Illinois General Assembly - Full Text of Public Act 093-0713
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Public Act 093-0713


 

Public Act 0713 93RD GENERAL ASSEMBLY



 


 
Public Act 093-0713
 
SB2491 Enrolled LRB093 20569 SAS 46378 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 Sections 143.11b, 143.14, 143.15, 143.16, 143.17,
143.17a, and 513a11 as follows:
 
    (215 ILCS 5/143.11b)
    Sec. 143.11b. Assignment or transfer of property and
casualty policies. An assignment or transfer of a policy of
insurance to which Section 143.11 applies among or between
insurers within an insurance holding company system or insurers
under common management or control, or as a result of a merger,
acquisition, or restructuring of an insurance company, is not a
nonrenewal for purposes of the notification requirements under
Sections 143.12 through 143.24. However, in the event of an
increase in the renewal premium of 30% or more, change in
deductibles or change in coverage that materially alters any
policy to which subsection b of Section 143.17a applies, the
company shall adhere to the provisions set forth in subsection
b of Section 143.17a. A company making an assignment or
transfer of a policy among or between insurers within an
insurance holding company system or insurers under common
management or control, or as a result of a merger, acquisition,
or restructuring of an insurance company, shall have delivered
to the named insured notice of such assignment or transfer at
least 60 days prior to the renewal date. An exact and unaltered
copy of the notice shall also be sent to the insured's
producer, if known, and agent of record. The assignment or
transfer of a policy or policies of insurance among or between
insurers shall not occur without the producer or agent of
record, or both, having a signed agency contract with the
entity to which the policy or policies are to be assigned or
transferred. If there is not a signed agency contract, all of
the notice requirements of Sections 143.17 and 143.17a shall
apply. Nothing in this Section shall contravene any existing
producer and company contract rights. For purposes of this
Section, the insured's producer, if known, and agent of record
may opt to accept notification of assignment or transfer of
policies electronically.
(Source: P.A. 91-800, eff. 6-13-00.)
 
    (215 ILCS 5/143.14)  (from Ch. 73, par. 755.14)
    Sec. 143.14. Notice of cancellation.
    (a) No notice of cancellation of any policy of insurance,
to which Section 143.11 applies, shall be effective unless
mailed by the company to the named insured and the mortgage or
lien holder, at the last mailing address known by the company.
The company shall maintain proof of mailing of such notice on a
recognized U.S. Post Office form or a form acceptable to the U.
S. Post Office or other commercial mail delivery service. A
copy of all such notices shall be sent to the insured's broker
if known, or the agent of record, and to the mortgagee or
lienholder, if known, at the last mailing address known to the
company. For purposes of this Section, the mortgage or lien
holder, insured's broker, if known, or the agent of record may
opt to accept notification electronically.
    (b) Whenever a financed insurance contract is cancelled,
the insurer shall return whatever gross unearned premiums are
due under the insurance contract or contracts not to exceed the
unpaid balance due the premium finance company directly to the
premium finance company effecting the cancellation for the
account of the named insured. The return premium must be mailed
to the premium finance company within 60 days. The request for
the unearned premium by the premium finance company shall be in
the manner of a monthly account, current accounting by
producer, policy number, unpaid balance and name of insured for
each cancelled amount. In the event the insurance contract or
contracts are subject to audit, the insurer shall retain the
right to withhold the return of the portion of premium that can
be identified to the contract or contracts until the audit is
completed. Within 30 days of the completion of the audit, if a
premium retained by the insurer after crediting the earned
premium would result in a surplus, the insurer shall return the
surplus directly to the premium finance company. If the audit
should result in an additional premium due the insurer, the
obligation for the collection of this premium shall fall upon
the insurer and not affect any other contract or contracts
currently being financed by the premium finance company for the
named insured.
    (c) Whenever a premium finance agreement contains a power
of attorney enabling the premium finance company to cancel any
insurance contract or contracts in the agreement, the insurer
shall honor the date of cancellation as set forth in the
request from the premium finance company without requiring the
return of the insurance contract or contracts. The insurer may
mail to the named insured an acknowledgment of the notice of
cancellation from the premium finance company but the named
insured shall not incur any additional premium charge for any
extension of coverage. The insurer need not maintain proof of
mailing of this notice.
    (d) All statutory regulatory and contractual restrictions
providing that the insurance contract may not be cancelled
unless the required notice is mailed to a governmental agency,
mortgagee, lienholder, or other third party shall apply where
cancellation is effected under a power of attorney under a
premium finance agreement. The insurer shall have the right for
a premium charge for this extension of coverage.
(Source: P.A. 86-370; 86-437; 86-1028; 87-811; 87-1123.)
 
    (215 ILCS 5/143.15)  (from Ch. 73, par. 755.15)
    Sec. 143.15. Mailing of cancellation notice. All notices of
cancellation of insurance as defined in subsections (a), (b)
and (c) of Section 143.13 must be mailed at least 30 days prior
to the effective date of cancellation to the named insured and
mortgagee or lien holder, if known, at the last mailing address
known to the company. All notices of cancellation shall include
a specific explanation of the reason or reasons for
cancellation. However, where cancellation is for nonpayment of
premium, the notice of cancellation must be mailed at least 10
days before the effective date of the cancellation. For
purposes of this Section, the mortgagee or lien holder, if
known, may opt to accept notification electronically.
(Source: P.A. 89-669, eff. 1-1-97.)
 
    (215 ILCS 5/143.16)  (from Ch. 73, par. 755.16)
    Sec. 143.16. Mailing of cancellation notice. All notices of
cancellation of insurance to which Section 143.11 applies,
except for those defined in subsections (a), (b) and (c) of
Section 143.13 must be mailed at least 30 days prior to the
effective date of cancellation during the first 60 days of
coverage. After the coverage has been effective for 61 days or
more, all notices must be mailed at least 60 days prior to the
effective date of cancellation. All such notices shall include
a specific explanation of the reason or reasons for
cancellation and shall be mailed to the named insured and
mortgagee or lien holder, if known, at the last mailing address
known to the company. However, where cancellation is for
nonpayment of premium, the notice of cancellation must be
mailed at least 10 days before the effective date of the
cancellation. For purposes of this Section, the mortgagee or
lien holder, if known, may opt to accept notification
electronically.
(Source: P.A. 89-669, eff. 1-1-97.)
 
    (215 ILCS 5/143.17)  (from Ch. 73, par. 755.17)
    Sec. 143.17. Notice of intention not to renew.
    a. No company shall fail to renew any policy of insurance,
as defined in subsections (a), (b), (c), and (h) of Section
143.13, to which Section 143.11 applies, unless it shall send
by mail to the named insured at least 30 days advance notice of
its intention not to renew. The company shall maintain proof of
mailing of such notice on a recognized U.S. Post Office form or
a form acceptable to the U. S. Post Office or other commercial
mail delivery service. An exact and unaltered copy of such
notice shall also be sent to the insured's broker, if known, or
the agent of record and to the mortgagee or lien holder at the
last mailing address known by the company. However, where
cancellation is for nonpayment of premium, the notice of
cancellation must be mailed at least 10 days before the
effective date of the cancellation.
    b. This Section does not apply if the company has
manifested its willingness to renew directly to the named
insured. Such written notice shall specify the premium amount
payable, including any premium payment plan available, and the
name of any person or persons, if any, authorized to receive
payment on behalf of the company. If no person is so
authorized, the premium notice shall so state. The notice of
nonrenewal and the proof of mailing shall be effected on the
same date.
    b-5. This Section does not apply if the company manifested
its willingness to renew directly to the named insured.
However, no company may impose changes in deductibles or
coverage for any policy forms applicable to an entire line of
business enumerated in subsections (a), (b), (c), and (h) of
Section 143.13 to which Section 143.11 applies unless the
company mails to the named insured written notice of the change
in deductible or coverage at least 60 days prior to the renewal
or anniversary date. An exact and unaltered copy of the notice
shall also be sent to the insured's broker, if known, or the
agent of record.
    c. Should a company fail to comply with (a) or (b) of this
Section, the policy shall terminate only on the effective date
of any similar insurance procured by the insured with respect
to the same subject or location designated in both policies.
    d. Renewal of a policy does not constitute a waiver or
estoppel with respect to grounds for cancellation which existed
before the effective date of such renewal.
    e. In all notices of intention not to renew any policy of
insurance, as defined in Section 143.11 the company shall
provide a specific explanation of the reasons for nonrenewal.
    f. For purposes of this Section, the insured's broker, if
known, or the agent of record and the mortgagee or lien holder
may opt to accept notification electronically.
(Source: P.A. 91-597, eff. 1-1-00.)
 
    (215 ILCS 5/143.17a)  (from Ch. 73, par. 755.17a)
    Sec. 143.17a. Notice of intention not to renew.
    a. No company shall fail to renew any policy of insurance,
to which Section 143.11 applies, except for those defined in
subsections (a), (b), (c), and (h) of Section 143.13, unless it
shall send by mail to the named insured at least 60 days
advance notice of its intention not to renew. The company shall
maintain proof of mailing of such notice on one of the
following forms: a recognized U.S. Post Office form or a form
acceptable to the U.S. Post Office or other commercial mail
delivery service. An exact and unaltered copy of such notice
shall also be sent to the insured's broker, if known, or the
agent of record and to the mortgagee or lien holder at the last
mailing address known by the company. However, where
cancellation is for nonpayment of premium, the notice of
cancellation must be mailed at least 10 days before the
effective date of the cancellation.
    b. This Section does not apply if the company has
manifested its willingness to renew directly to the named
insured. Provided, however, that no company may increase the
renewal premium on any policy of insurance to which Section
143.11 applies, except for those defined in subsections (a),
(b), (c), and (h) of Section 143.13, by 30% or more, nor impose
changes in deductibles or coverage that materially alter the
policy, unless the company shall have mailed or delivered to
the named insured written notice of such increase or change in
deductible or coverage at least 60 days prior to the renewal or
anniversary date. The increase in premium shall be the renewal
premium based on the known exposure as of the date of the
quotation compared to the premium as of the last day of
coverage for the current year's policy, annualized. The premium
on the renewal policy may be subsequently amended to reflect
any change in exposure or reinsurance costs not considered in
the quotation. An exact and unaltered copy of such notice shall
also be sent to the insured's broker, if known, or the agent of
record. If an insurer fails to provide the notice required by
this subsection, then the company must extend the current
policy under the same terms, conditions, and premium to allow
60 days notice of renewal and provide the actual renewal
premium quotation and any change in coverage or deductible on
the policy. Proof of mailing or proof of receipt may be proven
by a sworn affidavit by the insurer as to the usual and
customary business practices of mailing notice pursuant to this
Section or may be proven consistent with Illinois Supreme Court
Rule 236.
    c. Should a company fail to comply with the non-renewal
notice requirements of subsection a., the policy shall be
extended for an additional year or until the effective date of
any similar insurance procured by the insured, whichever is
less, on the same terms and conditions as the policy sought to
be terminated, unless the insurer has manifested its intention
to renew at a different premium that represents an increase not
exceeding 30%.
    d. Renewal of a policy does not constitute a waiver or
estoppel with respect to grounds for cancellation which existed
before the effective date of such renewal.
    e. In all notices of intention not to renew any policy of
insurance, as defined in Section 143.11 the company shall
provide a specific explanation of the reasons for nonrenewal.
    f. For purposes of this Section, the insured's broker, if
known, or the agent of record and the mortgagee or lien holder
may opt to accept notification electronically.
(Source: P.A. 93-477, eff. 8-8-03.)
 
    (215 ILCS 5/513a11)  (from Ch. 73, par. 1065.60a11)
    Sec. 513a11. Cancellation requirements upon default.
    (a) When a premium finance agreement contains a power of
attorney enabling the premium finance company to cancel any
insurance contract or contracts listed in the premium finance
agreement, the insurance contract or contracts shall not be
cancelled by the premium finance company unless the request for
cancellation is effectuated under this Section.
    (b) Not less than 10 days written notice shall be mailed to
the named insured of the intent of the premium finance company
to cancel the insurance contract unless the default is cured
within the 10 day period.
    (c) After expiration of the 10 day period, the premium
finance company may request, in the name of the named insured,
cancellation of the insurance contract or contracts by mailing
or hand delivering to the insurer a request for cancellation,
and the insurance contract shall be cancelled as if the request
for cancellation had been submitted by the named insured, but
without requiring the return of the insurance contract or
contracts. The premium finance company shall also mail a copy
of the request for cancellation to the named insured at his
last known address.
    (d) All statutory, regulatory, and contractual
restrictions providing that the insurance contract may not be
cancelled unless notice is given to a governmental agency,
mortgagee, or other third party shall apply where cancellation
is effected under provisions of this Section. The insurer shall
give the notice to any governmental agency, mortgagee, or other
third party on or before the fifth business day after it
receives the notice of cancellation from the premium finance
company. For purposes of this Section, any governmental agency,
mortgagee, or other third party may opt to receive notices
electronically.
    (e) In the event that the collection of return premiums for
the account of the named insured results in a surplus over the
amount due from the named insured, the premium finance company
shall refund the excess to the named insured; however, no
refund is required if it amounts to less than $5.
    (f) All cancellation provisions required of the premium
finance company and insurer are applicable to any policy to
which Section 143.11 applies.
(Source: P.A. 87-811.)

Effective Date: 1/1/2005