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Public Act 093-0713
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| SB2491 Enrolled |
LRB093 20569 SAS 46378 b |
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AN ACT in relation to insurance.
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Be it enacted by the People of the State of Illinois, |
represented in the General Assembly:
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Section 5. The Illinois Insurance Code is amended by |
changing Sections 143.11b, 143.14, 143.15, 143.16, 143.17, |
143.17a, and 513a11 as follows:
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(215 ILCS 5/143.11b)
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Sec. 143.11b. Assignment or transfer of property and |
casualty policies. An assignment or transfer of a policy of |
insurance to which Section 143.11
applies among or between |
insurers within an insurance holding company system or
insurers |
under common management or control, or as a result of a merger,
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acquisition,
or restructuring of an insurance company, is not a |
nonrenewal
for purposes of the notification requirements under |
Sections 143.12 through
143.24. However,
in the event of an |
increase in the renewal premium of 30% or more, change in
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deductibles or change in coverage that materially alters any |
policy to which
subsection b of Section 143.17a applies, the |
company shall adhere to the
provisions set forth in
subsection |
b of Section 143.17a. A company making an assignment or |
transfer of
a policy among or between insurers within an |
insurance holding company system
or insurers under common |
management or control, or as a result of a merger,
acquisition, |
or restructuring of an insurance company, shall
have delivered |
to the named insured notice of such assignment or transfer at
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least 60 days prior to the renewal date. An exact and unaltered |
copy of the
notice shall also be sent to the insured's |
producer, if known, and agent of
record. The assignment or |
transfer of a policy or policies of insurance among
or between
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insurers shall not occur without the producer or agent of |
record, or both,
having a signed agency contract with the |
entity to
which the policy or policies are to be assigned or |
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transferred. If there is
not a signed agency contract, all of |
the notice requirements of Sections 143.17
and 143.17a shall |
apply. Nothing in
this Section shall contravene any existing |
producer and company contract
rights. For purposes of this |
Section, the insured's producer, if known, and agent of record |
may opt to accept notification of assignment or transfer of |
policies electronically.
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(Source: P.A. 91-800, eff. 6-13-00.)
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(215 ILCS 5/143.14) (from Ch. 73, par. 755.14)
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Sec. 143.14. Notice of cancellation.
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(a) No notice of cancellation of any
policy of insurance, |
to which
Section 143.11 applies, shall be effective unless |
mailed by the company
to the named insured and the mortgage or |
lien holder, at the last mailing
address known by the company.
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The company shall maintain proof of mailing of such notice on a |
recognized
U.S. Post Office form or a form acceptable to the U. |
S. Post Office or
other commercial mail delivery service. A
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copy of all such
notices shall be sent to the insured's broker |
if known, or the agent of
record, and to the mortgagee or |
lienholder, if known, at the last mailing
address
known to the |
company. For purposes of this Section, the mortgage or lien |
holder, insured's broker, if known, or the agent of record may |
opt to accept notification electronically.
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(b) Whenever a financed insurance contract is cancelled, |
the insurer
shall return
whatever gross unearned premiums are |
due
under the insurance contract or contracts not to exceed the |
unpaid balance
due the premium finance company directly to the |
premium finance
company effecting the cancellation for the |
account of the named insured.
The return premium must be mailed |
to the premium finance company within
60 days.
The request for |
the unearned premium by the premium finance company shall
be in |
the manner of a monthly account, current accounting by |
producer,
policy number, unpaid balance and name of insured for |
each cancelled amount.
In the event the insurance contract or |
contracts are subject to audit, the
insurer shall retain the |
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right to withhold the return of the portion of
premium that can |
be identified to the contract or contracts until the audit
is |
completed. Within 30 days of the completion of the audit, if a |
premium
retained by the insurer after crediting the earned |
premium would result in
a surplus, the insurer shall return the |
surplus directly to the premium
finance company. If the audit |
should result in an additional premium due
the insurer, the |
obligation for the collection of this premium shall fall
upon |
the insurer and not affect any other contract or contracts |
currently
being financed by the premium finance company for the |
named insured.
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(c) Whenever a premium finance agreement contains a power |
of attorney
enabling the premium finance company to cancel any |
insurance contract or contracts
in the agreement, the insurer |
shall honor the date of cancellation as set
forth in the |
request from the premium finance company without requiring the
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return of the insurance contract or contracts. The insurer may |
mail to the
named insured an acknowledgment of the notice of |
cancellation from the
premium finance company but the named |
insured shall not incur any
additional premium charge for any |
extension of coverage. The insurer need
not maintain proof of |
mailing of this notice.
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(d) All statutory regulatory and contractual restrictions |
providing that
the insurance contract may not be cancelled |
unless the required notice is
mailed to a governmental agency, |
mortgagee, lienholder, or other third
party shall apply where |
cancellation is effected under a power of
attorney under a |
premium finance agreement. The insurer shall have the
right for |
a premium charge for this extension of coverage.
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(Source: P.A. 86-370; 86-437; 86-1028; 87-811; 87-1123.)
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(215 ILCS 5/143.15) (from Ch. 73, par. 755.15)
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Sec. 143.15. Mailing of cancellation notice. All notices of
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cancellation of insurance as
defined in subsections (a), (b) |
and (c) of Section 143.13 must
be mailed at least 30 days prior |
to the effective date of
cancellation to the named insured and |
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mortgagee or lien holder,
if known, at the last mailing address |
known to the company. All
notices of cancellation shall include |
a specific explanation of
the reason or reasons for |
cancellation. However, where cancellation
is for nonpayment of |
premium, the notice of
cancellation must be mailed at least 10 |
days before the effective date of the
cancellation. For |
purposes of this Section, the mortgagee or lien holder, if |
known, may opt to accept notification electronically.
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(Source: P.A. 89-669, eff. 1-1-97.)
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(215 ILCS 5/143.16) (from Ch. 73, par. 755.16)
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Sec. 143.16. Mailing of cancellation notice. All notices of
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cancellation of insurance to which Section
143.11 applies, |
except for those defined in subsections (a), (b) and (c) of
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Section 143.13 must be mailed at least 30 days prior to the |
effective date
of cancellation during the first 60 days of |
coverage. After the coverage
has been effective for 61 days or |
more, all notices must be mailed at least
60 days prior to the |
effective date of cancellation. All such notices shall
include |
a specific explanation of the reason or reasons for |
cancellation
and shall be mailed to the named insured and |
mortgagee or lien holder, if
known, at the last mailing address |
known to the company. However, where
cancellation is for |
nonpayment of premium, the notice
of
cancellation must be |
mailed at least 10 days before the
effective date of the |
cancellation. For purposes of this Section, the mortgagee or |
lien holder, if known, may opt to accept notification |
electronically.
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(Source: P.A. 89-669, eff. 1-1-97.)
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(215 ILCS 5/143.17) (from Ch. 73, par. 755.17)
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Sec. 143.17. Notice of intention not to renew.
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a. No company shall fail
to renew any policy of insurance, |
as defined in subsections (a), (b),
(c), and (h) of Section |
143.13, to which Section 143.11 applies, unless it
shall
send |
by mail to the named insured at least 30 days advance notice of |
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its
intention not to renew. The company shall maintain proof of |
mailing of
such notice on a recognized U.S. Post Office form or |
a form acceptable to
the U. S. Post Office or other commercial |
mail delivery service. An exact
and unaltered copy of such |
notice shall also be sent to the insured's
broker, if known, or |
the agent of record and to the mortgagee or lien
holder at the |
last mailing address known by the company. However, where
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cancellation is for nonpayment of premium, the notice
of
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cancellation must be mailed at least 10 days before the
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effective date of the cancellation.
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b. This Section does not apply if the company has |
manifested its
willingness to renew directly to the named |
insured.
Such written notice shall specify the premium amount |
payable, including
any premium payment plan available, and the |
name of any person or persons,
if any, authorized to receive |
payment on behalf of the company. If no
person is so |
authorized, the premium notice shall so state. The notice of
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nonrenewal and the proof of mailing shall be effected on the |
same date.
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b-5. This Section does not apply if the company manifested |
its
willingness to renew directly to the named insured. |
However, no company may
impose changes in deductibles or |
coverage for any policy forms applicable to an
entire line of |
business enumerated in subsections (a), (b), (c), and (h) of
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Section 143.13 to which Section 143.11 applies unless the |
company mails to the
named insured written notice of the change |
in deductible or coverage at least
60 days prior to the renewal |
or anniversary date. An exact and unaltered copy
of the notice |
shall also be sent to the insured's broker, if known, or the
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agent of record.
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c. Should a company fail to comply with (a) or (b) of this |
Section,
the policy shall terminate only on the effective date |
of any similar
insurance procured by the insured with respect |
to the same subject or
location designated in both policies.
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d. Renewal of a policy does not constitute a waiver or |
estoppel with
respect to grounds for cancellation which existed |
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before the effective
date of such renewal.
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e. In all notices of intention not to renew any policy of |
insurance,
as defined in Section 143.11 the company shall |
provide a specific
explanation of the reasons for nonrenewal.
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f. For purposes of this Section, the insured's broker, if |
known, or the agent of record and the mortgagee or lien holder |
may opt to accept notification electronically.
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(Source: P.A. 91-597, eff. 1-1-00.)
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(215 ILCS 5/143.17a) (from Ch. 73, par. 755.17a)
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Sec. 143.17a. Notice of intention not to renew.
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a. No company shall fail to renew any policy of insurance,
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to which
Section 143.11 applies, except for those defined in |
subsections (a),
(b), (c), and (h) of Section 143.13, unless it |
shall send by
mail
to the named insured at least 60 days |
advance
notice of its intention not to renew. The company shall |
maintain proof
of mailing of such notice on one of the |
following forms: a recognized U.S.
Post Office form or a form |
acceptable to the U.S. Post Office or other
commercial mail |
delivery service. An exact and unaltered
copy of such notice |
shall also be
sent to the insured's broker, if known, or the |
agent of record and to
the mortgagee or lien holder at
the
last |
mailing address known by the company.
However, where |
cancellation is for nonpayment of premium, the notice of |
cancellation must be mailed at least 10 days
before the |
effective date of the cancellation.
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b. This Section does not apply if the company has |
manifested its
willingness to renew directly to the named |
insured.
Provided, however, that no company
may increase the |
renewal premium on any policy of insurance to which Section
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143.11 applies, except for those defined in subsections (a), |
(b), (c), and (h)
of Section
143.13, by 30% or more, nor impose |
changes in deductibles or coverage that
materially alter the |
policy, unless the company shall have mailed or delivered
to |
the named insured written notice of such increase or change in
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deductible or coverage at least 60 days prior
to the renewal or |
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anniversary date.
The increase in premium shall be the
renewal |
premium based on the known exposure as of the date of the |
quotation
compared to the premium
as of the last day of |
coverage for the current year's policy, annualized.
The premium |
on the renewal policy may be subsequently amended to reflect
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any change in exposure or reinsurance costs not considered in |
the
quotation. An exact and unaltered
copy of such notice shall |
also be sent to the insured's broker, if known,
or the agent of |
record. If an insurer fails to provide the notice
required by |
this subsection, then the company must extend the current |
policy
under the same terms, conditions, and premium to allow |
60 days notice of
renewal and provide the actual renewal |
premium quotation and any change in
coverage or deductible on |
the policy. Proof of mailing or proof of receipt may
be proven |
by a sworn affidavit by the insurer as to the usual and |
customary
business practices of mailing notice pursuant to this |
Section or may be proven
consistent with Illinois Supreme Court |
Rule 236.
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c. Should a company fail to comply with the non-renewal |
notice
requirements
of subsection a.,
the policy shall be |
extended for an additional year
or until the effective date of |
any similar insurance
procured by the insured, whichever is |
less,
on the same terms and conditions as the policy sought to |
be
terminated, unless the insurer has manifested its intention |
to renew at a
different premium that represents an increase not |
exceeding 30%.
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d. Renewal of a policy does not constitute a waiver or |
estoppel with
respect to grounds for cancellation which existed |
before the effective
date of such renewal.
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e. In all notices of intention not to renew any policy of |
insurance,
as defined in Section 143.11 the company shall |
provide a specific
explanation of the reasons for nonrenewal.
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f. For purposes of this Section, the insured's broker, if |
known, or the agent of record and the mortgagee or lien holder |
may opt to accept notification electronically.
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(Source: P.A. 93-477, eff. 8-8-03.)
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(215 ILCS 5/513a11) (from Ch. 73, par. 1065.60a11)
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Sec. 513a11. Cancellation requirements upon default.
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(a) When a premium finance agreement contains a power of |
attorney
enabling the premium finance company to cancel any |
insurance contract or
contracts listed in the premium finance |
agreement, the insurance contract
or contracts shall not be |
cancelled by the premium finance company unless
the request for |
cancellation is effectuated under this Section.
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(b) Not less than 10 days written notice shall be mailed to |
the named
insured of the intent of the premium finance company |
to cancel the
insurance contract unless the default is cured |
within the 10 day period.
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(c) After expiration of the 10 day period, the premium |
finance company
may request, in the name of the named insured, |
cancellation of the insurance
contract or contracts by mailing |
or hand delivering to the insurer a
request for cancellation, |
and the insurance contract shall be cancelled as
if the request |
for cancellation had been submitted by the named insured,
but |
without requiring the return of the insurance contract or |
contracts.
The premium finance company shall also mail a copy |
of the request for
cancellation to the named insured at his |
last known address.
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(d) All statutory, regulatory, and contractual |
restrictions providing
that the insurance contract may not be |
cancelled unless notice is given to
a governmental agency, |
mortgagee, or other third party shall apply where
cancellation |
is effected under provisions of this Section. The insurer
shall |
give the notice to any governmental agency, mortgagee, or other
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third party on or before the fifth business day after it |
receives the
notice of cancellation from the premium finance |
company. For purposes of this Section, any governmental agency, |
mortgagee, or other third party may opt to receive notices |
electronically.
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(e) In the event that the collection of return premiums for |
the account of
the named insured results in a surplus over the |