215 ILCS 5/ Illinois Insurance Code.

(215 ILCS 5/131.28) (from Ch. 73, par. 743.28)

Sec. 131.28. Separability of provisions.

If any provisions of this Article or the application thereof to any person or circumstances is held invalid, the invalidity does not affect other provisions or applications of this Article which can be given effect without the invalid provision or application, and for this purpose the provisions of this Article are separable.

(Source: P. A. 77‑673.)

(215 ILCS 5/Art. IX heading) ARTICLE IX. PROVISIONS APPLICABLE TO ALL COMPANIES

(215 ILCS 5/132) (from Ch. 73, par. 744)

Sec. 132. Market conduct and non‑financial examinations.

(1) The Director, for the purposes of ascertaining the non‑financial business practices, performance, and operations of any company, may make examinations of:

(a) any company transacting or being organized to transact business in this State;

(b) any person engaged in or proposing to be engaged in the organization, promotion, or solicitation of shares or capital contributions to or aiding in the formation of a company;

(c) any person having a contract, written or oral, pertaining to the management or control of a company as general agent, managing agent, or attorney‑in‑fact;

(d) any licensed or registered producer, firm, or administrator, or any person, organization, or corporation making application for any licenses or registration;

(e) any person engaged in the business of adjusting losses or financing premiums; or

(f) any person, organization, trust, or corporation having custody or control of information reasonably related to the operation, performance, or conduct of a company or person subject to the jurisdiction of the Director.

(2) Every company or person being examined and its officers, directors, and agents must provide to the Director convenient and free access at all reasonable hours at its office or location to all books, records, documents, and any or all papers relating to the business, performance, operations, and affairs of the company. The officers, directors, and agents of the company or person must facilitate the examination and aid in the examination so far as it is in their power to do so.

The Director and any authorized examiner have the power to administer oaths and examine under oath any person relative to the business of the company being examined.

(3) The examiners designated by the Director under Section 402 must make a full and true report of every examination made by them, which contains only facts ascertained from the books, papers, records, or documents, and other evidence obtained by investigation and examined by them or ascertained from the testimony of officers or agents or other persons examined under oath concerning the business, affairs, conduct, and performance of the company or person. The report of examination must be verified by the oath of the examiner in charge thereof, and when so verified is prima facie evidence in any action or proceeding in the name of the State against the company, its officers, or agents upon the facts stated therein.

(4) The Director must notify the company or person made the subject of any examination hereunder of the contents of the verified examination report before filing it and making the report public of any matters relating thereto, and must afford the company or person an opportunity to demand a hearing with reference to the facts and other evidence therein contained.

The company or person may request a hearing within 10 days after receipt of the examination report by giving the Director written notice of that request, together with a statement of its objections. The Director must then conduct a hearing in accordance with Sections 402 and 403. He must issue a written order based upon the examination report and upon the hearing within 90 days after the report is filed or within 90 days after the hearing.

If the examination reveals that the company is operating in violation of any law, regulation, or prior order, the Director in the written order may require the company or person to take any action he considers necessary or appropriate in accordance with the report of examination or any hearing thereon. The order is subject to judicial review under the Administrative Review Law. The Director may withhold any report from public inspection for such time as he may deem proper and may, after filing the same, publish any part or all of the report as he considers to be in the interest of the public, in one or more newspapers in this State, without expense to the company.

(5) Any company which or person who violates or aids and abets any violation of a written order issued under this Section shall be guilty of a business offense and may be fined not more than $5,000. The penalty shall be paid into the General Revenue fund of the State of Illinois.

(Source: P.A. 87‑108.)

(215 ILCS 5/132.1) (from Ch. 73, par. 744.1)

Sec. 132.1. Purpose. The purpose of Sections 132.1 through 132.7 of this Code is to provide an effective system for the financial examination of the activities, operations, financial condition, and affairs of all persons transacting the business of insurance in this State and all persons otherwise subject to the jurisdiction of the Director. The provisions are intended to enable the Director to adopt a flexible system of examinations that directs resources as may be deemed appropriate and necessary for the administration of the insurance and insurance related laws of this State.

(Source: P.A. 87‑108.)

(215 ILCS 5/132.2) (from Ch. 73, par. 744.2)

Sec. 132.2. Definitions. As used in Sections 132.1 through 132.7, the terms set forth in this Section have the following meanings:

"Company" means any person engaging in or proposing or attempting to engage in any transaction or kind of insurance or surety business and any person or group of persons who may otherwise be subject to the administrative, regulatory, or taxing authority of the Director.

"Examiner" means any individual or firm having been authorized by the Director to conduct an examination under this Code.

"Insurer" means any company licensed or authorized by the Director to provide any insurance contracts, whether by indemnity, guaranty, suretyship, or otherwise; including, but not limited to, those companies licensed or authorized by the Director under the following Acts:

(1) The Voluntary Health Services Plans Act.

(2) (Blank).

(3) The Dental Service Plan Act.

(4) (Blank).

(5) The Farm Mutual Insurance Company Act of 1986.

(6) The Limited Health Service Organization Act.

(7) The Health Maintenance Organization Act.

"Person" means any individual, aggregation of individuals, trust, association, partnership, or corporation, or any affiliate thereof.

(Source: P.A. 90‑372, eff. 7‑1‑98; 90‑655, eff. 7‑30‑98.)

(215 ILCS 5/132.3) (from Ch. 73, par. 744.3)

Sec. 132.3. Authority, scope, and scheduling of examinations.

(a) The Director or any of his examiners may conduct an examination of any company as often as the Director, in his sole discretion, deems appropriate, but shall, at a minimum, conduct an examination of every insurer authorized or licensed in this State not less frequently than once every 5 years. In scheduling and determining the nature, scope, and frequency of the examinations, the Director shall consider the results of financial statement analyses and ratios, changes in management or ownership, actuarial opinions, reports of independent certified public accountants and other criteria set forth in the Examiners' Handbook adopted by the National Association of Insurance Commissioners and in effect when the Director exercises discretion under this subsection.

(b) For purposes of completing an examination of any company, the Director may examine or investigate any person, or the business of any person, insofar as the examination or investigation is, in the sole discretion of the Director, necessary or material to the examination of the company.

(c) In lieu of an examination of any foreign or alien insurer authorized or licensed in this State, the Director may accept an examination report on the company as prepared by the insurance department for the company's state of domicile or port‑of‑entry state until January 1, 1994. Thereafter, those reports may only be accepted if (1) the insurance department was at the time of the examination accredited under the National Association of Insurance Commissioners' Financial Regulation Standards and Accreditation Program, (2) the examination is performed under the supervision of an accredited insurance department or with the participation of one or more examiners who are employed by an accredited state insurance department, and who, after a review of the examination work papers and report, state under oath that the examination was performed in a manner consistent with the standards and procedures required by their insurance department, or (3) the Director otherwise determines that the examination was performed in a manner substantially similar to the standards and procedures required by Sections 132.1 through 132.6 of this Code.

(Source: P.A. 89‑97, eff. 7‑7‑95.)

(215 ILCS 5/132.4) (from Ch. 73, par. 744.4)

Sec. 132.4. Conduct of examinations.

(a) Upon determining that an examination should be conducted, the Director or his designee shall issue an examination warrant appointing one or more examiners to perform the examination and instructing them as to the scope of the examination. In conducting the examination, the examiner shall observe those guidelines and procedures set forth in the Examiners' Handbook adopted by the National Association of Insurance Commissioners. The Director may also employ other guidelines or procedures as the Director may deem appropriate.

(b) Every company or person from whom information is sought and its officers, directors, and agents must provide to the examiners appointed under subsection (a) timely, convenient, and free access, at all reasonable hours at its offices, to all books, records, accounts, papers, documents, and any or all computer or other recordings relating to the property, assets, business, and affairs of the company being examined. The officers, directors, employees, and agents of the company or person must facilitate the examination and aid in the examination so far as it is in their power to do so. The refusal of any company or its officers, directors, employees, and agents to submit to examination or to comply with any reasonable written request of the examiners shall be grounds for suspension, refusal, or nonrenewal of any license or authority held by the company to engage in an insurance or other business subject to the Director's jurisdiction. Any proceedings for suspension, revocation, or refusal of any license or authority shall be conducted under the procedures set forth in Section 401.1 of this Code. Evidence of refusal to submit to examination or to comply with reasonable written requests of examiners shall establish a rebuttable presumption that the conduct of the company's business and affairs is hazardous to its policyholders and the public and may cause irreparable loss and injury to others so long as the refusal to submit or to comply with the examination continues.

(c) The Director or any of his examiners shall have the power to issue subpoenas, to administer oaths, and to examine under oath any person as to any matter pertinent to the examination. Subpoenas may be enforced under the provisions of Section 403 of this Code.

(d) When making an examination, the Director may retain, in consultation with the company being examined, attorneys, appraisers, independent actuaries, independent certified public accountants, or other professionals and specialists as examiners, the cost of which shall be borne by the company that is the subject of the examination.

(e) Nothing contained in this Act shall be construed to limit the Director's authority to terminate or suspend any examination in order to pursue other legal or regulatory action under the insurance laws of this State. Findings of fact and conclusions made in the course of any examination shall be prima facie evidence in any legal or regulatory action.

(f) Nothing contained in this Code shall be construed to limit the Director's authority to use and, if appropriate, to make public any final or preliminary examination report, any examiner or company work papers or other documents, or any other information discovered or developed during the course of any examination in the furtherance of any legal or regulatory action that the Director may, in his sole discretion, deem appropriate.

(Source: P.A. 87‑108.)

(215 ILCS 5/132.5) (from Ch. 73, par. 744.5)

Sec. 132.5. Examination reports.

(a) General description. All examination reports shall be comprised of only facts appearing upon the books, records, or other documents of the company, its agents, or other persons examined or as ascertained from the testimony of its officers, agents, or other persons examined concerning its affairs and the conclusions and recommendations as the examiners find reasonably warranted from those facts.

(b) Filing of examination report. No later than 60 days following completion of the examination, the examiner in charge shall file with the Department a verified written report of examination under oath. Upon receipt of the verified report, the Department shall transmit the report to the company examined, together with a notice that affords the company examined a reasonable opportunity of not more than 30 days to make a written submission or rebuttal with respect to any matters contained in the examination report.

(c) Adoption of the report on examination. Within 30 days of the end of the period allowed for the receipt of written submissions or rebuttals, the Director shall fully consider and review the report, together with any written submissions or rebuttals and any relevant portions of the examiners work papers and enter an order:

(1) Adopting the examination report as filed or with modification or corrections. If the examination report reveals that the company is operating in violation of any law, regulation, or prior order of the Director, the Director may order the company to take any action the Director considers necessary and appropriate to cure the violation.

(2) Rejecting the examination report with directions to the examiners to reopen the examination for purposes of obtaining additional data, documentation, or information and refiling under subsection (b).

(3) Calling for an investigatory hearing with no less than 20 days notice to the company for purposes of obtaining additional documentation, data, information, and testimony.

(d) Order and procedures. All orders entered under paragraph (1) of subsection (c) shall be accompanied by findings and conclusions resulting from the Director's consideration and review of the examination report, relevant examiner work papers, and any written submissions or rebuttals. The order shall be considered a final administrative decision and may be appealed in accordance with the Administrative Review Law. The order shall be served upon the company by certified mail, together with a copy of the adopted examination report. Within 30 days of the issuance of the adopted report, the company shall file affidavits executed by each of its directors stating under oath that they have received a copy of the adopted report and related orders.

Any hearing conducted under paragraph (3) of subsection (c) by the Director or an authorized representative shall be conducted as a nonadversarial confidential investigatory proceeding as necessary for the resolution of any inconsistencies, discrepancies, or disputed issues apparent upon the face of the filed examination report or raised by or as a result of the Director's review of relevant work papers or by the written submission or rebuttal of the company. Within 20 days of the conclusion of any hearing, the Director shall enter an order under paragraph (1) of subsection (c).

The Director shall not appoint an examiner as an authorized representative to conduct the hearing. The hearing shall proceed expeditiously with discovery by the company limited to the examiner's work papers that tend to substantiate any assertions set forth in any written submission or rebuttal. The Director or his representative may issue subpoenas for the attendance of any witnesses or the production of any documents deemed relevant to the investigation, whether under the control of the Department, the company, or other persons. The documents produced shall be included in the record, and testimony taken by the Director or his representative shall be under oath and preserved for the record. Nothing contained in this Section shall require the Department to disclose any information or records that would indicate or show the existence or content of any investigation or activity of a criminal justice agency.

The hearing shall proceed with the Director or his representative posing questions to the persons subpoenaed. Thereafter the company and the Department may present testimony relevant to the investigation. Cross‑examination shall be conducted only by the Director or his representative. The company and the Department shall be permitted to make closing statements and may be represented by counsel of their choice.

(e) Publication and use. Upon the adoption of the examination report under paragraph (1) of subsection (c), the Director shall continue to hold the content of the examination report as private and confidential information for a period of 35 days, except to the extent provided in subsection (b). Thereafter, the Director may open the report for public inspection so long as no court of competent jurisdiction has stayed its publication.

Nothing contained in this Code shall prevent or be construed as prohibiting the Director from disclosing the content of an examination report, preliminary examination report or results, or any matter relating thereto, to the insurance department of any other state or country or to law enforcement officials of this or any other state or agency of the federal government at any time, so long as the agency or office receiving the report or matters relating thereto agrees in writing to hold it confidential and in a manner consistent with this Code.

In the event the Director determines that regulatory action is appropriate as a result of any examination, he may initiate any proceedings or actions as provided by law.

(f) Confidentiality of ancillary information. All working papers, recorded information, documents, and copies thereof produced by, obtained by, or disclosed to the Director or any other person in the course of any examination must be given confidential treatment, are not subject to subpoena, and may not be made public by the Director or any other persons, except to the extent provided in subsection (e). Access may also be granted to the National Association of Insurance Commissioners. Those parties must agree in writing before receiving the information to provide to it the same confidential treatment as required by this Section, unless the prior written consent of the company to which it pertains has been obtained.

(Source: P.A. 87‑108.)

(215 ILCS 5/132.6) (from Ch. 73, par. 744.6)

Sec. 132.6. Conflict of interest.

(a) No examiner may be appointed by the Director if that examiner, either directly or indirectly, has a conflict of interest, is affiliated with the management of, or owns a pecuniary interest in any person subject to examination. This Section shall not be construed to automatically preclude an examiner from being:

(1) A policyholder or claimant under an insurance policy.

(2) A grantor of a mortgage or similar instrument on the examiner's residence to a regulated entity if done under customary terms and in the ordinary course of business.

(3) An investment owner in shares of regulated diversified investment companies.

(4) A settlor or beneficiary of a "blind trust" into which any otherwise impermissible holdings have been placed.

(b) Notwithstanding the provisions of this Section, the Director may retain from time to time, on an individual basis, qualified actuaries, certified public accountants, or other similar individuals who are independently practicing their professions, even though those persons may from time to time be similarly employed or retained by persons subject to examination under this Code.

(Source: P.A. 87‑108.)

(215 ILCS 5/132.7) (from Ch. 73, par. 744.7)

Sec. 132.7. Immunity from liability.

(a) No cause of action shall arise nor shall any liability be imposed against the Director, the Director's authorized representatives, or any examiner appointed by the Director for any statements made or conduct performed in good faith while carrying out the provisions of this Code.

(b) No cause of action shall arise, nor shall any liability be imposed against any person for the act of communicating or delivering information or data to the Director or the Director's authorized representative or examiner in the course of an examination if the act of communication or delivery was performed in good faith and without fraudulent intent or the intent to deceive.

(c) This Section does not abrogate or modify in any way any common law or statutory privilege or immunity heretofore enjoyed by any person identified in subsection (a).

(d) Persons identified in subsection (a) shall be entitled to an award of attorney's fees and costs if they are a prevailing party in a civil action for libel, slander, or any other relevant tort arising out of their activities in carrying out the provisions of this Code and the party bringing the action was not substantially justified in doing so. For purposes of this Section a proceeding is "substantially justified" if it has a reasonable basis in law or fact at the time that it was initiated.

(Source: P.A. 87‑108.)

(215 ILCS 5/133) (from Ch. 73, par. 745)

Sec. 133. Books, records, accounts and vouchers.

(1) Every domestic company shall keep its books, records, documents, accounts and vouchers in such manner that its financial condition, affairs and operations can be ascertained and so that its financial statements filed with the Director can be readily verified and its compliance with the law determined and may cause any or all such books, records, documents, accounts and vouchers to be photographed or reproduced on film. Any such photographs, microphotographs, optical imaging, or film reproductions of any original books, records, documents, accounts and vouchers shall for all purposes be considered the same as the originals thereof and a transcript, exemplification or certified copy of any such photograph, microphotograph, optical imaging, or film reproduction shall for all purposes be deemed to be a transcript, exemplification or certified copy of the original. Any original so reproduced may thereafter be disposed of or destroyed if provision is made for preserving and examining such reproductions.

(2) All such original books, records, documents, accounts and vouchers, or such reproductions thereof, of the home office of any domestic company or of any principal United States office of a foreign or alien company located in this State shall be preserved and kept available in this State for the purpose of examination and until authority to destroy or otherwise dispose of such records is secured from the Director. Such original records may, however, be kept and maintained outside this State if, according to a plan adopted by the company's board of directors and approved by the Director, it maintains suitable records in lieu thereof. Every domestic company shall keep its securities within the State of Illinois except where:

(a) on deposit with other states of the United States of America, or political subdivision thereof; or

(b) on deposit with foreign countries where the company is licensed to transact an insurance business; or

(c) where requisite for the normal transaction of the company's business and approved by the Director.

(3) Any domestic company may maintain with a corporation, qualified to administer trusts in this State under the Corporate Fiduciary Act and that has an office in this State at which the account is maintained, for its securities, a limited agency, custodial or depository account, or other type of account for the safekeeping of those securities, collecting the income from those securities and providing supportive accounting services relating to such safekeeping and collection, provided, the domestic company maintains full investment discretion over those securities. Such a corporation in safekeeping such securities shall have all the powers, rights, duties and responsibilities as it has for holding securities in its fiduciary accounts under the Securities in Fiduciary Accounts Act.

(4) Any director, officer, agent or employee of any company who destroys any such books, records or documents without the authority of the Director in violation of this section or who fails to keep the books, records, documents, accounts and vouchers required by this section shall be guilty of a business offense and shall be fined not more than $5000.00.

(Source: P.A. 88‑364; 89‑437, eff. 12‑15‑95.)

(215 ILCS 5/134) (from Ch. 73, par. 746)

Sec. 134. Falsification of Records‑Sentence.

Any officer, director, agent or employee of any company who makes or causes to be made any false entry in any book, report or statement of such company with intent to injure or defraud such company, or any other company or person, or to deceive any officer of such company, or the Director or any agent or examiner appointed to examine the affairs of such company and any person who with like intent aids or abets any officer, director, agent or employee in any violation of this Section shall be guilty of a Class 4 felony.

(Source: P. A. 77‑2830.)

(215 ILCS 5/136) (from Ch. 73, par. 748)

Sec. 136. Annual statement.

(1) Every company authorized to do business in this State or accredited by this State shall file with the Director by March 1st in each year 2 copies of its financial statement for the year ending December 31st immediately preceding on forms prescribed by the Director, which shall conform substantially to the form of statement adopted by the National Association of Insurance Commissioners. Unless the Director provides otherwise, the annual statement is to be prepared in accordance with the annual statement instructions and the Accounting Practices and Procedures Manual adopted by the National Association of Insurance Commissioners. The Director shall have power to make such modifications and additions in this form as he may deem desirable or necessary to ascertain the condition and affairs of the company. The Director shall have authority to extend the time for filing any statement by any company for reasons which he considers good and sufficient. In every statement the admitted assets shall be shown at the actual values as of the last day of the preceding year, in accordance with Section 126.7. The statement shall be verified by oaths of the president and secretary of the company or, in their absence, by 2 other principal officers. In addition, any company may be required by the Director, when he considers that action to be necessary and appropriate for the protection of policyholders, creditors, shareholders, or claimants, to file, within 60 days after mailing to the company a notice that such is required, a supplemental summary statement as of the last day of any calendar month occurring during the 100 days next preceding the mailing of such notice designated by him on forms prescribed and furnished by the Director. The Director may require supplemental summary statements to be certified by an independent actuary deemed competent by the Director or by an independent certified public accountant.

(2) The statement of an alien company shall embrace only its condition and transactions in the United States and shall be verified by the oaths of its resident manager or principal representative in the United States, except that in the case of any life company organized under the laws of Canada or any province thereof, the statement may be verified by the oaths of any of its principal officers designated for that purpose by its board of directors.

(3) For the information of the public generally the Director shall cause an abstract of the information contained in the annual statement to be made available to the public as soon as practicable after filing with the Department, by printing those abstracts in pamphlet tabular form for free general distribution by the Department, or by such other publication in the city of Springfield or in the city of Chicago as may be reasonably necessary more fully to inform the public of the financial condition of companies transacting business in this State.

(4) Each domestic, foreign, and alien insurer authorized to do business in this State or accredited by this State shall participate in the National Association of Insurance Commissioners' Insurance Regulatory Information System, including the payment of all fees and charges of the system. Each company shall, on or before March 1 of each year, file with the National Association of Insurance Commissioners a copy of its annual financial statement along with any additional filings prescribed by the Director for the preceding year. The statement filed with the National Association of Insurance Commissioners shall be in the same format and scope as that required by this Code and shall include a signed jurat page and actuarial certification. Any amendments and addendums to the annual statement shall also be filed with the National Association of Insurance Commissioners. Each company shall also file with the National Association of Insurance Commissioners annual and quarterly financial statement information in computer readable format as required by the Insurance Regulatory Information System. Failure of a company to file financial statement information in computer readable format shall subject the company to the provisions of Section 139.

(5) All financial analysis ratios and examination synopsis concerning insurance companies that are submitted to the Director by the National Association of Insurance Commissioners' Insurance Regulatory Information System are confidential and may not be disclosed by the Director.

(6) Every property and casualty insurance company doing business in this State, unless otherwise exempted by the Director, shall annually submit the opinion of an appointed actuary entitled "Statement of Actuarial Opinion". This opinion shall be filed in accordance with the appropriate National Association of Insurance Commissioners Property and Casualty Annual Statement Instructions.

(a) Every property and casualty insurance company domiciled in this State that is required to submit a Statement of Actuarial Opinion shall annually submit an Actuarial Opinion Summary, written by the company's appointed actuary. This Actuarial Opinion Summary shall be filed in accordance with the appropriate National Association of Insurance Commissioners Property and Casualty Annual Statement Instructions and shall be considered as a document supporting the Actuarial Opinion required in this subsection (6). Each foreign and alien property and casualty company authorized to do business in this State shall provide the Actuarial Opinion Summary upon request.

(b) An Actuarial Report and underlying workpapers as required by the appropriate National Association of Insurance Commissioners Property and Casualty Annual Statement Instructions shall be prepared to support each Actuarial Opinion. If the insurance company fails to provide a supporting Actuarial Report or workpapers at the request of the Director or the Director determines that the supporting Actuarial Report or workpapers provided by the insurance company is otherwise unacceptable to the Director, the Director may engage a qualified actuary at the expense of the company to review the opinion and the basis for the opinion and prepare the supporting Actuarial Report or workpapers.

(c) The appointed actuary shall not be liable for damages to any person (other than the insurance company and the Director) for any act, error, omission, decision, or conduct with respect to the actuary's opinion, except in cases of fraud or willful misconduct on the part of the appointed actuary.

(d) The Statement of Actuarial Opinion shall be provided with the Annual Statement in accordance with the appropriate National Association of Insurance Commissioners Property and Casualty Annual Statement Instructions and shall be treated as a public document. Documents, materials, or other information in the possession or control of the Director that are considered an Actuarial Report, workpapers, or Actuarial Opinion Summary provided in support of the opinion, and any other material provided by the company to the Director in connection with the Actuarial Report, workpapers or Actuarial Opinion Summary, must be given confidential treatment, are not subject to subpoena, and may not be made public by the Director or any other persons. This paragraph (d) shall not be construed to limit the Director's authority to release the documents to the Actuarial Board for Counseling and Discipline (ABCD), so long as the material is required for the purpose of professional disciplinary proceedings and that the ABCD establishes procedures satisfactory to the Director for preserving the confidentiality of the documents, nor shall this paragraph (d) be construed to limit the Director's authority to use the documents, materials or other information in furtherance of any regulatory or legal action brought as part of the Director's official duties. Neither the Director nor any person who received documents, materials, or other information while acting under the authority of the Director shall be permitted or required to testify in any private civil action concerning any confidential documents, materials, or information subject to this subsection (6). Except where another provision of this Code expressly prohibits a disclosure of confidential information to the specific officials or organizations described in this subsection, the Director may:

(i) share documents, materials, or other information, including the confidential and privileged documents, materials or information subject to this paragraph (d) with the insurance department of any other state or country or with law enforcement officials of this or any other state or agency of the federal government at any time, as long as the agency or office receiving the document, material, or other information agrees in writing to hold it confidential and in a manner consistent with this Code;

(ii) receive documents, materials, or information, including otherwise confidential and privileged documents, materials, or information, from the National Association of Insurance Commissioners and its affiliates and subsidiaries, and from regulatory and law enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material, or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material, or information; and

(iii) enter into agreements governing sharing and use of information consistent with paragraph (d).

(e) No waiver of any applicable privilege or claim of confidentiality in the documents, materials or information shall occur as a result of disclosure to the Director under this Section or as a result of sharing as authorized in subparagraphs (i), (ii), and (iii) of paragraph (d) of subsection (6) of this Section. All 2008 Annual Statements, which are filed in 2009, and all subsequent Annual Statement filings shall be done in accordance with subsection (6) of this Section.

(Source: P.A. 96‑145, eff. 8‑7‑09.)

(215 ILCS 5/137) (from Ch. 73, par. 749)

Sec. 137. Every Insurance Company doing business in this state which is required to file a statement or report with the Securities and Exchange Commission, shall at the request of the Director, file a copy of such statement or report with the Department.

(Source: P.A. 80‑514.)

(215 ILCS 5/139) (from Ch. 73, par. 751)

Sec. 139. Penalties for late or false annual statement.

(1) Any company failing, without just cause, to file its financial statements as required in this Code shall be required, after notice and hearing, to pay a penalty of up to $1,000 for each day's delay, to be recovered by the Director of Insurance of the State of Illinois and the penalty so recovered shall be paid into the General Revenue fund of the State of Illinois. The Director may reduce the penalty if the company demonstrates to the Director that the imposition of the penalty would constitute a financial hardship to the company.

Any statement which is not materially complete when filed shall not be considered to have been properly filed until those deficiencies which make the filing incomplete have been corrected and filed.

(2) Any director, officer, agent or employee of any company, who subscribes to, makes or concurs in making or publishing any annual or other statement required by law, knowing the same to contain any material statement which is false shall, after notice and hearing, be guilty of a business offense and shall be fined not more than $50,000.

The penalty shall be paid into the General Revenue fund of the State of Illinois.

(Source: P.A. 88‑364.)

(215 ILCS 5/140) (from Ch. 73, par. 752)

Sec. 140. Vouchers for disbursements.

No domestic company shall make any disbursement of one hundred dollars or more unless the same be evidenced by a voucher or receipt signed or check endorsed by or on behalf of the person receiving the money and describing the consideration for the payment, and if the expenditure be in connection with any matter pending before any legislative or public body or before any department or officer of any state or government the voucher shall describe the nature of the matter and the interest of the company therein, or if such voucher cannot be obtained, the expenditure shall be evidenced by affidavit describing its character and object and stating the reasons for not obtaining such voucher, receipt or check.

(Source: Laws 1937, p. 696.)

(215 ILCS 5/141) (from Ch. 73, par. 753)

Sec. 141. Agency contracts. (1) Any domestic company which contracts with any person (different legal entities, directly or indirectly owned or controlled by the same person shall be considered as a person within the meaning of this Section) whereby such person is granted the right or privilege to solicit, procure, write or produce a major part of the insurance business for such company and collect premiums therefor shall file such contract with the Director within 15 days from the execution of such contract or within 60 days following the end of any calendar quarter in which such person produces a major portion of the company's insurance business. For purposes of this Section, any person who produces in excess of five percent (5%) of a company's insurance premium volume during any one calendar quarter shall be deemed as having been granted the privilege of producing a major portion of such company's business. Failure of the Director to disapprove any such contract within thirty days after the same shall be filed with him, shall constitute his approval thereof. A company may continue to accept business from such person until such contract is disapproved by the Director. Such disapproval shall be in writing, stating the reasons therefor and a copy thereof delivered to the company.

(2) The Director shall not approve any such contract which

(a) subjects the company to excessive charges for expenses or commissions;

(b) vests in the agent or agency company any control over the management of the affairs of the insurance company to the exclusion of the board of directors of the insurance company;

(c) gives to such person, the right to solicit, procure, write or produce a major part of the insurance business for such insurance company and collect and hold the premiums for such unreasonable period as may jeopardize the security of policyholders; or

(d) fails to require such person to make available to the Director or his designees all books, records and documents pertaining to such person's insurance business.

(3) The Director shall not approve any contract with any person if such person or its officers and directors are of known bad character or have been affiliated directly or indirectly through ownership, control, management, reinsurance transactions or other insurance or business relationships with any person or persons known to have been involved in the improper manipulation of assets, accounts or reinsurance. (4) The Director, for the purpose of ascertaining the assets, conditions and affairs of any person having a contract as provided in subsection (1), may examine the books, records, documents and assets of such person.

(5) The Director may, after a hearing held pursuant to Section 401, withdraw his approval of any agency contract theretofore approved by him, if he finds that the basis of his original approval no longer exist, or that the contract has, in actual operation, shown itself to be subject to disapproval on any of the grounds referred to in subsections (2) and (3) above.

(Source: P.A. 84‑714.)

(215 ILCS 5/141a) (from Ch. 73, par. 753a)

Sec. 141a. Managing general agents and retrospective compensation agreements.

(a) As used in this Section, the following terms have the following meanings:

"Actuary" means a person who is a member in good standing of the American Academy of Actuaries.

"Gross direct written premium" means direct premium including policy and membership fees, net of returns and cancellations, and prior to any cessions.

"Insurer" means any person duly licensed in this State as an insurance company pursuant to Articles II, III, III 1/2, IV, V, VI, and XVII of this Code.

"Managing general agent" means any person, firm, association, or corporation, either separately or together with affiliates, that:

(1) manages all or part of the insurance business of an insurer (including the management of a separate division, department, or underwriting office), and

(2) acts as an agent for the insurer whether known as a managing general agent, manager, or other similar term, and

(3) with or without the authority produces, directly or indirectly, and underwrites:

(A) within any one calendar quarter, an amount of gross direct written premium equal to or more than 5% of the policyholders' surplus as reported in the insurer's last annual statement, or

(B) within any one calendar year, an amount of gross direct written premium equal to or more than 8% of the policyholders' surplus as reported in the insurer's last annual statement, and either

(4) has the authority to bind the company in settlement of individual claims in amounts in excess of $500, or

(5) has the authority to negotiate reinsurance on behalf of the insurer.

Notwithstanding the provisions of items (1) through (5), the following persons shall not be considered to be managing general agents for the purposes of this Code:

(1) An employee of the insurer;

(2) A U.S. manager of the United States branch of an alien insurer;

(3) An underwriting manager who, pursuant to a contract meeting the standards of Section 141.1 manages all or part of the insurance operations of the insurer, is affiliated with the insurer, subject to Article VIII 1/2, and whose compensation is not based on the volume of premiums written;

(4) The attorney or the attorney in fact authorized and acting for or on behalf of the subscriber policyholders of a reciprocal or inter‑insurance exchange, under the terms of the subscription agreement, power of attorney, or policy of insurance or the attorney in fact for any Lloyds organization licensed in this State.

"Retrospective compensation agreement" means any arrangement, agreement, or contract having as its purpose the actual or constructive retention by the insurer of a fixed proportion of the gross premiums, with the balance of the premiums, retained actually or constructively by the agent or the producer of the business, who assumes to pay therefrom all losses, all subordinate commission, loss adjustment expenses, and his profit, if any, with other provisions of the arrangement, agreement, or contract being auxiliary or incidental to that purpose.

"Underwrite" means to accept or reject risk on behalf of the insurer.

(b) Licensure of managing general agents.

(1) No person, firm, association, or corporation shall act in the capacity of a managing general agent with respect to risks located in this State for an insurer licensed in this State unless the person is a licensed producer or a registered firm in this State under Article XXXI of this Code or a licensed third party administrator in this State under Article XXXI 1/4 of this Code.

(2) No person, firm, association, or corporation shall act in the capacity of a managing general agent with respect to risks located outside this State for an insurer domiciled in this State unless the person is a licensed producer or a registered firm in this State under Article XXXI of this Code or a licensed third party administrator in this State under Article XXXI 1/4 of this Code.

(3) The managing general agent must provide a surety bond for the benefit of the insurer in an amount equal to the greater of $100,000 or 5% of the gross direct written premium underwritten by the managing general agent on behalf of the insurer. The bond shall provide for a discovery period and prior notification of cancellation in accordance with the rules of the Department unless otherwise approved in writing by the Director.

(4) The managing general agent must maintain an errors and omissions policy for the benefit of the insurer with coverage in an amount equal to the greater of $1,000,000 or 5% of the gross direct written premium underwritten by the managing general agent on behalf of the insurer.

(5) Evidence of the existence of the bond and the errors and omissions policy must be made available to the Director upon his request.

(c) No person, firm, association, or corporation acting in the capacity of a managing general agent shall place business with an insurer unless there is in force a written contract between the parties that sets forth the responsibilities of each party, that, if both parties share responsibility for a particular function, specifies the division of responsibility, and that contains the following minimum provisions:

(1) The insurer may terminate the contract for cause upon written notice to the managing general agent. The insurer may suspend the underwriting authority of the managing general agent during the pendency of any dispute regarding the cause for termination.

(2) The managing general agent shall render accounts to the insurer detailing all transactions and remit all funds due under the contract to the insurer on not less than a monthly basis.

(3) All funds collected for the account of an insurer shall be held by the managing general agent in a fiduciary capacity in a bank that is a federally or State chartered bank and that is a member of the Federal Deposit Insurance Corporation. This account shall be used for all payments on behalf of the insurer; however, the managing general agent shall not have authority to draw on any other accounts of the insurer. The managing general agent may retain no more than 3 months estimated claims payments and allocated loss adjustment expenses.

(4) Separate records of business written by the managing general agent will be maintained. The insurer shall have access to and the right to copy all accounts and records related to its business in a form usable by the insurer, and the Director shall have access to all books, bank accounts, and records of the managing general agent in a form usable to the Director.

(5) The contract may not be assigned in whole or part by the managing general agent.

(6) The managing general agent shall provide to the company audited financial statements required under paragraph (1) of subsection (d).

(7) That appropriate underwriting guidelines be followed, which guidelines shall stipulate the following:

(A) the maximum annual premium volume;

(B) the basis of the rates to be charged;

(C) the types of risks that may be written;

(D) maximum limits of liability;

(E) applicable exclusions;

(F) territorial limitations;

(G) policy cancellation provisions; and

(H) the maximum policy period.

(8) The insurer shall have the right to: (i) cancel or nonrenew any policy of insurance subject to applicable laws and regulations concerning those actions; and (ii) require cancellation of any subproducer's contract after appropriate notice.

(9) If the contract permits the managing general agent to settle claims on behalf of the insurer:

(A) all claims must be reported to the company in a timely manner.

(B) a copy of the claim file must be sent to the insurer at its request or as soon as it becomes known that the claim:

(i) has the potential to exceed an amount determined by the company;

(ii) involves a coverage dispute;

(iii) may exceed the managing general agent's claims settlement authority;

(iv) is open for more than 6 months; or

(v) is closed by payment of an amount set by the company.

(C) all claim files will be the joint property of the insurer and the managing general agent. However, upon an order of liquidation of the insurer, the files shall become the sole property of the insurer or its estate; the managing general agent shall have reasonable access to and the right to copy the files on a timely basis.

(D) any settlement authority granted to the managing general agent may be terminated for cause upon the insurer's written notice to the managing general agent or upon the termination of the contract. The insurer may suspend the settlement authority during the pendency of any dispute regarding the cause for termination.

(10) Where electronic claims files are in existence, the contract must address the timely transmission of the data.

(11) If the contract provides for a sharing of interim profits by the managing general agent and the managing general agent has the authority to determine the amount of the interim profits by establishing loss reserves, controlling claim payments, or by any other manner, interim profits will not be paid to the managing general agent until one year after they are earned for property insurance business and until 5 years after they are earned on casualty business and in either case, not until the profits have been verified.

(12) The managing general agent shall not:

(A) Bind reinsurance or retrocessions on behalf of the insurer, except that the managing general agent may bind facultative reinsurance contracts under obligatory facultative agreements if the contract with the insurer contains reinsurance underwriting guidelines including, for both reinsurance assumed and ceded, a list of reinsurers with which automatic agreements are in effect, the coverages and amounts or percentages that may be reinsured, and commission schedules.

(B) Appoint any producer without assuring that the producer is lawfully licensed to transact the type of insurance for which he is appointed.

(C) Without prior approval of the insurer, pay or commit the insurer to pay a claim over a specified amount, net of reinsurance, that shall not exceed 1% of the insurer's policyholders' surplus as of December 31 of the last completed calendar year.

(D) Collect any payment from a reinsurer or commit the insurer to any claim settlement with a reinsurer without prior approval of the insurer. If prior approval is given, a report must be promptly forwarded to the insurer.

(E) Permit its subproducer to serve on its board of directors.

(F) Employ an individual who is also employed by the insurer.

(13) The contract may not be written for a term of greater than 5 years.

(d) Insurers shall have the following duties:

(1) The insurer shall have on file the managing general agent's audited financial statements as of the end of the most recent fiscal year prepared in accordance with Generally Accepted Accounting Principles. The insurer shall notify the Director if the auditor's opinion on those statements is other than an unqualified opinion. That notice shall be given to the Director within 10 days of receiving the audited financial statements or becoming aware that such opinion has been given.

(2) If a managing general agent establishes loss reserves, the insurer shall annually obtain the opinion of an actuary attesting to the adequacy of loss reserves established for losses incurred and outstanding on business produced by the managing general agent, in addition to any other required loss reserve certification.

(3) The insurer shall periodically (at least semiannually) conduct an on‑site review of the underwriting and claims processing operations of the managing general agent.

(4) Binding authority for all reinsurance contracts or participation in insurance or reinsurance syndicates shall rest with an officer of the insurer, who shall not be affiliated with the managing general agent.

(5) Within 30 days of entering into or terminating a contract with a managing general agent, the insurer shall provide written notification of the appointment or termination to the Director. Notices of appointment of a managing general agent shall include a statement of duties that the applicant is expected to perform on behalf of the insurer, the lines of insurance for which the applicant is to be authorized to act, and any other information the Director may request.

(6) An insurer shall review its books and records each quarter to determine if any producer has become a managing general agent. If the insurer determines that a producer has become a managing general agent, the insurer shall promptly notify the producer and the Director of that determination, and the insurer and producer must fully comply with the provisions of this Section within 30 days of the notification.

(7) The insurer shall file any managing general agent contract for the Director's approval within 45 days after the contract becomes subject to this Section. Failure of the Director to disapprove the contract within 45 days shall constitute approval thereof. Upon expiration of the contract, the insurer shall submit the replacement contract for approval. Contracts filed under this Section shall be exempt from filing under Sections 141, 141.1 and 131.20a.

(8) An insurer shall not appoint to its board of directors an officer, director, employee, or controlling shareholder of its managing general agents. This provision shall not apply to relationships governed by Article VIII 1/2 of this Code.

(e) The acts of a managing general agent are considered to be the acts of the insurer on whose behalf it is acting. A managing general agent may be examined in the same manner as an insurer.

(f) Retrospective compensation agreements for business written under Section 4 of this Code in Illinois and outside of Illinois by an insurer domiciled in this State must be filed for approval. The standards for approval shall be as set forth under Section 141 of this Code.

(g) Unless specifically required by the Director, the provisions of this Section shall not apply to arrangements between a managing general agent not underwriting any risks located in Illinois and a foreign insurer domiciled in an NAIC accredited state that has adopted legislation substantially similar to the NAIC Managing General Agents Model Act. "NAIC accredited state" means a state or territory of the United States having an insurance regulatory agency that maintains an accredited status granted by the National Association of Insurance Commissioners.

(h) If the Director determines that a managing general agent has not materially complied with this Section or any regulation or order promulgated hereunder, after notice and opportunity to be heard, the Director may order a penalty in an amount not exceeding $100,000 for each separate violation and may order the revocation or suspension of the producer's license. If it is found that because of the material noncompliance the insurer has suffered any loss or damage, the Director may maintain a civil action brought by or on behalf of the insurer and its policyholders and creditors for recovery of compensatory damages for the benefit of the insurer and its policyholders and creditors or other appropriate relief. This subsection (h) shall not be construed to prevent any other person from taking civil action against a managing general agent.

(i) If an Order of Rehabilitation or Liquidation is entered under Article XIII and the receiver appointed under that Order determines that the managing general agent or any other person has not materially complied with this Section or any regulation or Order promulgated hereunder and the insurer suffered any loss or damage therefrom, the receiver may maintain a civil action for recovery of damages or other appropriate sanctions for the benefit of the insurer.

Any decision, determination, or order of the Director under this subsection shall be subject to judicial review under the Administrative Review Law.

Nothing contained in this subsection shall affect the right of the Director to impose any other penalties provided for in this Code.

Nothing contained in this subsection is intended to or shall in any manner limit or restrict the rights of policyholders, claimants, and auditors.

(j) A domestic company shall not during any calendar year write, through a managing general agent or managing general agents, premiums in an amount equal to or greater than its capital and surplus as of the preceding December 31st unless the domestic company requests in writing the Director's permission to do so and the Director has either approved the request or has not disapproved the request within 45 days after the Director received the request.

No domestic company with less than $5,000,000 of capital and surplus may write any business through a managing general agent unless the domestic company requests in writing the Director's permission to do so and the Director has either approved the request or has not disapproved the request within 45 days after the Director received the request.

(Source: P.A. 93‑32, eff. 7‑1‑03.)

(215 ILCS 5/141.01) (from Ch. 73, par. 753.01)

Sec. 141.01. No company authorized to do business in Illinois shall cancel, terminate or refuse to renew any policy on the ground that the company's contract with the agent through whom such policy was obtained has been terminated. This provision shall not alter any contract between the agent and the company regarding ownership of expirations where the agent is able to place the policy with another insurer with similar coverage to the satisfaction of the insured.

(Source: P.A. 80‑1374.)

(215 ILCS 5/141.02) (from Ch. 73, par. 753.02)

Sec. 141.02. (1) Definitions. For purposes of this Section an independent insurance agent is any licensed agent representing an insurance company on an independent contractor basis and not as an employee. This term shall include only those agents not obligated by contract to place insurance accounts with any insurance company or group of companies. This Section shall only apply to contracts which have been effective for more than one year between an independent insurance agent and any company authorized in this State for the purpose of transacting the kind or kinds of business enumerated in Class 2 or Class 3 of Section 4 of this Code, except accident and health insurance.

(2) Rehabilitation. In an effort to avoid termination, the company and agent may endeavor to reach mutual agreement on a written plan for rehabilitation for a period of time agreed by them. Any written plan agreed upon shall identify the problem areas and specify what the agent must do in an effort to avoid termination.

(3) Notice of Termination. Contracts between the independent insurance agent and any company shall not be terminated by the company except by signed mutual agreement at the time of written termination notice or unless the company provides 180 days written notice to the independent insurance agent prior to the effective date of termination. The effective date of termination shall be 180 days from the date of mailing of the termination notice. The company must maintain proof of mailing of the termination notice on a recognized U.S. Post Office form.

(4) Renewals following termination. A. During the 180 days notice or other mutually agreed time period the independent insurance agent shall not write or bind any new business on behalf of the terminating company without specific written approval.

B. The terminating company shall, following the date of termination, renew all policies written by the independent insurance agent for one policy term or for a period of one year if the policy period is longer than one year unless:

(a) the policies do not meet the insurer's underwriting standards; or

(b) the independent insurance agent notifies the insurer in writing that the policy has been placed with another insurer.

C. If a renewal policy does not meet the underwriting requirements, the terminating insurer must give the independent insurance agent 60 days notice of its intention not to renew.

D. The rate of commission and renewal terms shall be in accordance with those in effect immediately prior to termination. The commission must be paid only through the first renewal subsequent to the effective date of the termination.

(5) Paragraphs (1) through (4) of this Section shall not apply to terminations for abandonment, insolvency of the terminating company, gross and willful misconduct, refusal, suspension, revocation or termination of the agent's license by the Director of Insurance, sale or material change of ownership of agency, fraud, material misrepresentation or failure to pay such independent insurance agent's account less the independent insurance agent's commission and any disputed items within 30 days after written demand by the company.

(Source: P.A. 85‑334.)

(215 ILCS 5/141.03) (from Ch. 73, par. 753.03)

Sec. 141.03. Insurance companies authorized to do business in this State shall not refuse to do business with an independent insurance agent representing an insurance company as an independent contractor and not as an employee solely on account of the volume of insurance written by that agent prior to affiliation with such company.

(Source: P.A. 84‑742.)

(215 ILCS 5/141.1) (from Ch. 73, par. 753.1)

Sec. 141.1. Management contracts and service agreements. All agreements or contracts under which any person, organization or corporation is delegated management duties or control of any domestic company, or which transfer a substantial part of any major function of a domestic company such as adjustment of losses, production of business, investment of assets or general servicing of the company's business must be filed with the Department on or before the effective date of such contract or agreement. The Director may upon notice review these arrangements entered by foreign companies.

There shall be exempted from the filing requirement of this Section contracts by groups of affiliated companies on a "pooled" funds basis or service company management basis, where costs to the individual member companies are charged on an actually incurred or closely estimated basis. However, these contracts must be reduced to written form.

Sections 141.1, 141.2, and 141.3 shall not apply to any power of attorney or other authority authorized by Section 67 of this Code.

(Source: P.A. 91‑357, eff. 7‑29‑99.)

(215 ILCS 5/141.2) (from Ch. 73, par. 753.2)

Sec. 141.2. Grounds for disapproval.

The Director must disapprove any such management contract or service agreement if, at any time, he finds:

(1) that the service or management charges are based upon criteria unrelated either to the managed company's profits or to the reasonable customary and usual charges for such services or are based on factors unrelated to the value of such services to the company; or

(2) that management personnel or other employees of the insurance company are to be performing management functions and receiving any remuneration therefor through the management or service contract in addition to the compensation by way of salary received directly from the insurance company for their services; or

(3) that the contract would transfer substantial control of the company or any of the powers vested in the board of directors, by statute, articles of incorporation or by‑laws, or substantially all of the basic functions of the insurance company management; or

(4) that the contract contains provisions which would be clearly detrimental to the best interests of policyholders, stockholders or members of the company; or

(5) that the officers and directors of the management firm are of known bad character or have been affiliated, directly or indirectly, through ownership, control, management, reinsurance transactions or other insurance or business relations with any person or persons known to have been involved in the improper manipulation of assets, accounts or reinsurance.

If the Director disapproves of any management contract or service agreement, notice of such action shall be given to the company assigning the reasons therefor in writing. The Director shall grant any party to the contract a hearing upon request according to Article XXIV of this Code.

(Source: P.A. 77‑1040.)

(215 ILCS 5/141.3) (from Ch. 73, par. 753.3)

Sec. 141.3. Supplement to annual statement.

Any company which has a management contract shall file with its annual statement a supplement on forms prescribed by the Director which discloses the following: Salaries, commissions, or any valuable consideration paid to each officer and director of the management company or to any shareholder who owns, directly or indirectly, 10% of the shares of either the managed insurance company or the management company.

Any changes in the officers or directors of the managing company are to be reported to the Director in accordance with Section 155.04.

(Source: Laws 1967, p. 1818.)

(215 ILCS 5/141.4)

Sec. 141.4. Disclosure of material transactions.

(a) An insurer domiciled in this State shall file a report with the Director disclosing material acquisitions and dispositions of assets or material nonrenewals, cancellations, or revisions of ceded reinsurance agreements unless the acquisitions and dispositions of assets or the material nonrenewals, cancellations, or revisions of ceded reinsurance agreements have been otherwise submitted to the Director for review, approval, or information purposes. The report must be filed no later than 15 days after the end of the calendar month in which a reportable transaction occurs. A copy of the report, including any exhibits or other attachments filed as a part of the report, shall be filed with the National Association of Insurance Commissioners. All reports obtained by or disclosed to the Director under this Section shall be given confidential treatment and shall not be subject to subpoena and shall not be made public by the Director, the National Association of Insurance Commissioners, or any other person, except to insurance departments of other states, without the prior written consent of the insurer to which it pertains unless the Director, after giving the insurer who would be affected notice and an opportunity to be heard, determines that the interests of policyholders, shareholders, or the public will be served by publication, in which event the Director may publish all or any part in the manner the Director may deem appropriate.

(b) Asset acquisitions or dispositions that are not material do not have to be reported under this Section. For purposes of this Section, a material acquisition (or the aggregate of any series of related acquisitions during any 30 day period) or disposition (or the aggregate of any series of related dispositions during any 30 day period) is one that is nonrecurring and not in the ordinary course of business and involves more than 5% of the reporting insurer's total admitted assets as reported in its most recent statutory financial statement filed with the Director. Asset acquisitions subject to this Section include, but are not limited to, every purchase, lease, exchange, merger, consolidation, succession, or other acquisition other than the construction or development of real property by or for the reporting insurer or the acquisition of materials for that purpose. Asset dispositions subject to this Section include, but are not limited to, every sale, lease, exchange, merger, consolidation, mortgage, hypothecation, assignment (whether for the benefit of creditors or otherwise), abandonment, destruction, or other disposition. All of the following information shall be disclosed in the report of a material acquisition or disposition of assets:

(1) Date of the transaction.

(2) Manner of acquisition or disposition.

(3) Description of the assets involved.

(4) Nature and amount of the consideration received or given.

(5) Purpose of, or reason for, the transaction.

(6) Manner by which the amount of consideration was determined.

(7) Gain or loss recognized or realized as a result of the transaction.

(8) Name of the person from whom the assets were acquired or to whom they were disposed.

Insurers shall report acquisitions and dispositions on a nonconsolidated basis unless the insurer is part of a consolidated group of insurers that utilizes a pooling arrangement or a 100% reinsurance agreement that affects the solvency and integrity of the insurer's reserves and the insurer ceded substantially all of its direct and assumed business to the pool. An insurer is deemed to have ceded substantially all of its direct and assumed business to a pool if the insurer has less than $1,000,000 total direct plus assumed written premiums during a calendar year that are not subject to a pooling arrangement and the net income of the business not subject to the pooling arrangement represents less than 5% of the insurer's capital and surplus.

(c) Ceded reinsurance agreement nonrenewals, cancellations, or revisions that are not material do not have to be reported under this Section. For purposes of this Section, a material nonrenewal, cancellation, or revision is one that affects:

(1) For property and casualty business, including accident and health business written by a property and casualty insurer:

(A) more than 50% of the insurer's total ceded written premium; or

(B) more than 50% of the insurer's total ceded indemnity and loss adjustment reserves.

(2) For life, annuity, and accident and health business: more than 50% of the total reserve credit taken for business ceded, on an annual basis, as indicated in the insurer's most recent annual statement.

(3) Property and casualty or life, annuity, and accident and health business:

(A) an authorized reinsurer representing more than 10% of total cession is replaced by one or more unauthorized reinsurers; or

(B) previously established collateral requirements have been reduced or waived as respects one or more unauthorized reinsurer representing collectively more than 10% of a total cession.

With respect to property and casualty business, including accident and health business written by a property and casualty insurer, no filing shall be required if the insurer's total ceded written premium represents, on an annualized basis, less than 10% of its total written premium for direct and assumed business. With respect to life, annuity, and accident and health business, no filing shall be required if the total reserve credit taken for business ceded represents, on an annualized basis, less than 10% of the statutory reserve requirement prior to any cession.

All of the following information shall be disclosed in the report of a material nonrenewal, cancellation, or revision of ceded reinsurance agreements:

(1) Effective date of the nonrenewal, cancellation or revision.

(2) The description of the transaction with an identification of the initiator thereof.

(3) Purpose of, or reason for, the transaction.

(4) The identity of the replacement insurers, if applicable.

Insurers shall report all material nonrenewals, cancellations, or revisions of ceded reinsurance agreements on a nonconsolidated basis unless the insurer is part of a consolidated group of insurers that utilizes a pooling arrangement or 100% reinsurance agreement that affects the solvency and integrity of the insurer's reserves and the insurer ceded substantially all of its direct and assumed business to the pool. An insurer is deemed to have ceded substantially all of its direct and assumed business to a pool if the insurer has less than $1,000,000 of total direct plus assumed written premiums during a calendar year that are not subject to the pooling arrangement and the net income of the business not subject to the pooling arrangement represents less than 5% of the insurer's capital and surplus.

(Source: P.A. 89‑97, eff. 7‑7‑95.)

(215 ILCS 5/142) (from Ch. 73, par. 754)

Sec. 142. Notice of amendment or change in by‑laws. Subject to the provisions of section 292.1 applicable to fraternal benefit societies, notice of any amendment or change in a company's by‑laws setting forth such amendment or change, certified by its president, secretary, or officer corresponding thereto, shall be delivered to the Director within thirty days after such amendment or change.

(Source: P.A. 86‑753.)

(215 ILCS 5/143) (from Ch. 73, par. 755)

Sec. 143. Policy forms.

(1) Life, accident and health. No company transacting the kind or kinds of business enumerated in Classes 1 (a), 1 (b) and 2 (a) of Section 4 shall issue or deliver in this State a policy or certificate of insurance or evidence of coverage, attach an endorsement or rider thereto, incorporate by reference bylaws or other matter therein or use an application blank in this State until the form and content of such policy, certificate, evidence of coverage, endorsement, rider, bylaw or other matter incorporated by reference or application blank has been filed electronically with the Director, either through the System for Electronic Rate and Form Filing (SERFF) or as otherwise prescribed by the Director, and approved by the Director. The Department shall mail a quarterly invoice to the company for the appropriate filing fees required under Section 408. Any such endorsement or rider that unilaterally reduces benefits and is to be attached to a policy subsequent to the date the policy is issued must be filed with, reviewed, and formally approved by the Director prior to the date it is attached to a policy issued or delivered in this State. It shall be the duty of the Director to withhold approval of any such policy, certificate, endorsement, rider, bylaw or other matter incorporated by reference or application blank filed with him if it contains provisions which encourage misrepresentation or are unjust, unfair, inequitable, ambiguous, misleading, inconsistent, deceptive, contrary to law or to the public policy of this State, or contains exceptions and conditions that unreasonably or deceptively affect the risk purported to be assumed in the general coverage of the policy. In all cases the Director shall approve or disapprove any such form within 60 days after submission unless the Director extends by not more than an additional 30 days the period within which he shall approve or disapprove any such form by giving written notice to the insurer of such extension before expiration of the initial 60 days period. The Director shall withdraw his approval of a policy, certificate, evidence of coverage, endorsement, rider, bylaw, or other matter incorporated by reference or application blank if he subsequently determines that such policy, certificate, evidence of coverage, endorsement, rider, bylaw, other matter, or application blank is misrepresentative, unjust, unfair, inequitable, ambiguous, misleading, inconsistent, deceptive, contrary to law or public policy of this State, or contains exceptions or conditions which unreasonably or deceptively affect the risk purported to be assumed in the general coverage of the policy or evidence of coverage.

If a previously approved policy, certificate, evidence of coverage, endorsement, rider, bylaw or other matter incorporated by reference or application blank is withdrawn for use, the Director shall serve upon the company an order of withdrawal of use, either personally or by mail, and if by mail, such service shall be completed if such notice be deposited in the post office, postage prepaid, addressed to the company's last known address specified in the records of the Department of Insurance. The order of withdrawal of use shall take effect 30 days from the date of mailing but shall be stayed if within the 30‑day period a written request for hearing is filed with the Director. Such hearing shall be held at such time and place as designated in the order given by the Director. The hearing may be held either in the City of Springfield, the City of Chicago or in the county where the principal business address of the company is located. The action of the Director in disapproving or withdrawing such form shall be subject to judicial review under the Administrative Review Law.

This subsection shall not apply to riders or endorsements issued or made at the request of the individual policyholder relating to the manner of distribution of benefits or to the reservation of rights and benefits under his life insurance policy.

(2) Casualty, fire, and marine. The Director shall require the filing of all policy forms issued or delivered by any company transacting the kind or kinds of business enumerated in Classes 2 (except Class 2 (a)) and 3 of Section 4. In addition, he may require the filing of any generally used riders, endorsements, certificates, application blanks, and other matter incorporated by reference in any such policy or contract of insurance. The Department shall mail a quarterly invoice to the company for the appropriate filing fees required under Section 408. Companies that are members of an organization, bureau, or association may have the same filed for them by the organization, bureau, or association. If the Director shall find from an examination of any such policy form, rider, endorsement, certificate, application blank, or other matter incorporated by reference in any such policy so filed that it (i) violates any provision of this Code, (ii) contains inconsistent, ambiguous, or misleading clauses, or (iii) contains exceptions and conditions that will unreasonably or deceptively affect the risks that are purported to be assumed by the policy, he shall order the company or companies issuing these forms to discontinue their use. Nothing in this subsection shall require a company transacting the kind or kinds of business enumerated in Classes 2 (except Class 2 (a)) and 3 of Section 4 to obtain approval of these forms before they are issued nor in any way affect the legality of any policy that has been issued and found to be in conflict with this subsection, but such policies shall be subject to the provisions of Section 442.

(3) This Section shall not apply (i) to surety contracts or fidelity bonds, (ii) to policies issued to an industrial insured as defined in Section 121‑2.08 except for workers' compensation policies, nor (iii) to riders or endorsements prepared to meet special, unusual, peculiar, or extraordinary conditions applying to an individual risk.

(Source: P.A. 93‑1083, eff. 2‑7‑05.)

(215 ILCS 5/143.01) (from Ch. 73, par. 755.01)

Sec. 143.01. (a) A provision in a policy of vehicle insurance described in Section 4 excluding coverage for bodily injury to members of the family of the insured shall not be applicable when a third party acquires a right of contribution against a member of the injured person's family.

(b) A provision in a policy of vehicle insurance excluding coverage for bodily injury to members of the family of the insured shall not be applicable when any person not in the household of the insured was driving the vehicle of the insured involved in the accident which is the subject of the claim or lawsuit.

This subsection (b) applies to any action filed on or after its effective date.

(Source: P.A. 83‑1132.)

(215 ILCS 5/143.1) (from Ch. 73, par. 755.1)

Sec. 143.1. Periods of limitation tolled. Whenever any policy or contract for insurance, except life, accident and health, fidelity and surety, and ocean marine policies, contains a provision limiting the period within which the insured may bring suit, the running of such period is tolled from the date proof of loss is filed, in whatever form is required by the policy, until the date the claim is denied in whole or in part.

(Source: P.A. 82‑352.)

(215 ILCS 5/143.10) (from Ch. 73, par. 755.10)

Sec. 143.10. No company shall cancel or refuse to issue or renew a policy on the sole basis that the insured or applicant for such policy was previously refused issuance or renewal of a policy by any insurer, or such insured's policy was cancelled on a prior date by any insurer.

(Source: P.A. 80‑1374.)

(215 ILCS 5/143.10a) (from Ch. 73, par. 755.10a)

Sec. 143.10a. Loss Information.

(1) All companies issuing policies to which Section 143.11 of this Code applies, except for those defined in subsections (a), (b) and (c) of Section 143.13 of this Code and to which subsection (o) of Section 19 of the Workers' Compensation Act applies, shall on or after January 1, 1987, provide the following loss information for the 3 previous policy years to the first named insured within 30 days of the insured's request. At the written request of the insured, the company shall send the loss information directly to the insured's producer. In addition, the company shall also send the loss information at the same time as any notice of cancellation or nonrenewal, except where the policy has been cancelled for nonpayment of premium, material misrepresentations or fraud on the part of the insured:

(a) On closed claims, date and description of occurrence, and total amounts of payments;

(b) On open claims, date and description of occurrence, total amount of payments and total reserves, if any; and

(c) For any occurrence not included in (a) or (b) of this subsection (1), the date and description of occurrence and total reserves, if any.

(2) Should a named insured be required by a prospective insurer to provide detailed loss information in addition to that required under subsection (1) of this Section, the named insured may mail or deliver a written request to the insurer for such additional information, including specific loss reserves. No prospective insurer shall request, however, more detailed information than required by it to underwrite the same line or class of insurance. The insurer shall provide such information to the first named insured as soon as possible, but in no event later than 20 days of receipt of such request. Coverage under the existing policy shall automatically be extended at the same terms and conditions by the same number of days it takes the insurer to provide the insured with this additional information.

(3) The Director may promulgate regulations to exclude the automatic providing of the loss information at the time of cancellation or renewal as outlined in subsection (1) of this Section for any line or class of insurance where it can be shown that the information is not needed for that line or class of insurance.

(4) If a company fails to provide the information as required by this Section with such frequency so as to indicate a practice of refusing to provide such information, such failure shall constitute an unfair trade practice as defined in Section 424 and subject to those hearing and penalty provisions as set forth in Sections 425 through 434.

(5) Information provided under subsection (2) of this Section shall not be subject to discovery by any party other than the insured, the insurer, and the prospective insurer.

(Source: P.A. 93‑155, eff. 7‑10‑03.)

(215 ILCS 5/143.10b) (from Ch. 73, par. 755.10b)

Sec. 143.10b. Loss information, private passenger automobile.

(1) All companies issuing a "policy of automobile insurance" as defined in paragraph (a) of Section 143.13 of this Code shall, on or after January 1, 1990, provide the following loss information for the 5 previous policy years to the named insured within 30 days of the insured's written request:

(a) on closed claims, date and description of occurrence, and total amount of payments;

(b) on open claims, date and description of occurrence and total amount of payments;

(c) for any occurrence not included in (a) or (b) of this subsection, the date and description of occurrence.

(2) If a company fails to provide the information as required by this Section with such frequency so as to indicate a practice of refusing to provide such information, such failure shall constitute an unfair trade practice as defined in Section 424 and subject to those hearing and penalty provisions as set forth in Sections 425 through 434 of this Code.

(Source: P.A. 90‑196, eff. 1‑1‑98.)

(215 ILCS 5/143.10c) (from Ch. 73, par. 755.10c)

Sec. 143.10c. No insurance company that is authorized to do business in this State and which issues policies for personal multiperil property coverage, commonly known as homeowners insurance, may refuse to issue or renew a homeowners insurance policy to the owner or tenant of any single family dwelling, or to any owner of or tenant residing in a multi‑unit residential dwelling which contains from 2 to 4 units in a single building, solely on the grounds that a space heater is being used inside the dwelling.

For purposes of this Section space heater means a heat radiating device used to warm rooms of a house or apartment and which is approved by Underwriters' Laboratories and uses gas, electricity or oil as its primary source of energy.

(Source: P.A. 86‑174; 86‑1028.)

(215 ILCS 5/143.11) (from Ch. 73, par. 755.11)

Sec. 143.11. Cancellation Provisions. All companies authorized to transact in this State the kinds of business enumerated in Section 4 of the "Illinois Insurance Code" shall include in their policies, except life, accident and health, fidelity and surety, and ocean marine policies, a cancellation provision setting out the manner in which such policies may be cancelled. However, nothing contained in Section 143.12 through Section 143.24 shall apply to contracts of reinsurance or to contracts procured by agents under the authority of Section 445.

(Source: P.A. 80‑1365.)

(215 ILCS 5/143.11a) (from Ch. 73, par. 755.11a)

Sec. 143.11a. Termination of Lines of Business. No company authorized to transact, in this State, the kinds of business enumerated in Section 4 of this Code, except life, accident and health, fidelity and surety, and ocean marine policies, may terminate any line of insurance without notifying the Director of the action as well as reasons for the action, 90 days before termination of any policy is effective. The notice shall include all data relied upon by the company as the basis for such action and shall disclose whether the company offers and will continue to offer such kinds of insurance in any other State. For the purposes of this Section, termination of a line of insurance shall mean cancellation or non‑renewal of a substantial portion of any type of business for the purpose of withdrawing from the market.

(Source: P.A. 84‑1431.)

(215 ILCS 5/143.11b)

Sec. 143.11b. Assignment or transfer of property and casualty policies. An assignment or transfer of a policy of insurance to which Section 143.11 applies among or between insurers within an insurance holding company system or insurers under common management or control, or as a result of a merger, acquisition, or restructuring of an insurance company, is not a nonrenewal for purposes of the notification requirements under Sections 143.12 through 143.24. However, in the event of an increase in the renewal premium of 30% or more, change in deductibles or change in coverage that materially alters any policy to which subsection b of Section 143.17a applies, the company shall adhere to the provisions set forth in subsection b of Section 143.17a. A company making an assignment or transfer of a policy among or between insurers within an insurance holding company system or insurers under common management or control, or as a result of a merger, acquisition, or restructuring of an insurance company, shall have delivered to the named insured notice of such assignment or transfer at least 60 days prior to the renewal date. An exact and unaltered copy of the notice shall also be sent to the insured's producer, if known, and agent of record. The assignment or transfer of a policy or policies of insurance among or between insurers shall not occur without the producer or agent of record, or both, having a signed agency contract with the entity to which the policy or policies are to be assigned or transferred. If there is not a signed agency contract, all of the notice requirements of Sections 143.17 and 143.17a shall apply. Nothing in this Section shall contravene any existing producer and company contract rights. For purposes of this Section, the insured's producer, if known, and agent of record may opt to accept notification of assignment or transfer of policies electronically.

(Source: P.A. 93‑713, eff. 1‑1‑05.)

(215 ILCS 5/143.12) (from Ch. 73, par. 755.12)

Sec. 143.12. "Short rate" cancellation. Notice required. No agent, broker or other representative or employee of any insurance company shall recommend, advise, suggest or require the cancellation of any insurance policy of the insurer which he represents, or of any other insurer at any time other than the policy anniversary or expiration date, unless he informs the insured in writing of the additional cost of such cancellation before the insured is requested or required to take action to cancel or terminate the policy which is then in force.

(Source: P.A. 79‑686.)

(215 ILCS 5/143.12a) (from Ch. 73, par. 755.12a)

Sec. 143.12a. Automobile insurance; pro rata refund of unearned premium.

(a) In the event of the cancellation of a policy of automobile insurance, as defined in Section 143.13, by either the company or the policyholder, the company shall refund the unearned premium pro rated to the date of cancellation. In no event may the refund of unearned premium be computed by use of a short rate table. Refund of the premium shall be without prejudice to any claim arising prior to the cancellation.

(b) The refund shall be made by the company within 30 days from the following:

(1) the date of the notice of cancellation by the company; or

(2) the date the company receives the request for cancellation from the policyholder.

(Source: P.A. 86‑1408.)

(215 ILCS 5/143.13) (from Ch. 73, par. 755.13)

Sec. 143.13. Definition of terms used in Sections 143.11 through 143.24.

(a) "Policy of automobile insurance" means a policy delivered or issued for delivery in this State, insuring a natural person as named insured or one or more related individuals resident of the same household and under which the insured vehicles therein designated are motor vehicles of the private passenger, station wagon, or any other 4‑wheeled motor vehicle with a load capacity of 1500 pounds or less which is not used in the occupation, profession or business of the insured or not used as a public or livery conveyance for passengers nor rented to others. Policy of automobile insurance shall also mean a named non‑owner's automobile policy.

Policy of automobile insurance does not apply to policies of automobile insurance issued under the Illinois Automobile Insurance Plan, to any policy covering garages, automobile sales agencies, repair shops, service stations or public parking place operation hazards. "Policy of automobile insurance" does not include a policy, binder, or application for which the applicant gives or has given for the initial premium a check or credit card charge that is subsequently dishonored for payment, unless the check or credit card charge was dishonored through no fault of the payor.

(b) "Policy of fire and extended coverage insurance" means a policy delivered or issued for delivery in this State, that includes but is not limited to, the perils of fire and extended coverage, and covers real property used principally for residential purposes up to and including a 4 family dwelling or any household or personal property that is usual or incidental to the occupancy to any premises used for residential purposes.

(c) "All other policies of personal lines" means any other policy of insurance issued to a natural person for personal or family protection.

(d) "Renewal" or "to renew" means (1) any change to an entire line of business in accordance with subsection b‑5 of Section 143.17 and (2) the issuance and delivery by an insurer of a policy superseding at the end of the policy period a policy previously issued and delivered by the same insurer or the issuance and delivery of a certificate or notice extending the term of a policy beyond its policy period or term; however, any successive policies issued by the same insurer to the same insured, for the same or similar coverage, shall be considered a renewal policy.

Any policy with a policy period or term of less than 6 months or any policy with no fixed expiration date shall be considered as if written for successive policy periods or terms of 6 months for the purpose of "renewal" or "to renew" as defined in this paragraph (d) and for the purpose of any non‑renewal notice required by Section 143.17 of this Code.

(e) "Nonpayment of premium" means failure of the named insured to discharge, when due, any of his obligations in connection with the payment of premiums or any installment of such premium that is payable directly to the insurer or to its agent. Premium shall mean the premium that is due for an individual policy which shall not include any membership dues or other consideration required to be a member of any organization in order to be eligible for such policy. The term "nonpayment of premium" does not include a check, credit card charge, or money order that an applicant gives or has given to any person for the initial premium payment for a policy, binder, or application and that is subsequently dishonored for payment, and any policy, binder, or application in connection therewith is void and of no effect and not subject to the cancellation provisions of this Code.

(f) "A policy delivered or issued for delivery in this State" shall include but not be limited to all binders of insurance, whether written or oral, and all applications bound for future delivery by a duly licensed resident agent. A written binder of insurance issued for a term of 60 days or less, which contains on its face a specific inception and expiration date and which a copy has been furnished to the insured, shall not be subject to the non‑renewal requirements of Section 143.17 of this Code.

(g) "Cancellation" or "cancelled" means the termination of a policy by an insurer prior to the expiration date of the policy. A policy of automobile or fire and extended coverage insurance which expires by its own terms on the policy expiration date unless advance premiums are received by the insurer for succeeding policy periods shall not be considered "cancelled" or a "cancellation" effected by the insurer in the event such premiums are not paid on or before the policy expiration date.

(h) "Commercial excess and umbrella liability policy" means a policy written over one or more underlying policies for an insured:

(1) that has at least 25 full‑time employees at the time the commercial excess and umbrella liability policy is written and procures the insurance of any risk or risks, other than life, accident and health, and annuity contracts, as described in clauses (a) and (b) of Class 1 of Section 4 and clause (a) of Class 2 of Section 4, by use of the services of a full‑time employee acting as an insurance manager or buyer; or

(2) whose aggregate annual premiums for all property and casualty insurance on all risks is at least $50,000.

(Source: P.A. 91‑552, eff. 8‑14‑99; 91‑597, eff. 1‑1‑00; 92‑16, eff. 6‑28‑01.)

(215 ILCS 5/143.13a)

Sec. 143.13a. Coverage for permissive drivers. Any policy of private passenger automobile insurance must provide the same limits of bodily injury liability, property damage liability, uninsured and underinsured motorist bodily injury, and medical payments coverage to all persons insured under that policy, whether or not an insured person is a named insured or permissive user under the policy. If the policy insures more than one private passenger automobile, the limits available to the permissive user shall be the limits associated with the vehicle used by the permissive user when the loss occurs.

(Source: P.A. 95‑395, eff. 1‑1‑08.)

(215 ILCS 5/143.14) (from Ch. 73, par. 755.14)

Sec. 143.14. Notice of cancellation.

(a) No notice of cancellation of any policy of insurance, to which Section 143.11 applies, shall be effective unless mailed by the company to the named insured and the mortgage or lien holder, at the last mailing address known by the company. The company shall maintain proof of mailing of such notice on a recognized U.S. Post Office form or a form acceptable to the U. S. Post Office or other commercial mail delivery service. A copy of all such notices shall be sent to the insured's broker if known, or the agent of record, if known, at the last mailing address known to the company. For purposes of this Section, the mortgage or lien holder, insured's broker, if known, or the agent of record may opt to accept notification electronically.

(b) Whenever a financed insurance contract is cancelled, the insurer shall return whatever gross unearned premiums are due under the insurance contract or contracts not to exceed the unpaid balance due the premium finance company directly to the premium finance company effecting the cancellation for the account of the named insured. The return premium must be mailed to the premium finance company within 60 days. The request for the unearned premium by the premium finance company shall be in the manner of a monthly account, current accounting by producer, policy number, unpaid balance and name of insured for each cancelled amount. In the event the insurance contract or contracts are subject to audit, the insurer shall retain the right to withhold the return of the portion of premium that can be identified to the contract or contracts until the audit is completed. Within 30 days of the completion of the audit, if a premium retained by the insurer after crediting the earned premium would result in a surplus, the insurer shall return the surplus directly to the premium finance company. If the audit should result in an additional premium due the insurer, the obligation for the collection of this premium shall fall upon the insurer and not affect any other contract or contracts currently being financed by the premium finance company for the named insured.

(c) Whenever a premium finance agreement contains a power of attorney enabling the premium finance company to cancel any insurance contract or contracts in the agreement, the insurer shall honor the date of cancellation as set forth in the request from the premium finance company without requiring the return of the insurance contract or contracts. The insurer may mail to the named insured an acknowledgment of the notice of cancellation from the premium finance company but the named insured shall not incur any additional premium charge for any extension of coverage. The insurer need not maintain proof of mailing of this notice.

(d) All statutory regulatory and contractual restrictions providing that the insurance contract may not be cancelled unless the required notice is mailed to a governmental agency, mortgagee, lienholder, or other third party shall apply where cancellation is effected under a power of attorney under a premium finance agreement. The insurer shall have the right for a premium charge for this extension of coverage.

(Source: P.A. 93‑713, eff. 1‑1‑05.)

(215 ILCS 5/143.15) (from Ch. 73, par. 755.15)

Sec. 143.15. Mailing of cancellation notice. All notices of cancellation of insurance as defined in subsections (a), (b) and (c) of Section 143.13 must be mailed at least 30 days prior to the effective date of cancellation to the named insured and mortgagee or lien holder, if known, at the last mailing address known to the company. All notices of cancellation shall include a specific explanation of the reason or reasons for cancellation. However, where cancellation is for nonpayment of premium, the notice of cancellation must be mailed at least 10 days before the effective date of the cancellation. For purposes of this Section, the mortgagee or lien holder, if known, may opt to accept notification electronically.

(Source: P.A. 93‑713, eff. 1‑1‑05.)

(215 ILCS 5/143.16) (from Ch. 73, par. 755.16)

Sec. 143.16. Mailing of cancellation notice. All notices of cancellation of insurance to which Section 143.11 applies, except for those defined in subsections (a), (b) and (c) of Section 143.13 must be mailed at least 30 days prior to the effective date of cancellation during the first 60 days of coverage. After the coverage has been effective for 61 days or more, all notices must be mailed at least 60 days prior to the effective date of cancellation. All such notices shall include a specific explanation of the reason or reasons for cancellation and shall be mailed to the named insured and mortgagee or lien holder, if known, at the last mailing address known to the company. However, where cancellation is for nonpayment of premium, the notice of cancellation must be mailed at least 10 days before the effective date of the cancellation. For purposes of this Section, the mortgagee or lien holder, if known, may opt to accept notification electronically.

(Source: P.A. 93‑713, eff. 1‑1‑05.)

(215 ILCS 5/143.16a) (from Ch. 73, par. 755.16a)

Sec. 143.16a. Cancellation of Casualty policies. No policy to which Section 143.11 applies, except for those defined in subsection (a) or (b) of Section 143.13, that has been in effect for 60 days may be cancelled except for one of the following reasons:

(a) Nonpayment of premium;

(b) The policy was obtained through a material misrepresentation;

(c) Any insured violated any of the terms and conditions of the policy;

(d) The risk originally accepted has measurably increased;

(e) Certification to the Director of the loss of reinsurance by the insurer which provided coverage to the insurer for all or a substantial part of the underlying risk insured; or

(f) A determination by the Director that the continuation of the policy could place the insurer in violation of the insurance laws of this State.

(Source: P.A. 84‑1005.)

(215 ILCS 5/143.16b) (from Ch. 73, par. 755.16b)

Sec. 143.16b. Premium Refunds for Drought Insurance. Whenever a person has submitted payment of premium for the purchase of drought insurance described in clause (b) of Class 3 of Section 4 of this Code to an insurer or one of its subsidiaries, employees, agents, or producers, the insurer shall have a duty, within 10 business days of receipt of such premium payment, to either:

(a) refund the premium payment in full; or

(b) accept the premium payment, and provide to the person who has offered such payment policy coverage in full conformity with representations of any application, declaration, binder, or contract of policy coverage issued by the insurer or one of its subsidiaries, employees, agents or producers.

This Section shall not apply to insurance provided, guaranteed or reinsured pursuant to the Federal Crop Insurance Program.

(Source: P.A. 86‑285.)

(215 ILCS 5/143.17) (from Ch. 73, par. 755.17)

Sec. 143.17. Notice of intention not to renew.

a. No company shall fail to renew any policy of insurance, as defined in subsections (a), (b), (c), and (h) of Section 143.13, to which Section 143.11 applies, unless it shall send by mail to the named insured at least 30 days advance notice of its intention not to renew. The company shall maintain proof of mailing of such notice on a recognized U.S. Post Office form or a form acceptable to the U. S. Post Office or other commercial mail delivery service. An exact and unaltered copy of such notice shall also be sent to the insured's broker, if known, or the agent of record and to the mortgagee or lien holder at the last mailing address known by the company. However, where cancellation is for nonpayment of premium, the notice of cancellation must be mailed at least 10 days before the effective date of the cancellation.

b. This Section does not apply if the company has manifested its willingness to renew directly to the named insured. Such written notice shall specify the premium amount payable, including any premium payment plan available, and the name of any person or persons, if any, authorized to receive payment on behalf of the company. If no person is so authorized, the premium notice shall so state. The notice of nonrenewal and the proof of mailing shall be effected on the same date.

b‑5. This Section does not apply if the company manifested its willingness to renew directly to the named insured. However, no company may impose changes in deductibles or coverage for any policy forms applicable to an entire line of business enumerated in subsections (a), (b), (c), and (h) of Section 143.13 to which Section 143.11 applies unless the company mails to the named insured written notice of the change in deductible or coverage at least 60 days prior to the renewal or anniversary date. An exact and unaltered copy of the notice shall also be sent to the insured's broker, if known, or the agent of record.

c. Should a company fail to comply with (a) or (b) of this Section, the policy shall terminate only on the effective date of any similar insurance procured by the insured with respect to the same subject or location designated in both policies.

d. Renewal of a policy does not constitute a waiver or estoppel with respect to grounds for cancellation which existed before the effective date of such renewal.

e. In all notices of intention not to renew any policy of insurance, as defined in Section 143.11 the company shall provide a specific explanation of the reasons for nonrenewal.

f. For purposes of this Section, the insured's broker, if known, or the agent of record and the mortgagee or lien holder may opt to accept notification electronically.

(Source: P.A. 93‑713, eff. 1‑1‑05.)

(215 ILCS 5/143.17a) (from Ch. 73, par. 755.17a)

Sec. 143.17a. Notice of intention not to renew.

(a) A company intending to nonrenew any policy of insurance to which Section 143.11 applies, except for those defined in subsections (a), (b), (c), and (h) of Section 143.13, must mail written notice to the named insured at least 60 days prior to the expiration date of the current policy. In all notices of intention not to renew any policy of insurance, as defined in Section 143.11, the company shall provide a specific explanation of the reasons for nonrenewal. A company may not extend the current policy period for purposes of providing notice of its intention not to renew required under this subsection (a).

(b) A company intending to renew any policy of insurance to which Section 143.11 applies, except for those defined in subsections (a), (b), (c), and (h) of Section 143.13, with an increase in premium of 30% or more or with changes in deductibles or coverage that materially alter the policy must mail or deliver to the named insured written notice of such increase or change in deductible or coverage at least 60 days prior to the renewal or anniversary date. If a company has failed to provide notice of intention to renew required under this subsection (b) at least 60 days prior to the renewal or anniversary date, but does so no less than 31 days prior to the renewal or anniversary date, the company may extend the current policy at the current terms and conditions for the period of time needed to equal the 60 day time period required to provide notice of intention to renew by this subsection (b). The increase in premium shall be the renewal premium based on the known exposure as of the date of the quotation compared to the premium as of the last day of coverage for the current year's policy, annualized. The premium on the renewal policy may be subsequently amended to reflect any change in exposure or reinsurance costs not considered in the quotation.

(c) A company that has failed to provide notice of intention to nonrenew under subsection (a) of this Section and has failed to provide notice of intention to renew as prescribed under subsection (b) of this Section must renew the expiring policy under the same terms and conditions for an additional year or until the effective date of any similar insurance is procured by the insured, whichever is earlier. The company may increase the renewal premium. However, such increase must be less than 30% of the expiring term's premium and notice of such increase must be delivered to the named insured on or before the date of expiration of the current policy period.

(d) Under subsection (a), the company shall maintain proof of mailing of the notice of intention not to renew to the named insured on one of the following forms: a recognized U.S. Post Office form or a form acceptable to the U.S. Post Office or other commercial mail delivery service. Under subsections (b) and (c), proof of mailing or proof of receipt of the notice of intention to renew to the named insured may be proven by a sworn affidavit by the company as to the usual and customary business practices of mailing notice pursuant to this Section or may be proven consistent with Illinois Supreme Court Rule 236. For all notice requirements under this Section, an exact and unaltered copy of the notice to the named insured shall also be sent to the named insured's producer, if known, or the producer of record. For notices of intention to not renew, an exact and unaltered copy of the notice to the named insured shall also be sent to the mortgagee or lien holder at the last mailing address known by the company.

(e) Renewal of a policy does not constitute a waiver or estoppel with respect to grounds for cancellation that existed before the effective date of such renewal.

(f) For purposes of this Section, the named insured's producer, if known, or the producer of record and the mortgagee or lien holder may opt to accept notification electronically.

(Source: P.A. 95‑533, eff. 6‑1‑08.)

(215 ILCS 5/143.18) (from Ch. 73, par. 755.18)

Sec. 143.18. Liability of Company or Agents Regarding Statements Made In Notices Or Information. There shall be no liability on the part of and no cause of action of any nature shall arise against any company, its authorized representative, its agents, its employees, or any firm, person or corporation furnishing to the company information as to reasons for cancellation, or nonrenewal, for any statement made by any of them in any written notice of cancellation or nonrenewal, or any other communications, oral or written, specifying the reasons for cancellation or nonrenewal, or for the providing of information pertaining thereto.

(Source: P.A. 79‑686.)

(215 ILCS 5/143.19) (from Ch. 73, par. 755.19)

Sec. 143.19. Cancellation of Automobile Insurance Policy ‑ Grounds. After a policy of automobile insurance as defined in Section 143.13(a) has been effective for 60 days, or if such policy is a renewal policy, the insurer shall not exercise its option to cancel such policy except for one or more of the following reasons:

a. Nonpayment of premium;

b. The policy was obtained through a material misrepresentation;

c. Any insured violated any of the terms and conditions of the policy;

d. The named insured failed to disclose fully his motor vehicle accidents and moving traffic violations for the preceding 36 months if called for in the application;

e. Any insured made a false or fraudulent claim of knowingly aided or abetted another in the presentation of such a claim;

f. The named insured or any other operator who either resides in the same household or customarily operates an automobile insured under such policy:

1. has, within the 12 months prior to the notice of cancellation, had his driver's license under suspension or revocation;

2. is or becomes subject to epilepsy or heart attacks, and such individual does not produce a certificate from a physician testifying to his unqualified ability to operate a motor vehicle safely;

3. has an accident record, conviction record (criminal or traffic), physical, or mental condition which is such that his operation of an automobile might endanger the public safety;

4. has, within the 36 months prior to the notice of cancellation, been addicted to the use of narcotics or other drugs; or

5. has been convicted, or forfeited bail, during the 36 months immediately preceding the notice of cancellation, for any felony, criminal negligence resulting in death, homicide or assault arising out of the operation of a motor vehicle, operating a motor vehicle while in an intoxicated condition or while under the influence of drugs, being intoxicated while in, or about, an automobile or while having custody of an automobile, leaving the scene of an accident without stopping to report, theft or unlawful taking of a motor vehicle, making false statements in an application for an operator's or chauffeur's license or has been convicted or forfeited bail for 3 or more violations within the 12 months immediately preceding the notice of cancellation, of any law, ordinance, or regulation limiting the speed of motor vehicles or any of the provisions of the motor vehicle laws of any state, violation of which constitutes a misdemeanor, whether or not the violations were repetitions of the same offense of different offenses;

g. The insured automobile is:

1. so mechanically defective that its operation might endanger public safety;

2. used in carrying passengers for hire or compensation (the use of an automobile for a car pool shall not be considered use of an automobile for hire or compensation);

3. used in the business of transportation of flammables or explosives;

4. an authorized emergency vehicle;

5. changed in shape or condition during the policy period so as to increase the risk substantially; or

6. subject to an inspection law and has not been inspected or, if inspected, has failed to qualify.

Nothing in this Section shall apply to nonrenewal.

(Source: P.A. 92‑16, eff. 6‑28‑01.)

(215 ILCS 5/143.19.1) (from Ch. 73, par. 755.19.1)

Sec. 143.19.1. Limits on exercise of right of nonrenewal. After a policy of automobile insurance, as defined in Section 143.13, has been effective or renewed for 5 or more years, the company shall not exercise its right of non‑renewal unless:

a. The policy was obtained through a material misrepresentation; or

b. Any insured violated any of the terms and conditions of the policy; or

c. The named insured failed to disclose fully his motor vehicle accidents and moving traffic violations for the preceding 36 months, if such information is called for in the application; or

d. Any insured made a false or fraudulent claim or knowingly aided or abetted another in the presentation of such a claim; or

e. The named insured or any other operator who either resides in the same household or customarily operates an automobile insured under such a policy:

1. Has, within the 12 months prior to the notice of non‑renewal had his drivers license under suspension or revocation; or

2. Is or becomes subject to epilepsy or heart attacks, and such individual does not produce a certificate from a physician testifying to his unqualified ability to operate a motor vehicle safely; or

3. Has an accident record, conviction record (criminal or traffic), or a physical or mental condition which is such that his operation of an automobile might endanger the public safety; or

4. Has, within the 36 months prior to the notice of non‑renewal, been addicted to the use of narcotics or other drugs; or

5. Has been convicted or forfeited bail, during the 36 months immediately preceding the notice of non‑renewal, for any felony, criminal negligence resulting in death, homicide or assault arising out of the operation of a motor vehicle, operating a motor vehicle while in an intoxicated condition or while under the influence of drugs, being intoxicated while in or about an automobile or while having custody of an automobile, leaving the scene of an accident without stopping to report, theft or unlawful taking of a motor vehicle, making false statements in an application for an operators or chauffeurs license, or has been convicted or forfeited bail for 3 or more violations within the 12 months immediately preceding the notice of non‑renewal, of any law, ordinance or regulation limiting the speed of motor vehicles or any of the provisions of the motor vehicle laws of any state, violation of which constitutes a misdemeanor, whether or not the violations were repetitions of the same offense or different offenses; or

f. The insured automobile is:

1. So mechanically defective that its operation might endanger public safety; or

2. Used in carrying passengers for hire or compensation (the use of an automobile for a car pool shall not be considered use of an automobile for hire or compensation); or

3. Used in the business of transportation of flammables or explosives; or

4. An authorized emergency vehicle; or

5. Changed in shape or condition during the policy period so as to increase the risk substantially; or

6. Subject to an inspection law and it has not been inspected or, if inspected, has failed to qualify; or

g. The notice of the intention not to renew is mailed to the insured at least 60 days before the date of nonrenewal as provided in Section 143.17.

(Source: P.A. 89‑669, eff. 1‑1‑97.)

(215 ILCS 5/143.19a) (from Ch. 73, par. 755.19a)

Sec. 143.19a. No policy of insurance as defined in subsection a. of Section 143.13 of this Act may be cancelled where the sole basis for such cancellation is the payment by the insurance company of a claim or claims against such policy.

(Source: P.A. 80‑1127.)

(215 ILCS 5/143.19b) (from Ch. 73, par. 755.19b)

Sec. 143.19b. No policy of insurance as defined in subsection (a) of Section 143.13 of this Code may be nonrenewed where the sole basis for nonrenewal was the reporting of a claim or claims against such policy and such claim or claims were closed without payment.

(Source: P.A. 86‑437.)

(215 ILCS 5/143.20) (from Ch. 73, par. 755.20)

Sec. 143.20. Notice to Insured as to Eligibility of Illinois Automobile Insurance Plan.

When a policy of automobile insurance is cancelled other than for nonpayment of premium or in the event of the renewal of a policy of automobile insurance to which Section 143.17 applies, the company shall notify the named insured of his possible eligibility for insurance through the Illinois Automobile Insurance Plan. Such notice shall accompany or be included in the notice of cancellation or in the notice of intent not to renew.

(Source: P.A. 80‑1136.)

(215 ILCS 5/143.20a) (from Ch. 73, par. 755.20a)

Sec. 143.20a. Cancellation of Fire and Marine Policies. (1) Policies covering property, except policies described in Section 143.13b, of this Code, issued for the kinds of business enumerated in Class 3 of Section 4 of this Code may be cancelled 10 days following receipt of written notice by the named insureds if the insured property is found to consist of one or more of the following:

(a) Buildings to which, following a fire loss, permanent repairs have not commenced within 60 days after satisfactory adjustment of loss, unless such delay is a direct result of a labor dispute or weather conditions.

(b) Buildings which have been unoccupied 60 consecutive days, except buildings which have a seasonal occupancy and buildings which are undergoing construction, repair or reconstruction and are properly secured against unauthorized entry.

(c) Buildings on which, because of their physical condition, there is an outstanding order to vacate, an outstanding demolition order, or which have been declared unsafe in accordance with applicable law.

(d) Buildings on which heat, water, sewer service or public lighting have not been connected for 30 consecutive days or more.

(2) All notices of cancellation under this Section shall be sent by certified mail and regular mail to the address of record of the named insureds.

(3) All cancellations made pursuant to this Section shall be on a pro rata basis.

(Source: P.A. 86‑437.)

(215 ILCS 5/143.21) (from Ch. 73, par. 755.21)

Sec. 143.21. Cancellation of Fire and Extended Coverage Policy ‑ Grounds. After a policy of fire and extended coverage insurance, as defined in paragraph (b) of Section 143.13, has been effective for 60 days, or if such policy is a renewal policy, the company shall not exercise its right to cancel except for one or more of the following reasons:

a. For nonpayment of premium;

b. When a policy was obtained by misrepresentation or fraud; or

c. For any act which measurably increases the risk originally accepted.

(Source: P.A. 86‑437.)

(215 ILCS 5/143.21.1) (from Ch. 73, par. 755.21.1)

Sec. 143.21.1. After a policy of fire and extended coverage, as defined in Section 143.13, has been effective or renewed for 5 or more years, the company shall not exercise its right of non‑renewal unless:

1. The policy was obtained by misrepresentation or fraud; or

2. The risk originally accepted has measurably increased; or

3. The insured has received 60 days notice of the intention of the company not to renew as provided in Section 143.17.

(Source: P.A. 80‑1126.)

(215 ILCS 5/143.21a) (from Ch. 73, par. 755.21a)

Sec. 143.21a. Nonrenewal of Fire and Extended Coverage Policy ‑ Grounds. A policy of fire and extended coverage insurance, as defined in subsection (b) of Section 143.13, may not be nonrenewed for any of the following reasons:

(a) age of property,

(b) location of property,

(c) age, sex, race, color, ancestry, marital status, or occupation of occupants.

(Source: P.A. 91‑357, eff. 7‑29‑99.)

(215 ILCS 5/143.21b) (from Ch. 73, par. 755.21b)

Sec. 143.21b. No policy of insurance as defined in subsection b. of Section 143.13 of this Act may be cancelled where the sole basis for such cancellation is the payment by the insurance company of a claim or claims against such policy.

(Source: P.A. 80‑1364.)

(215 ILCS 5/143.21c) (from Ch. 73, par. 755.21c)

Sec. 143.21c. Earthquake insurance; notice. In response to all applications for homeowners insurance, pursuant to subsection (b) of Section 143.13 of this Act, received by the insurance company for coverage on property located in the New Madrid Seismic Zone, as defined by the United States Geological Survey in Illinois, susceptible to Modified Mercalli intensity VII or greater damage, information shall be provided by the insurance company to the applicant regarding the availability of insurance for loss caused by earthquake.

(Source: P.A. 86‑1197; 87‑322.)

(215 ILCS 5/143.22) (from Ch. 73, par. 755.22)

Sec. 143.22. Notice to Insured as to Eligibility of Illinois Fair Plan Association. When a policy containing fire and extended coverage insurance is cancelled or nonrenewed other than for nonpayment of premium or evidence of incendiarism and if the location of the insured property is within the State of Illinois the company shall notify the named insured of his eligibility for the FAIR Plan and shall explain the procedure to make application to the FAIR Plan. Such notice shall accompany or be included in the notice of cancellation or the notice of intent not to renew.

(Source: P.A. 86‑437.)

(215 ILCS 5/143.23) (from Ch. 73, par. 755.23)

Sec. 143.23. Cancellation and Nonrenewal Policies ‑ Hearing. A named insured who wishes to appeal the reasons for cancellation or nonrenewal pursuant to Sections 143.16a and 143.19 through 143.24, shall at least 20 days prior to the effective date of cancellation or nonrenewal, mail or deliver to the Director of Insurance a written request for a hearing which shall clearly state the basis for the appeal. This Section does not apply to cancellation in the case of nonpayment of premium. The notice of cancellation or nonrenewal to which this Section applies shall advise the named insured of his right to appeal and the procedure to follow for such appeal.

Within 10 days after receipt of request for a hearing and upon 10 days notice to the parties, the Director shall call a hearing. Within 20 days of conclusion of the hearing, the Director shall issue his written findings to the parties. The policy will remain in force until such time as the Director has given his findings. If the Director finds for the named insured, he shall order the insurer to rescind its notice of cancellation, or in the case of a nonrenewal order the notice of nonrenewal withdrawn. If the Director finds for the Company he shall order that the cancellation or nonrenewal be effective at least 30 days from the date of his order. The company is entitled to a premium for any extension of coverage and such extension may be contingent upon the payment of the premium.

Costs of the hearing may be assessed against the losing party but shall not exceed $100.

(Source: P.A. 86‑437; 87‑757.)

(215 ILCS 5/143.23a) (from Ch. 73, par. 755.23a)

Sec. 143.23a. When any person has filed a complaint with the Director alleging cancellation, non‑renewal or refusal to issue a fire and extended coverage policy, as defined in Section 143.13 of this Code, by any insurer, such person, upon written request to the insurer, to which the insurer shall respond within 21 days, shall have access to the complete file of such insurer pertaining to such person's application or policy. There shall be no liability on the part of, and no cause of action shall rise against, any insurer or authorized representative, or its agents or employees, or the director or his authorized representative for any statement made by them or any information contained in the files revealed in compliance with the provisions of this Section.

(Source: P.A. 80‑1374.)

(215 ILCS 5/143.24) (from Ch. 73, par. 755.24)

Sec. 143.24. Limited Nonrenewal of Automobile Insurance Policy. A policy of automobile insurance, as defined in subsection (a) of Section 143.13, may not be nonrenewed for any of the following reasons:

a. Age;

b. Sex;

c. Race;

d. Color;

e. Creed;

f. Ancestry;

g. Occupation;

h. Marital Status;

i. Employer of the insured;

j. Physical handicap as defined in Section 143.24a of this Act.

(Source: P.A. 86‑437.)

(215 ILCS 5/143.24a) (from Ch. 73, par. 755.24a)

Sec. 143.24a. (a) No insurer, licensed to issue a policy of automobile insurance, as defined in subsection (a) of Section 143.13, shall fail or refuse to accept an application from a physically handicapped person for such insurance, refuse to issue such insurance to a physically handicapped applicant therefor solely because of physical handicap, or issue or cancel such insurance under conditions less favorable to physically handicapped persons than nonhandicapped persons; nor shall a physical handicap itself constitute a condition or risk for which a higher premium may be required of a physically handicapped person for such insurance.

(b) As used in this Section, "physical handicap" refers only to an impairment of physical ability because of amputation or loss of function which impairment has been compensated for, when necessary, by vehicle equipment adaptation or modification; or an impairment of hearing which impairment has been compensated for, when necessary, either by sensory equipment adaptation or modification, or an impairment of speech; provided, that the insurer may require a physically handicapped applicant for such insurance on the renewal of such insurance to furnish proof that he or she has qualified for a new or renewed drivers license since the occurrence of the handicapping condition.

(Source: P.A. 85‑762.)

(215 ILCS 5/143.24b) (from Ch. 73, par. 755.24b)

Sec. 143.24b. Any insurer insuring any person or entity against damages arising out of a vehicular accident shall disclose the dollar amount of liability coverage under the insured's personal private passenger automobile liability insurance policy upon receipt of the following: (a) a certified letter from a claimant or any attorney purporting to represent any claimant which requests such disclosure and (b) a brief description of the nature and extent of the injuries, accompanied by a statement of the amount of medical bills incurred to date and copies of medical records. The disclosure shall be confidential and available only to the claimant, his attorney and personnel in the office of the attorney entitled to access to the claimant's files. The insurer shall forward the information to the party requesting it by certified mail, return receipt requested, within 30 days of receipt of the request.

(Source: P.A. 85‑1209.)

(215 ILCS 5/143.24c)

Sec. 143.24c. Hate crimes; coverage refusal.

(a) This Section applies to policies of insurance if the insured or proposed insured is (1) an individual, (2) a religious organization described in clause (i) of subparagraph (A) of paragraph (1) of subsection (b) of Section 170 of Title 26 of the United States Code, (3) an educational organization described in clause (ii) of subparagraph (A) of paragraph (1) of subsection (b) of Section 170 of Title 26 of the United States Code, or (4) any other nonprofit organization described in clause (vi) of subparagraph (A) of paragraph (1) of subsection (b) of Section 170 of Title 26 of the United States Code that is organized and operated for religious, charitable, or educational purposes.

(b) An insurer issuing policies subject to this Section may not cancel, refuse to issue, or refuse to renew the policy solely on the basis that one or more claims have been made against any policy during the preceding 60 months for a loss that is the result of a hate crime committed against the person or property insured if the insured provides evidence to the insurer that the act causing the loss is identified as a hate crime on a police report.

(c) As it relates to this Section, if determined by a law enforcement agency, a "hate crime" may include any of the following:

(1) By force or threat of force, willfully injuring, intimidating, interfering with, oppressing, or threatening any other person in the free exercise or enjoyment of any right or privilege secured to him or her by the Constitution or laws of this State or by the Constitution or laws of the United States because of the other person's race, color, religion, ancestry, national origin, disability, gender, or sexual orientation or because he or she perceives that the other person has one or more of those characteristics. This offense, however, does not include speech alone, except upon a showing that the speech itself threatened violence against a specific person or group of persons and that the defendant had the apparent ability to carry out the threat.

(2) Knowingly defacing, damaging, or destroying the real or personal property of any other person for the purpose of intimidating or interfering with the free exercise or enjoyment of any right or privilege secured to the other person by the Constitution or laws of this State or by the Constitution or laws of the United States because of the other person's race, color, religion, ancestry, national origin, disability, gender, or sexual orientation or because he or she perceives that the other person has one or more of those characteristics.

(d) Nothing in this Section prevents an insurer subject to this Section from taking any of the actions specified in subsection (b) on the basis of criteria not otherwise made invalid by this Section or any other law or rule.

(Source: P.A. 92‑669, eff. 1‑1‑03.)

(215 ILCS 5/143.25) (from Ch. 73, par. 755.25)

Sec. 143.25. The Director of insurance may order any of the following if it is determined to be in the public interest:

(a) Some or all companies issuing policies of insurance as defined in subsections (a) and (b) of Section 143.13 annually disclose by postal zip code area the number of policies applied for, the number of policies issued including renewals, the number of policies cancelled or nonrenewed for some or all areas of the State, and loss data.

(b) The Illinois FAIR Plan created by Article XXXIII of the Code annually disclose by postal zip code area the number of policies it has written including renewals and cancellations for some or all areas of the State.

(c) The Illinois FAIR Plan created by Article XXXIII annually disclose by classification the earned premiums and losses of the Plan.

(Source: P.A. 81‑217.)

(215 ILCS 5/143.25a) (from Ch. 73, par. 755.25a)

Sec. 143.25a. Prior to the first renewal of any policy of automobile insurance as defined in subsection (a) of Section 143.13 of this Code, an insurance company shall notify an individual planning to purchase such renewal policy of the availability of higher deductibles for collision and comprehensive coverage and that a premium savings could result if the higher deductibles were purchased.

(Source: P.A. 86‑783.)

(215 ILCS 5/143.26) (from Ch. 73, par. 755.26)

Sec. 143.26. No company issuing policies of automobile insurance, as defined in Section 143.13 of this Code, in this State, and no officer, director, agent, clerk, employee or broker of such company shall cancel or refuse to issue or renew a policy of automobile insurance to any applicant for such insurance solely on the grounds that an agent or broker for such company is not located in geographical proximity to the residence of the applicant.

(Source: P.A. 80‑1369.)

(215 ILCS 5/143.26a) (from Ch. 73, par. 755.26a)

Sec. 143.26a. Automobile insurance sales requirements.

(a) Every company authorized to issue policies of automobile insurance as defined in Section 143.13 must, upon request, provide the names and addresses of its authorized producers reasonably determined to be located nearest to the residence of the person making the request.

(b) No company or authorized licensed producer may refuse to accept an application for automobile insurance from any applicant solely on the grounds that the applicant is eligible for placement only under the Illinois Automobile Insurance Plan.

(Source: P.A. 86‑1408.)

(215 ILCS 5/143.27) (from Ch. 73, par. 755.27)

Sec. 143.27. No insurance company may give to any named insured any notice of cancellation or nonrenewal of a policy of fire and extended coverage insurance, as defined in subsection (b) of Section 143.13, covering property which is capable of being rehabilitated, without allowing the named insured a reasonable period of time in which to repair defects in the insured property or relevant portion thereof, to an extent reasonably sufficient to facilitate continued coverage thereon. The time reasonably allowable therefor (which in no event shall exceed ninety days) and the degree of sufficiency of such rehabilitative efforts which insurance companies shall accept, may be determined by a certificate from a licensed contractor or architect and such rehabilitative efforts shall be in compliance with local municipal building codes. The notice of need for repair shall be from the insurance company, which may be sent to the insured at any time during the policy term, and which notice shall commence the time period established under this Section.

(Source: P.A. 81‑857.)

(215 ILCS 5/143.28) (from Ch. 73, par. 755.28)

Sec. 143.28. The rates and premium charges for all policies of automobile insurance, as described in sub‑section (a) of Section 143.13 of this Code, shall include appropriate reductions for insured automobiles which are equipped with anti‑theft mechanisms or devices approved by the Director. To implement the provisions of this Section, the Director shall promulgate rules and regulations.

(Source: P.A. 91‑798, eff. 7‑9‑00; 92‑125, eff. 7‑20‑01.)

(215 ILCS 5/143.29) (from Ch. 73, par. 755.29)

Sec. 143.29. (a) The rates and premium charges for every policy of automobile liability insurance shall include appropriate reductions as determined by the insurer for any insured over age 55 upon successful completion of the National Safety Council's Defensive Driving Course or a motor vehicle accident prevention course which is found by the Secretary of State to meet or exceed the standards of the National Safety Council's Defensive Driving Course's 8 hour classroom safety instruction program.

(b) The premium reduction shall remain in effect for the qualifying insured for a period of 3 years from the date of successful completion of the accident prevention course, except that the insurer may elect to apply the premium reduction beginning either with the last effective date of the policy or the next renewal date of the policy if the reduction will result in a savings as though applied over a full 3 year period. An insured who has completed the course of instruction prior to July 1, 1982 shall receive the insurance premium reduction for only the period remaining within the 3 years from course completion. The period of premium reduction for an insured who has repeated the accident prevention course shall be based upon the last such course the insured has successfully completed.

(c) Any accident prevention course approved by the Secretary of State under this Section shall be taught by an instructor approved by the Secretary of State, shall consist of at least 8 hours of classroom instruction and shall provide for a certificate of completion. Records of certification of course completion shall be maintained in a manner acceptable to the Secretary of State.

(d) Any person claiming eligibility for a rate or premium reduction shall be responsible for providing to his insurance company the information necessary to determine eligibility.

(e) This Section shall not apply to:

(1) any motor vehicle which is a part of a fleet or is used for commercial purposes unless there is a regularly assigned principal operator.

(2) any motor vehicle subject to a higher premium rate because of the insured's previous motor vehicle claim experience or to any motor vehicle whose principal operator has been convicted of violating any of the motor vehicle laws of this State, until that operator shall have maintained a driving record free of accidents and moving violations for a continuous one year period, in which case such driver shall be eligible for a reduction the remaining 2 years of the 3 year period.

(3) any motor vehicle whose principal operator has had his drivers license revoked or suspended for any reason by the Secretary of State within the previous 36 months.

(4) any policy of group automobile insurance under which premiums are broadly averaged for the group rather than determined individually.

(Source: P.A. 82‑920.)

(215 ILCS 5/143.30) (from Ch. 73, par. 755.30)

Sec. 143.30. Selection of glass replacement or glass repair companies.

With reference to every policy of automobile insurance as defined in Section 143.13(a):

(a) An automobile insurer authorized to do business in this State shall not unreasonably restrict access to automobile glass repair or replacement facilities by its policyholders.

(b) An automobile insurer may enter into an agreement or agreements with automobile glass repair or replacement facilities for the purpose of containing the cost of automobile glass repair or replacement claims.

(c) An insurer, or a producer acting on its behalf, shall disclose to an insured, either orally or in writing, that the insured may freely choose an automobile glass repair or replacement facility.

(d) No such insurance company, producer, or adjuster may engage in any act or practice of intimidation, coercion, or threat against any insured person to use a particular facility to provide such services.

(e) If a policyholder selects an automobile glass repair or replacement facility, the insurer shall provide payment to the facility based on a competitive price, as established by that insurer through competitive bids or market surveys to determine a fair and reasonable market price for similar services. Reasonable deviation from this market price is allowed based on the facts in each case.

(Source: P.A. 87‑1110.)

(215 ILCS 5/143.31)

Sec. 143.31. Uniform medical claim and billing forms.

(a) The Director shall prescribe by rule, after consultation with providers of health care or treatment, insurers, hospital, medical, and dental service corporations, and other prepayment organizations, insurance claim and billing forms that the Director determines will provide for uniformity and simplicity in insurance claims handling. The claim forms shall include, but need not be limited to, information regarding the medical diagnosis, treatment, and prognosis of the patient, together with the details of charges incident to the providing of care, treatment, or services, sufficient for the purpose of meeting the proof requirements of an insurance policy or a hospital, medical, or dental service contract.

(b) An insurer or a provider of health care treatment may not refuse to accept a claim or bill submitted on duly promulgated uniform claim and billing forms. An insurer, however, may accept claims and bills submitted on any other form.

(c) Accident and health insurer explanation of benefits paid statements or claims summary statements sent to an insured by the accident and health insurer shall be in a format and written in a manner that promotes understanding by the insured by setting forth all of the following:

(1) The total dollar amount submitted to the insurer for payment.

(2) Any reduction in the amount paid due to the application of any co‑payment or deductible, along with an explanation of the amount of the co‑payment or deductible applied under the insured's policy.

(3) Any reduction in the amount paid due to the application of any other policy limitation or exclusion set forth in the insured's policy, along with an explanation thereof.

(4) The total dollar amount paid.

(5) The total dollar amount remaining unpaid.

(d) The Director may issue an order directing an accident and health insurer to comply with subsection (c).

(e) An accident and health insurer does not violate subsection (c) by using a document that the accident and health insurer is required to use by the federal government or the State.

(f) The adoption of uniform claim forms and uniform billing forms by the Director under this Section does not preclude an insurer, hospital, medical, or dental service corporation, or other prepayment organization from obtaining any necessary additional information regarding a claim from the claimant, provider of health care or treatment, or certifier of coverage, as may be required.

(g) On and after January 1, 1996 when billing insurers or otherwise filing insurance claims with insurers subject to this Section, providers of health care or treatment, medical services, dental services, pharmaceutical services, or medical equipment must use the uniform claim and billing forms adopted by the Director under this Section.

(Source: P.A. 91‑357, eff. 7‑29‑99.)

(215 ILCS 5/143.32)

Sec. 143.32. Replacement of child restraint systems. A policy of automobile insurance, as defined in Section 143.13, that is amended, delivered, issued, or renewed after the effective date of this amendatory Act of the 91st General Assembly must include coverage for replacement of a child restraint system that was in use by a child during an accident to which coverage is applicable. As used in this Section, "child restraint system" has the meaning given that term in the Child Passenger Restraint Act.

(Source: P.A. 91‑749, eff. 6‑2‑00.)

(215 ILCS 5/143a) (from Ch. 73, par. 755a)

Sec. 143a. Uninsured and hit and run motor vehicle coverage.

(1) No policy insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person arising out of the ownership, maintenance or use of a motor vehicle that is designed for use on public highways and that is either required to be registered in this State or is principally garaged in this State shall be renewed, delivered, or issued for delivery in this State unless coverage is provided therein or supplemental thereto, in limits for bodily injury or death set forth in Section 7‑203 of the Illinois Vehicle Code for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles and hit‑and‑run motor vehicles because of bodily injury, sickness or disease, including death, resulting therefrom. Uninsured motor vehicle coverage does not apply to bodily injury, sickness, disease, or death resulting therefrom, of an insured while occupying a motor vehicle owned by, or furnished or available for the regular use of the insured, a resident spouse or resident relative, if that motor vehicle is not described in the policy under which a claim is made or is not a newly acquired or replacement motor vehicle covered under the terms of the policy. The limits for any coverage for any vehicle under the policy may not be aggregated with the limits for any similar coverage, whether provided by the same insurer or another insurer, applying to other motor vehicles, for purposes of determining the total limit of insurance coverage available for bodily injury or death suffered by a person in any one accident. No policy shall be renewed, delivered, or issued for delivery in this State unless it is provided therein that any dispute with respect to the coverage and the amount of damages shall be submitted for arbitration to the American Arbitration Association and be subject to its rules for the conduct of arbitration hearings as to all matters except medical opinions. As to medical opinions, if the amount of damages being sought is equal to or less than the amount provided for in Section 7‑203 of the Illinois Vehicle Code, then the current American Arbitration Association Rules shall apply. If the amount being sought in an American Arbitration Association case exceeds that amount as set forth in Section 7‑203 of the Illinois Vehicle Code, then the Rules of Evidence that apply in the circuit court for placing medical opinions into evidence shall govern. Alternatively, disputes with respect to damages and the coverage shall be determined in the following manner: Upon the insured requesting arbitration, each party to the dispute shall select an arbitrator and the 2 arbitrators so named shall select a third arbitrator. If such arbitrators are not selected within 45 days from such request, either party may request that the arbitration be submitted to the American Arbitration Association. Any decision made by the arbitrators shall be binding for the amount of damages not exceeding $50,000 for bodily injury to or death of any one person, $100,000 for bodily injury to or death of 2 or more persons in any one motor vehicle accident, or the corresponding policy limits for bodily injury or death, whichever is less. All 3‑person arbitration cases proceeding in accordance with any uninsured motorist coverage conducted in this State in which the claimant is only seeking monetary damages up to the limits set forth in Section 7‑203 of the Illinois Vehicle Code shall be subject to the following rules:

(A) If at least 60 days' written notice of the intention to offer the following documents in evidence is given to every other party, accompanied by a copy of the document, a party may offer in evidence, without foundation or other proof:

(1) bills, records, and reports of hospitals, doctors, dentists, registered nurses, licensed practical nurses, physical therapists, and other healthcare providers;

(2) bills for drugs, medical appliances, and prostheses;

(3) property repair bills or estimates, when identified and itemized setting forth the charges for labor and material used or proposed for use in the repair of the property;

(4) a report of the rate of earnings and time lost from work or lost compensation prepared by an employer;

(5) the written opinion of an opinion witness, the deposition of a witness, and the statement of a witness that the witness would be allowed to express if testifying in person, if the opinion or statement is made by affidavit or by certification as provided in Section 1‑109 of the Code of Civil Procedure;

(6) any other document not specifically covered by any of the foregoing provisions that is otherwise admissible under the rules of evidence.

Any party receiving a notice under this paragraph (A) may apply to the arbitrator or panel of arbitrators, as the case may be, for the issuance of a subpoena directed to the author or maker or custodian of the document that is the subject of the notice, requiring the person subpoenaed to produce copies of any additional documents as may be related to the subject matter of the document that is the subject of the notice. Any such subpoena shall be issued in substantially similar form and served by notice as provided by Illinois Supreme Court Rule 204(a)(4). Any such subpoena shall be returnable not less than 5 days before the arbitration hearing.

(B) Notwithstanding the provisions of Supreme Court Rule 213(g), a party who proposes to use a written opinion of an expert or opinion witness or the testimony of an expert or opinion witness at the hearing may do so provided a written notice of that intention is given to every other party not less than 60 days prior to the date of hearing, accompanied by a statement containing the identity of the witness, his or her qualifications, the subject matter, the basis of the witness's conclusions, and his or her opinion.

(C) Any other party may subpoena the author or maker of a document admissible under this subsection, at that party's expense, and examine the author or maker as if under cross‑examination. The provisions of Section 2‑1101 of the Code of Civil Procedure shall be applicable to arbitration hearings, and it shall be the duty of a party requesting the subpoena to modify the form to show that the appearance is set before an arbitration panel and to give the time and place set for the hearing.

(D) The provisions of Section 2‑1102 of the Code of Civil Procedure shall be applicable to arbitration hearings under this subsection.

(2) No policy insuring against loss resulting from liability imposed by law for property damage arising out of the ownership, maintenance, or use of a motor vehicle shall be renewed, delivered, or issued for delivery in this State with respect to any private passenger or recreational motor vehicle that is designed for use on public highways and that is either required to be registered in this State or is principally garaged in this State and is not covered by collision insurance under the provisions of such policy, unless coverage is made available in the amount of the actual cash value of the motor vehicle described in the policy or $15,000 whichever is less, subject to a $250 deductible, for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles and hit‑and‑run motor vehicles because of property damage to the motor vehicle described in the policy.

There shall be no liability imposed under the uninsured motorist property damage coverage required by this subsection if the owner or operator of the at‑fault uninsured motor vehicle or hit‑and‑run motor vehicle cannot be identified. This subsection shall not apply to any policy which does not provide primary motor vehicle liability insurance for liabilities arising from the maintenance, operation, or use of a specifically insured motor vehicle.

Each insurance company providing motor vehicle property damage liability insurance shall advise applicants of the availability of uninsured motor vehicle property damage coverage, the premium therefor, and provide a brief description of the coverage. Each insurer, with respect to the initial renewal, reinstatement, or reissuance of a policy of motor vehicle property damage liability insurance shall provide present policyholders with the same information in writing. That information need be given only once and shall not be required in any subsequent renewal, reinstatement or reissuance, substitute, amended, replacement or supplementary policy. No written rejection shall be required, and the absence of a premium payment for uninsured motor vehicle property damage shall constitute conclusive proof that the applicant or policyholder has elected not to accept uninsured motorist property damage coverage.

An insurance company issuing uninsured motor vehicle property damage coverage may provide that:

(i) Property damage losses recoverable thereunder shall be limited to damages caused by the actual physical contact of an uninsured motor vehicle with the insured motor vehicle.

(ii) There shall be no coverage for loss of use of the insured motor vehicle and no coverage for loss or damage to personal property located in the insured motor vehicle.

(iii) Any claim submitted shall include the name and address of the owner of the at‑fault uninsured motor vehicle, or a registration number and description of the vehicle, or any other available information to establish that there is no applicable motor vehicle property damage liability insurance.

Any dispute with respect to the coverage and the amount of damages shall be submitted for arbitration to the American Arbitration Association and be subject to its rules for the conduct of arbitration hearings or for determination in the following manner: Upon the insured requesting arbitration, each party to the dispute shall select an arbitrator and the 2 arbitrators so named shall select a third arbitrator. If such arbitrators are not selected within 45 days from such request, either party may request that the arbitration be submitted to the American Arbitration Association. Any arbitration proceeding under this subsection seeking recovery for property damages shall be subject to the following rules:

(A) If at least 60 days' written notice of the intention to offer the following documents in evidence is given to every other party, accompanied by a copy of the document, a party may offer in evidence, without foundation or other proof:

(1) property repair bills or estimates, when identified and itemized setting forth the charges for labor and material used or proposed for use in the repair of the property;

(2) the written opinion of an opinion witness, the deposition of a witness, and the statement of a witness that the witness would be allowed to express if testifying in person, if the opinion or statement is made by affidavit or by certification as provided in Section 1‑109 of the Code of Civil Procedure;

(3) any other document not specifically covered by any of the foregoing provisions that is otherwise admissible under the rules of evidence.

Any party receiving a notice under this paragraph (A) may apply to the arbitrator or panel of arbitrators, as the case may be, for the issuance of a subpoena directed to the author or maker or custodian of the document that is the subject of the notice, requiring the person subpoenaed to produce copies of any additional documents as may be related to the subject matter of the document that is the subject of the notice. Any such subpoena shall be issued in substantially similar form and served by notice as provided by Illinois Supreme Court Rule 204(a)(4). Any such subpoena shall be returnable not less than 5 days before the arbitration hearing.

(B) Notwithstanding the provisions of Supreme Court Rule 213(g), a party who proposes to use a written opinion of an expert or opinion witness or the testimony of an expert or opinion witness at the hearing may do so provided a written notice of that intention is given to every other party not less than 60 days prior to the date of hearing, accompanied by a statement containing the identity of the witness, his or her qualifications, the subject matter, the basis of the witness's conclusions, and his or her opinion.

(C) Any other party may subpoena the author or maker of a document admissible under this subsection, at that party's expense, and examine the author or maker as if under cross‑examination. The provisions of Section 2‑1101 of the Code of Civil Procedure shall be applicable to arbitration hearings, and it shall be the duty of a party requesting the subpoena to modify the form to show that the appearance is set before an arbitration panel and to give the time and place set for the hearing.

(D) The provisions of Section 2‑1102 of the Code of Civil Procedure shall be applicable to arbitration hearings under this subsection.

(3) For the purpose of the coverage the term "uninsured motor vehicle" includes, subject to the terms and conditions of the coverage, a motor vehicle where on, before or after the accident date the liability insurer thereof is unable to make payment with respect to the legal liability of its insured within the limits specified in the policy because of the entry by a court of competent jurisdiction of an order of rehabilitation or liquidation by reason of insolvency on or after the accident date. An insurer's extension of coverage, as provided in this subsection, shall be applicable to all accidents occurring after July 1, 1967 during a policy period in which its insured's uninsured motor vehicle coverage is in effect. Nothing in this Section may be construed to prevent any insurer from extending coverage under terms and conditions more favorable to its insureds than is required by this Section.

(4) In the event of payment to any person under the coverage required by this Section and subject to the terms and conditions of the coverage, the insurer making the payment shall, to the extent thereof, be entitled to the proceeds of any settlement or judgment resulting from the exercise of any rights of recovery of the person against any person or organization legally responsible for the property damage, bodily injury or death for which the payment is made, including the proceeds recoverable from the assets of the insolvent insurer. With respect to payments made by reason of the coverage described in subsection (3), the insurer making such payment shall not be entitled to any right of recovery against the tort‑feasor in excess of the proceeds recovered from the assets of the insolvent insurer of the tort‑feasor.

(5) This amendatory Act of 1967 shall not be construed to terminate or reduce any insurance coverage or any right of any party under this Code in effect before July 1, 1967. This amendatory Act of 1990 shall not be construed to terminate or reduce any insurance coverage or any right of any party under this Code in effect before its effective date.

(6) Failure of the motorist from whom the claimant is legally entitled to recover damages to file the appropriate forms with the Safety Responsibility Section of the Department of Transportation within 120 days of the accident date shall create a rebuttable presumption that the motorist was uninsured at the time of the injurious occurrence.

(7) An insurance carrier may upon good cause require the insured to commence a legal action against the owner or operator of an uninsured motor vehicle before good faith negotiation with the carrier. If the action is commenced at the request of the insurance carrier, the carrier shall pay to the insured, before the action is commenced, all court costs, jury fees and sheriff's fees arising from the action.

The changes made by this amendatory Act of 1997 apply to all policies of insurance amended, delivered, issued, or renewed on and after the effective date of this amendatory Act of 1997.

(Source: P.A. 93‑485, eff. 1‑1‑04.)

(215 ILCS 5/143a‑2) (from Ch. 73, par. 755a‑2)

Sec. 143a‑2. (1) Additional uninsured motor vehicle coverage. No policy insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person arising out of the ownership, maintenance or use of a motor vehicle shall be renewed or delivered or issued for delivery in this State with respect to any motor vehicle designed for use on public highways and required to be registered in this State unless uninsured motorist coverage as required in Section 143a of this Code is included in an amount equal to the insured's bodily injury liability limits unless specifically rejected by the insured as provided in paragraph (2) of this Section. Each insurance company providing the coverage must provide applicants with a brief description of the coverage and advise them of their right to reject the coverage in excess of the limits set forth in Section 7‑203 of The Illinois Vehicle Code. The provisions of this amendatory Act of 1990 apply to policies of insurance applied for after June 30, 1991.

(2) Right of rejection of additional uninsured motorist coverage. Any named insured or applicant may reject additional uninsured motorist coverage in excess of the limits set forth in Section 7‑203 of the Illinois Vehicle Code by making a written request for limits of uninsured motorist coverage which are less than bodily injury liability limits or a written rejection of limits in excess of those required by law. This election or rejection shall be binding on all persons insured under the policy. In those cases where the insured has elected to purchase limits of uninsured motorist coverage which are less than bodily injury liability limits or to reject limits in excess of those required by law, the insurer need not provide in any renewal, reinstatement, reissuance, substitute, amended, replacement or supplementary policy, coverage in excess of that elected by the insured in connection with a policy previously issued to such insured by the same insurer unless the insured subsequently makes a written request for such coverage.

(3) The original document indicating the applicant's selection of uninsured motorist coverage limits shall constitute sufficient evidence of the applicant's selection of uninsured motorist coverage limits. For purposes of this Section any reproduction of the document by means of photograph, photostat, microfiche, computerized optical imaging process, or other similar process or means of reproduction shall be deemed the equivalent of the original document.

(4) For the purpose of this Code the term "underinsured motor vehicle" means a motor vehicle whose ownership, maintenance or use has resulted in bodily injury or death of the insured, as defined in the policy, and for which the sum of the limits of liability under all bodily injury liability insurance policies or under bonds or other security required to be maintained under Illinois law applicable to the driver or to the person or organization legally responsible for such vehicle and applicable to the vehicle, is less than the limits for underinsured coverage provided the insured as defined in the policy at the time of the accident. The limits of liability for an insurer providing underinsured motorist coverage shall be the limits of such coverage, less those amounts actually recovered under the applicable bodily injury insurance policies, bonds or other security maintained on the underinsured motor vehicle.

On or after July 1, 1983, no policy insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person arising out of the ownership, maintenance or use of a motor vehicle shall be renewed or delivered or issued for delivery in this State with respect to any motor vehicle designed for use on public highways and required to be registered in this State unless underinsured motorist coverage is included in such policy in an amount equal to the total amount of uninsured motorist coverage provided in that policy where such uninsured motorist coverage exceeds the limits set forth in Section 7‑203 of the Illinois Vehicle Code.

The changes made to this subsection (4) by this amendatory Act of the 93rd General Assembly apply to policies issued or renewed on or after December 1, 2004.

(5) Scope. Nothing herein shall prohibit an insurer from setting forth policy terms and conditions which provide that if the insured has coverage available under this Section under more than one policy or provision of coverage, any recovery or benefits may be equal to, but may not exceed, the higher of the applicable limits of the respective coverage, and the limits of liability under this Section shall not be increased because of multiple motor vehicles covered under the same policy of insurance. Insurers providing liability coverage on an excess or umbrella basis are neither required to provide, nor are they prohibited from offering or making available coverages conforming to this Section on a supplemental basis. Notwithstanding the provisions of this Section, an insurer shall not be prohibited from solely providing a combination of uninsured and underinsured motorist coverages where the limits of liability under each coverage is in the same amount.

(6) Subrogation against underinsured motorists. No insurer shall exercise any right of subrogation under a policy providing additional uninsured motorist coverage against an underinsured motorist where the insurer has been provided with written notice in advance of a settlement between its insured and the underinsured motorist and the insurer fails to advance a payment to the insured, in an amount equal to the tentative settlement, within 30 days following receipt of such notice.

(7) A policy which provides underinsured motor vehicle coverage may include a clause which denies payment until the limits of liability or portion thereof under all bodily injury liability insurance policies applicable to the underinsured motor vehicle and its operators have been partially or fully exhausted by payment of judgment or settlement. A judgment or settlement of the bodily injury claim in an amount less than the limits of liability of the bodily injury coverages applicable to the claim shall not preclude the claimant from making an underinsured motorist claim against the underinsured motorist coverage. Any such provision in a policy of insurance shall be inapplicable if the insured, or the legal representative of the insured, and the insurer providing underinsured motor vehicle coverage agree that the insured has suffered bodily injury or death as the result of the negligent operation, maintenance, or use of an underinsured motor vehicle and, without arbitration, agree also on the amount of damages that the insured is legally entitled to collect. The maximum amount payable pursuant to such an underinsured motor vehicle insurance settlement agreement shall not exceed the amount by which the limits of the underinsured motorist coverage exceed the limits of the bodily injury liability insurance of the owner or operator of the underinsured motor vehicle. Any such agreement shall be final as to the amount due and shall be binding upon both the insured and the underinsured motorist insurer regardless of the amount of any judgment, or any settlement reached between any insured and the person or persons responsible for the accident. No such settlement agreement shall be concluded unless: (i) the insured has complied with all other applicable policy terms and conditions; and (ii) before the conclusion of the settlement agreement, the insured has filed suit against the underinsured motor vehicle owner or operator and has not abandoned the suit, or settled the suit without preserving the rights of the insurer providing underinsured motor vehicle coverage in the manner described in paragraph (6) of this Section.

(Source: P.A. 93‑762, eff. 7‑16‑04.)

(215 ILCS 5/143b) (from Ch. 73, par. 755b)

Sec. 143b. Any insurance carrier whose payment to its insured is reduced by a deductible amount under a policy providing collision coverage is subrogated to its insured's entire collision loss claim including the deductible amount unless the deductible amount has been otherwise recovered by the insured, but if the deductible amount has been otherwise recovered by the insured it shall not be included in the subrogated loss claim and shall be excluded from the amount of loss pleaded. If the deductible amount is included in the subrogated loss claim the insurance carrier shall pay the full pro rata deductible share to its insured out of the net recovery on the subrogated claim. Administrative expenses of the insurance carrier cannot be deducted from the gross recovery, and only incurred expenses of the carrier, such as attorney's fees, collection fees and adjuster's fees, may be deducted therefrom to determine the net recovery. When the insurance carrier is recovering directly from a third party a claim by means of installments, the insured shall receive his full pro rata deductible share as soon as such amount is collected and before any part of such recovery is applied to any other use.

(Source: P.A. 83‑588.)

(215 ILCS 5/143c) (from Ch. 73, par. 755c)

Sec. 143c. No insurance policy authorized under Class 1, 2 or 3 of Section 4 of this Code shall be delivered in this State unless the policyholder or certificate holder is provided written notice of:

(1) the address of the complaint department of the insurance company; and

(2) the address of the Public Service Division of the Department of Insurance or its successor.

The Director may, by rule, exempt certain types of insurance policies from the provisions of this Section whenever the application of this Section in such cases would be unwarranted or unduly burdensome in view of any benefit to the public.

(Source: P.A. 80‑823.)

(215 ILCS 5/143d) (from Ch. 73, par. 755d)

Sec. 143d. Customer affairs and information department.

(a) Every company licensed to issue policies of insurance as defined in subsections (a) and (b) of Section 143.13 shall establish a customer affairs and information department to respond to policyholder inquiries and complaints. The department shall be staffed by an employee or employees generally knowledgeable in the affairs and operations of the company. The department shall be located in either the home, regional, or branch office of the company and must, during regular business hours, either maintain a toll free telephone number or permit policyholders to call a designated telephone number at the company's expense. The telephone numbers shall be made available to policyholders in accordance with Section 143(c).

(b) The customer affairs and information department shall provide information and services that may reasonably be requested by policyholders who are residents of this State and must respond promptly to complaints made by policyholder. Companies must provide a written response to written inquiries and complaints within 21 days of receipt.

(c) Records of the customer affairs and information department shall be maintained in compliance with Department of Insurance regulations.

(Source: P.A. 86‑1407.)

(215 ILCS 5/144) (from Ch. 73, par. 756)

Sec. 144. Limitation of risk.

(1) No company authorized to transact any of the kind of business enumerated in Classes 2 and 3 of Section 4 in this State may expose itself to any loss on any one risk or hazard to an amount exceeding 10% of its admitted assets in excess of its liabilities excluding, in the case of a stock company, its capital stock liability. No portion of any such risk or hazard which has been reinsured in a domestic or an approved foreign or alien company, in accordance with this Code, shall be included in determining the limitation of risk prescribed herein.

(2) Any company transacting the kind of business enumerated in clause (g) of Class 2 of Section 4 may expose itself to a risk or hazard in excess of the amount prescribed in subsection (1) if it is protected in excess of that amount by the following:

(a) The co‑suretyship of such a company similarly authorized; or

(b) By deposit with it in pledge or conveyance to it in trust for its protection of property; or

(c) By conveyance or mortgage for its protection; or

(d) In case a suretyship obligation was made on behalf or on account of a fiduciary holding property in a trust capacity, by deposit or other disposition of a portion of the property so held in trust that no future sale, mortgage, pledge or other disposition can be made thereof without the consent of such company except by a judgment or order of a court of competent jurisdiction.

(3) A company designated in subsection (2) may also execute transportation or warehouse bonds for United States Internal Revenue taxes to an amount equal to 50% of its capital and surplus. When the penalty of the suretyship obligation exceeds the amount of a judgment described therein as appealed from and thereby secured, or exceeds the amount of the subject matter in controversy or of the estate in the custody of the fiduciary for the performance of whose duties it is conditioned, the bond may be executed if the actual amount of the judgment or the subject matter in controversy or estate not subject to supervision or control of the surety is not in excess of such limitation. When the penalty of the suretyship obligation executed for the performance of a contract exceeds the contract price, the latter shall be taken as the basis for estimating the limit of risk within the meaning of this Section.

(4) Whenever the ratio of the annual premium volume in proportion to the policyholder surplus of any company transacting the kinds of business authorized in Class 2 and Class 3 of Section 4 when reviewed in conjunction with the kinds and nature of risks insured, the financial condition of the company and its ownership including but not limited to the liquidity of assets, relationship of surplus to liabilities and adequacy of outstanding loss reserves, creates a condition such that the further assumption of risks might be hazardous to policyholders, creditors or the general public, then the Director may order such company to take one or more of the following steps:

(a) to reduce the loss exposure by reinsurance;

(b) to reduce the volume of new business being accepted;

(c) to suspend the writing of new business for a period not to exceed 3 months;

(d) to increase and maintain the company's surplus by a contribution to surplus which will raise the surplus for such a period of time and by such an amount as the Director may deem necessary and essential; or

(e) to reduce general or acquisition expenses by specified methods.

(f) (Blank).

(5) The provisions of this Section do not apply to domestic, foreign, and alien Lloyds.

The company may, within 10 days after receipt of an Order of the Director under this Section, request that the Director hold a hearing to determine whether the Order of the Director should be modified in any way. A request for a hearing by a company under this Section stays any Order of the Director entered under this Section until such time as the Director has entered an Order pursuant to the hearing.

(Source: P.A. 89‑97, eff. 7‑7‑95; 90‑794, eff. 8‑14‑98.)

(215 ILCS 5/144.1) (from Ch. 73, par. 756.1)

Sec. 144.1. Insurance Sales by Insolvent or Impaired Companies Prohibited.) (1) Unless allowed by the Director, no foreign or alien company officer, director, trustee, agent, or employee of such company may renew, issue or deliver or cause to be renewed, issued or delivered, any policy, contract or certificate of insurance in this State, nor may any domestic company, officer, director, trustee, agent or employee of such company renew, issue or deliver or cause to be renewed, issued or delivered, any policy, contract or certificate of insurance, for which a premium is charged or collected, when the company writing such insurance is insolvent or impaired and the fact of such insolvency or impairment is known to the company officer, director, trustee, agent or employee of such company. A company is impaired when its assets are less than its capital, minimum required surplus and all liabilities.

However, the existence of an impairment does not prevent the issuance or renewal of a policy when an insured or owner exercises an option granted to him under an existing policy to obtain new, renewed or converted insurance coverage.

(2) Any company officer, director, trustee, agent, or employee of such company violating this Section shall be guilty of a Class A misdemeanor.

(Source: P.A. 82‑498.)

(215 ILCS 5/144.2) (from Ch. 73, par. 756.2)

Sec. 144.2. Notification of insurance business.

(a) Upon notice by the Director, a company having direct premium income must file with the Director supplemental information regarding its insurance business. The Director shall by rule establish standards to determine the companies to be given notice.

(b) The notice prescribed by this Section may require the company to provide information concerning, but not limited to, the following:

(1) adequacy of rates;

(2) marketing methodology and acquisition expenses;

(3) underwriting standards;

(4) recordkeeping and statistical systems;

(5) claim systems and claim reserving systems;

(6) reinsurance; and

(7) the general financial condition of the company.

(Source: P.A. 90‑381, eff. 8‑14‑97.)

(215 ILCS 5/145) (from Ch. 73, par. 757)

Sec. 145. Deposits.

When any company is required by the laws of this State or of any state or country, or by other competent authority, to make a deposit with an insurance supervising official or other financial officer and the company desires to make such deposit in this State the Director shall accept such deposit, if made in securities authorized for investment by Article VIII of this Code. So long as the company continues solvent and complies with the laws of this State it may collect the income on such securities. The company may substitute therefor other like securities as prescribed by this Code for deposit. If the value of securities deposited by any company shall decline below the amount so required, the company shall make a further deposit.

(Source: Laws 1959, p. 1431.)

(215 ILCS 5/146) (from Ch. 73, par. 758)

Sec. 146. Withdrawal of deposits.

(1) The Director shall at any time upon request release to a company any portion of its deposit which is not required as a compliance with the conditions of this Code.

(2) When all of the business of a company has been reinsured in accordance with this Code and the assets thereof by contract assigned to another company, the Director may deliver to the reinsured company or to its assigns under the contract of reinsurance after one year from the effective date of such reinsurance contract, all the securities deposited by the reinsured company upon compliance with the following conditions:

(a) The reinsuring company under the reinsurance contract has assumed all liabilities of every kind due and to become due which the deposit of the reinsured company was made to secure or adequate provision has been made therefor;

(b) The said reinsuring company shall have and maintain a deposit in this State or with the department or official charged with the duty of supervising the business of insurance in the state where it is incorporated or, if an alien company, where it is entered, in securities authorized by this Code as lawful investments of the company and in an amount and value not less than the deposit formerly required of the reinsured company by this Code; and

(c) The deposit of the said reinsuring company shall be such that it will subsist for the security of all the obligations of the reinsuring company.

(Source: Laws 1937, p. 696.)

(215 ILCS 5/147) (from Ch. 73, par. 759)

Sec. 147. Deceptive statements as to assets prohibited.

No company doing business in this State or agent thereof, shall state or represent by advertisement in any newspaper, periodical, magazine or over the radio, or by any sign, circular, card, policy of insurance or certificate of renewal thereof or otherwise that any funds or assets are owned by such company which are not actually owned by it and available for the payment of losses and claims and held for the protection of its policyholders and creditors.

(Source: Laws 1937, p. 696.)

(215 ILCS 5/147.1) (from Ch. 73, par. 759.1)

Sec. 147.1. Sale of insurance company shares. (1) No shares of the capital stock of a domestic stock company shall be sold or offered for sale to the public in this State by an issuer, underwriter, dealer or controlling person in respect of such shares without first procuring from the Director a permit so to do.

(2) Unless the context otherwise indicates the following terms as used in this Section shall have the following meanings:

(a) The word "issuer" shall mean every company which shall have issued or proposes to issue any such shares of capital stock,

(b) The word "underwriter" shall mean any person who has purchased such shares of capital stock from an issuer or controlling person with a view to, or sells such shares of capital stock for an issuer or a controlling person in connection with, the distribution thereof, or participates or has a participation in the direct or indirect underwriting of such distribution; but such term shall not include a person whose interest is limited to a commission or discount from an underwriter or dealer not in excess of the usual and customary distributer's or seller's commission or discount or not in excess of any applicable statutory maximum commission or discount. An underwriter shall be deemed to be no longer an underwriter of an issue of shares of capital stock after he has completely disposed of his allotment of such shares or, if he did not purchase the shares, after he has ceased to sell such shares for the issuer or controlling person.

(c) The word "dealer" shall mean any person other than an issuer, a controlling person, a bank organized under the banking laws of this State or of the United States, a trust company organized under the laws of this State, an insurance company or a salesman, who engages in this State, either for all or part of his time, directly or indirectly, as agent, broker or principal, in the business of offering, selling, buying and selling, or otherwise dealing or trading in shares of capital stock of insurance companies.

(d) The words "controlling person" shall mean any person selling such shares of capital stock, or group of persons acting in concert in the sale of such shares, owning beneficially (and in the absence of knowledge, or reasonable grounds of belief, to the contrary, record ownership shall for the purposes hereof be presumed to be beneficial ownership) either

(i) 25% Or more of the outstanding voting shares of the issuer of such shares where no other person owns or controls a greater percentage of such shares, or

(ii) Such number of outstanding number of shares of the issuer as would enable such person, or group of persons, to elect a majority of the Board of Directors of such issuer.

(e) The word "salesman" shall mean an individual, other than an issuer, an underwriter, a dealer or a controlling person, employed or appointed or authorized by an issuer, an underwriter, a dealer or a controlling person to sell such shares in this State. The partners or officers of an issuer, an underwriter, a dealer or a controlling person shall not be deemed to be a salesman within the meaning of this definition.

(3) The provisions of this Section shall not apply to any of the following transactions:

(a) The sale in good faith, whether through a dealer or otherwise, of such shares by a vendor who is not an issuer, underwriter, dealer or controlling person in respect of such shares, and who, being the bona fide owner of such shares deposes thereof for his own account; provided, that such sale is not made directly or indirectly for the benefit of the issuer or of an underwriter or controlling person.

(b) The sale, issuance or exchange by an issuer of its shares to or with its own shareholders, if no commission or other remuneration is paid or given directly or indirectly for or on account of the procuring or soliciting of such sale or exchange (other than a fee paid to underwriters based on their undertaking to purchase any shares not purchased by shareholders in connection with such sale or exchange), or the issuance by an issuer of its shares to a holder of convertible securities pursuant to a conversion provision granted at the time of issuance of such convertible securities, provided that no commission or other remuneration is paid or given directly or indirectly thereon on account of the procuring or soliciting of such conversion and no consideration from the holder in addition to the surrender or cancellation of the convertible security is required to effect the conversion.

(c) The sale of such shares to any corporation, bank, savings institution, trust company, insurance company, building and loan association, dealer, pension fund or pension trust, employees profit sharing trust or to any association engaged as a substantial part of its business or operations in purchasing or holding securities, or to any trust in respect of which a bank or trust company is trustee or co‑trustee.

(d) The sale of such shares by an executor, administrator, guardian, receiver or trustee in insolvency or bankruptcy or at any judicial sale or at a public sale by auction held at an advertised time and place or the sale of such shares in good faith and not for the purpose of avoiding the provisions of this Section by a pledgee of such shares pledged for a bona fide debt.

(e) Such other transaction as may be declared by ruling of the Director to be exempt from the provisions of this Section.

(4) Prior to the issuance of any permit under this Section, there shall be delivered to the Director two copies of the following:

(a) the prospectus which is to be used in connection with the sale of such shares;

(b) the underwriting and selling agreements, if any;

(c) the subscription agreement;

(d) the depository agreement under which the subscription proceeds are to be held;

(e) any and all other documents, agreements, contracts and other papers of whatever nature which are to be used in connection with or relative to the sale of such shares, which may be required by the Director.

(5) The Director shall within a reasonable time examine the documents submitted to him and unless he finds from said documents that the sale of said shares is inequitable or would work or tend to work a fraud or deceit upon the purchasers thereof, he shall issue a permit authorizing the sale of said shares.

(6) The Director shall have the power to prescribe such rules and regulations relating to the sale, issuance, and offering of said shares as will effectuate the purpose of this section to the end that no inequity, fraud or deceit will be perpetrated upon the purchasers thereof.

(7) If the Director finds that any of the provisions of this Section or of the rules and regulations adopted pursuant hereto have been violated or that the sale, issuance or offering of any such shares is inequitable or works or tends to work a fraud or deceit upon the purchasers thereof he may refuse to issue a permit to sell, issue or offer such shares or may, after notice and hearing, revoke such permit. The action of the Director in refusing, after due application therefor in form prescribed by the Director, or revoking, any such permit shall be subject to judicial review in the manner prescribed by the insurance laws of this State.

(8) Any person who violates any of the provisions of this Section shall be guilty of a business offense and, upon conviction thereof shall be fined not less than $1,000 nor more than the greater of either $5,000 or twice the whole amount, received upon the sale of shares in violation of this Section and may in addition, if a natural person, be convicted of a Class A misdemeanor.

(Source: P.A. 84‑502.)

(215 ILCS 5/147.2) (from Ch. 73, par. 759.2)

Sec. 147.2. Civil remedies.) (A) Every sale of a security made in violation of Sections 20, 32 or 147.1 of this Code or the rules and regulations adopted pursuant thereto and every sale of any security for which a prospectus is required to be filed with the Department which is made without a copy of the prospectus as filed having been given to such prospective purchaser prior to payment of all or part of the purchase price shall be voidable at the election of the purchaser. Any person who offers or sells a security by means of a prospectus or oral communication which contains an untrue statement of a material fact or omits to state a material fact necessary in order to make the statements, in the light of the circumstances under which they were made, not misleading, (the purchaser not knowing of such untruth or omission), and who shall not sustain the burden of proof that he did not know, and in the exercise of reasonable care could not have known, of such untruth or omission, shall be liable to the person purchasing such security from him, who may bring a civil action in any circuit court. Upon tender to the seller or into court of the securities sold or, where the securities were not received, of any contract made in respect of such sale, the issuer, controlling person, underwriter, dealer or other person by or on behalf of whom said sale was made, and each underwriter, dealer or salesman who shall have participated or aided in any way in making such sale, and in case such issuer, controlling person, underwriter or dealer is a corporation or unincorporated association or organization, each of its officers and directors (or persons performing similar functions) who shall have participated or aided in making such sale, shall be jointly and severally liable to such purchaser for (1) the full amount paid, together with interest from the date of payment for the securities sold at the legal rate of interest less any income or other amounts received by such purchaser on such securities or for any damages if he no longer owns the security and (2) the reasonable fees of such purchaser's attorney incurred in any action brought for recovery of the amounts recoverable hereunder.

(B) Notice of any election provided for in subsection (A) of this Section shall be given by the purchaser, within 6 months after the purchaser shall have knowledge that the sale of the securities to him is voidable, to each person from whom recovery will be sought, by registered letter addressed to the person to be notified at his last known address with proper postage affixed, or by personal service.

(C) No purchaser shall have any right or remedy under this Section who shall fail, within 15 days from the date of receipt thereof, to accept an offer to repurchase the securities purchased by him for a price equal to the full amount paid therefor plus interest thereon and less any income thereon as set forth in subsection (A) of this Section or for damages if he no longer owns the security. Every offer of repurchase provided for in this subsection shall be in writing, shall be delivered to the purchaser or sent by registered mail addressed to the purchaser at his last known address, and shall offer to repurchase the securities sold for a price equal to the full amount paid therefor plus interest thereon and less any income thereon as set forth in subsection (A) of this Section. Such offer shall continue in force for 15 days from the date on which it was received by the purchaser, shall advise the purchaser of his rights and the period of time limited for acceptance thereof, and shall contain such further information, if any, as the Director may prescribe. Any agreement not to accept or refusing or waiving any such offer made during or prior to said 15 days shall be void.

(D) No action shall be brought for relief under this Section or upon or because of any of the matters for which relief is granted by this Section after 3 years from the date of sale.

(E) The term purchaser as used in this Section shall include the personal representative or representatives of the purchaser.

(F) The term security does not include any insurance or endowment policy or annuity contract under which an insurance company promises to pay money either in a lump sum or periodically for life or for some other specified period.

(G) The rights and remedies provided by this Act are in addition to any other rights or remedies that may exist.

This Section shall not apply to insurance stock sales made prior to the effective date of this Act.

(Source: P.A. 81‑1509.)

(215 ILCS 5/147.3)

Sec. 147.3. Issuance of capital notes by domestic companies.

(a) A domestic company may at any time or from time to time issue capital notes pursuant to this Section in an aggregate principal amount not exceeding (1) 25% of its total adjusted capital (including the aggregate principal amount of outstanding capital notes and outstanding surplus notes or guaranty fund certificates and guaranty capital shares) as of the end of the immediately preceding calendar year less (2) the aggregate principal amount of outstanding capital notes and outstanding surplus notes or guaranty fund certificates and guaranty capital shares; provided, however, that capital notes shall not be issued for an aggregate principal amount that would cause the aggregate principal amount for all of the insurer's capital notes scheduled to mature in any calendar year to exceed 5%, or the aggregate principal amount of all of the insurer's capital notes scheduled to mature in any 3 consecutive calendar years to exceed 12%, of the insurer's total adjusted capital as of the end of the calendar year immediately preceding the issuance of the capital notes. The aggregate amount of capital notes and surplus notes or guaranty fund certificates and guaranty capital shares is at all times limited to 33 1/3% of total adjusted capital. Any aggregate amount in excess of this limit shall reduce the amount of capital notes included in the insurer's total adjusted capital.

(b) No insurer shall issue capital notes pursuant to this Section unless the form and terms thereof shall have been approved by the Director. The term of any capital note shall be no less than 5 years.

(c) An insurer with a capital note outstanding shall file a report with the Director at the same time that the insurer files its Annual Statement and at such other times as the Director determines necessary. The Director may by rule establish times for and the content of these reports.

(d) The insurer shall not pay or redeem the principal amount of any capital notes, make any sinking fund payment, or pay any interest on the notes, and the principal, payment, and interest shall not become due or payable if, based on the preceding year‑end annual statement filed with the Director:

(1)(A) The insurer's total adjusted capital is less than the insurer's company action level RBC or (B) the insurer's total adjusted capital is less than the product of 1.25 and its company action level RBC and there is a negative trend, as determined in accordance with the Article IIA of this Code; or

(2) the aggregate of all payments or redemptions made during a calendar year would, if made immediately prior to the preceding year‑end, have caused (A) the insurer's total adjusted capital to be less than the insurer's company action level RBC or (B) the insurer's total adjusted capital at such time to be less than the product of 1.25 and its company action level RBC and there is a negative trend, as determined in accordance with Article IIA of this Code.

Notwithstanding items (1) and (2), upon request by the insurer, the Director may approve, in whole or in part, any payment or redemption on the capital notes if and at such time or times as in his or her judgment the financial condition of the insurer warrants. The amount of the redemptions or payments of principal amounts of any capital notes that cannot be made as the result of the provisions of this subsection may accumulate at the rate of interest of the capital notes.

(e) Capital notes issued pursuant to this Section:

(1) may provide (A) for interest payments at fixed or adjustable rates, sinking fund payments, and payments and redemptions of principal, in each case in accordance with the terms of the capital note and without the prior approval of the Director except to the extent that such approval is required pursuant to this subsection or subsection (d) of this Section, (B) that the capital notes automatically become due and payable in the event the insurer becomes subject to an order of rehabilitation, liquidation, or conservation granted pursuant to a proceeding under Article XIII of this Code, and (C) for such other features as the Director determines are appropriate for capital notes issued according to this Section; and

(2) shall provide that if at the end of any calendar year the total amount of the insurer's total adjusted capital (including the aggregate principal amount of outstanding capital notes and outstanding surplus notes or guaranty fund certificates and guaranty capital shares) is less than 3 times the aggregate principal amount of capital notes outstanding and surplus notes or guaranty fund certificates and guaranty capital shares, the Director may notify the insurer that the financial condition of the insurer does not warrant the payment or redemption or sinking fund payment, in whole or in part, on the capital notes. Such action by the Director shall, without any action on the part of the insurer or any other person, automatically defer payment or redemption until such time as the Director finds that the financial condition warrants payment or redemption. The amount of redemptions or payments of principal amounts of any capital notes so deferred may accumulate at the rate of interest of the capital notes.

(f) The outstanding principal of a capital note issued pursuant to this Section shall be considered part of the insurer's total adjusted capital, but shall not be considered part of the insurer's surplus; provided, however, (1) that, in the case of any capital note maturing 15 years or less from the year in which the capital note is issued, one‑fifth of the aggregate principal amount of the capital note shall be subtracted from total adjusted capital in each year starting with the fifth year immediately preceding the calendar year in which the capital note is scheduled to mature; and (2) that, in the case of any capital note maturing more than 15 years from the year in which the capital note is issued, one‑tenth of the aggregate principal amount of the capital note shall be subtracted from total adjusted capital in each year starting with the tenth year immediately preceding the calendar year in which the capital note is scheduled to mature, and further provided that, in no event shall the amount included in total adjusted capital for any capital note exceed the principal amount, at issue, of the outstanding capital note less the aggregate of all sinking fund payments made on the capital note. The insurer shall disclose the aggregate principal amount of capital notes then outstanding as a liability on its financial statements filed with the Director pursuant to this Code.

(g) As used in this Section, the terms "total adjusted capital", "company action level RBC", and "authorized control level RBC" shall have the meanings given those terms in Article IIA of this Code.

(Source: P.A. 90‑831, eff. 8‑14‑97.)

(215 ILCS 5/148) (from Ch. 73, par. 760)

Sec. 148. Contents of advertisements as to financial condition.

(1) No company authorized to do business in this State shall cause to be inserted in any newspaper, periodical, magazine or other publication, any advertisement purporting to set forth in figures its financial standing unless the figures exhibited in such advertisement correspond to the figures contained in the next preceding verified statement made to the Director and unless there is set forth either

(a) the total amount of the capital actually paid in, the total value of the admitted assets owned, the total amount of the liabilities, including therein the reserves required by law and the amount of the net surplus of assets over liabilities actually available for the payment of losses and claims and held for the protection of policyholders; or

(b) the capital paid in or the surplus, separately or combined.

(2) No alien company authorized to do business in this State shall cause to be inserted in any newspaper, periodical or magazine any advertisement purporting to set forth in figures its financial standing, unless the figures exhibited in such advertisement correspond to the figures contained in the next preceding verified statement made to the Director by the United States Branch of such company and unless there is set forth the total amount of the capital and assets held by its United States Branch, the total amount of its liabilities, including therein the reserves required by law and the total amount of the net surplus of assets over all liabilities actually available for the payment of losses and claims and held for the protection of its policyholders in the United States; provided that any life company organized under the laws of the Dominion of Canada or any province thereof may use in its advertising a statement of its total business and condition in all countries if such statement is accompanied by a statement showing the amount of its total assets and total liabilities in the United States, corresponding to the figures contained in the next preceding statement of such company filed with the Director.

(3) Any company violating any provision of this section, and any officer or director thereof knowingly participating in or abetting such violation, shall be guilty of a business offense and shall be required to pay a penalty of not less than five hundred dollars nor more than one thousand dollars, to be recovered in the name of the People of the State of Illinois by the State's Attorney of the county in which the violation occurs and the penalty so recovered shall be paid into the county treasury.

(Source: P.A. 77‑2699.)

(215 ILCS 5/149) (from Ch. 73, par. 761)

Sec. 149. Misrepresentation and defamation prohibited.

(1) No company doing business in this State, and no officer, director, agent, clerk or employee thereof, broker, or any other person, shall make, issue or circulate or cause or knowingly permit to be made, issued or circulated any estimate, illustration, circular, or verbal or written statement of any sort misrepresenting the terms of any policy issued or to be issued by it or any other company or the benefits or advantages promised thereby or any misleading estimate of the dividends or share of the surplus to be received thereon, or shall by the use of any name or title of any policy or class of policies misrepresent the nature thereof.

(2) No such company or officer, director, agent, clerk or employee thereof, or broker shall make any misleading representation or comparison of companies or policies, to any person insured in any company for the purpose of inducing or tending to induce a policyholder in any company to lapse, forfeit, change or surrender his insurance, whether on a temporary or permanent plan.

(3) No such company, officer, director, agent, clerk or employee thereof, broker or other person shall make, issue or circulate or cause or knowingly permit to be made, issued or circulated any pamphlet, circular, article, literature or verbal or written statement of any kind which contains any false or malicious statement calculated to injure any company doing business in this State in its reputation or business.

(4) No such company, or officer, director, agent, clerk or employee thereof, no agent, broker, solicitor, or company service representative, and no other person, firm, corporation, or association of any kind or character, shall make, issue, circulate, use, or utter, or cause or knowingly permit to be made, issued, circulated, used, or uttered, any policy or certificate of insurance, or endorsement or rider thereto, or matter incorporated therein by reference, or application blanks, or any stationery, pamphlet, circular, article, literature, advertisement or advertising of any kind or character, visual, or aural, including radio advertising and television advertising, or any other verbal or written statement or utterance (a) which tends to create the impression or from which it may be implied or inferred, directly or indirectly, that the company, its financial condition or status, or the payment of its claims, or the merits, desirability, or advisability of its policy forms or kinds or plans of insurance are approved, endorsed, or guaranteed by the State of Illinois or United States Government or the Director or the Department or are secured by Government bonds or are secured by a deposit with the Director, or (b) which uses or refers to any deposit with the Director or any certificate of deposit issued by the Director or any facsimile, reprint, photograph, photostat, or other reproduction of any such certificate of deposit.

(5) Any company, officer, director, agent, clerk or employee thereof, broker, or other person who violates any of the provisions of this Section, or knowingly participates in or abets such violation, is guilty of a business offense and shall be required to pay a penalty of not less than $200 nor more than $10,000, to be recovered in the name of the People of the State of Illinois either by the Attorney General or by the State's Attorney of the county in which the violation occurs. The penalty so recovered shall be paid into the county treasury if recovered by the State's Attorney or into the State treasury if recovered by the Attorney General.

(6) No company shall be held guilty of having violated any of the provisions of this Section by reason of the act of any agent, solicitor or employee, not an officer, director or department head thereof, unless an officer, director or department head of such company shall have knowingly permitted such act or shall have had prior knowledge thereof.

(7) Any person, association, organization, partnership, business trust or corporation not authorized to transact an insurance business in this State which disseminates in or causes to be disseminated in this State any advertising, invitations to inquire, questionnaires or requests for information designed to result in a solicitation for the purchase of insurance by residents of this State is also subject to the sanctions of this Section. The phrase "designed to result in a solicitation for the purchase of insurance" includes but is not limited to:

(a) the use of any form or document which provides either generalized or specific information or recommendations regardless of the insurance needs of the recipient or the availability of any insurance policy or plan; or

(b) any offer to provide such information or recommendation upon subsequent contacts or solicitation either by the entity generating the material or some other person; or

(c) the use of a coupon, reply card or request to write for further information; or

(d) the use of an application for insurance or an offer to provid