Full Text of SB1873 94th General Assembly
SB1873 94TH GENERAL ASSEMBLY
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94TH GENERAL ASSEMBLY
State of Illinois
2005 and 2006 SB1873
Introduced 2/25/2005, by Sen. James F. Clayborne, Jr. SYNOPSIS AS INTRODUCED: |
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215 ILCS 5/143a-2 |
from Ch. 73, par. 755a-2 |
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Amends the Illinois Insurance Code. Requires underinsured motorist coverage contracts to allow for arbitration claim deadlines at least 2 years after damages are determined and up to 10 years after the accident takes place.
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A BILL FOR
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SB1873 |
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LRB094 06734 LJB 36833 b |
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| AN ACT concerning insurance.
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| Be it enacted by the People of the State of Illinois,
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| represented in the General Assembly:
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| Section 5. The Illinois Insurance Code is amended by | 5 |
| changing Section 143a-2 as follows:
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| (215 ILCS 5/143a-2) (from Ch. 73, par. 755a-2)
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| Sec. 143a-2. (1) Additional uninsured motor vehicle
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| coverage. No policy insuring against loss resulting from | 9 |
| liability imposed
by law for bodily injury or death suffered by | 10 |
| any person arising out of the
ownership, maintenance or use of | 11 |
| a motor vehicle shall be renewed or
delivered or issued for | 12 |
| delivery in this State with respect to any motor
vehicle | 13 |
| designed for use on public highways and required to be | 14 |
| registered
in this State unless uninsured motorist coverage as | 15 |
| required in Section
143a of this Code is included in an amount | 16 |
| equal to the insured's bodily
injury liability limits unless | 17 |
| specifically rejected by the insured as provided in paragraph | 18 |
| (2) of this Section. Each
insurance company providing the | 19 |
| coverage must provide applicants with a
brief description of | 20 |
| the coverage and advise them of their right to reject
the | 21 |
| coverage in excess of the limits set forth in Section 7-203 of | 22 |
| The
Illinois Vehicle Code. The provisions of this amendatory | 23 |
| Act of 1990 apply
to policies of insurance applied for after | 24 |
| June 30, 1991.
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| (2) Right of rejection of additional uninsured motorist
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| coverage. Any named insured or applicant may reject additional | 27 |
| uninsured
motorist coverage in excess of the limits set forth | 28 |
| in Section 7-203
of the Illinois Vehicle Code by making a | 29 |
| written request for limits of uninsured motorist coverage which | 30 |
| are less than bodily injury liability limits or a written | 31 |
| rejection of limits in excess of those required by law. This | 32 |
| election or rejection shall be binding on all persons insured |
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| under the policy. In those cases where the insured has elected
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| to purchase limits of uninsured motorist coverage which are | 3 |
| less than
bodily injury liability limits or to reject limits in | 4 |
| excess of those
required by law, the insurer need not provide | 5 |
| in any renewal,
reinstatement, reissuance, substitute, | 6 |
| amended, replacement or
supplementary policy, coverage in | 7 |
| excess of that elected by the insured in
connection with a | 8 |
| policy previously issued to such insured by the same
insurer | 9 |
| unless the insured subsequently makes a written request for
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| such coverage.
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| (3) The original document indicating the applicant's | 12 |
| selection of
uninsured motorist coverage limits shall | 13 |
| constitute sufficient evidence of
the applicant's selection of | 14 |
| uninsured motorist coverage limits. For purposes of this
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| Section any reproduction of the document by means of | 16 |
| photograph,
photostat, microfiche, computerized optical | 17 |
| imaging process, or other
similar process or means of | 18 |
| reproduction shall be deemed the equivalent of
the original | 19 |
| document.
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| (4) For the purpose of this Code the term "underinsured | 21 |
| motor vehicle"
means a motor vehicle whose ownership, | 22 |
| maintenance or use has resulted in
bodily injury or death of | 23 |
| the insured, as defined in the policy, and for
which the sum of | 24 |
| the limits of liability under all bodily injury liability
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| insurance policies or under bonds or other security required to | 26 |
| be
maintained under Illinois law applicable to the driver or to | 27 |
| the person or
organization legally responsible for such vehicle | 28 |
| and applicable to the
vehicle, is less than the limits for | 29 |
| underinsured coverage provided the
insured as defined in the | 30 |
| policy at the time of the accident. The limits
of liability for | 31 |
| an insurer providing underinsured motorist coverage shall
be | 32 |
| the limits of such coverage, less those amounts actually | 33 |
| recovered under
the applicable bodily injury insurance | 34 |
| policies, bonds or other security
maintained on the | 35 |
| underinsured motor vehicle.
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| On or after July 1, 1983, no policy insuring against loss |
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| resulting
from liability imposed by law for bodily injury or | 2 |
| death suffered by any
person arising out of the ownership, | 3 |
| maintenance or use of a motor vehicle
shall be renewed or | 4 |
| delivered or issued for delivery in this State with respect
to | 5 |
| any motor vehicle designed for use on public highways and | 6 |
| required to be
registered in this State unless underinsured | 7 |
| motorist coverage is included
in such policy in an amount equal | 8 |
| to the total amount of uninsured motorist
coverage provided in | 9 |
| that policy where such uninsured motorist coverage
exceeds the | 10 |
| limits set forth in Section 7-203 of the Illinois Vehicle Code.
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| The changes made to this subsection (4) by this amendatory | 12 |
| Act of the 93rd General Assembly apply to policies issued or | 13 |
| renewed on or after December 1, 2004.
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| (5) Scope. Nothing herein shall prohibit an insurer from | 15 |
| setting forth
policy terms and conditions which provide that if | 16 |
| the insured has coverage
available under this Section under | 17 |
| more than one policy or provision of
coverage, any recovery or | 18 |
| benefits may be equal to, but may not exceed,
the higher of the | 19 |
| applicable limits of the respective coverage, and the
limits of | 20 |
| liability under this Section shall not be increased because
of | 21 |
| multiple motor vehicles covered under the same policy of | 22 |
| insurance.
Insurers providing liability coverage on an excess | 23 |
| or umbrella basis are
neither required to provide, nor are they | 24 |
| prohibited from offering or
making available coverages | 25 |
| conforming to this Section on a supplemental
basis. | 26 |
| Notwithstanding the provisions of this Section, an insurer | 27 |
| shall
not be prohibited from solely providing a combination of | 28 |
| uninsured and
underinsured motorist coverages where the limits | 29 |
| of liability under each
coverage is in the same amount.
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| (6) Subrogation against underinsured motorists. No insurer | 31 |
| shall exercise
any right of subrogation under a policy | 32 |
| providing additional uninsured motorist
coverage against an | 33 |
| underinsured motorist where the insurer has been provided
with | 34 |
| written notice in advance of a settlement between its insured | 35 |
| and the
underinsured motorist and the insurer fails to advance | 36 |
| a payment to
the insured, in an amount equal to the tentative |
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| settlement, within 30 days
following receipt of such notice.
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| (7) A policy which provides underinsured motor vehicle | 3 |
| coverage may
include a clause which denies payment until the | 4 |
| limits of liability or
portion thereof under
all bodily injury | 5 |
| liability insurance policies applicable to the
underinsured | 6 |
| motor vehicle and its operators have been partially or fully
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| exhausted
by payment
of judgment or settlement. A judgment or | 8 |
| settlement of the bodily injury
claim in an amount less than | 9 |
| the limits of liability of the bodily injury
coverages | 10 |
| applicable to the claim shall not preclude the claimant from | 11 |
| making
an underinsured motorist claim against the underinsured | 12 |
| motorist coverage.
Any such provision in a policy of insurance
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| shall be inapplicable if the insured, or the legal | 14 |
| representative of the
insured, and the insurer providing | 15 |
| underinsured motor vehicle coverage
agree that the insured has | 16 |
| suffered bodily injury or death as the result of
the negligent | 17 |
| operation, maintenance, or use of an underinsured motor
vehicle | 18 |
| and, without arbitration, agree also on the amount of damages | 19 |
| that
the insured is legally entitled to collect. The maximum | 20 |
| amount payable
pursuant to such an underinsured motor vehicle | 21 |
| insurance settlement
agreement shall not exceed the amount by | 22 |
| which the limits of the
underinsured motorist coverage exceed | 23 |
| the limits of the bodily injury
liability insurance of the | 24 |
| owner or operator of the underinsured motor
vehicle. Any such | 25 |
| agreement shall be final as to the amount due and shall
be | 26 |
| binding upon both the insured and the underinsured motorist | 27 |
| insurer
regardless of the amount of any judgment, or any | 28 |
| settlement reached between
any insured and the person or | 29 |
| persons responsible for the accident. No
such settlement | 30 |
| agreement shall be concluded unless: (i) the insured has
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| complied with all other applicable policy terms and conditions; | 32 |
| and (ii)
before the conclusion of the settlement agreement, the | 33 |
| insured has filed
suit against the underinsured motor vehicle | 34 |
| owner or operator and has not
abandoned the suit, or settled | 35 |
| the suit without preserving the rights of
the insurer providing | 36 |
| underinsured motor vehicle coverage in the manner
described in |
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| paragraph (6) of this Section.
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| (8) No policy for underinsured motorist coverage shall be | 3 |
| renewed, delivered, or issued for delivery in this State unless | 4 |
| the contractual deadline or limitation to initiate a demand for | 5 |
| arbitration is no sooner than 2 years after the damages in the | 6 |
| underlying claim or lawsuit have been determined, whether by | 7 |
| suit, settlement, or otherwise. In no instance shall the | 8 |
| written demand for arbitration be made more than 10 years after | 9 |
| the accident for which damages are being sought took place.
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| (Source: P.A. 93-762, eff. 7-16-04.)
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