093_SB0559sam004

 










                                     LRB093 02174 JLS 14257 a

 1                    AMENDMENT TO SENATE BILL 559

 2        AMENDMENT NO.     .  Amend Senate Bill 559,  AS  AMENDED,
 3    by replacing the title with the following:
 4        "AN ACT concerning insurance."; and

 5    by  replacing  everything  after the enacting clause with the
 6    following:

 7        "Section 5.  The Illinois Insurance Code  is  amended  by
 8    changing Section 143.17a as follows:

 9        (215 ILCS 5/143.17a) (from Ch. 73, par. 755.17a)
10        Sec. 143.17a.  Notice of intention not to renew.
11        a.  No   company  shall  fail  to  renew  any  policy  of
12    insurance, to which Section 143.11 applies, except for  those
13    defined  in  subsections  (a),  (b),  (c), and (h) of Section
14    143.13, unless it shall send by mail to the named insured  at
15    least  60  days advance notice of its intention not to renew.
16    The company shall maintain proof of mailing of such notice on
17    one of the following forms:  a recognized  U.S.  Post  Office
18    form  or  a  form acceptable to the U.S. Post Office or other
19    commercial mail delivery service.   An  exact  and  unaltered
20    copy  of  such  notice  shall  also  be sent to the insured's
21    broker, if known, or the agent of record and to the mortgagee
 
                            -2-      LRB093 02174 JLS 14257 a
 1    or lien holder at the  last  mailing  address  known  by  the
 2    company.  However,  where  cancellation  is for nonpayment of
 3    premium, the notice of cancellation must be mailed  at  least
 4    10 days before the effective date of the cancellation.
 5        b.  This  Section  does  not  apply  if  the  company has
 6    manifested its willingness to renew  directly  to  the  named
 7    insured.  Provided, however, that no company may increase the
 8    renewal premium on any policy of insurance to  which  Section
 9    143.11  applies, except for those defined in subsections (a),
10    (b), (c), and (h) of Section 143.13,  by  30%  or  more,  nor
11    impose  changes  in  deductibles  or coverage that materially
12    alter the policy,  unless the company shall  have  mailed  or
13    delivered  to  the  named  insured  written  notice  of  such
14    increase or change in deductible or coverage at least 60 days
15    prior  to  the  renewal  or anniversary date. The increase in
16    premium shall be the  renewal  premium  based  on  the  known
17    exposure  as  of  the  date  of the quotation compared to the
18    premium as of the last day of coverage for the current year's
19    policy, annualized.  The premium on the renewal policy may be
20    subsequently amended to reflect any  change  in  exposure  or
21    reinsurance  costs not considered in the quotation.  An exact
22    and unaltered copy of such notice shall also be sent  to  the
23    insured's  broker,  if  known, or the agent of record. If the
24    company intends to increase the premium on a policy by 30% or
25    more and the renewal date is less than 60 but  more  than  30
26    days  away,  then  the company must extend the current policy
27    under the same terms, conditions, and  premium  to  allow  60
28    days notice of renewal and provide the actual renewal premium
29    quotation  and  any  change  in coverage or deductible on the
30    policy. Proof of mailing or proof of receipt may be proven by
31    a sworn  affidavit  by  the  insurer  as  to  the  usual  and
32    customary  business  practices  of mailing notice pursuant to
33    this Section  or  may  be  proven  consistent  with  Illinois
34    Supreme  Court  Rule 236. The company shall maintain proof of
 
                            -3-      LRB093 02174 JLS 14257 a
 1    mailing or proof of receipt whichever is required.
 2        c.  Should a company  fail  to  comply  with  the  notice
 3    requirements of this Section, the policy shall terminate only
 4    as provided in this subsection. In the event of a nonrenewal,
 5    if  a  notice of nonrenewal is not provided at least 31 days,
 6    but less than 60 days prior to expiration of the policy,  the
 7    policy  shall  be extended for an additional year a period of
 8    60 days or until the effective date of any similar  insurance
 9    procured by the insured, whichever is less, on the same terms
10    and conditions as the policy sought to be terminated.  In the
11    event  notice  is  provided  less  than  31 days prior to the
12    expiration of the policy, the policy shall be extended for  a
13    period of one year or until the effective date of any similar
14    insurance  procured by the insured, whichever is less, on the
15    same  terms  and  conditions  as  the  policy  sought  to  be
16    terminated unless the insurer has manifested its  willingness
17    to  renew  at  a  premium  which  represents  an increase not
18    exceeding 30%. The premium for coverage shall be prorated  in
19    accordance  with  the  amount of the last year's premium, and
20    the company  shall  be  entitled  to  this  premium  for  the
21    extension  of  coverage  and such extension may be contingent
22    upon the payment of such premium.
23        d.  Renewal of a policy does not constitute a  waiver  or
24    estoppel  with  respect  to  grounds  for  cancellation which
25    existed before the effective date of such renewal.
26        e.  In all notices of intention not to renew  any  policy
27    of  insurance, as defined in Section 143.11 the company shall
28    provide a specific explanation of the reasons for nonrenewal.
29    (Source: P.A. 89-669, eff. 1-1-97.)

30        Section 99.  Effective date.  This Act takes effect  upon
31    becoming law.".