93RD GENERAL ASSEMBLY
State of Illinois
2003 and 2004
SB2565

 

Introduced 2/4/2004, by Denny Jacobs

 

SYNOPSIS AS INTRODUCED:
 
215 ILCS 5/143a-2   from Ch. 73, par. 755a-2

    Amends the Illinois Insurance Code. In provisions giving an applicant's the right to reject additional uninsured motorist coverage, provides the same right to insureds. Provides that a rejection of additional uninsured motorist coverage in excess of the limits set forth in the Illinois Vehicle Code must be executed by the applicant or insured before the policy is issued by the insurer or within 60 days after the issuance of the policy. Effective immediately.


LRB093 18249 SAS 43949 b

 

 

A BILL FOR

 

SB2565 LRB093 18249 SAS 43949 b

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 by
10 any person arising out of the ownership, maintenance or use of
11 a motor vehicle shall be renewed or delivered or issued for
12 delivery in this State with respect to any motor vehicle
13 designed for use on public highways and required to be
14 registered in this State unless uninsured motorist coverage as
15 required in Section 143a of this Code is included in an amount
16 equal to the insured's bodily injury liability limits unless
17 specifically rejected by the insured. Each insurance company
18 providing the coverage must provide applicants with a brief
19 description of the coverage and advise them of their right to
20 reject the coverage in excess of the limits set forth in
21 Section 7-203 of The Illinois Vehicle Code. The provisions of
22 this amendatory Act of 1990 apply to policies of insurance
23 applied for after June 30, 1991.
24     (2) Right of rejection of additional uninsured motorist
25 coverage. After June 30, 1991, every application for motor
26 vehicle coverage must contain a space for indicating the
27 rejection of additional uninsured motorist coverage. No
28 rejection of that coverage may be effective unless the
29 applicant or insured signs or initials the indication of
30 rejection. The applicant or insured may reject additional
31 uninsured motorist coverage in excess of the limits set forth
32 in Section 7-203 of the Illinois Vehicle Code if the rejection

 

 

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1 is executed by the applicant or insured before the policy is
2 issued by the insurer or within 60 days after the issuance of
3 the policy. In those cases, including policies first issued
4 before July 1, 1991, where the insured has elected to purchase
5 limits of uninsured motorist coverage which are less than
6 bodily injury liability limits or to reject limits in excess of
7 those required by law, the insurer need not provide in any
8 renewal, reinstatement, reissuance, substitute, amended,
9 replacement or supplementary policy, coverage in excess of that
10 elected by the insured in connection with a policy previously
11 issued to such insured by the same insurer unless the insured
12 subsequently makes a 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 of
16 uninsured motorist coverage limits and shall be binding on all
17 persons insured under the policy. For purposes of this Section
18 any reproduction of the application by means of photograph,
19 photostat, microfiche, computerized optical imaging process,
20 or other similar process or means of reproduction shall be
21 deemed the equivalent of the original application.
22     (4) For the purpose of this Code the term "underinsured
23 motor vehicle" means a motor vehicle whose ownership,
24 maintenance or use has resulted in bodily injury or death of
25 the insured, as defined in the policy, and for which the sum of
26 the limits of liability under all bodily injury liability
27 insurance policies or under bonds or other security required to
28 be maintained under Illinois law applicable to the driver or to
29 the person or organization legally responsible for such vehicle
30 and applicable to the vehicle, is less than the limits for
31 underinsured coverage provided the insured as defined in the
32 policy at the time of the accident. The limits of liability for
33 an insurer providing underinsured motorist coverage shall be
34 the limits of such coverage, less those amounts actually
35 recovered under the applicable bodily injury insurance
36 policies, bonds or other security maintained on the

 

 

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1 underinsured motor vehicle. However, the maximum amount
2 payable by the underinsured motorist coverage carrier shall not
3 exceed the amount by which the limits of the underinsured
4 motorist coverage exceeds the limits of the bodily injury
5 liability insurance of the owner or operator of the
6 underinsured motor vehicle.
7      On or after July 1, 1983, no policy insuring against loss
8 resulting from liability imposed by law for bodily injury or
9 death suffered by any person arising out of the ownership,
10 maintenance or use of a motor vehicle shall be renewed or
11 delivered or issued for delivery in this State with respect to
12 any motor vehicle designed for use on public highways and
13 required to be registered in this State unless underinsured
14 motorist coverage is included in such policy in an amount equal
15 to the total amount of uninsured motorist coverage provided in
16 that policy where such uninsured motorist coverage exceeds the
17 limits set forth in Section 7-203 of the Illinois Vehicle Code.
18     (5) Scope. Nothing herein shall prohibit an insurer from
19 setting forth policy terms and conditions which provide that if
20 the insured has coverage available under this Section under
21 more than one policy or provision of coverage, any recovery or
22 benefits may be equal to, but may not exceed, the higher of the
23 applicable limits of the respective coverage, and the limits of
24 liability under this Section shall not be increased because of
25 multiple motor vehicles covered under the same policy of
26 insurance. Insurers providing liability coverage on an excess
27 or umbrella basis are neither required to provide, nor are they
28 prohibited from offering or making available coverages
29 conforming to this Section on a supplemental basis.
30 Notwithstanding the provisions of this Section, an insurer
31 shall not be prohibited from solely providing a combination of
32 uninsured and underinsured motorist coverages where the limits
33 of liability under each coverage is in the same amount.
34     (6) Subrogation against underinsured motorists. No insurer
35 shall exercise any right of subrogation under a policy
36 providing additional uninsured motorist coverage against an

 

 

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1 underinsured motorist where the insurer has been provided with
2 written notice in advance of a settlement between its insured
3 and the underinsured motorist and the insurer fails to advance
4 a payment to the insured, in an amount equal to the tentative
5 settlement, within 30 days following receipt of such notice.
6     (7) A policy which provides underinsured motor vehicle
7 coverage may include a clause which denies payment until the
8 limits of liability or portion thereof under all bodily injury
9 liability insurance policies applicable to the underinsured
10 motor vehicle and its operators have been partially or fully
11 exhausted by payment of judgment or settlement. A judgment or
12 settlement of the bodily injury claim in an amount less than
13 the limits of liability of the bodily injury coverages
14 applicable to the claim shall not preclude the claimant from
15 making an underinsured motorist claim against the underinsured
16 motorist coverage. Any such provision in a policy of insurance
17 shall be inapplicable if the insured, or the legal
18 representative of the insured, and the insurer providing
19 underinsured motor vehicle coverage agree that the insured has
20 suffered bodily injury or death as the result of the negligent
21 operation, maintenance, or use of an underinsured motor vehicle
22 and, without arbitration, agree also on the amount of damages
23 that the insured is legally entitled to collect. The maximum
24 amount payable pursuant to such an underinsured motor vehicle
25 insurance settlement agreement shall not exceed the amount by
26 which the limits of the underinsured motorist coverage exceed
27 the limits of the bodily injury liability insurance of the
28 owner or operator of the underinsured motor vehicle. Any such
29 agreement shall be final as to the amount due and shall be
30 binding upon both the insured and the underinsured motorist
31 insurer regardless of the amount of any judgment, or any
32 settlement reached between any insured and the person or
33 persons responsible for the accident. No such settlement
34 agreement shall be concluded unless: (i) the insured has
35 complied with all other applicable policy terms and conditions;
36 and (ii) before the conclusion of the settlement agreement, the

 

 

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1 insured has filed suit against the underinsured motor vehicle
2 owner or operator and has not abandoned the suit, or settled
3 the suit without preserving the rights of the insurer providing
4 underinsured motor vehicle coverage in the manner described in
5 paragraph (6) of this Section.
6 (Source: P.A. 89-658, eff. 1-1-97.)
 
7     Section 99. Effective date. This Act takes effect upon
8 becoming law.