State of Illinois
92nd General Assembly
Legislation

   [ Search ]   [ PDF text ]   [ Legislation ]   
[ Home ]   [ Back ]   [ Bottom ]


[ Engrossed ][ Senate Amendment 001 ]


92_SB1839

 
                                               LRB9215873JSpc

 1        AN ACT concerning insurance.

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

 4        Section 5.  The Illinois Insurance  Code  is  amended  by
 5    changing Section 143a-2 as follows:

 6        (215 ILCS 5/143a-2) (from Ch. 73, par. 755a-2)
 7        Sec.  143a-2.  (1)  Additional  uninsured  motor  vehicle
 8    coverage.  No  policy  insuring  against  loss resulting from
 9    liability imposed by law for bodily injury or death  suffered
10    by  any  person  arising out of the ownership, maintenance or
11    use of a motor vehicle  shall  be  renewed  or  delivered  or
12    issued  for  delivery in this State with respect to any motor
13    vehicle designed for use on public highways and  required  to
14    be   registered  in  this  State  unless  uninsured  motorist
15    coverage as required in Section 143a of this Code is included
16    in an amount equal to the insured's bodily  injury  liability
17    limits  unless  specifically  rejected  by the insured.  Each
18    insurance  company  providing  the  coverage   must   provide
19    applicants  with  a  brief  description  of  the coverage and
20    advise them of their right to reject the coverage  in  excess
21    of  the  limits  set  forth  in Section 7-203 of The Illinois
22    Vehicle Code.  The provisions of this amendatory Act of  1990
23    apply  to  policies  of  insurance applied for after June 30,
24    1991.
25        (2)  Right of rejection of additional uninsured  motorist
26    coverage.  After  June  30, 1991, every application for motor
27    vehicle coverage must contain  a  space  for  indicating  the
28    rejection  of  additional  uninsured  motorist  coverage.  No
29    rejection of  that  coverage  may  be  effective  unless  the
30    applicant signs or initials the indication of rejection.  The
31    applicant  may  reject additional uninsured motorist coverage
 
                            -2-                LRB9215873JSpc
 1    in excess of the limits set forth in  Section  7-203  of  the
 2    Illinois  Vehicle  Code.  In  those cases, including policies
 3    first issued before July  1,  1991,  where  the  insured  has
 4    elected  to  purchase  limits  of uninsured motorist coverage
 5    which are less than bodily  injury  liability  limits  or  to
 6    reject limits in excess of those required by law, the insurer
 7    need  not  provide in any renewal, reinstatement, reissuance,
 8    substitute, amended,  replacement  or  supplementary  policy,
 9    coverage  in  excess  of  that  elected  by  the  insured  in
10    connection with a policy previously issued to such insured by
11    the  same  insurer  unless  the  insured subsequently makes a
12    written request for such coverage.
13        (3)  The original application indicating the  applicant's
14    selection   of   uninsured  motorist  coverage  limits  shall
15    constitute sufficient evidence of the  applicant's  selection
16    of uninsured motorist coverage limits and shall be binding on
17    all  persons  insured under the policy.  For purposes of this
18    Section any reproduction  of  the  application  by  means  of
19    photograph,   photostat,   microfiche,  computerized  optical
20    imaging  process,  or  other  similar  process  or  means  of
21    reproduction shall be deemed the equivalent of  the  original
22    application.
23        (4)  For  the purpose of this Code the term "underinsured
24    motor  vehicle"  means  a  motor  vehicle  whose   ownership,
25    maintenance  or use has resulted in bodily injury or death of
26    the insured, as defined in the policy, and for which the  sum
27    of  the limits of liability under all bodily injury liability
28    insurance policies or under bonds or other security  required
29    to  be maintained under Illinois law applicable to the driver
30    or to the person or organization legally responsible for such
31    vehicle and applicable to  the  vehicle,  is  less  than  the
32    limits  for  underinsured  coverage  provided  the insured as
33    defined in the policy at  the  time  of  the  accident.   The
34    limits  of  liability  for  an insurer providing underinsured
 
                            -3-                LRB9215873JSpc
 1    motorist coverage shall be the limits of such coverage,  less
 2    those  amounts actually recovered under the applicable bodily
 3    injury insurance policies, bonds or other security maintained
 4    on the  underinsured  motor  vehicle.  However,  the  maximum
 5    amount  payable by the underinsured motorist coverage carrier
 6    shall not exceed the  amount  by  which  the  limits  of  the
 7    underinsured  motorist  coverage  exceeds  the  limits of the
 8    bodily injury liability insurance of the owner or operator of
 9    the underinsured motor vehicle.
10          On or after July 1, 1983, no  policy  insuring  against
11    loss  resulting  from  liability  imposed  by  law for bodily
12    injury or death suffered by any person  arising  out  of  the
13    ownership,  maintenance  or  use  of a motor vehicle shall be
14    renewed or delivered or issued for  delivery  in  this  State
15    with  respect to any motor vehicle designed for use on public
16    highways and required to be registered in this  State  unless
17    underinsured  motorist coverage is included in such policy in
18    an amount equal to the total  amount  of  uninsured  motorist
19    coverage   provided  in  that  policy  where  such  uninsured
20    motorist coverage exceeds the limits  set  forth  in  Section
21    7-203 of the Illinois Vehicle Code.  An insurer shall provide
22    to  its  insureds  a  written  explanation  of  the  coverage
23    provided  by underinsured motorist coverage.  The explanation
24    shall be provided when a policy is issued and  at  the  first
25    renewal, reinstatement, or reissuance of a policy that occurs
26    after  the  effective date of this amendatory Act of the 92nd
27    General Assembly.
28        (5)  Scope.  Nothing herein  shall  prohibit  an  insurer
29    from  setting forth policy terms and conditions which provide
30    that if the insured has coverage available under this Section
31    under more than one policy  or  provision  of  coverage,  any
32    recovery or benefits may be equal to, but may not exceed, the
33    higher  of  the applicable limits of the respective coverage,
34    and the limits of liability under this Section shall  not  be
 
                            -4-                LRB9215873JSpc
 1    increased  because  of  multiple motor vehicles covered under
 2    the same policy of insurance.  Insurers  providing  liability
 3    coverage  on an excess or umbrella basis are neither required
 4    to provide, nor are they prohibited from offering  or  making
 5    available   coverages   conforming   to  this  Section  on  a
 6    supplemental basis.  Notwithstanding the provisions  of  this
 7    Section,  an  insurer  shall  not  be  prohibited from solely
 8    providing  a  combination  of  uninsured   and   underinsured
 9    motorist  coverages  where the limits of liability under each
10    coverage is in the same amount.
11        (6)  Subrogation  against  underinsured  motorists.    No
12    insurer  shall  exercise  any  right  of  subrogation under a
13    policy  providing  additional  uninsured  motorist   coverage
14    against  an  underinsured motorist where the insurer has been
15    provided with written  notice  in  advance  of  a  settlement
16    between  its  insured  and  the underinsured motorist and the
17    insurer fails to advance a payment  to  the  insured,  in  an
18    amount  equal  to  the  tentative  settlement, within 30 days
19    following receipt of such notice.
20        (7)  A policy which provides underinsured  motor  vehicle
21    coverage  may include a clause which denies payment until the
22    limits of liability  or  portion  thereof  under  all  bodily
23    injury   liability   insurance  policies  applicable  to  the
24    underinsured  motor  vehicle  and  its  operators  have  been
25    partially or  fully  exhausted  by  payment  of  judgment  or
26    settlement.   A  judgment  or settlement of the bodily injury
27    claim in an amount less than the limits of liability  of  the
28    bodily  injury  coverages  applicable  to the claim shall not
29    preclude the claimant from making  an  underinsured  motorist
30    claim  against  the underinsured motorist coverage.  Any such
31    provision in a policy of insurance shall be  inapplicable  if
32    the  insured, or the legal representative of the insured, and
33    the insurer providing  underinsured  motor  vehicle  coverage
34    agree that the insured has suffered bodily injury or death as
 
                            -5-                LRB9215873JSpc
 1    the result of the negligent operation, maintenance, or use of
 2    an underinsured motor vehicle and, without arbitration, agree
 3    also  on  the  amount  of damages that the insured is legally
 4    entitled to collect.  The maximum amount payable pursuant  to
 5    such  an  underinsured  motor  vehicle  insurance  settlement
 6    agreement  shall not exceed the amount by which the limits of
 7    the underinsured motorist coverage exceed the limits  of  the
 8    bodily injury liability insurance of the owner or operator of
 9    the  underinsured motor vehicle.  Any such agreement shall be
10    final as to the amount due and shall be binding upon both the
11    insured and the underinsured motorist insurer  regardless  of
12    the amount of any judgment, or any settlement reached between
13    any  insured  and  the  person or persons responsible for the
14    accident.  No such settlement agreement  shall  be  concluded
15    unless:    (i)  the  insured  has  complied  with  all  other
16    applicable policy terms and conditions; and (ii)  before  the
17    conclusion of the settlement agreement, the insured has filed
18    suit against the underinsured motor vehicle owner or operator
19    and  has  not abandoned the suit, or settled the suit without
20    preserving the rights of the insurer  providing  underinsured
21    motor  vehicle  coverage in the manner described in paragraph
22    (6) of this Section.
23    (Source: P.A. 89-658, eff. 1-1-97.)

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

[ Top ]