Public Act 90-0340 of the 90th General Assembly

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Public Act 90-0340

HB1428 Enrolled                                LRB9003980LDdv

    AN ACT to amend the Illinois Insurance Code  by  changing
Section 154.6.

    Be  it  enacted  by  the People of the State of Illinois,
represented in the General Assembly:

    Section 5.  The Illinois Insurance  Code  is  amended  by
changing Section 154.6 as follows:

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

    Section 99.  Effective date.  This Act takes effect  upon
becoming law.

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