(815 ILCS 180/5)
Sec. 5.
Definitions.
In this Act, unless the context otherwise
requires, the following words and phrases shall have the following meanings:
"Collateral" means any or all property pledged or otherwise used to
secure payment,
repayment, or performance under a credit or lease agreement, whether
personal property,
real property, fixtures, inventory, receivables, rights, privileges, or
otherwise.
"Collateral protection insurance" means:
Insurance coverage that: (1) is purchased unilaterally by a creditor
subsequent to the date of a credit agreement; (2)
provides monetary protection against loss of or damage to the collateral or
against liability arising out of the ownership or use of the collateral; and
(3) is purchased according to the terms of a credit agreement as a result of a
debtor's failure to provide evidence of insurance or failure to maintain
adequate insurance
covering the collateral, with the costs of the collateral protection insurance,
including interest and any other charges imposed by the creditor in connection
with the placement of the collateral protection insurance, payable by the
debtor. Collateral protection insurance includes insurance coverage that is
purchased to protect only the interest of the creditor and insurance coverage
that is purchased to protect both the interest of the creditor and some or all
of the interest of the debtor. The term of a collateral protection insurance
policy may, but need not, extend to the full term of the credit
transaction.
Collateral protection insurance does not include insurance coverage
that is: (1) purchased by the creditor for which the debtor is not charged; (2)
purchased at the inception of a credit transaction to which the debtor is a
party or agrees, whether or not the costs are included in any payment plan
under the credit transaction; (3) purchased by the creditor following
foreclosure, repossession, or a similar event wherein the creditor gains
possession or control over the collateral; (4) maintained by the creditor for
the protection of any or all collateral which may come into the possession or
control of the creditor through foreclosure, repossession, or a similar event;
(5) credit insurance, mortgage protection insurance, insurance issued to cover
the life or health of the debtor, or any other insurance maintained to cover
the inability or failure of the debtor to make payment under the credit
agreement; (6) title insurance; or (7) flood insurance required to be placed
by creditors by 42 U.S.C. 4012(a), as amended, pursuant to the National Flood
Insurance Reform Act of 1994.
"Credit agreement" means the written document or documents that set forth
the terms of the credit transaction.
"Credit transaction" means any transaction the terms of which require the
payment or repayment of money, goods, services, property, rights, or
privileges, which is to be made on one or more future dates, where such
obligation is secured by collateral.
"Creditor" means any person, corporation, partnership, association, or
other venture, which is a lender of money or the vendor or lessor of goods,
services, property, rights, or privileges, for which repayment is arranged
through a credit transaction, and includes any successor to the rights, title,
interest, or liens of such lender, vendor, or lessor.
"Debtor" means a borrower of money or a purchaser or lessee of goods,
services, property, rights, or privileges, for which payment or repayment is
arranged through a credit agreement. Debtor does not include any person who is
not the primary obligor under a credit
transaction and who is not jointly liable or jointly and severally liable with
the debtor for the obligation.
(Source: P.A. 89-623, eff. 8-9-96; 90-35, eff. 6-27-97.)
|