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| Public Act 093-0713 |
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AN ACT in relation to insurance.
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Be it enacted by the People of the State of Illinois, | ||||
represented in the General Assembly:
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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:
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(215 ILCS 5/143.11b)
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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,
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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
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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
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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
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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.
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(Source: P.A. 91-800, eff. 6-13-00.)
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(215 ILCS 5/143.14) (from Ch. 73, par. 755.14)
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Sec. 143.14. Notice of cancellation.
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(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.
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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
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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.
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(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.
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(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
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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.
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(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.
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(Source: P.A. 86-370; 86-437; 86-1028; 87-811; 87-1123.)
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(215 ILCS 5/143.15) (from Ch. 73, par. 755.15)
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Sec. 143.15. Mailing of cancellation notice. All notices of
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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.
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(Source: P.A. 89-669, eff. 1-1-97.)
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(215 ILCS 5/143.16) (from Ch. 73, par. 755.16)
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Sec. 143.16. Mailing of cancellation notice. All notices of
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cancellation of insurance to which Section
143.11 applies, | ||
except for those defined in subsections (a), (b) and (c) of
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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.
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(Source: P.A. 89-669, eff. 1-1-97.)
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(215 ILCS 5/143.17) (from Ch. 73, par. 755.17)
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Sec. 143.17. Notice of intention not to renew.
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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
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cancellation is for nonpayment of premium, the notice
of
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cancellation must be mailed at least 10 days before the
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effective date of the cancellation.
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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
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nonrenewal and the proof of mailing shall be effected on the | ||
same date.
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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
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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
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agent of record.
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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.
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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.
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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.
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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.
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(Source: P.A. 91-597, eff. 1-1-00.)
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(215 ILCS 5/143.17a) (from Ch. 73, par. 755.17a)
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Sec. 143.17a. Notice of intention not to renew.
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a. No company shall fail to renew any policy of insurance,
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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.
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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
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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
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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
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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.
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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%.
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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.
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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.
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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.
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(Source: P.A. 93-477, eff. 8-8-03.)
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(215 ILCS 5/513a11) (from Ch. 73, par. 1065.60a11)
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Sec. 513a11. Cancellation requirements upon default.
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(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.
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(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.
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(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.
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(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
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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.
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(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.
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(f) All cancellation provisions required of the premium | ||
finance company
and insurer are applicable to any policy to | ||
which Section 143.11 applies.
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(Source: P.A. 87-811.)
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