vehicle protection product
3warranty. "Warrantor" Warrantor does not include an authorized
4insurer.
5    "Vehicle protection product warranty" means a written
6warranty by a vehicle protection product warrantor that (i) is
7included, for no separate and identifiable consideration, with
8the purchase of a vehicle protection product sold or offered
9for sale in this State and (ii) provides if the vehicle
10protection product fails to prevent loss or damage to a vehicle
11from a specific cause, that the warranty holder shall be paid
12specified incidental costs by the warrantor as a result of the
13failure of the vehicle protection product to perform pursuant
14to the terms of the warranty.
15    "Warranty reimbursement insurance policy" means a policy
16of insurance issued to the vehicle protection product warrantor
17to pay on behalf of the warrantor all covered contractual
18obligations incurred by the warrantor under the terms and
19conditions of the insured vehicle protection product
20warranties sold by the warrantor. The warranty reimbursement
21insurance policy shall be issued by an insurer authorized to do
22business in this State that has filed its policy form with the
23Department.
24    (a-5) A vehicle protection product warrantor's liabilities
25under a vehicle protection product warranty shall be covered by
26a warranty reimbursement insurance policy.

 

 

10000HB3072ham001- 4 -LRB100 10497 SMS 25524 a

1    (b) No vehicle protection product warranty sold or offered
2for sale in this State shall be subject to the provisions of
3this Code. Vehicle protection product warranties are express
4warranties and not insurance.
5    Vehicle protection product warrantors and related vehicle
6protection product sellers and warranty administrators
7complying with this Section are not required to comply with and
8are not subject to any other provision of this Code. The
9vehicle protection products' written warranties are express
10warranties and not insurance.
11    (c) This Section applies to all vehicle protection products
12sold or offered for sale prior to, on, or after the effective
13date of this amendatory Act of the 93rd General Assembly. The
14enactment of this Section does not imply that vehicle
15protection products should have been subject to regulation
16under this Code prior to the enactment of this Section. The
17changes made to this Section by this amendatory Act of the
18100th General Assembly do not imply that vehicle protection
19products and vehicle protection product warranties should have
20been subject to regulation under this Code prior to this
21amendatory Act of the 100th General Assembly.
22(Source: P.A. 95-331, eff. 8-21-07.)
 
23    Section 10. The Service Contract Act is amended by changing
24Sections 5 and 35 as follows:
 

 

 

10000HB3072ham001- 5 -LRB100 10497 SMS 25524 a

1    (215 ILCS 152/5)
2    Sec. 5. Definitions.
3    "Department" means the Department of Insurance.
4    "Director" means the Director of Insurance.
5    "Road hazard" means a hazard that is encountered while
6driving a motor vehicle, including, but not limited to,
7potholes, rocks, wood debris, metal parts, glass, plastic,
8curbs, and composite scraps.
9    "Service contract" means a contract or agreement whereby a
10service contract provider undertakes for a specified period of
11time, for separate and identifiable consideration, to perform
12the repair, replacement, or maintenance, or indemnification
13for such services, of any automobile, system, or consumer
14product in connection with the operational or structural
15failure due to a defect in materials or workmanship, or normal
16wear and tear, with or without additional provision for
17incidental payment or indemnity under limited circumstances,
18for related expenses, including, but not limited to, towing,
19rental, and emergency road service. Service contracts may
20provide for:
21        (1) the repair, replacement, or maintenance of such
22    property for damage resulting from power surges and
23    accidental damage from handling;
24        (2) the repair or replacement of tires or wheels, or
25    both, on a motor vehicle damaged as the result of coming
26    into contact with road hazards;

 

 

10000HB3072ham001- 6 -LRB100 10497 SMS 25524 a

1        (3) the removal of dents, dings, or creases on a motor
2    vehicle that can be repaired using the process of paintless
3    dent removal without affecting the existing paint finish
4    and without replacing vehicle body panels, sanding,
5    bonding, or painting;
6        (4) the repair of chips or cracks in or the replacement
7    of motor vehicle windshields as a result of damage caused
8    by road hazards;
9        (5) the replacement of a motor vehicle key or key-fob
10    in the event that the key or key-fob becomes inoperable or
11    is lost or stolen;
12        (6) the payment of specified incidental costs in the
13    event that a vehicle protection product a protective
14    chemical, substance, device, or system that (A) is
15    installed on or applied to a motor vehicle, (B) is designed
16    to prevent loss or damage to a motor vehicle from a
17    specific cause, and (C) includes a written product warranty
18    providing for payment to or on behalf of the warranty
19    holder's incidental costs in the event that the product
20    fails to prevent loss or damage as specified; the
21    reimbursement of incidental costs under the warranty must
22    be tied to the purchase of a physical product that is
23    formulated or designed to make the specified loss or damage
24    less likely to occur; or
25        (7) other services that may be approved by the
26    Director, if not inconsistent with other provisions of this

 

 

10000HB3072ham001- 7 -LRB100 10497 SMS 25524 a

1    Act.
2Service contracts shall not include:
3        (i) contracts of limited duration that provide for
4    scheduled maintenance only;
5        (ii) fuel additives, oil additives, or other chemical
6    products applied to the engine, transmission, or fuel
7    system of a motor vehicle;
8        (iii) coverage for the repair or replacement, or both,
9    of damage to the interior surfaces of a vehicle, or for
10    repair or replacement, or both, of damage to the exterior
11    paint or finish of a vehicle; however, such coverage may be
12    offered in connection with the sale of a vehicle protection
13    product; and
14        (iv) a vehicle product protection warranty included,
15    for no separate and identifiable consideration, with the
16    purchase of a vehicle protection product protective
17    chemical, device, or system described in item (6) of this
18    definition.
19    "Service contract holder" means the person who purchases a
20service contract or a permitted transferee.
21    "Service contract provider" means a person who is
22contractually obligated to the service contract holder under
23the terms of the service contract. A service contract provider
24does not include an insurer.
25    "Service contract reimbursement insurance policy" means a
26policy of insurance that is issued to the service contract

 

 

10000HB3072ham001- 8 -LRB100 10497 SMS 25524 a

1provider to provide reimbursement to the service contract
2provider or to pay on behalf of the service contract provider
3all covered contractual obligations incurred by the service
4contract provider under the terms and conditions of the insured
5service contracts issued or sold by the service contract
6provider.
7    "System" means the heating, cooling, plumbing, electrical,
8ventilation, or any other similar system of a home.
9    "Vehicle protection product" has the same meaning as that
10term is defined in subsection (a) of Section 155.39 of the
11Illinois Insurance Code.
12    "Vehicle protection product warranty" has the same meaning
13as that term is defined in subsection (a) of Section 155.39 of
14the Illinois Insurance Code.
15(Source: P.A. 98-222, eff. 1-1-14.)
 
16    (215 ILCS 152/35)
17    Sec. 35. Cancellation and refunds.
18    (a) No service contract may be issued, sold, or offered for
19sale in this State unless the service contract clearly states
20that the service contract holder is allowed to cancel the
21service contract. If the service contract holder elects
22cancellation, the service contract provider may retain a
23cancellation fee not to exceed the lesser of 10% of the service
24contract price or $50. The service contract cancellation
25provision must provide that the service contract may be

 

 

10000HB3072ham001- 9 -LRB100 10497 SMS 25524 a

1cancelled:
2    (1) within 30 days after its purchase if no service has
3been provided and that a full refund of the service contract
4consideration, less any cancellation fee stated in the service
5contract will be paid to the service contract holder; or
6    (2) at any other time and a pro rata refund of the service
7contract consideration for the unexpired term of the service
8contract, based on the number of elapsed months, miles, hours,
9or such other reasonably applicable measure which is clearly
10disclosed in the service contract, less the value of any
11service received, and any cancellation fee stated in the
12service contract will be paid to the service contract holder.
13    (b) In the event of the cancellation of a service contract
14that includes the coverage described in paragraph (6) of the
15definition of "service contract" in Section 5 of this Act, the
16service contract provider is not required to, but may, refund
17the purchase price of the vehicle protection product. The
18coverage described in paragraph (6) of the definition of
19"service contract" in Section 5 of this Act may not be offered
20as or within a service contract unless the service contract
21clearly states whether the service contract holder is entitled
22to a refund of the purchase price of the vehicle protection
23product and, if applicable, the terms of such refund.
24(Source: P.A. 90-711, eff. 8-7-98.)".