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1 | AN ACT concerning regulation.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 5. The Illinois Insurance Code is amended by adding | |||||||||||||||||||||||
5 | Section 143.11c and by changing Sections 154.6 and 155 as | |||||||||||||||||||||||
6 | follows: | |||||||||||||||||||||||
7 | (215 ILCS 5/143.11c new) | |||||||||||||||||||||||
8 | Sec. 143.11c. Cancellation of policy during pendency of a | |||||||||||||||||||||||
9 | claim. No company authorized to do business in this State may | |||||||||||||||||||||||
10 | cancel, terminate, or refuse to renew any policy of property | |||||||||||||||||||||||
11 | and casualty insurance during the pendency of a claim in which | |||||||||||||||||||||||
12 | the primary residence of the policyholder is or comes to be | |||||||||||||||||||||||
13 | uninhabitable, unoccupied, or under construction or has yet to | |||||||||||||||||||||||
14 | be permanently repaired.
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15 | (215 ILCS 5/154.6) (from Ch. 73, par. 766.6)
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16 | Sec. 154.6. Acts constituting improper claims practice. | |||||||||||||||||||||||
17 | Any of the
following acts by a company, if committed without | |||||||||||||||||||||||
18 | just cause and in
violation of Section 154.5, constitutes an | |||||||||||||||||||||||
19 | improper claims practice:
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20 | (a) Knowingly misrepresenting to claimants and insureds | |||||||||||||||||||||||
21 | relevant
facts or policy provisions relating to coverages at | |||||||||||||||||||||||
22 | issue;
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1 | (b) Failing to acknowledge with reasonable promptness | ||||||
2 | pertinent
communications with respect to claims arising under | ||||||
3 | its policies;
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4 | (c) Failing to adopt and implement reasonable standards for | ||||||
5 | the
prompt investigations and settlement of claims arising | ||||||
6 | under its policies;
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7 | (d) Not attempting in good faith to effectuate prompt, fair | ||||||
8 | and
equitable settlement of claims submitted in which liability | ||||||
9 | has become
reasonably clear;
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10 | (e) Compelling policyholders to institute suits to recover | ||||||
11 | amounts
due under its policies by offering substantially less | ||||||
12 | than the amounts
ultimately recovered in suits brought by them;
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13 | (f) Engaging in activity which results in a | ||||||
14 | disproportionate number
of meritorious complaints against the | ||||||
15 | insurer received by the Insurance
Department;
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16 | (g) Engaging in activity which results in a | ||||||
17 | disproportionate number
of lawsuits to be filed against the | ||||||
18 | insurer or its insureds by
claimants;
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19 | (h) Refusing to pay claims without conducting a reasonable
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20 | investigation based on all available information;
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21 | (i) Failing to affirm or deny coverage of claims within a | ||||||
22 | reasonable
time after proof of loss statements have been | ||||||
23 | completed;
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24 | (j) Attempting to settle a claim for less than the amount | ||||||
25 | to which a
reasonable person would believe the claimant was | ||||||
26 | entitled, by reference
to written or printed advertising |
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1 | material accompanying or made part of
an application or | ||||||
2 | establishing unreasonable caps or limits on paint
or materials
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3 | when estimating vehicle repairs;
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4 | (k) Attempting to settle claims on the basis of an | ||||||
5 | application which
was altered without notice to, or knowledge | ||||||
6 | or consent of, the insured;
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7 | (l) Making a claims payment to a policyholder or | ||||||
8 | beneficiary
omitting the coverage under which each payment is | ||||||
9 | being made;
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10 | (m) Delaying the investigation or payment of claims by | ||||||
11 | requiring an
insured, a claimant, or the physicians of either | ||||||
12 | to submit a preliminary
claim report and then requiring | ||||||
13 | subsequent submission of formal proof of
loss forms, resulting | ||||||
14 | in the duplication of verification;
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15 | (n) Failing in the case of the denial of a claim or the | ||||||
16 | offer of a
compromise settlement to promptly provide a | ||||||
17 | reasonable and accurate
explanation of the basis in the | ||||||
18 | insurance policy or applicable law for
such denial or | ||||||
19 | compromise settlement;
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20 | (o) Failing to provide forms necessary to present claims | ||||||
21 | within 15
working days of a request with such explanations as | ||||||
22 | are necessary to use
them effectively;
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23 | (p) Failing to adopt and implement reasonable standards to | ||||||
24 | verify that
a repairer designated by the insurance company to | ||||||
25 | provide an estimate,
perform repairs, or engage in any other | ||||||
26 | service in connection with an
insured loss on a vehicle is duly |
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1 | licensed under Section 5-301 of the
Illinois Vehicle Code;
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2 | (q) Failing to provide as a persistent tendency a | ||||||
3 | notification on any
written estimate prepared by an insurance | ||||||
4 | company in connection with an
insured loss that Illinois law | ||||||
5 | requires that vehicle repairers must be
licensed in accordance | ||||||
6 | with Section 5-301 of the Illinois Vehicle Code;
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7 | (q-5) Offering or agreeing to pay an appraiser, contractor, | ||||||
8 | or vendor involved in providing services or estimates for | ||||||
9 | appraising the value of any loss for repairing, restoring, or | ||||||
10 | reconstructing a policyholder's home; | ||||||
11 | (q-10) Compelling a policy holder as to which appraiser, | ||||||
12 | vendor, or contractor the policyholder must use for the repair, | ||||||
13 | restoration, or reconstruction of the policyholder's home; | ||||||
14 | (q-15) Failing to reimburse a policyholder for | ||||||
15 | out-of-pocket expenses incurred by the policyholder for goods | ||||||
16 | or services that are covered by the insurance policy within 30 | ||||||
17 | days after receipt of proof of those expenses; | ||||||
18 | (q-20) Denying a policyholder's request for reimbursement | ||||||
19 | and failing to provide a written explanation, within 30 days | ||||||
20 | after receipt of a policyholder's request, that sets forth a | ||||||
21 | good faith basis for denying the specific item for which the | ||||||
22 | policyholder requested reimbursement; | ||||||
23 | (r) Engaging in any other acts which are in substance | ||||||
24 | equivalent to
any of the foregoing.
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25 | (Source: P.A. 90-340, eff. 8-8-97.)
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1 | (215 ILCS 5/155) (from Ch. 73, par. 767)
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2 | Sec. 155. Attorney fees.
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3 | (1) In any action by or against a company wherein
there is | ||||||
4 | in issue the liability of a company on a policy or policies of
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5 | insurance or the amount of the loss payable thereunder, or for | ||||||
6 | an unreasonable
delay in settling a claim, and it appears to | ||||||
7 | the court that such action
or delay is vexatious and | ||||||
8 | unreasonable, the court may allow as part of the
taxable costs | ||||||
9 | in the action reasonable attorney fees, other costs, plus
an | ||||||
10 | amount not to exceed any one of the following amounts:
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11 | (a) 60% of the amount which the court or jury finds | ||||||
12 | such party
is entitled to recover against the company, | ||||||
13 | exclusive of all costs;
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14 | (b) (blank); $60,000;
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15 | (c) the excess of the amount which the court or jury | ||||||
16 | finds such party is
entitled to recover, exclusive of | ||||||
17 | costs, over the amount, if any, which
the company offered | ||||||
18 | to pay in settlement of the claim prior to the action.
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19 | (2) Where there are several policies insuring the same | ||||||
20 | insured
against the same loss whether issued by the same or by | ||||||
21 | different
companies, the court may fix the amount of the | ||||||
22 | allowance so that the
total attorney fees on account of one | ||||||
23 | loss shall not be increased by
reason of the fact that the | ||||||
24 | insured brings separate suits on such policies.
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25 | (Source: P.A. 93-485, eff. 1-1-04.)
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26 | Section 99. Effective date. This Act takes effect upon |
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1 | becoming law.
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