SB2238ham002 93RD GENERAL ASSEMBLY

Rep. Robert S. Molaro

Filed: 05/11/04

09300SB2238ham002 LRB093 15870 LCB 50652 a

AMENDMENT TO SENATE BILL 2238

AMENDMENT NO. ______. Amend Senate Bill 2238 by replacing the title with the following:

"AN ACT concerning transportation."; and

by replacing everything after the enacting clause with the following:

"Section 5. The Illinois Insurance Code is amended by changing Section 143a-2 as follows:

(215 ILCS 5/143a-2) (from Ch. 73, par. 755a-2)

Sec. 143a-2. (1) Additional uninsured motor vehicle coverage. No policy insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person arising out of the ownership, maintenance or use of a motor vehicle shall be renewed or delivered or issued for delivery in this State with respect to any motor vehicle designed for use on public highways and required to be registered in this State unless uninsured motorist coverage as required in Section 143a of this Code is included in an amount equal to the insured's bodily injury liability limits unless specifically rejected by the insured as provided in paragraph (2) of this Section. Each insurance company providing the coverage must provide applicants with a brief description of the coverage and advise them of their right to reject the coverage in excess of the limits set forth in Section 7-203 of The Illinois Vehicle Code. The provisions of this amendatory Act of 1990 apply to policies of insurance applied for after June 30, 1991.

(2) Right of rejection of additional uninsured motorist coverage. Any named insured or applicant After June 30, 1991, every application for motor vehicle coverage must contain a space for indicating the rejection of additional uninsured motorist coverage. No rejection of that coverage may be effective unless the applicant signs or initials the indication of rejection. The applicant may reject additional uninsured motorist coverage in excess of the limits set forth in Section 7-203 of the Illinois Vehicle Code by making a written request for limits of uninsured motorist coverage which are less than bodily injury liability limits or a written rejection of limits in excess of those required by law. This election or rejection shall be binding on all persons insured under the policy. In those cases, including policies first issued before July 1, 1991, where the insured has elected to purchase limits of uninsured motorist coverage which are less than bodily injury liability limits or to reject limits in excess of those required by law, the insurer need not provide in any renewal, reinstatement, reissuance, substitute, amended, replacement or supplementary policy, coverage in excess of that elected by the insured in connection with a policy previously issued to such insured by the same insurer unless the insured subsequently makes a written request for such coverage.

(3) The original document application indicating the applicant's selection of uninsured motorist coverage limits shall constitute sufficient evidence of the applicant's selection of uninsured motorist coverage limits and shall be binding on all persons insured under the policy. For purposes of this Section any reproduction of the document application by means of photograph, photostat, microfiche, computerized optical imaging process, or other similar process or means of reproduction shall be deemed the equivalent of the original document application.

(4) For the purpose of this Code the term "underinsured motor vehicle" means a motor vehicle whose ownership, maintenance or use has resulted in bodily injury or death of the insured, as defined in the policy, and for which the sum of the limits of liability under all bodily injury liability insurance policies or under bonds or other security required to be maintained under Illinois law applicable to the driver or to the person or organization legally responsible for such vehicle and applicable to the vehicle, is less than the limits for underinsured coverage provided the insured as defined in the policy at the time of the accident. The limits of liability for an insurer providing underinsured motorist coverage shall be the limits of such coverage, less those amounts actually recovered under the applicable bodily injury insurance policies, bonds or other security maintained on the underinsured motor vehicle. However, the maximum amount payable by the underinsured motorist coverage carrier shall not exceed the amount by which the limits of the underinsured motorist coverage exceeds the limits of the bodily injury liability insurance of the owner or operator of the underinsured motor vehicle.

On or after July 1, 1983, no policy insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person arising out of the ownership, maintenance or use of a motor vehicle shall be renewed or delivered or issued for delivery in this State with respect to any motor vehicle designed for use on public highways and required to be registered in this State unless underinsured motorist coverage is included in such policy in an amount equal to the total amount of uninsured motorist coverage provided in that policy where such uninsured motorist coverage exceeds the limits set forth in Section 7-203 of the Illinois Vehicle Code.

The changes made to this subsection (4) by this amendatory Act of the 93rd General Assembly apply to policies issued or renewed on or after January 1, 2005.

(5) Scope. Nothing herein shall prohibit an insurer from setting forth policy terms and conditions which provide that if the insured has coverage available under this Section under more than one policy or provision of coverage, any recovery or benefits may be equal to, but may not exceed, the higher of the applicable limits of the respective coverage, and the limits of liability under this Section shall not be increased because of multiple motor vehicles covered under the same policy of insurance. Insurers providing liability coverage on an excess or umbrella basis are neither required to provide, nor are they prohibited from offering or making available coverages conforming to this Section on a supplemental basis. Notwithstanding the provisions of this Section, an insurer shall not be prohibited from solely providing a combination of uninsured and underinsured motorist coverages where the limits of liability under each coverage is in the same amount.

(6) Subrogation against underinsured motorists. No insurer shall exercise any right of subrogation under a policy providing additional uninsured motorist coverage against an underinsured motorist where the insurer has been provided with written notice in advance of a settlement between its insured and the underinsured motorist and the insurer fails to advance a payment to the insured, in an amount equal to the tentative settlement, within 30 days following receipt of such notice.

(7) A policy which provides underinsured motor vehicle coverage may include a clause which denies payment until the limits of liability or portion thereof under all bodily injury liability insurance policies applicable to the underinsured motor vehicle and its operators have been partially or fully exhausted by payment of judgment or settlement. A judgment or settlement of the bodily injury claim in an amount less than the limits of liability of the bodily injury coverages applicable to the claim shall not preclude the claimant from making an underinsured motorist claim against the underinsured motorist coverage. Any such provision in a policy of insurance shall be inapplicable if the insured, or the legal representative of the insured, and the insurer providing underinsured motor vehicle coverage agree that the insured has suffered bodily injury or death as the result of the negligent operation, maintenance, or use of an underinsured motor vehicle and, without arbitration, agree also on the amount of damages that the insured is legally entitled to collect. The maximum amount payable pursuant to such an underinsured motor vehicle insurance settlement agreement shall not exceed the amount by which the limits of the underinsured motorist coverage exceed the limits of the bodily injury liability insurance of the owner or operator of the underinsured motor vehicle. Any such agreement shall be final as to the amount due and shall be binding upon both the insured and the underinsured motorist insurer regardless of the amount of any judgment, or any settlement reached between any insured and the person or persons responsible for the accident. No such settlement agreement shall be concluded unless: (i) the insured has complied with all other applicable policy terms and conditions; and (ii) before the conclusion of the settlement agreement, the insured has filed suit against the underinsured motor vehicle owner or operator and has not abandoned the suit, or settled the suit without preserving the rights of the insurer providing underinsured motor vehicle coverage in the manner described in paragraph (6) of this Section.

(Source: P.A. 89-658, eff. 1-1-97.)

Section 10. The Illinois Vehicle Code is amended by changing Sections 1-164.5, 7-203, 7-311, and 7-317 as follows:

(625 ILCS 5/1-164.5)

Sec. 1-164.5. Proof of financial responsibility.

(a) Except as otherwise provided in subsection (b), proof Proof of ability to respond in damages for any liability thereafter incurred resulting from the ownership, maintenance, use or operation of a motor vehicle for bodily injury to or death of any person in the amount of $20,000, and subject to this limit for any one person injured or killed, in the amount of $40,000 for bodily injury to or death of 2 or more persons in any one accident, and for damage to property in the amount of $15,000 resulting from any one accident.

(b) In any case in which the proof of financial responsibility consists of (i) a motor vehicle liability policy, as defined in Section 7-317 of this Code, issued or renewed on or after December 1, 2004 or (ii) a bond issued or renewed on or after December 1, 2004, proof of ability to respond in damages for any liability thereafter incurred resulting from the ownership, maintenance, use or operation of a motor vehicle for bodily injury to or death of any person in the amount of $30,000, and subject to this limit for any one person injured or killed, in the amount of $60,000 for bodily injury to or death of 2 or more persons in any one accident, and for damage to property in the amount of $25,000 resulting from any one accident.

(c) This proof in these amounts shall be furnished for each motor vehicle registered by every person required to furnish this proof.

(Source: P.A. 90-89, eff. 1-1-98.)

(625 ILCS 5/7-203) (from Ch. 95 1/2, par. 7-203)

Sec. 7-203. Requirements as to policy or bond.

(a) No such policy or bond referred to in Section 7-202 shall be effective under this Section unless issued by an insurance company or surety company authorized to do business in this State, except that if such motor vehicle was not registered in this State, or was a motor vehicle which was registered elsewhere than in this State at the effective date of the policy or bond, or the most recent renewal thereof, such policy or bond shall not be effective under this Section unless the insurance company or surety company, if not authorized to do business in this State, shall execute a power of attorney authorizing the Secretary of State to accept service on its behalf of notice or process in any action upon such policy or bond arising out of such motor vehicle accident.

(b) Except as provided in subsection (c) However, every such policy or bond is subject, if the motor vehicle accident has resulted in bodily injury or death, to a limit, exclusive of interest and costs, of not less than $20,000 because of bodily injury to or death of any one person in any one motor vehicle accident and, subject to said limit for one person, to a limit of not less than $40,000 because of bodily injury to or death of 2 or more persons in any one motor vehicle accident, and, if the motor vehicle accident has resulted in injury to or destruction of property, to a limit of not less than $15,000 because of injury to or destruction of property of others in any one motor vehicle accident.

(c) Any policy or bond issued or renewed on or after December 1, 2004 is subject, if the motor vehicle accident has resulted in bodily injury or death, to a limit, exclusive of interest and costs, of not less than $30,000 because of bodily injury to or death of any one person in any one motor vehicle accident and, subject to the limit for one person, to a limit of not less than $60,000 because of bodily injury to or death of 2 or more persons in any one motor vehicle accident, and, if the motor vehicle accident has resulted in injury to or destruction of property, to a limit of not less than $25,000 because of injury to or destruction of property of others in any one motor vehicle accident.

(d) Upon receipt of a written motor vehicle accident report from the Administrator the insurance company or surety company named in such notice shall notify the Administrator within such time and in such manner as the Administrator may require, in case such policy or bond was not in effect at the time of such motor vehicle accident.

(Source: P.A. 85-730.)

(625 ILCS 5/7-311) (from Ch. 95 1/2, par. 7-311)

Sec. 7-311. Payments sufficient to satisfy requirements.

(a) Except as otherwise provided in subsection (a-1), judgments Judgments herein referred to arising out of motor vehicle accidents occurring on or after January 1, 1956, shall for the purpose of this Chapter be deemed satisfied:

1. When $20,000 has been credited upon any judgment or judgments rendered in excess of that amount for bodily injury to or the death of one person as the result of any one motor vehicle accident; or

2. When, subject to said limit of $20,000 as to any one person, the sum of $40,000 has been credited upon any judgment or judgments rendered in excess of that amount for bodily injury to or the death of more than one person as the result of any one motor vehicle accident; or

3. When $15,000 has been credited upon any judgment or judgments, rendered in excess of that amount for damages to property of others as a result of any one motor vehicle accident.

(a-1) A Judgment arising out of a motor vehicle accident occurring on or after December 1, 2004, if the judgment debtor is covered by (i) a motor vehicle liability policy, as defined in Section 7-317 of this Code, issued or renewed on or after December 1, 2004 or (ii) a bond issued or renewed on or after December 1, 2004, is satisfied for the purpose of this Chapter:

1. When $30,000 has been credited upon any judgment or judgments rendered in excess of that amount for bodily injury to or the death of one person as the result of any one motor vehicle accident; or

2. When, subject to the limit of $30,000 as to any one person, the sum of $60,000 has been credited upon any judgment or judgments rendered in excess of that amount for bodily injury to or the death of more than one person as the result of any one motor vehicle accident; or

3. When $25,000 has been credited upon any judgment or judgments, rendered in excess of that amount for damages to property of others as a result of any one motor vehicle accident.

(b) Credit for such amounts shall be deemed a satisfaction of any such judgment or judgments in excess of said amounts only for the purposes of this Chapter.

(c) Whenever payment has been made in settlement of any claim for bodily injury, death or property damage arising from a motor vehicle accident resulting in injury, death or property damage to two or more persons in such accident, any such payment shall be credited in reduction of the amounts provided for in this Section.

(Source: P.A. 85-730.)

(625 ILCS 5/7-317) (from Ch. 95 1/2, par. 7-317)

Sec. 7-317. "Motor vehicle liability policy" defined. (a) Certification. -A "motor vehicle liability policy", as that term is used in this Act, means an "owner's policy" or an "operator's policy" of liability insurance, certified as provided in Section 7-315 or Section 7-316 as proof of financial responsibility for the future, and issued, except as otherwise provided in Section 7-316, by an insurance carrier duly authorized to transact business in this State, to or for the benefit of the person named therein as insured.

(b) Owner's Policy. --Such owner's policy of liability insurance:

1. Shall designate by explicit description or by appropriate reference, all motor vehicles with respect to which coverage is thereby intended to be granted;

2. Shall insure the person named therein and any other person using or responsible for the use of such motor vehicle or vehicles with the express or implied permission of the insured;

3. Shall, except as otherwise provided in paragraph 4 of this subsection (b), insure every named insured and any other person using or responsible for the use of any motor vehicle owned by the named insured and used by such other person with the express or implied permission of the named insured on account of the maintenance, use or operation of any motor vehicle owned by the named insured, within the continental limits of the United States or the Dominion of Canada against loss from liability imposed by law arising from such maintenance, use or operation, to the extent and aggregate amount, exclusive of interest and cost, with respect to each motor vehicle, of $20,000 for bodily injury to or death of one person as a result of any one accident and, subject to such limit as to one person, the amount of $40,000 for bodily injury to or death of all persons as a result of any one accident and the amount of $15,000 for damage to property of others as a result of any one accident.

4. Shall, with regard to policies issued or renewed on or after December 1, 2004, insure every named insured and any other person using or responsible for the use of any motor vehicle owned by the named insured and used by any other person with the express or implied permission of the named insured on account of the maintenance, use, or operation of any motor vehicle owned by the named insured, within the continental limits of the United States or the Dominion of Canada against loss from liability imposed by law arising from that maintenance, use, or operation, to the extent and aggregate amount, exclusive of interest and cost, with respect to each motor vehicle, of $30,000 for bodily injury to or death of one person as a result of any one accident and, subject to that limit as to one person, the amount of $60,000 for bodily injury to or death of all persons as a result of any one accident, and the amount of $25,000 for damage to property of others as a result of any one accident.

(c) Operator's Policy. --When an operator's policy is required, it shall insure the person named therein as insured against the liability imposed by law upon the insured for bodily injury to or death of any person or damage to property to the amounts and limits above set forth and growing out of the use or operation by the insured within the continental limits of the United States or the Dominion of Canada of any motor vehicle not owned by him.

(d) Required Statements in Policies. --Every motor vehicle liability policy must specify the name and address of the insured, the coverage afforded by the policy, the premium charged therefor, the policy period, and the limits of liability, and shall contain an agreement that the insurance thereunder is provided in accordance with the coverage defined in this Act, as respects bodily injury and death or property damage or both, and is subject to all the provisions of this Act.

(e) Policy Need Not Insure Workers' Compensation. --Any liability policy or policies issued hereunder need not cover any liability of the insured assumed by or imposed upon the insured under any workers' compensation law nor any liability for damage to property in charge of the insured or the insured's employees.

(f) Provisions Incorporated in Policy. --Every motor vehicle liability policy is subject to the following provisions which need not be contained therein:

1. The liability of the insurance carrier under any such policy shall become absolute whenever loss or damage covered by the policy occurs and the satisfaction by the insured of a final judgment for such loss or damage shall not be a condition precedent to the right or obligation of the carrier to make payment on account of such loss or damage.

2. No such policy may be cancelled or annulled as respects any loss or damage, by any agreement between the carrier and the insured after the insured has become responsible for such loss or damage, and any such cancellation or annulment shall be void.

3. The insurance carrier shall, however, have the right to settle any claim covered by the policy, and if such settlement is made in good faith, the amount thereof shall be deductible from the limits of liability specified in the policy.

4. The policy, the written application therefor, if any, and any rider or endorsement which shall not conflict with the provisions of this Act shall constitute the entire contract between the parties.

(g) Excess or Additional Coverage. --Any motor vehicle liability policy may, however, grant any lawful coverage in excess of or in addition to the coverage herein specified or contain any agreements, provisions, or stipulations not in conflict with the provisions of this Act and not otherwise contrary to law.

(h) Reimbursement Provision Permitted. --The policy may provide that the insured, or any other person covered by the policy shall reimburse the insurance carrier for payment made on account of any loss or damage claim or suit involving a breach of the terms, provisions or conditions of the policy; and further, if the policy shall provide for limits in excess of the limits specified in this Act, the insurance carrier may plead against any plaintiff, with respect to the amount of such excess limits of liability, any defense which it may be entitled to plead against the insured.

(i) Proration of Insurance Permitted. --The policy may provide for the pro-rating of the insurance thereunder with other applicable valid and collectible insurance.

(j) Binders. --Any binder pending the issuance of any policy, which binder contains or by reference includes the provisions hereunder shall be sufficient proof of ability to respond in damages.

(k) Copy of Policy to Be Filed with Department of Insurance--Approval. --A copy of the form of every motor vehicle liability policy which is to be used to meet the requirements of this Act must be filed, by the company offering such policy, with the Department of Insurance, which shall approve or disapprove the policy within 30 days of its filing. If the Department approves the policy in writing within such 30 day period or fails to take action for 30 days, the form of policy shall be deemed approved as filed. If within the 30 days the Department disapproves the form of policy filed upon the ground that it does not comply with the requirements of this Act, the Department shall give written notice of its decision and its reasons therefor to the carrier and the policy shall not be accepted as proof of financial responsibility under this Act.

(l) Insurance Carrier Required to File Certificate. --An insurance carrier who has issued a motor vehicle liability policy or policies or an operator's policy meeting the requirements of this Act shall, upon the request of the insured therein, deliver to the insured for filing, or at the request of the insured, shall file direct, with the Secretary of State a certificate, as required by this Act, which shows that such policy or policies have been issued. No insurance carrier may require the payment of any extra fee or surcharge, in addition to the insurance premium, for the execution, delivery or filing of such certificate.

(m) Proof When Made By Endorsement. --Any motor vehicle liability policy which by endorsement contains the provisions required hereunder shall be sufficient proof of ability to respond in damages.

(Source: P.A. 85-730.)

Section 99. Effective date. This Act takes effect upon becoming law.".