102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB2112

 

Introduced 2/26/2021, by Sen. Napoleon Harris, III

 

SYNOPSIS AS INTRODUCED:
 
215 ILCS 5/143.17b new

    Amends the Illinois Insurance Code. Provides that a contract for life insurance covering a natural person 64 years of age or older that has been in force for at least one year may not be lapsed for nonpayment of premium unless the insurer has mailed a notification of the impending lapse in coverage to the policyowner and to a specified secondary addressee if such addressee has been designated in writing by name and address by the policyowner. Provides that an insurer issuing a life insurance contract on or after January 1, 2022 shall notify the applicant of the right to designate a secondary addressee at the time of application for the policy, on a form provided by the insurer and at any time the policy is in force, by submitting a written notice to the insurer containing the name and address of the secondary addressee. Provides that the notice of impending lapse in coverage must be mailed to the policyowner and the secondary addressee at least 21 days before the expiration of the grace period provided in the policy in specified circumstances. Provides that the secondary notice requirement does not apply to any life insurance contract under which premiums are payable monthly or more frequently and are regularly collected by a licensed agent or are paid by credit card or any preauthorized check processing or automatic debit service of a financial institution. Provides that if the policyowner has a life agent of record or any agent of record, the insurer must also notify the agent of the impending lapse in coverage at least 21 days before the effective date of the lapse. Provides that an insurer is not required to notify the agent in specified circumstances. Effective January 1, 2022.


LRB102 11322 BMS 16655 b

 

 

A BILL FOR

 

SB2112LRB102 11322 BMS 16655 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Insurance Code is amended by
5adding Section 143.17b as follows:
 
6    (215 ILCS 5/143.17b new)
7    Sec. 143.17b. Secondary notice of intention to cancel life
8insurance.
9    (a) Except as provided in this Section, a contract for
10life insurance amended, delivered, issued, or renewed in this
11State on or after January 1, 2022 covering a natural person 64
12years of age or older that has been in force for at least one
13year may not be lapsed for nonpayment of premium unless, after
14expiration of the grace period and at least 21 days before the
15effective date of any such lapse, the insurer has mailed a
16notification of the impending lapse in coverage to the
17policyowner and to a specified secondary addressee if such
18addressee has been designated in writing by name and address
19by the policyowner. An insurer issuing a life insurance
20contract on or after January 1, 2022 shall notify the
21applicant of the right to designate a secondary addressee at
22the time of application for the policy, on a form provided by
23the insurer and at any time the policy is in force, by

 

 

SB2112- 2 -LRB102 11322 BMS 16655 b

1submitting a written notice to the insurer containing the name
2and address of the secondary addressee. For purposes of any
3life insurance policy that provides a grace period of more
4than 51 days for nonpayment of premiums, the notice of
5impending lapse in coverage required by this Section must be
6mailed to the policyowner and the secondary addressee at least
721 days before the expiration of the grace period provided in
8the policy. This Section does not apply to any life insurance
9contract under which premiums are payable monthly or more
10frequently and are regularly collected by a licensed agent or
11are paid by credit card or any preauthorized check processing
12or automatic debit service of a financial institution.
13    (b) If the policyowner has a life agent of record or any
14agent of record, the insurer must also notify the agent of the
15impending lapse in coverage or mail or send electronically a
16copy of the notification of the impending lapse in coverage
17under subsection (a) to the agent at least 21 days before the
18effective date of any such lapse. Receipt of such notice does
19not make the agent responsible for any lapse in coverage. An
20insurer is not required to notify the agent under this
21subsection if any of the following apply:
22        (1) The insurer maintains an online system that allows
23    an agent to independently determine if a policy has
24    lapsed.
25        (2) The insurer maintains a procedure that allows an
26    agent to independently determine whether the notice of

 

 

SB2112- 3 -LRB102 11322 BMS 16655 b

1    lapse has been sent to the insured.
2        (3) The insurer has no record of the current agent of
3    record.
4        (4) The agent is employed by the insurer or an
5    affiliate of the insurer.
 
6    Section 99. Effective date. This Act takes effect January
71, 2022.