Full Text of HB1954 100th General Assembly
HB1954enr 100TH GENERAL ASSEMBLY |
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| 1 | | AN ACT concerning regulation.
| 2 | | Be it enacted by the People of the State of Illinois, | 3 | | represented in the General Assembly:
| 4 | | Section 5. The Illinois Insurance Code is amended by | 5 | | changing Sections 132.5, 143.14, 143.15, 143.16, 143.17, and | 6 | | 143.17a as follows:
| 7 | | (215 ILCS 5/132.5) (from Ch. 73, par. 744.5)
| 8 | | Sec. 132.5. Examination reports.
| 9 | | (a) General description. All examination reports shall be | 10 | | comprised of
only facts appearing upon the books, records, or | 11 | | other documents of the
company, its agents, or other persons | 12 | | examined or as ascertained from the
testimony of its officers, | 13 | | agents, or other persons examined concerning its
affairs and | 14 | | the conclusions and recommendations as the examiners find
| 15 | | reasonably warranted from those facts.
| 16 | | (b) Filing of examination report. No later than 60 days | 17 | | following
completion of the examination, the examiner in charge | 18 | | shall file with the
Department a verified written report of | 19 | | examination under oath. Upon
receipt of the verified report, | 20 | | the Department shall transmit the report to
the company | 21 | | examined, together with a notice that affords the company | 22 | | examined
a reasonable opportunity of not more than 30 days to | 23 | | make a written
submission or rebuttal with respect to any |
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| 1 | | matters contained in the examination report.
| 2 | | (c) Adoption of the report on examination. Within 30 days | 3 | | of the end of the
period allowed for the receipt of written | 4 | | submissions or rebuttals, the
Director shall fully consider and | 5 | | review the report, together with any
written submissions or | 6 | | rebuttals and any relevant portions of the examiners
work | 7 | | papers and enter an order:
| 8 | | (1) Adopting the examination report as filed or with | 9 | | modification or
corrections. If the examination report | 10 | | reveals that the company is
operating in violation of any | 11 | | law, regulation, or prior order of the
Director, the | 12 | | Director may order the company to take any action the
| 13 | | Director considers necessary and appropriate to cure the | 14 | | violation.
| 15 | | (2) Rejecting the examination report with directions | 16 | | to the examiners
to reopen the examination for purposes of | 17 | | obtaining additional data,
documentation, or information | 18 | | and refiling under subsection (b).
| 19 | | (3) Calling for an investigatory hearing with no less | 20 | | than 20 days
notice to the company for purposes of | 21 | | obtaining additional documentation,
data, information, and | 22 | | testimony.
| 23 | | (d) Order and procedures. All orders entered under | 24 | | paragraph (1) of
subsection (c) shall be accompanied by | 25 | | findings and conclusions resulting
from the Director's | 26 | | consideration and review of the examination report,
relevant |
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| 1 | | examiner work papers, and any written submissions or rebuttals.
| 2 | | The order shall be considered a final administrative decision | 3 | | and may be
appealed in accordance with the Administrative | 4 | | Review Law. The order shall
be served upon the company by | 5 | | certified mail, together with a copy of the
adopted examination | 6 | | report. Within 30 days of the issuance of the adopted
report, | 7 | | the company shall file affidavits executed by each of its | 8 | | directors
stating under oath that they have received a copy of | 9 | | the adopted report and
related orders.
| 10 | | Any hearing conducted under paragraph (3) of subsection (c) | 11 | | by the
Director or an authorized representative shall be | 12 | | conducted as a
nonadversarial confidential investigatory | 13 | | proceeding as necessary for the
resolution of any | 14 | | inconsistencies, discrepancies, or disputed issues
apparent | 15 | | upon the face of the filed examination report or raised by or | 16 | | as a
result of the Director's review of relevant work papers or | 17 | | by the written
submission or rebuttal of the company.
Within 20 | 18 | | days of the conclusion of any hearing, the Director shall enter
| 19 | | an order under paragraph (1) of subsection (c).
| 20 | | The Director shall not appoint an examiner as an authorized
| 21 | | representative to conduct the hearing. The hearing shall | 22 | | proceed
expeditiously with discovery by the company limited to | 23 | | the examiner's work
papers that tend to substantiate any | 24 | | assertions set forth in any written
submission or rebuttal. The | 25 | | Director or his representative may issue
subpoenas for the | 26 | | attendance of any witnesses or the production of any
documents |
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| 1 | | deemed relevant to the investigation, whether under the control
| 2 | | of the Department, the company, or other persons. The documents | 3 | | produced
shall be included in the record, and testimony taken | 4 | | by the Director or his
representative shall be under oath and | 5 | | preserved for the record. Nothing
contained in this Section | 6 | | shall require the Department to disclose any
information or | 7 | | records that would indicate or show the existence or content
of | 8 | | any investigation or activity of a criminal justice agency.
| 9 | | The hearing shall proceed with the Director or his | 10 | | representative
posing questions to the persons subpoenaed. | 11 | | Thereafter the company and the
Department may present testimony | 12 | | relevant to the investigation.
Cross-examination shall be | 13 | | conducted only by the Director or his representative.
The | 14 | | company and the Department shall be permitted to make closing
| 15 | | statements and may be represented by counsel of their choice.
| 16 | | (e) Publication and use. Upon the adoption of the | 17 | | examination report
under paragraph (1) of subsection (c), the | 18 | | Director shall continue to hold
the content of the examination | 19 | | report as private and confidential
information for a period of | 20 | | 35 days, except to the extent provided in
subsection (b). | 21 | | Thereafter, the Director may open the report for public
| 22 | | inspection so long as no court of competent jurisdiction has | 23 | | stayed its publication.
| 24 | | Nothing contained in this Code shall prevent or be | 25 | | construed as
prohibiting the Director from disclosing the | 26 | | content of an examination
report, preliminary examination |
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| 1 | | report or results, or any matter relating
thereto, to the | 2 | | insurance department of any other state or country or to law
| 3 | | enforcement officials of this or any other state or agency of | 4 | | the federal
government at any time, so long as the agency or | 5 | | office receiving the
report or matters relating thereto agrees | 6 | | in writing to hold it
confidential and in a manner consistent | 7 | | with this Code.
| 8 | | In the event the Director determines that regulatory action | 9 | | is
appropriate as a result of any examination, he may initiate | 10 | | any
proceedings or actions as provided by law.
| 11 | | (f) Confidentiality of ancillary information. All working | 12 | | papers,
recorded information, documents, and copies
thereof | 13 | | produced by, obtained by, or disclosed to the Director or any | 14 | | other
person in the course of any examination must be given | 15 | | confidential
treatment, are not subject to subpoena, and may | 16 | | not be made public by the
Director or any other persons, except | 17 | | to the extent provided in subsection
(e). Access may also be | 18 | | granted to the National Association of Insurance | 19 | | Commissioners.
Those parties must agree in writing before | 20 | | receiving the information to
provide to it the same | 21 | | confidential treatment as required by this Section,
unless the | 22 | | prior written consent of the company to which it pertains has | 23 | | been obtained.
| 24 | | This subsection (f) applies to market conduct examinations | 25 | | described in Section 132 of this Code. | 26 | | (Source: P.A. 87-108.)
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| 1 | | (215 ILCS 5/143.14) (from Ch. 73, par. 755.14)
| 2 | | Sec. 143.14. Notice of cancellation.
| 3 | | (a) No notice of cancellation of any
policy of insurance, | 4 | | to which
Section 143.11 applies, shall be effective unless | 5 | | mailed by the company
to the named insured and the mortgage or | 6 | | lien holder, at the last mailing
address known by the company.
| 7 | | The company shall maintain proof of mailing of such notice on a | 8 | | recognized
U.S. Post Office form or a form acceptable to the U. | 9 | | S. Post Office or
other commercial mail delivery service. | 10 | | Notification A
copy of all such
notices shall also be sent to | 11 | | the insured's broker if known, or the agent of
record, if | 12 | | known, and to the mortgagee or lien holder listed on the policy | 13 | | at the last mailing
address
known to the company . For purposes | 14 | | of this Section, the mortgage or lien holder, insured's broker, | 15 | | if known, or the agent of record may opt to accept notification | 16 | | electronically.
| 17 | | (b) Whenever a financed insurance contract is cancelled, | 18 | | the insurer
shall return
whatever gross unearned premiums are | 19 | | due
under the insurance contract or contracts not to exceed the | 20 | | unpaid balance
due the premium finance company directly to the | 21 | | premium finance
company effecting the cancellation for the | 22 | | account of the named insured.
The return premium must be mailed | 23 | | to the premium finance company within
60 days.
The request for | 24 | | the unearned premium by the premium finance company shall
be in | 25 | | the manner of a monthly account, current accounting by |
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| 1 | | producer,
policy number, unpaid balance and name of insured for | 2 | | each cancelled amount.
In the event the insurance contract or | 3 | | contracts are subject to audit, the
insurer shall retain the | 4 | | right to withhold the return of the portion of
premium that can | 5 | | be identified to the contract or contracts until the audit
is | 6 | | completed. Within 30 days of the completion of the audit, if a | 7 | | premium
retained by the insurer after crediting the earned | 8 | | premium would result in
a surplus, the insurer shall return the | 9 | | surplus directly to the premium
finance company. If the audit | 10 | | should result in an additional premium due
the insurer, the | 11 | | obligation for the collection of this premium shall fall
upon | 12 | | the insurer and not affect any other contract or contracts | 13 | | currently
being financed by the premium finance company for the | 14 | | named insured.
| 15 | | (c) Whenever a premium finance agreement contains a power | 16 | | of attorney
enabling the premium finance company to cancel any | 17 | | insurance contract or contracts
in the agreement, the insurer | 18 | | shall honor the date of cancellation as set
forth in the | 19 | | request from the premium finance company without requiring the
| 20 | | return of the insurance contract or contracts. The insurer may | 21 | | mail to the
named insured an acknowledgment of the notice of | 22 | | cancellation from the
premium finance company but the named | 23 | | insured shall not incur any
additional premium charge for any | 24 | | extension of coverage. The insurer need
not maintain proof of | 25 | | mailing of this notice.
| 26 | | (d) All statutory regulatory and contractual restrictions |
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| 1 | | providing that
the insurance contract may not be cancelled | 2 | | unless the required notice is
mailed to a governmental agency, | 3 | | mortgagee, lienholder, or other third
party shall apply where | 4 | | cancellation is effected under a power of
attorney under a | 5 | | premium finance agreement. The insurer shall have the
right for | 6 | | a premium charge for this extension of coverage.
| 7 | | (Source: P.A. 93-713, eff. 1-1-05.)
| 8 | | (215 ILCS 5/143.15) (from Ch. 73, par. 755.15)
| 9 | | Sec. 143.15. Mailing of cancellation notice. All notices of
| 10 | | cancellation of insurance as
defined in subsections (a), (b) | 11 | | and (c) of Section 143.13 must
be mailed at least 30 days prior | 12 | | to the effective date of
cancellation to the named insured ; | 13 | | however, if cancellation is for nonpayment of premium, the | 14 | | notice of cancellation must be mailed at least 10 days before | 15 | | the effective date of the cancellation to and mortgagee or lien | 16 | | holder,
if known, at the last mailing address known to the | 17 | | company. All
notices of cancellation to the named insured shall | 18 | | include a specific explanation of
the reason or reasons for | 19 | | cancellation. However, where cancellation
is for nonpayment of | 20 | | premium, the notice of
cancellation must be mailed at least 10 | 21 | | days before the effective date of the
cancellation. For | 22 | | purposes of this Section, the mortgagee or lien holder, if | 23 | | known, may opt to accept notification electronically.
| 24 | | (Source: P.A. 93-713, eff. 1-1-05.)
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| 1 | | (215 ILCS 5/143.16) (from Ch. 73, par. 755.16)
| 2 | | Sec. 143.16. Mailing of cancellation notice. All notices of
| 3 | | cancellation of insurance to which Section
143.11 applies, | 4 | | except for those defined in subsections (a), (b) and (c) of
| 5 | | Section 143.13 must be mailed at least 30 days prior to the | 6 | | effective date
of cancellation during the first 60 days of | 7 | | coverage. After the coverage
has been effective for 61 days or | 8 | | more, all notices must be mailed at least
60 days prior to the | 9 | | effective date of cancellation. However, where cancellation is | 10 | | for nonpayment of premium, the notice of cancellation must be | 11 | | mailed at least 10 days before the effective date of the | 12 | | cancellation. All such notices shall
include a specific | 13 | | explanation of the reason or reasons for cancellation
and shall | 14 | | be mailed to the named insured and mortgagee or lien holder, if
| 15 | | known, at the last mailing address known to the company. | 16 | | However, where
cancellation is for nonpayment of premium, the | 17 | | notice
of
cancellation must be mailed at least 10 days before | 18 | | the
effective date of the cancellation. For purposes of this | 19 | | Section, the mortgagee or lien holder, if known, may opt to | 20 | | accept notification electronically.
| 21 | | (Source: P.A. 93-713, eff. 1-1-05.)
| 22 | | (215 ILCS 5/143.17) (from Ch. 73, par. 755.17)
| 23 | | Sec. 143.17. Notice of intention not to renew.
| 24 | | a. No company shall fail
to renew any policy of insurance, | 25 | | as defined in subsections (a), (b),
(c), and (h) of Section |
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| 1 | | 143.13, to which Section 143.11 applies, unless it
shall
send | 2 | | by mail to the named insured at least 30 days advance notice of | 3 | | its
intention not to renew. The company shall maintain proof of | 4 | | mailing of
such notice on a recognized U.S. Post Office form or | 5 | | a form acceptable to
the U. S. Post Office or other commercial | 6 | | mail delivery service. The nonrenewal shall not become | 7 | | effective until at least 30 days from the proof of mailing date | 8 | | of the notice to the name insured. Notification An exact
and | 9 | | unaltered copy of such notice shall also be sent to the | 10 | | insured's
broker, if known, or the agent of record ,if known, | 11 | | and to the last known mortgagee or lien
holder at the last | 12 | | mailing address known by the company . For purposes of this | 13 | | Section, the mortgagee or lien holder, insured's broker, or the | 14 | | agent of record may opt to accept notification electronically. | 15 | | However, where
cancellation is for nonpayment of premium, the | 16 | | notice
of
cancellation must be mailed at least 10 days before | 17 | | the
effective date of the cancellation.
| 18 | | b. This Section does not apply if the company has | 19 | | manifested its
willingness to renew directly to the named | 20 | | insured.
Such written notice shall specify the premium amount | 21 | | payable, including
any premium payment plan available, and the | 22 | | name of any person or persons,
if any, authorized to receive | 23 | | payment on behalf of the company. If no
person is so | 24 | | authorized, the premium notice shall so state. The notice of
| 25 | | nonrenewal and the proof of mailing shall be effected on the | 26 | | same date.
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| 1 | | b-5. This Section does not apply if the company manifested | 2 | | its
willingness to renew directly to the named insured. | 3 | | However, no company may
impose changes in deductibles or | 4 | | coverage for any policy forms applicable to an
entire line of | 5 | | business enumerated in subsections (a), (b), (c), and (h) of
| 6 | | Section 143.13 to which Section 143.11 applies unless the | 7 | | company mails to the
named insured written notice of the change | 8 | | in deductible or coverage at least
60 days prior to the renewal | 9 | | or anniversary date. Notice An exact and unaltered copy
of the | 10 | | notice shall also be sent to the insured's broker, if known, or | 11 | | the
agent of record.
| 12 | | c. Should a company fail to comply with (a) or (b) of this | 13 | | Section,
the policy shall terminate only on the effective date | 14 | | of any similar
insurance procured by the insured with respect | 15 | | to the same subject or
location designated in both policies.
| 16 | | d. Renewal of a policy does not constitute a waiver or | 17 | | estoppel with
respect to grounds for cancellation which existed | 18 | | before the effective
date of such renewal.
| 19 | | e. In all notices of intention not to renew any policy of | 20 | | insurance,
as defined in Section 143.11 the company shall | 21 | | provide the named insured a specific
explanation of the reasons | 22 | | for nonrenewal.
| 23 | | f. For purposes of this Section, the insured's broker, if | 24 | | known, or the agent of record and the mortgagee or lien holder | 25 | | may opt to accept notification electronically.
| 26 | | (Source: P.A. 93-713, eff. 1-1-05.)
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| 1 | | (215 ILCS 5/143.17a) (from Ch. 73, par. 755.17a)
| 2 | | Sec. 143.17a. Notice of intention not to renew.
| 3 | | (a) A company intending to nonrenew any policy of insurance | 4 | | to which Section 143.11 applies, except for those defined in | 5 | | subsections (a), (b), (c), and (h) of Section 143.13, must mail | 6 | | written notice to the named insured at least 60 days prior to | 7 | | the expiration date of the current policy. The notice to the | 8 | | named insured shall provide a specific explanation of the | 9 | | reasons for nonrenewal. In all notices of intention not to | 10 | | renew any policy of insurance, as defined in Section 143.11, | 11 | | the company shall provide a specific explanation of the reasons | 12 | | for nonrenewal. A company may not extend the current policy | 13 | | period for purposes of providing notice of its intention not to | 14 | | renew required under this subsection (a).
| 15 | | (b) A company intending to renew any policy of insurance to | 16 | | which Section 143.11 applies, except for those defined in | 17 | | subsections (a), (b), (c), and (h) of Section 143.13, with an | 18 | | increase in premium of 30% or more or with changes in | 19 | | deductibles or coverage that materially alter the policy must | 20 | | mail or deliver to the named insured written notice of such | 21 | | increase or change in deductible or coverage at least 60 days | 22 | | prior to the renewal or anniversary date. If a company has | 23 | | failed to provide notice of intention to renew required under | 24 | | this subsection (b) at least 60 days prior to the renewal or | 25 | | anniversary date, but does so no less than 31 days prior to the |
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| 1 | | renewal or anniversary date, the company may extend the current | 2 | | policy at the current terms and conditions for the period of | 3 | | time needed to equal the 60 day time period required to provide | 4 | | notice of intention to renew by this subsection (b). The | 5 | | increase in premium shall be the renewal premium based on the | 6 | | known exposure as of the date of the quotation compared to the | 7 | | premium as of the last day of coverage for the current year's | 8 | | policy, annualized. The premium on the renewal policy may be | 9 | | subsequently amended to reflect any change in exposure or | 10 | | reinsurance costs not considered in the quotation.
| 11 | | (c) A company that has failed to provide notice of | 12 | | intention to nonrenew under subsection (a) of this Section and | 13 | | has failed to provide notice of intention to renew as | 14 | | prescribed under subsection (b) of this Section must renew the | 15 | | expiring policy under the same terms and conditions for an | 16 | | additional year or until the effective date of any similar | 17 | | insurance is procured by the insured, whichever is earlier. The | 18 | | company may increase the renewal premium. However, such | 19 | | increase must be less than 30% of the expiring term's premium | 20 | | and notice of such increase must be delivered to the named | 21 | | insured on or before the date of expiration of the current | 22 | | policy period.
| 23 | | (d) Under subsection (a), the company shall maintain proof | 24 | | of mailing of the notice of intention not to renew to the named | 25 | | insured on one of the following forms: a recognized U.S. Post | 26 | | Office form or a form acceptable to the U.S. Post Office or |
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| 1 | | other commercial mail delivery service. Under subsections (b) | 2 | | and (c), proof of mailing or proof of receipt of the notice of | 3 | | intention to renew to the named insured may be proven by a | 4 | | sworn affidavit by the company as to the usual and customary | 5 | | business practices of mailing notice pursuant to this Section | 6 | | or may be proven consistent with Illinois Supreme Court Rule | 7 | | 236. For all notice requirements under this Section, an exact | 8 | | and unaltered copy of the notice to the named insured shall | 9 | | also be sent to the named insured's producer, if known, or the | 10 | | producer of record. Notification For notices of intention to | 11 | | not renew, an exact and unaltered copy of the notice to the | 12 | | named insured shall also be sent to the mortgagee or lien | 13 | | holder listed on the policy at the last mailing address known | 14 | | by the company .
| 15 | | (e) Renewal of a policy does not constitute a waiver or | 16 | | estoppel with respect to grounds for cancellation that existed | 17 | | before the effective date of such renewal.
| 18 | | (f) For purposes of this Section, the named insured's | 19 | | producer, if known, or the producer of record and the mortgagee | 20 | | or lien holder may opt to accept notification electronically.
| 21 | | (Source: P.A. 95-533, eff. 6-1-08 .)
| 22 | | Section 99. Effective date. This Act takes effect January | 23 | | 1, 2018.
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