State of Illinois
90th General Assembly

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[ Introduced ][ House Amendment 001 ]


      215 ILCS 5/802.1
          Amends the Illinois Insurance Code in  relation  to  mine
      subsidence  insurance.    Includes  within  the definition of
      "insurer"   intergovernmental   cooperatives   that   provide
      Standard Fire Policy and Extended Coverage Endorsements.
HB0829 Engrossed                               LRB9004077JSgc
 1        AN ACT to amend the Illinois Insurance Code  by  changing
 2    Sections 802.1 and 803.1.
 3        Be  it  enacted  by  the People of the State of Illinois,
 4    represented in the General Assembly:
 5        Section 5.  The Illinois Insurance  Code  is  amended  by
 6    changing Sections 802.1 and 803.1 as follows:
 7        (215 ILCS 5/802.1)
 8        Sec. 802.1. Definitions.  As used in this Article:
 9        (a)  "Commercial Building" means any building, other than
10    a   residence,  permanently  affixed  to  realty  located  in
11    Illinois, including basements, footings, foundations,  septic
12    systems   and   underground   pipes  directly  servicing  the
13    building, but does not include sidewalks, driveways,  parking
14    lots,   living   units,   land,   trees,   plants,  crops  or
15    agricultural field drainage tile.
16        (b)  "Commercial   Coverage"   means   mine    subsidence
17    insurance for a commercial building.
18        (c)  "Insurer"  or  "Insurers"  means insurance companies
19    and reciprocals licensed and  authorized  to  write  Class  3
20    policies  of  insurance,  as  defined  in  this  Code, within
21    Illinois  and  also  means   intergovernmental   cooperatives
22    organized pursuant to Article VII, Section 10 of the Illinois
23    Constitution  and  the    Intergovernmental  Cooperation Act,
24    which provide the coverage of the standard  fire  policy  and
25    extended coverage endorsement on a residence, living unit, or
26    commercial building within Illinois.
27        (d)  "Living  Unit"  shall  mean  that  physical  portion
28    designated   for   separate   ownership   or   occupancy  for
29    residential purposes, of a building or  group  of  buildings,
30    permanently  affixed  to  realty  located in Illinois, having
31    elements which are owned  or  used  in  common,  including  a
HB0829 Engrossed            -2-                LRB9004077JSgc
 1    condominium  unit,  a  cooperative  unit or any other similar
 2    unit.
 3        (e)  "Living  Unit  Coverage"   means   mine   subsidence
 4    insurance  for a living unit covering the losses described in
 5    Section 805.1(d).
 6        (f)  "Mine Subsidence" means lateral or  vertical  ground
 7    movement  caused by a failure initiated at the mine level, of
 8    man-made underground mines, including,  but  not  limited  to
 9    coal  mines, clay mines, limestone mines, and fluorspar mines
10    that directly damages  residences  or  commercial  buildings.
11    "Mine Subsidence" does not include lateral or vertical ground
12    movement  caused by earthquake, landslide, volcanic eruption,
13    soil conditions, soil erosion,  soil  freezing  and  thawing,
14    improperly  compacted  soil,  construction  defects, roots of
15    trees and shrubs or collapse of storm and  sewer  drains  and
16    rapid transit tunnels.
17        (g)  "Mine Subsidence Insurance Fund" or "Fund" means the
18    fund established by this Article.
19        (h)  "Policy"   or   "policies"  means  any  contract  or
20    contracts of insurance, including joint self-insurance issued
21    by an intergovernmental cooperative organized pursuant to the
22    Article VII, Section 10 of the Illinois Constitution and  the
23    Intergovernmental  Cooperation Act, providing the coverage of
24    the Standard Fire Policy and Extended Coverage Endorsement on
25    any residence, living unit or commercial building.   It  does
26    not include those insurance contracts that are referred to as
27    marine or inland marine policies.
28        (i)  "Premium"  or  "premiums"  means  the  gross  amount
29    charged  to  policyholders  for the mine subsidence insurance
30    made available under this Article.
31        (j)  "Rates" or "rate schedules" means the rates by which
32    premiums shall be computed for the mine subsidence  insurance
33    made available under this Article.
34        (k)  "Residence"  means  a  building used principally for
HB0829 Engrossed            -3-                LRB9004077JSgc
 1    residential purposes  up  to  and  including  a  four  family
 2    dwelling, permanently affixed to realty located  in Illinois,
 3    including   appurtenant   structures,  driveways,  sidewalks,
 4    basements,  footings,   foundations,   septic   systems   and
 5    underground   pipes   directly   servicing  the  dwelling  or
 6    building, but does not include  living  units,  land,  trees,
 7    plants, crops or agricultural field drainage tile.
 8        (l)  "Residential   Coverage"   means   mine   subsidence
 9    insurance for a residence.
10        (m)  "Intergovernmental     cooperative"     means     an
11    intergovernmental  cooperative  organized pursuant to Article
12    VII, Section 10 of the Illinois Constitution and Section 6 of
13    the Intergovernmental Cooperation Act.
14    (Source: P.A. 88-379.)
15        (215 ILCS 5/803.1)
16        Sec. 803.1. Establishment of Fund.
17        (a)  There is established a  fund  to  be  known  as  the
18    "Illinois  Mine  Subsidence  Insurance Fund".  The Fund shall
19    operate pursuant to this Article.  The Fund is authorized  to
20    transact business, provide services, enter into contracts and
21    sue or be sued in its own name.
22        (b)  The   Fund   shall   provide  reinsurance  for  mine
23    subsidence losses to all  insurers  writing  mine  subsidence
24    insurance pursuant to this Article.
25        (c)  The  monies  in  the  Fund  shall  be  derived  from
26    premiums for mine subsidence insurance collected on behalf of
27    the Fund pursuant to this Article, from investment income and
28    from  receipt  of  Federal  or State funds.  No insurer shall
29    have any liability to the Fund or  to  any  creditor  of  the
30    Fund,  except  as  may  be  set forth in this Article, in the
31    Articles of Governance which may be adopted by the Fund, in a
32    reinsurance agreement executed pursuant to  paragraph  810.1,
33    in  the  Plan of Operation established by the Fund, or in the
34    rules and procedures adopted by the Fund as authorized by the
HB0829 Engrossed            -4-                LRB9004077JSgc
 1    reinsurance agreement.
 2        (d)  The  Fund  shall   establish   the   rates,   rating
 3    schedules,  deductibles and retentions, minimum premiums, and
 4    classifications for mine subsidence insurance which the  Fund
 5    shall  file  with  the  Director.  The Director shall have 30
 6    days from the date of receipt to approve or disapprove a rate
 7    filing.  If no action is taken  by  the  Director  within  30
 8    days,  the  rate is deemed to be approved.  The Director may,
 9    in writing, extend the period for an additional  30  days  if
10    the Director determines that additional time is needed.
11        (e)  The   Fund   shall   establish   its  rates,  rating
12    schedules, deductibles and retentions, minimum premiums,  and
13    classification  in such a manner as to satisfy all reasonably
14    foreseeable claims and expenses the Fund is likely to  incur.
15    The  Fund shall give due consideration to loss experience and
16    relevant trends, premium  and  other  income  and  reasonable
17    reserves  established  for  contingencies in establishing the
18    mine subsidence rates.
19        (f)  The  Fund  shall  compile  and  publish  an   annual
20    operating report.
21        (g)  The   Fund   shall   develop  at  least  2  consumer
22    information publications to aid the public  in  understanding
23    mine  subsidence  and  mine  subsidence  insurance  and shall
24    establish a schedule for the distribution of the publications
25    pursuant to the reinsurance agreement.  Topics that shall  be
26    addressed shall include but are not limited to:
27             (1)  Descriptive  information about mine subsidence,
28        and what benefits mine subsidence insurance  provides  to
29        the property owner.
30             (2)  Information   that   will   be   useful   to  a
31        policyholder who has filed a mine subsidence claim,  such
32        as  information  that  explains  the  claim investigation
33        process and claim handling procedures.
34        (h)  The Fund shall  be  empowered  to  conduct  research
HB0829 Engrossed            -5-                LRB9004077JSgc
 1    programs  in  an  effort to improve the administration of the
 2    mine  subsidence  insurance  program  and  help  reduce   and
 3    mitigate  mine  subsidence  losses consistent with the public
 4    interest.
 5        (i)  The Fund may enter into reinsurance agreements  with
 6    any   intergovernmental   cooperative   that  provides  joint
 7    self-insurance for mine subsidence  losses  of  its  members.
 8    These  reinsurance  agreements shall be substantially similar
 9    to reinsurance agreements described in Section 810.1.
10    (Source: P.A. 88-379; 89-206, eff. 7-21-95.)

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