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.