Public Act 093-0762
 
SB2238 Enrolled LRB093 15870 RCE 41487 b

    AN ACT in relation to insurance.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The Illinois Insurance Code is amended by
changing Section 143a-2 as follows:
 
    (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 After June 30, 1991,
every application for motor vehicle coverage must contain a
space for indicating the rejection of additional uninsured
motorist coverage. No rejection of that coverage may be
effective unless the applicant signs or initials the indication
of rejection. The 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, including policies first issued before July 1,
1991, 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 application indicating the
applicant's selection of uninsured motorist coverage limits
shall constitute sufficient evidence of the applicant's
selection of uninsured motorist coverage limits and shall be
binding on all persons insured under the policy. For purposes
of this Section any reproduction of the document application 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 application.
    (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. However, the maximum amount
payable by the underinsured motorist coverage carrier shall not
exceed the amount by which the limits of the underinsured
motorist coverage exceeds the limits of the bodily injury
liability insurance of the owner or operator of 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. 89-658, eff. 1-1-97.)
 
    Section 99. Effective date. This Act takes effect upon
becoming law.

Effective Date: 7/16/2004