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| | 98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014 HB1460 Introduced , by Rep. Greg Harris SYNOPSIS AS INTRODUCED: |
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Creates the Motor Vehicle Ancillary Products Act. Provides that each ancillary product provider intending to issue or sell ancillary product contracts in
the State shall file a registration with the Director of Insurance and designate a person in the State for service of
process. Provides that each ancillary product provider shall pay to the Director a fee upon initial registration and every year thereafter. Provides that other than the ancillary product provider registration requirements in the provision requiring ancillary product provider registration,
ancillary product providers and related ancillary product contract sellers, administrators, and
other persons marketing, selling, offering to sell, or issuing ancillary product contracts are exempt
from any licensing requirements of the State to conduct ancillary product contract
business. Sets forth provisions concerning ancillary product provider financial requirements; ancillary product contract receipt requirements; disclosures; ancillary protection
product warranties; reimbursement insurance
policies; ancillary product contract exemption from insurance laws; prohibited acts; record keeping; cancellation of reimbursement insurance
policies; obligations of reimbursement insurance policy
insurers; enforcement provisions; premium taxes; applicability; and severability. Amends the Illinois Insurance Code to provide that the Code shall not be construed to apply to ancillary product contracts under the Motor Vehicle Ancillary Products Act. Effective January
1, 2014.
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| | | FISCAL NOTE ACT MAY APPLY | |
| | A BILL FOR |
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1 | | AN ACT concerning insurance.
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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 1. Short title. This Act may be cited as the Motor |
5 | | Vehicle Ancillary Products Act. |
6 | | Section 5. Scope and purpose. |
7 | | (a) The purpose of this Act is to create a legal framework |
8 | | within which motor vehicle
ancillary product contracts, as |
9 | | defined in this Act, are regulated and may be sold in this |
10 | | State. This Act
declares that ancillary product contracts are |
11 | | not insurance and not otherwise subject to the
Illinois |
12 | | Insurance Code. This Act adds significant consumer protections |
13 | | and eliminates unnecessary
administration. |
14 | | (b) The following are exempt from this Act: |
15 | | (1) warranties, indemnity agreements, and guarantees |
16 | | that are not provided incidental
to the purchase of an |
17 | | ancillary protection product;
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18 | | (2) maintenance agreements;
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19 | | (3) service contracts as defined in Section 5 of the |
20 | | Service Contract Act;
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21 | | (4) automobile clubs; and
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22 | | (5) GAP waiver agreements. |
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1 | | Section 10. Definitions. In this Act: |
2 | | "Administrator" means the person who is responsible for the |
3 | | administration of the
ancillary product contracts.
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4 | | "Ancillary product contract" means an ancillary service |
5 | | contract or ancillary protection
product warranty or both. |
6 | | "Ancillary product holder" means, collectively, both |
7 | | contract
holders and warranty holders.
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8 | | "Ancillary product provider" means, collectively, both |
9 | | providers
and warrantors.
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10 | | "Ancillary protection product" means a protective |
11 | | chemical, substance, device, system, or
service that (i) is |
12 | | installed on or applied to a motor vehicle, (ii) is designed to |
13 | | prevent loss or
damage to a motor vehicle from a specific |
14 | | cause, and (iii) includes an ancillary protection
product |
15 | | warranty. For purposes of this Section, "ancillary protection |
16 | | product" includes, but is not limited to, protective chemicals, |
17 | | alarm systems, body part marking products,
steering locks, |
18 | | window etch products, pedal and ignition locks, fuel and |
19 | | ignition kill switches,
and electronic, radio, and satellite |
20 | | tracking devices.
"Ancillary protection product" does not
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21 | | include fuel additives, oil additives, or other chemical |
22 | | products applied to the engine,
transmission, or fuel system of |
23 | | a motor vehicle. |
24 | | "Ancillary protection product warranty" means a written |
25 | | agreement by a warrantor that
provides if the ancillary |
26 | | protection product fails to prevent loss or damage to a motor |
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1 | | vehicle
from a specific cause, that the warrantor will pay to |
2 | | or on behalf of the warranty holder specified
incidental costs |
3 | | as a result of the failure of the ancillary protection product |
4 | | to perform pursuant to
the terms of the ancillary protection |
5 | | product warranty.
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6 | | "Ancillary service contract" means an agreement that is |
7 | | effective for a specified duration
and paid for by means other |
8 | | than the purchase of a motor vehicle to perform any one or more |
9 | | of
the following services: |
10 | | (1) the repair or replacement of tires or wheels or |
11 | | both on a motor vehicle
damaged as a result of coming into |
12 | | contact with road hazards; |
13 | | (2) the removal of dents, dings, or creases on a motor |
14 | | vehicle that can be
repaired using the process of paintless |
15 | | dent removal without affecting the
existing paint finish |
16 | | and without replacing vehicle body panels, sanding, |
17 | | bonding, or painting;
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18 | | (3) the repair of chips or cracks in or the replacement |
19 | | of motor vehicle
windshields as a result of damage caused |
20 | | by road hazards;
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21 | | (4) the replacement of a motor vehicle key or key-fob |
22 | | in the event that the key
or key-fob becomes inoperable or |
23 | | is lost or stolen;
or |
24 | | (5) other services that may be approved by the |
25 | | Director. |
26 | | An ancillary service contract may not include coverage for |
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1 | | the repair of damage to the interior
surfaces of a vehicle or |
2 | | for repair of damage to the exterior paint or finish of a |
3 | | vehicle; however,
such coverage may be offered in connection |
4 | | with the sale of an ancillary protection product. |
5 | | "Contract holder" means the person who purchases an |
6 | | ancillary service contract, any
authorized transferee or |
7 | | assignee of the purchaser, or any other person legally assuming |
8 | | the
purchaser's rights under the ancillary service contract.
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9 | | "Director" means the Director of Insurance.
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10 | | "Incidental costs" means expenses specified in an |
11 | | ancillary protection product warranty
that are incurred by the |
12 | | warranty holder due to the failure of an ancillary protection |
13 | | product to
perform as provided in the contract. Incidental |
14 | | costs may include, without limitation, insurance
policy |
15 | | deductibles, rental vehicle charges, the difference between |
16 | | the actual value of the stolen
vehicle at the time of theft and |
17 | | the cost of a replacement vehicle, sales taxes, registration |
18 | | fees,
transaction fees, and mechanical inspection fees. |
19 | | Incidental costs may be reimbursed in either a
fixed amount |
20 | | specified in the ancillary protection product warranty or by |
21 | | use of a formula
itemizing specific incidental costs incurred |
22 | | by the warranty holder.
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23 | | "Motor vehicle" means self-propelled or towed vehicles |
24 | | designed for personal or
commercial use, including, but not |
25 | | limited to, automobiles, trucks, motorcycles, recreational
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26 | | vehicles, all-terrain vehicles, snowmobiles, campers, boats, |
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1 | | personal watercraft, and motorcycle,
boat, camper, and |
2 | | personal watercraft trailers.
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3 | | "Person" means an individual, company, association, |
4 | | organization, partnership, business
trust, corporation, or any |
5 | | other form of legal entity.
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6 | | "Provider" means a person who is contractually obligated to |
7 | | a contract holder under the
terms of an ancillary service |
8 | | contract.
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9 | | "Reimbursement insurance policy" means a policy of |
10 | | insurance issued to an ancillary
product provider to either |
11 | | provide reimbursement to the ancillary product provider under |
12 | | the
terms of the designated ancillary product contracts issued |
13 | | or sold by the provider or, in the event
of the provider's |
14 | | non-performance, to pay on behalf of the provider all covered |
15 | | contractual
obligations incurred by the provider under the |
16 | | terms of the insured ancillary product contracts.
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17 | | "Road hazard" means a hazard that is encountered while |
18 | | driving a motor vehicle and
that may include, but not be |
19 | | limited to, potholes, rocks, wood debris, metal parts, glass, |
20 | | plastic,
curbs, or composite scraps. |
21 | | "Warranty holder" means the person who purchases an |
22 | | ancillary protection product, any
authorized transferee or |
23 | | assignee of the purchaser, or any other person legally assuming |
24 | | the
purchaser's rights under the ancillary product contract.
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25 | | "Warrantor" means a person who is contractually obligated |
26 | | to the warranty holder under
the terms of the ancillary |
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1 | | protection product warranty. |
2 | | Section 15. Ancillary product provider registration |
3 | | required. |
4 | | (a) Each ancillary product provider intending to issue or |
5 | | sell ancillary product contracts in
this State shall file a |
6 | | registration with the Director consisting of their name, full |
7 | | corporate
address, telephone number, and contact person and |
8 | | designate a person in this State for service of
process. Each |
9 | | ancillary product provider shall pay to the Director a fee in |
10 | | the amount of
$200 upon initial registration and every year |
11 | | thereafter. The registration need only be updated
by written |
12 | | notification to the Director if material changes occur in the |
13 | | registration on file.
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14 | | (b) An ancillary product provider may, but is not required |
15 | | to, appoint an administrator or
other designee to be |
16 | | responsible for any or all of the administration of its |
17 | | ancillary product
contracts and compliance with this Act.
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18 | | (c) Other than the ancillary product provider registration |
19 | | requirements in this Section,
ancillary product providers and |
20 | | related ancillary product contract sellers, administrators, |
21 | | and
other persons marketing, selling, offering to sell, or |
22 | | issuing ancillary product contracts are exempt
from any |
23 | | licensing requirements of this State in order to conduct |
24 | | ancillary product contract
business. |
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1 | | Section 20. Ancillary product provider financial |
2 | | requirements. |
3 | | (a) In order to ensure the faithful performance of an |
4 | | ancillary product provider's obligations
to its ancillary |
5 | | product holders, each ancillary product provider shall insure |
6 | | all ancillary product contracts under a reimbursement |
7 | | insurance
policy issued by an insurer licensed, registered, or |
8 | | otherwise authorized to
do business in this State, and the |
9 | | insurer shall either:
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10 | | (1) at the time the policy is filed with the Director, |
11 | | and continuously
thereafter, (A) maintain surplus as to |
12 | | policyholders and paid-in capital of at
least $15,000,000 |
13 | | and (B) annually file copies of
the insurer's financial |
14 | | statements, its NAIC Annual Statement, and the
actuarial |
15 | | certification required by and filed in the insurer's state |
16 | | of
domicile; or |
17 | | (2) at the time the policy is filed with the Director, |
18 | | and continuously
thereafter, (A) maintain surplus as to |
19 | | policyholders and paid-in capital of
less than $15,000,000 |
20 | | but at least equal to $10,000,000, (B) demonstrate to the |
21 | | satisfaction of the
Director that the company maintains a |
22 | | ratio of net written
premiums, where ever written, to |
23 | | surplus as to policyholders and paid-in
capital of not |
24 | | greater than 3 to one, and (C) annually file copies of the
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25 | | insurer's audited financial statements, its NAIC Annual |
26 | | Statement, and the
actuarial certification required by and |
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1 | | filed in the insurer's state of
domicile. |
2 | | (b) Except for the requirements specified in this Section, |
3 | | no other financial security
requirements shall be required by |
4 | | the Director for ancillary product providers. |
5 | | Section 25. Ancillary product contract receipt required. |
6 | | (a) Ancillary product contracts shall not be issued, sold, |
7 | | or offered for sale in this State unless
the provider provides |
8 | | a copy of the ancillary product contract to the contract holder |
9 | | within a
reasonable period of time from the date of purchase. A |
10 | | provider may comply with this subsection (a)
by providing the |
11 | | consumer with a physical copy of the complete terms and |
12 | | conditions of the
contract, by directing the consumer to an |
13 | | Internet website containing a copy of the complete terms and
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14 | | conditions of the contract, or by delivering a copy of the |
15 | | complete terms and conditions of the
contract via electronic |
16 | | mail.
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17 | | (b) An ancillary product provider shall provide a consumer |
18 | | with a complete sample copy of
the contract terms and |
19 | | conditions prior to the time of sale upon a request for the |
20 | | same by the
consumer. A provider may comply with this |
21 | | subsection (b) by providing the consumer with a
complete sample |
22 | | copy of the terms and conditions or by directing the consumer |
23 | | to an Internet website
containing a complete sample of the |
24 | | terms and conditions of the contract. |
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1 | | Section 30. Required disclosures. |
2 | | (a) Ancillary service contracts marketed, sold, offered |
3 | | for sale, issued, made, proposed to be
made, or administered in |
4 | | this State shall be written, printed, or typed in clear, |
5 | | understandable
language that is easy to read and shall disclose |
6 | | the following requirements, as applicable:
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7 | | (1) the name and address of the provider, and shall |
8 | | identify any administrator if different
from the provider, |
9 | | the ancillary service contract seller, and the contract |
10 | | holder to the
extent that the name of the contract holder |
11 | | has been furnished by the contract holder; the identities |
12 | | of the parties are not required to be preprinted on the |
13 | | ancillary service
contract and may be added to the contract |
14 | | at the time of sale; |
15 | | (2) the total purchase price and the terms under which |
16 | | the contract is sold; the purchase
price is not required to |
17 | | be pre-printed on the ancillary service contract and may be
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18 | | negotiated at the time of sale with the contract holder; |
19 | | (3) the existence of any deductible amount, if |
20 | | applicable; |
21 | | (4) the merchandise and services to be provided and any |
22 | | limitations, exceptions, or
exclusions; |
23 | | (5) whether the use of non-original manufacturers' |
24 | | parts is allowed; |
25 | | (6) any restrictions governing the transferability of |
26 | | the contract, if applicable; |
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1 | | (7) the terms, restrictions, or conditions governing |
2 | | cancellation of the contract prior to the
termination or |
3 | | expiration date of the ancillary service contract by either |
4 | | the provider
or the contract holder; |
5 | | (8) all of the obligations and duties of the contract |
6 | | holder, such as the duty to protect
against any further |
7 | | damage and any service requirements to follow as provided |
8 | | in the
owner's manual, supplement, or guide; and |
9 | | (9) whether or not the contract provides for or |
10 | | excludes consequential damages or preexisting
conditions, |
11 | | if applicable. |
12 | | (b) An ancillary service contract that is insured by a |
13 | | reimbursement insurance policy under
Section 20 of this Act |
14 | | shall conspicuously state all of the following:
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15 | | (1) "This contract is not insurance and is not subject |
16 | | to the insurance laws of this State.";
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17 | | (2) that the obligations of the provider are insured |
18 | | under a reimbursement insurance
policy;
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19 | | (3) that if a provider fails to perform or make payment |
20 | | due under the terms of the
contract within 60 days after |
21 | | the contract holder requests performance or payment
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22 | | pursuant to the terms of the contract, the contract holder |
23 | | may request performance or
payment directly from the |
24 | | provider's reimbursement insurance policy insurer,
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25 | | including any obligation in the contract by which the |
26 | | provider must refund the
contract holder upon cancellation |
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1 | | of a contract;
and |
2 | | (4) the name, address, and telephone number of the |
3 | | provider's reimbursement insurance
policy insurer.
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4 | | (c) Ancillary service contracts shall require the provider |
5 | | to permit the contract holder to
return the contract within 30 |
6 | | days after the date the contract was mailed to the holder or |
7 | | within 30
days after delivery if the contract is delivered to |
8 | | the contract holder at the time of sale or within a
longer time |
9 | | period permitted under the contract. Upon return of the |
10 | | ancillary service contract to
the provider within the |
11 | | applicable time period, if no claim has been made under the |
12 | | contract prior
to its return to the provider, the contract is |
13 | | void and the provider shall refund to the contract
holder, or |
14 | | credit the account of the contract holder, with the full |
15 | | purchase price of the ancillary
service contract. The right to |
16 | | void the ancillary product service provided in this subsection |
17 | | (c) is not
transferable and shall apply only to the original |
18 | | contract purchaser, and only if no claim has been made prior to |
19 | | its return to the provider. A 10% penalty per month shall be |
20 | | added to a
refund that is not paid or credited within 45 days |
21 | | after the return of the ancillary service contract
to the |
22 | | provider. |
23 | | (d) Subsequent to the time period specified in subsection |
24 | | (c) or if a claim has been made
under the contract within that |
25 | | time period, an ancillary service contract holder may cancel |
26 | | the
contract and the provider shall refund to the contract |
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1 | | holder 100% of the unearned pro rata
provider fee, less any |
2 | | claims paid. A reasonable administrative fee may be charged by |
3 | | the
provider not to exceed 10% of the purchase price paid by |
4 | | the contract holder.
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5 | | (e) The provider shall mail a written notice to the |
6 | | contract holder at the last known address of the
contract |
7 | | holder contained in the records of the provider at least 5 days |
8 | | prior to cancellation
by the provider. Prior notice is not |
9 | | required if the reason for cancellation is nonpayment of the
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10 | | provider fee, a material misrepresentation by the contract |
11 | | holder to the provider, a substantial
breach of duties by the |
12 | | contract holder relating to the covered product or its use, or |
13 | | a request to
cancel by the contract holder. The notice shall |
14 | | state the effective date of the cancellation and the
reason for |
15 | | the cancellation. If an ancillary service contract is cancelled |
16 | | by the provider for a
reason other than nonpayment of the |
17 | | provider fee, the provider shall refund to the contract holder
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18 | | 100% of the unearned pro rata provider fee, less any claims |
19 | | paid. A reasonable administrative
fee may be charged by the |
20 | | provider not to exceed 10% of the price paid by the contract |
21 | | holder. |
22 | | Section 35. Ancillary protection product warranty. |
23 | | (a) Ancillary protection product warranties offered, |
24 | | issued, made, proposed to be made, or
administered in this |
25 | | State shall be written, printed, or typed in clear, |
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1 | | understandable language that
is easy to read, and shall |
2 | | disclose the following requirements, as applicable:
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3 | | (1) the name and address of the warrantor, the seller |
4 | | of the ancillary protection product, and
the warranty |
5 | | holder;
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6 | | (2) the total purchase price of the ancillary |
7 | | protection product and the terms under which it is
to be |
8 | | paid; however, the purchase price is not required to be |
9 | | preprinted on the ancillary
protection product warranty |
10 | | and may be negotiated with the consumer at the time of |
11 | | sale;
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12 | | (3) the procedure for making a claim, including a |
13 | | telephone number for the warrantor or
administrator |
14 | | responsible for processing the claim;
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15 | | (4) the payments or performance to be provided under |
16 | | the warranty, including payments for
incidental costs, the |
17 | | manner of calculation or determination of payments or |
18 | | performance,
and any limitations, exceptions or |
19 | | exclusions; incidental costs may be reimbursed under
the |
20 | | provisions of the warranty in either a fixed amount |
21 | | specified in the warranty or sales
agreement or by the use |
22 | | of a formula itemizing specific incidental costs incurred |
23 | | by the
warranty holder;
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24 | | (5) the obligations and duties of the warranty holder, |
25 | | such as the duty to protect against any
further damage to |
26 | | the vehicle, the obligation to notify the warrantor in |
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1 | | advance of any
repair, or other similar requirements, if |
2 | | any; |
3 | | (6) any terms, restrictions, or conditions governing |
4 | | transferability and cancellation of the
warranty, if any;
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5 | | and |
6 | | (7) a disclosure that reads substantially as follows: |
7 | | "This agreement is a product warranty
and is not |
8 | | insurance.". |
9 | | (b) An ancillary protection product warranty that is |
10 | | insured by a reimbursement insurance
policy under Section 20 of |
11 | | this Act shall conspicuously state all of the following: |
12 | | (1) "This contract is not insurance and is not subject |
13 | | to the insurance laws of this State.";
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14 | | (2) that the obligations of the warrantor are insured |
15 | | under a reimbursement insurance
policy;
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16 | | (3) that if a warrantor fails to perform or make |
17 | | payment due under the terms of the
warranty within 60 days |
18 | | after the warranty holder requests performance or payment
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19 | | pursuant to the terms of the warranty, the warranty holder |
20 | | may request performance
or payment directly from the |
21 | | warrantor's reimbursement insurance policy insurer;
and |
22 | | (4) the name, address, and telephone number of the |
23 | | warrantor's reimbursement
insurance policy insurer. |
24 | | (c) A warrantor may only cancel an ancillary protection |
25 | | product warranty if the warranty
holder does any of the |
26 | | following: |
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1 | | (1) Fails to pay for the ancillary protection product.
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2 | | (2) Makes a material misrepresentation to the seller of |
3 | | the ancillary protection product or
to the warrantor.
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4 | | (3) Commits fraud related to the purchase of the |
5 | | ancillary protection product, registration
of the |
6 | | ancillary protection product warranty, or a claim made |
7 | | under the ancillary protection
product warranty.
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8 | | (4) Substantially breaches the warranty holder's |
9 | | duties under the warranty.
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10 | | (5) Fails to make required payments on the vehicle such |
11 | | that the vehicle is repossessed.
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12 | | (6) Damages the vehicle such that the vehicle is deemed |
13 | | a total loss. |
14 | | (d) A warrantor canceling an ancillary protection product |
15 | | warranty shall mail written notice
of cancellation to the |
16 | | warranty holder at the last address of the warranty holder in |
17 | | the warrantor's
records at least 30 days prior to the effective |
18 | | date of the cancellation. The notice shall state the
effective |
19 | | date of the cancellation and the reason for cancellation. |
20 | | Section 40. Required disclosures; reimbursement insurance |
21 | | policy. A reimbursement insurance policy that is required to be |
22 | | issued under this Act shall contain: |
23 | | (1) a statement that if an ancillary product provider |
24 | | fails to perform or make payment due
under the terms of the |
25 | | ancillary product contract within 60 days after the |
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1 | | ancillary product
holder requests performance or payment |
2 | | pursuant to the terms of the ancillary product contract,
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3 | | the ancillary product holder may request performance or |
4 | | payment directly from the ancillary
product provider's |
5 | | reimbursement insurance policy insurer, including any |
6 | | obligation in the
ancillary product contract by which the |
7 | | ancillary product provider must refund the contract
holder |
8 | | upon cancellation of an ancillary product contract; and
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9 | | (2) a statement that in the event of cancellation of |
10 | | the ancillary product provider's
reimbursement insurance |
11 | | policy, insurance coverage shall continue for all |
12 | | ancillary product
holders whose ancillary product |
13 | | contracts were issued by the ancillary product provider and
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14 | | reported to the insurer for coverage during the term of the |
15 | | reimbursement insurance policy. |
16 | | Section 45. Ancillary product contract; not insurance. The |
17 | | marketing, sale, offering for sale, issuance, making, |
18 | | proposing to make, and administration
of ancillary product |
19 | | contracts by ancillary product providers and related ancillary |
20 | | product
contract sellers, administrators, and other persons |
21 | | shall be exempt from all provisions of this
State's insurance |
22 | | laws other than this Act. |
23 | | Section 50. Prohibited acts. |
24 | | (a) An ancillary product provider shall not use in its name |
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1 | | the words "insurance", "casualty",
"surety", "mutual", or any |
2 | | other words descriptive of the insurance, casualty, or surety |
3 | | business or a
name deceptively similar to the name or |
4 | | description of any insurance or surety corporation or to
the |
5 | | name of any other ancillary product provider. The word |
6 | | "guaranty" or a similar word may be
used by an ancillary |
7 | | product provider. This Section shall not apply to a company |
8 | | that was using
any of the prohibited language in its name prior |
9 | | to the effective date of this Act. |
10 | | (b) An ancillary product provider or its representative |
11 | | shall not, in its contracts, warranties,
or literature, make, |
12 | | permit, or cause to be made any false or misleading statement |
13 | | or deliberately
omit any material statement that would be |
14 | | considered misleading if omitted.
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15 | | (c) A person, such as a bank, savings and loan association, |
16 | | lending institution,
manufacturer, or seller of any product, |
17 | | shall not require the purchase of an ancillary product
contract |
18 | | as a condition of a loan or a condition for the sale of any |
19 | | motor vehicle or other
property.
|
20 | | (d) An ancillary product provider or its representative |
21 | | shall not, directly or indirectly,
represent in any manner, |
22 | | whether by written solicitation or telemarketing, a false, |
23 | | deceptive, or
misleading statement with respect to: |
24 | | (1) the ancillary product provider's affiliation with |
25 | | a motor vehicle
manufacturer;
|
26 | | (2) the ancillary product provider's possession of |
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1 | | information regarding a
motor vehicle owner's current |
2 | | motor vehicle manufacturer's original
equipment warranty;
|
3 | | (3) the expiration of a motor vehicle owner's current |
4 | | motor vehicle
manufacturer's original equipment warranty; |
5 | | or
|
6 | | (4) a requirement that a motor vehicle owner register |
7 | | for a new ancillary
product contract with an ancillary |
8 | | product provider in order to maintain
coverage under the |
9 | | motor vehicle owner's current ancillary product
contract |
10 | | or manufacturer's original equipment warranty. |
11 | | Section 55. Record-keeping requirements. |
12 | | (a) The following provisions shall apply concerning books |
13 | | and records: |
14 | | (1) An ancillary product provider shall keep accurate |
15 | | accounts, books, and
records concerning transactions |
16 | | regulated under this Act.
|
17 | | (2) The ancillary product provider's accounts, books, |
18 | | and records shall
include the following: |
19 | | (A) copies of each type of ancillary product |
20 | | contract sold or issued;
|
21 | | (B) the name and address of each ancillary product |
22 | | holder to the
extent that the name and address have |
23 | | been furnished by the
ancillary product holder; |
24 | | (C) a list of the locations where ancillary product |
25 | | contracts are issued,
marketed, sold, or offered for |
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1 | | sale; and
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2 | | (D) written claims files, which shall contain at |
3 | | least the dates and
description of claims related to |
4 | | the ancillary product contracts. |
5 | | (3) Except as provided in subsection (b) of this |
6 | | Section, the ancillary product provider
shall retain all |
7 | | records required to be maintained by this Section for at |
8 | | least
one year after the specified period of coverage has |
9 | | expired.
|
10 | | (4) The records required under this Section may be, but |
11 | | are not required to be,
maintained on a computer disk or |
12 | | other record keeping technology. If the
records are |
13 | | maintained in other than hard copy, the records shall be
|
14 | | capable of duplication to legible hard copy at the request |
15 | | of the
Director. |
16 | | (b) An ancillary product provider discontinuing business |
17 | | in this State shall maintain its
records until it furnishes the |
18 | | Director satisfactory proof that it has discharged all
|
19 | | obligations to ancillary product holders in this State. |
20 | | Section 60. Cancellation of reimbursement insurance |
21 | | policy. As applicable, an insurer that issued a reimbursement |
22 | | insurance policy required under this Act
shall not terminate |
23 | | the policy until a notice of termination in accordance with |
24 | | Section 143.16 of the Illinois Insurance Code has been mailed |
25 | | or delivered to the Director. The termination of a
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1 | | reimbursement insurance policy shall not reduce the issuer's |
2 | | responsibility for ancillary product
contracts issued by |
3 | | insured ancillary product providers prior to the date of the |
4 | | termination. |
5 | | Section 65. Obligation of reimbursement insurance policy |
6 | | insurers. |
7 | | (a) Insurers issuing reimbursement insurance to ancillary |
8 | | product providers are deemed
to have received the premiums for |
9 | | such insurance upon the payment of ancillary product
provider |
10 | | fees by consumers for ancillary product contracts issued by the |
11 | | insured ancillary
product providers.
|
12 | | (b) This Act shall not prevent or limit the right of an |
13 | | insurer that issued a
reimbursement insurance policy to seek |
14 | | indemnification or subrogation against an ancillary product |
15 | | provider if the insurer pays or is obligated to pay the |
16 | | ancillary product holder sums that
the ancillary product |
17 | | provider was obligated to pay pursuant to the provisions of the |
18 | | ancillary
product contract. |
19 | | Section 70. Enforcement provisions. |
20 | | (a) The Director may conduct examinations of ancillary |
21 | | product providers,
administrators, insurers, or other persons |
22 | | to enforce the provisions of this Act and protect
ancillary |
23 | | product holders in this State. Upon request of the Director, |
24 | | the ancillary product
provider shall make available to the |
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1 | | Director all accounts, books, and records concerning
ancillary |
2 | | product contracts sold or issued by the ancillary product |
3 | | provider that are necessary
to enable the Director to |
4 | | reasonably determine compliance or noncompliance with this
|
5 | | Act.
|
6 | | (b) The Director may take action that is necessary or |
7 | | appropriate to enforce the
provisions of this Act and the |
8 | | Director's rules and orders, and to protect ancillary
product |
9 | | holders in this State. The following provisions shall apply: |
10 | | (1) If an ancillary product provider has violated this |
11 | | Act or the
Director's rules or orders, then the Director |
12 | | may issue an
order directed to that ancillary product |
13 | | provider to cease and desist from
committing violations of |
14 | | this Act or the Director's rules or
orders; may issue an |
15 | | order prohibiting an ancillary product provider from
|
16 | | issuing, selling, or offering for sale ancillary product |
17 | | contracts in violation
of this Act; or may issue an order |
18 | | imposing a civil penalty on that ancillary
product |
19 | | provider, or any combination of the foregoing, as |
20 | | applicable. The following provisions shall apply |
21 | | concerning hearings: |
22 | | (A) a person aggrieved by an order issued under |
23 | | this paragraph (1) may
request a hearing before the |
24 | | Director; the hearing request
shall be filed with the |
25 | | Director within 20 days after the date the
Director's |
26 | | order is effective;
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1 | | (B) if a hearing is requested, an order issued by |
2 | | the Director
under this Section shall be suspended from |
3 | | the original effective
date of the order until |
4 | | completion of the hearing and final decision
of the |
5 | | Director; and
|
6 | | (C) at the hearing, the burden shall be on the |
7 | | Director to show
why the order issued pursuant to this |
8 | | paragraph (1) is justified; the provisions of Article |
9 | | XXIV of the Illinois Insurance Code shall apply to a |
10 | | hearing requested under this Section. |
11 | | (2) The Director may bring an action in any court of |
12 | | competent
jurisdiction for an injunction or other |
13 | | appropriate relief to enjoin
threatened or existing |
14 | | violations of this Act or of the Director's
rules or |
15 | | orders. An action filed under this paragraph (2) may also |
16 | | seek
restitution on behalf of persons aggrieved by a |
17 | | violation of this Act or
rules or orders of the Director.
|
18 | | (3) A person who is found to have violated this Act or |
19 | | rules or orders of
the Director may be assessed a civil |
20 | | penalty in an amount
determined by the Director of not more |
21 | | than $500 per violation and no more than $10,000 in the |
22 | | aggregate for all violations of a similar nature. For
|
23 | | purposes of this Section, violations shall be of a similar |
24 | | nature if the
violation consists of the same or similar |
25 | | course of conduct, action, or
practice, irrespective of the |
26 | | number of times the act, conduct, or practice
that is |
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1 | | determined to be a violation of this Act occurred. |
2 | | (c) This Act does not create a separate civil cause of |
3 | | action. |
4 | | Section 75. Premium taxes. |
5 | | (a) Ancillary product provider fees collected on ancillary |
6 | | product contracts shall not be
subject to premium taxes.
|
7 | | (b) Premiums for reimbursement insurance policies shall be |
8 | | subject to applicable premium
taxes. |
9 | | Section 80. Applicability. This Act applies to all |
10 | | ancillary product contracts issued, sold, or offered for sale |
11 | | on or after
January 1, 2014. The failure of any person to |
12 | | comply with this Act prior to January 1, 2014, shall not be |
13 | | admissible in any court proceeding, administrative proceeding, |
14 | | arbitration, or
alternative dispute resolution proceeding and |
15 | | may not otherwise be used to prove that the action
of any |
16 | | person or the affected ancillary product contract was unlawful |
17 | | or otherwise improper. The adoption of this Act does not imply |
18 | | that an ancillary product contract was insurance prior to
|
19 | | January 1, 2014. The penalty provisions of this chapter do not |
20 | | apply to any violation of this
Act relating to or in connection |
21 | | with the sale or failure to disclose in a retail installment
|
22 | | contract or lease, or contract or agreement that provides for |
23 | | payments under an ancillary product
contract as long as the |
24 | | sale of such product, contract, or agreement was otherwise |
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1 | | disclosed to
the purchaser in writing at the time of the |
2 | | purchase or lease. In the event of a violation for which
the |
3 | | penalty provisions of this Act do not apply, the court shall |
4 | | award actual damages and
costs, including reasonable |
5 | | attorney's fees. Nothing in this Section shall be construed to |
6 | | require
the application of the penalty provisions where this |
7 | | Section is not applicable. |
8 | | A person engaged in the ancillary product contract |
9 | | business, as an ancillary product
provider or otherwise, in |
10 | | this State on or before the effective date of this Act, who |
11 | | registers as an
ancillary product provider pursuant to this Act |
12 | | within 30 days after the Director makes the
registration form |
13 | | available, may continue to engage in business as an ancillary |
14 | | product provider
in this State until final agency action is |
15 | | taken by the Director regarding the registration and
all rights |
16 | | to administrative judicial review have been exhausted or |
17 | | expired. |
18 | | Section 90. The Illinois Insurance Code is amended by |
19 | | changing Section 2.5 as follows:
|
20 | | (215 ILCS 5/2.5)
|
21 | | Sec. 2.5. Exemption. This Code shall not be construed to |
22 | | apply to the
administration of the Drycleaner Environmental |
23 | | Response Trust Fund under the
Drycleaner Environmental |
24 | | Response Trust Fund Act or ancillary product contracts under |