State of Illinois
90th General Assembly
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[ Engrossed ][ Enrolled ][ House Amendment 002 ]

90_HB1428

      215 ILCS 5/154.6          from Ch. 73, par. 766.6
          Amends  the  Illinois  Insurance  Code.   Provides   that
      establishing arbitrary caps or limits on paint, materials, or
      labor  when  estimating vehicles repairs constitutes improper
      claims practice.  Effective immediately.
                                                     LRB9003980LDdv
                                               LRB9003980LDdv
 1        AN ACT to amend the Illinois Insurance Code  by  changing
 2    Section 154.6.
 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 Section 154.6 as follows:
 7        (215 ILCS 5/154.6) (from Ch. 73, par. 766.6)
 8        Sec. 154.6.  Acts constituting improper claims practice.)
 9    Any  of the following acts by a company, if committed without
10    just cause and in violation of Section 154.5, constitutes  an
11    improper claims practice:
12        (a)  Knowingly  misrepresenting to claimants and insureds
13    relevant facts or policy provisions relating to coverages  at
14    issue;
15        (b)  Failing  to  acknowledge  with reasonable promptness
16    pertinent communications with respect to claims arising under
17    its policies;
18        (c)  Failing to adopt and implement reasonable  standards
19    for  the  prompt  investigations  and  settlement  of  claims
20    arising under its policies;
21        (d)  Not  attempting  in good faith to effectuate prompt,
22    fair and equitable settlement of claims  submitted  in  which
23    liability has become reasonably clear;
24        (e)  Compelling   policyholders  to  institute  suits  to
25    recover  amounts  due  under   its   policies   by   offering
26    substantially  less  than the amounts ultimately recovered in
27    suits brought by them;
28        (f)  Engaging   in   activity   which   results   in    a
29    disproportionate number of meritorious complaints against the
30    insurer received by the Insurance Department;
31        (g)  Engaging    in   activity   which   results   in   a
                            -2-                LRB9003980LDdv
 1    disproportionate number of lawsuits to be filed  against  the
 2    insurer or its insureds by claimants;
 3        (h)  Refusing   to   pay   claims  without  conducting  a
 4    reasonable investigation based on all available information;
 5        (i)  Failing to affirm or deny coverage of claims  within
 6    a  reasonable  time  after proof of loss statements have been
 7    completed;
 8        (j)  Attempting to settle  a  claim  for  less  than  the
 9    amount  to  which  a  reasonable  person  would  believe  the
10    claimant  was  entitled,  by  reference to written or printed
11    advertising  material  accompanying  or  made  part   of   an
12    application  or  establishing  arbitrary  caps  or  limits on
13    paint, materials, or labor when estimating vehicle repairs;
14        (k)  Attempting to settle  claims  on  the  basis  of  an
15    application which was altered without notice to, or knowledge
16    or consent of, the insured;
17        (l)  Making   a  claims  payment  to  a  policyholder  or
18    beneficiary omitting the coverage under which each payment is
19    being made;
20        (m)  Delaying the investigation or payment of  claims  by
21    requiring an insured, a claimant, or the physicians of either
22    to  submit  a  preliminary  claim  report  and then requiring
23    subsequent  submission  of  formal  proof  of   loss   forms,
24    resulting in the duplication of verification;
25        (n)  Failing  in the case of the denial of a claim or the
26    offer of  a  compromise  settlement  to  promptly  provide  a
27    reasonable  and  accurate  explanation  of  the  basis in the
28    insurance  policy  or  applicable  law  for  such  denial  or
29    compromise settlement;
30        (o)  Failing to provide forms necessary to present claims
31    within 15 working days of a request with such explanations as
32    are necessary to use them effectively;
33        (p)  Failing to adopt and implement reasonable  standards
34    to verify that a repairer designated by the insurance company
                            -3-                LRB9003980LDdv
 1    to  provide  an  estimate,  perform repairs, or engage in any
 2    other service in connection with an insured loss on a vehicle
 3    is duly licensed under Section 5-301 of the Illinois  Vehicle
 4    Code;
 5        (q)  Failing  to  provide  as  a  persistent  tendency  a
 6    notification on any written estimate prepared by an insurance
 7    company  in connection with an insured loss that Illinois law
 8    requires  that  vehicle  repairers  must   be   licensed   in
 9    accordance with Section 5-301 of the Illinois Vehicle Code;
10        (r)  Engaging  in  any  other acts which are in substance
11    equivalent to any of the foregoing.
12    (Source: P.A. 84-1308.)
13        Section 99.  Effective date.  This Act takes effect  upon
14    becoming law.

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