093_SB0559eng

 
SB559 Engrossed                      LRB093 02174 JLS 10929 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 143.17a as follows:

 6        (215 ILCS 5/143.17a) (from Ch. 73, par. 755.17a)
 7        Sec. 143.17a.  Notice of intention not to renew.
 8        a.  No  company  shall  fail  to  renew  any  policy   of
 9    insurance,  to which Section 143.11 applies, except for those
10    defined in subsections (a), (b),  (c),  and  (h)  of  Section
11    143.13,  unless it shall send by mail to the named insured at
12    least 60 days advance notice of its intention not  to  renew.
13    The company shall maintain proof of mailing of such notice on
14    one  of  the  following forms:  a recognized U.S. Post Office
15    form or a form acceptable to the U.S. Post  Office  or  other
16    commercial  mail  delivery  service.   An exact and unaltered
17    copy of such notice shall  also  be  sent  to  the  insured's
18    broker, if known, or the agent of record and to the mortgagee
19    or  lien  holder  at  the  last  mailing address known by the
20    company. However, where cancellation  is  for  nonpayment  of
21    premium,  the  notice of cancellation must be mailed at least
22    10 days before the effective date of the cancellation.
23        b.  This Section  does  not  apply  if  the  company  has
24    manifested  its  willingness  to  renew directly to the named
25    insured. Provided, however, that no company may increase  the
26    renewal  premium  on any policy of insurance to which Section
27    143.11 applies, except for those defined in subsections  (a),
28    (b),  (c),  and  (h)  of  Section 143.13, by 30% or more, nor
29    impose changes in deductibles  or  coverage  that  materially
30    alter  the  policy,   unless the company shall have mailed or
31    delivered  to  the  named  insured  written  notice  of  such
 
SB559 Engrossed             -2-      LRB093 02174 JLS 10929 b
 1    increase or change in deductible or coverage at least 60 days
 2    prior to the renewal or anniversary  date.  The  increase  in
 3    premium  shall  be  the  renewal  premium  based on the known
 4    exposure as of the date of  the  quotation  compared  to  the
 5    premium as of the last day of coverage for the current year's
 6    policy, annualized.  The premium on the renewal policy may be
 7    subsequently  amended  to  reflect  any change in exposure or
 8    reinsurance costs not considered in the quotation.  An  exact
 9    and  unaltered  copy of such notice shall also be sent to the
10    insured's broker, if known, or the agent of  record.  If  the
11    company intends to increase the premium on a policy by 30% or
12    more  and  the  renewal date is less than 60 but more than 30
13    days away, then the company must extend  the  current  policy
14    under  the  same  terms,  conditions, and premium to allow 60
15    days notice of renewal and provide the actual renewal premium
16    quotation and any change in coverage  or  deductible  on  the
17    policy. Proof of mailing or proof of receipt may be proven by
18    a  sworn  affidavit  by  the  insurer  as  to  the  usual and
19    customary business practices of mailing  notice  pursuant  to
20    this  Section  or  may  be  proven  consistent  with Illinois
21    Supreme Court Rule 236. The company shall maintain  proof  of
22    mailing or proof of receipt whichever is required.
23        c.  Should  a  company  fail  to  comply  with the notice
24    requirements of this Section, the policy shall terminate only
25    as provided in this subsection. In the event of a nonrenewal,
26    if a notice of nonrenewal is not provided at least  31  days,
27    but  less than 60 days prior to expiration of the policy, the
28    policy shall be extended for an additional year a  period  of
29    60  days or until the effective date of any similar insurance
30    procured by the insured, whichever is less, on the same terms
31    and conditions as the policy sought to be terminated.  In the
32    event notice is provided less  than  31  days  prior  to  the
33    expiration  of the policy, the policy shall be extended for a
34    period of one year or until the effective date of any similar
 
SB559 Engrossed             -3-      LRB093 02174 JLS 10929 b
 1    insurance procured by the insured, whichever is less, on  the
 2    same  terms  and  conditions  as  the  policy  sought  to  be
 3    terminated  unless the insurer has manifested its willingness
 4    to renew at  a  premium  which  represents  an  increase  not
 5    exceeding  30%. The premium for coverage shall be prorated in
 6    accordance with the amount of the last  year's  premium,  and
 7    the  company  shall  be  entitled  to  this  premium  for the
 8    extension of coverage and such extension  may  be  contingent
 9    upon the payment of such premium.
10        d.  Renewal  of  a policy does not constitute a waiver or
11    estoppel with  respect  to  grounds  for  cancellation  which
12    existed before the effective date of such renewal.
13        e.  In  all  notices of intention not to renew any policy
14    of insurance, as defined in Section 143.11 the company  shall
15    provide a specific explanation of the reasons for nonrenewal.
16    (Source: P.A. 89-669, eff. 1-1-97.)

17        Section  99.  Effective date.  This Act takes effect upon
18    becoming law.