SB0776eng 94TH GENERAL ASSEMBLY

SB0776 Engrossed LRB094 10735 LJB 41145 b

AN ACT concerning State government.

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

Section 1. Short title. This Act may be cited as the Military Service Members Mortgage Life Insurance Act.

Section 5. Purpose. The General Assembly finds that, for the economic benefit of active duty military service members having residence in the State of Illinois, it is important to provide home-ownership security for those who are serving this State and the country. The State of Illinois should help active duty military service members procure mortgage life insurance to guard against the loss of a residence in this State from the inability to meet mortgage payments due to injuries or death as a result of service in the military.

Section 10. Definitions. As used in this Act:

"Active duty" means any duty performed in the active service of the United States Armed Forces in Iraq or Afghanistan pursuant to the orders of the President of the United States.

"Department" means the Department of Military Affairs.

"Mortgage life insurance" means insurance that will pay off all or a portion of the remaining balance of a mortgage if the policyholder dies prematurely or becomes critically ill or injured.

"Service member" means a member of the Illinois National Guard.

Section 15. Program. The Department shall establish a program for service members who are called up to active duty to assist individual service members in the procurement of mortgage life insurance and payment of premiums to protect the service member from defaulting on a home mortgage due to critical injury sustained or death or critical illness caused as a result of active duty.

Section 20. Application.

(a) A service member seeking relief under this program shall apply to the Department in writing and shall include the following information:

(1) the name and address of the service member;

(2) the name and address of the bank or financial institution holding the mortgage;

(3) the amount of the mortgage and the amount of the monthly payment, including taxes; and

(4) any other information required by the Department.

(c) The Department shall provide written information to an applicant, upon the applicant's request, explaining the application process and detailing the purpose and function of mortgage life insurance.

(d) The Department shall review each application and make a determination within 30 days of the receipt of the application.

(e) The Department shall notify the applicant in writing of the Department's decision regarding the application within 15 days of the determination.

Section 25. Payment. Upon approval of the application, the Department shall procure mortgage life insurance for the service member's mortgage in the name of the service member and pay all premiums for the insurance.

Section 30. Notification of discharge from active duty; assumption of premiums.

(a) A service member who has been accepted by the Department for participation in the program established under this Act must notify the Department of his or her discharge from active duty within 3 months after the discharge.

(b) Within 6 months after the discharge of the service member from active duty, the Department shall notify the mortgage life insurer that the mortgage life insurance will be cancelled unless the service member (i) chooses to continue to pay the premiums for the mortgage life insurance and (ii) notifies the insurer within 2 months after receiving notice from the Department pursuant to subsection (c) of this Section that he or she intends to pay premiums for the mortgage life insurance.

(c) The Department shall send a written notice to the service member within 2 weeks after the Department provides the notice to the insurer required under subsection (b) of this Section notifying him or her that the mortgage life insurance shall be cancelled unless the service member notifies the insurer of his or her intent to continue paying premiums. The notice required under this subsection (c) shall inform the service member that notice must be sent to the insurer within 2 months after the service member receives notice from the Department.

Section 35. Rules. The Department shall adopt rules necessary to carry out the provisions of this Act.