Full Text of SB1607 97th General Assembly
SB1607ham001 97TH GENERAL ASSEMBLY | Rep. Frank J. Mautino Filed: 5/9/2011
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| 1 | | AMENDMENT TO SENATE BILL 1607
| 2 | | AMENDMENT NO. ______. Amend Senate Bill 1607 as follows: | 3 | | on page 1, by replacing "Section" with "Sections 224 and"; and
| 4 | | on page 4, immediately below line 12, by inserting the | 5 | | following:
| 6 | | "(215 ILCS 5/224) (from Ch. 73, par. 836)
| 7 | | Sec. 224. Standard provisions for life policies.
| 8 | | (1) After the
first day of July, 1937, no policy of life | 9 | | insurance other than
industrial, group or annuities and pure | 10 | | endowments with or without
return of premiums or of premiums | 11 | | and interest, may be issued or
delivered in this State, unless | 12 | | such policy contains in substance the
following provisions:
| 13 | | (a) A provision that all premiums after the first shall | 14 | | be payable
in advance either at the home office of the | 15 | | company or to an agent of
the company, upon delivery of a |
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| 1 | | receipt signed by one or more of the
officers who shall be | 2 | | designated in the policy, when such receipt is
requested by | 3 | | the policyholder.
| 4 | | (b) A provision that the insured is entitled to a grace | 5 | | period
either of 30 days or of one month within which the | 6 | | payment of any
premium after the first may be made, subject | 7 | | at the option of the
company to an interest charge not in | 8 | | excess of 6% per annum for the
number of days of grace | 9 | | elapsing before the payment of the premium,
during which | 10 | | period of grace the policy shall continue in force, but in
| 11 | | case the policy becomes a claim during the grace period | 12 | | before the
overdue premium is paid, or the deferred | 13 | | premiums of the current policy
year, if any, are paid, the | 14 | | amount of such premium or premiums with
interest thereon | 15 | | may be deducted in any settlement under the policy.
| 16 | | (c) A provision that the policy, together with the | 17 | | application
therefor, a copy of which shall be endorsed | 18 | | upon or attached to the
policy and made a part thereof, | 19 | | shall constitute the entire contract
between the parties | 20 | | and that after it has been in force during the
lifetime of | 21 | | the insured a specified time, not later than 2 years from
| 22 | | its date, it shall be incontestable except for nonpayment | 23 | | of premiums
and except at the option of the company, with | 24 | | respect to provisions
relative to benefits in the event of | 25 | | total and permanent disability, and
provisions which grant | 26 | | additional insurance specifically against death
by |
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| 1 | | accident and except for violations of the conditions of the | 2 | | policy
relating to naval or military service in time of war | 3 | | or for violation of
an express condition, if any, relating | 4 | | to aviation, (except riding as a
fare-paying passenger of a | 5 | | commercial air line flying on regularly
scheduled routes | 6 | | between definitely established airports) in which case
the | 7 | | liability of the company shall be fixed at a definitely | 8 | | determined
amount not less than the full reserve for the | 9 | | policy and any dividend
additions; provided that the | 10 | | application therefor need not be attached
to or made a part | 11 | | of any policy containing a clause making the policy
| 12 | | incontestable from date of issue.
| 13 | | (d) A provision that if it is found at any time before | 14 | | final
settlement under the policy that the age of the | 15 | | insured (or the age of
the beneficiary, if considered in | 16 | | determining the premium) has been
misstated, the amount | 17 | | payable under the policy shall be such as the
premium would | 18 | | have purchased at the correct age or ages, according to
the | 19 | | company's published rate at date of issue.
| 20 | | (e) A provision that the policy shall participate | 21 | | annually in the
surplus of the company beginning not later | 22 | | than the end of the third
policy year; and any policy | 23 | | containing provision for annual
participation beginning at | 24 | | the end of the first policy year, may also
provide that | 25 | | each dividend be paid subject to the payment of the
| 26 | | premiums for the next ensuing year; and the insured under |
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| 1 | | any annual
dividend policy shall have the right each year | 2 | | to have the dividend
arising from such participation either | 3 | | paid in cash, or applied in
reduction of premiums, or | 4 | | applied to the purchase of paid-up additional
insurance, or | 5 | | be left to accumulate to the credit of the policy, with
| 6 | | interest at such rate as may be determined from time to | 7 | | time by the
company, but not less than a guaranteed minimum | 8 | | rate specified in the
policy, and payable at the maturity | 9 | | of the policy, but withdrawable on
any anniversary date, | 10 | | subject to such further provisions as the policy may
| 11 | | provide regarding the application of dividends toward the | 12 | | payment of any
premiums unpaid at the end of the grace | 13 | | period; and if the insured fails
to notify the company in
| 14 | | writing of his election within the period of grace allowed | 15 | | for the
payment of premium, the policy shall further | 16 | | provide which of such
options are effective.
| 17 | | (f) A provision that after the policy has been in force | 18 | | 3 full years
the company at any time, while the policy is | 19 | | in force, will advance, on
proper assignment or pledge of | 20 | | the policy and on the sole security
thereof, at a specified | 21 | | maximum fixed or adjusted rate of interest in
accordance
| 22 | | with Section 229.5, a sum equal to, or at the
option of the | 23 | | insured less than the amount required by Section 229.3
| 24 | | under the conditions specified thereby and with | 25 | | notification as required
by Section 229.5; and that the | 26 | | company will deduct
from such loan value any indebtedness |
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| 1 | | not already deducted in
determining such value and any | 2 | | unpaid balance of the premium for the
current policy year, | 3 | | and may collect interest in advance on the loan to
the end | 4 | | of the current policy year; and any policy may also provide | 5 | | that
if the interest on the loan is not paid when due it | 6 | | shall be added to
the existing loan and shall bear interest | 7 | | at the same rate. No
condition other than as provided | 8 | | herein or in Sections 229.3 and 229.5 shall be
exacted as a | 9 | | prerequisite to any such loan. This clause shall not apply
| 10 | | to term insurance.
| 11 | | (g) A provision for nonforfeiture benefits and cash | 12 | | surrender
values in accordance with the requirements of | 13 | | paragraph (1) of Section
229.1 or, Section 229.2.
| 14 | | (h) A table showing in figures the loan values and the | 15 | | options
available under the policy each year, upon default | 16 | | in premium payments,
during at least the first 20 years of | 17 | | the policy; the policy to contain
a provision that the | 18 | | company will furnish upon request an extension of
such | 19 | | table beyond the years shown in the policy.
| 20 | | (i) A provision that in event of default in premium | 21 | | payments the
value of the policy is applied to the purchase | 22 | | of other insurance as
provided in this Section, and if such | 23 | | insurance is in force and the
original policy is not | 24 | | surrendered to the company and cancelled, the
policy may be | 25 | | reinstated within 3 years from such default, upon evidence
| 26 | | of insurability satisfactory to the company and payment of |
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| 1 | | arrears of
premiums and the payment or reinstatement of any | 2 | | other indebtedness to
the company upon the policy, with | 3 | | interest on the premiums
at a rate not exceeding 6% per | 4 | | annum payable annually and with interest
on the | 5 | | indebtedness at a rate not exceeding the rate prescribed by | 6 | | Section
229.5.
| 7 | | (j) A provision that when a policy is a claim by the | 8 | | death of the
insured settlement shall be made upon receipt | 9 | | of due proof of death and
not later than 2 months after the | 10 | | receipt of such proof. The policy may require that due | 11 | | proof of the death of the insured
shall consist of a | 12 | | certified copy of the death certificate of the insured, or | 13 | | other lawful
evidence providing equivalent information, | 14 | | and proof of the claimant's interest in the
proceeds.
| 15 | | (k) If the policy provides for payment of its proceeds | 16 | | in
installments, a table showing the amount and period of | 17 | | such installments
shall be included in the policy.
| 18 | | (l) Interest shall accrue on the proceeds payable | 19 | | because of the
death of the insured, from date of death, at | 20 | | the rate of 10% annually 9% on the
total
amount payable or | 21 | | the face amount if payments are to be made in
installments | 22 | | until the total payment or first installment is paid,
| 23 | | unless payment is made within fifteen (15) days from the | 24 | | the latest of the
following to occur: | 25 | | (1) the date that due proof of death is received by | 26 | | the company; |
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| 1 | | (2) the date that the company receives sufficient | 2 | | information to determine its
liability, the extent of | 3 | | the liability, and the appropriate payee legally
| 4 | | entitled to the proceeds; or | 5 | | (3) the date that legal impediments to payment of | 6 | | proceeds that depend on
the action of parties other | 7 | | than the company are resolved and sufficient
evidence | 8 | | of the same is provided to the company; legal | 9 | | impediments to
payment include, but are not limited to, | 10 | | (A) the establishment of
guardianships and | 11 | | conservatorships, (B) the appointment and | 12 | | qualification
of trustees, executors, and | 13 | | administrators, and (C) the submission of
information | 14 | | required to satisfy State and federal reporting | 15 | | requirements. | 16 | | date of receipt
by the company of due proof of loss. This | 17 | | provision need not appear in
the policy, however, the | 18 | | company shall notify the beneficiary at the
time of claim | 19 | | of this provision. The payment of interest shall apply to
| 20 | | all policies now in force, as well as those written after | 21 | | the effective
date of this amendment.
| 22 | | (m) Title on the face and on the back of the policy | 23 | | briefly
describing its form.
| 24 | | (n) A provision, or a notice attached to the policy, to | 25 | | the effect
that during a period of ten days from the date | 26 | | the policy is delivered
to the policy owner, it may be |
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| 1 | | surrendered to the insurer together with
a written request | 2 | | for cancellation of the policy and in such event, the
| 3 | | insurer will refund any premium paid therefor, including | 4 | | any policy fees
or other charges. The Director may by rule | 5 | | exempt specific types of
policies from the requirements of | 6 | | this subsection.
| 7 | | (2) In the case of the replacement of life insurance, as | 8 | | defined in the
rule promulgated by the Director, the replacing | 9 | | insurer shall either (1)
delay the issuance of its policy for | 10 | | not less than 20 days from the date
it has transmitted a policy | 11 | | summary to the existing insurer, or (2) provide
in a form | 12 | | titled "Notice Regarding Replacement of Life Insurance", as | 13 | | well
as in its policy, or in a separate notice delivered with | 14 | | the policy, that
the insured has the right to an unconditional | 15 | | refund of all premiums paid,
and that such right may be | 16 | | exercised within a period of 20 days commencing
from the date | 17 | | of delivery of such policy. Where option (2) is exercised,
the | 18 | | replacing insurer shall also transmit a policy summary to the | 19 | | existing
insurer within 3 working days after the date the | 20 | | replacement policy is issued.
| 21 | | (3) Any of the foregoing provisions or portions thereof not
| 22 | | applicable to single premium or nonparticipating or term | 23 | | policies shall
to that extent not be incorporated therein. This | 24 | | Section shall not
apply to policies of reinsurance nor to | 25 | | policies issued or granted
pursuant to the nonforfeiture | 26 | | provisions prescribed in subparagraph (g)
of paragraph (1) of |
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| 1 | | this Section.
| 2 | | (Source: P.A. 92-139, eff. 7-24-01.)".
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