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| [ Introduced ] | [ House Amendment 001 ] |
91_HB0496eng HB0496 Engrossed LRB9101701JSpc 1 AN ACT to amend the Illinois Insurance Code by changing 2 Section 397.1. 3 Be it enacted by the People of the State of Illinois, 4 represented in the General Assembly: 5 Section 5. The Illinois Insurance Code is amended by 6 changing Section 397.1 as follows: 7 (215 ILCS 5/397.1) (from Ch. 73, par. 1009.1) 8 Sec. 397.1. Certificate regarding payment of taxes and 9 expenses on property sustaining loss. 10 (a) It shall be unlawful for any company transacting 11 insurance business in this State to pay a claim of an insured 12 property owner for loss by fire or explosion to a structure 13 located in this State where the amount recoverable for loss 14 to the structure under a policy exceeds $25,000, until the 15 insurance company receives the certificate required by this 16 Section. A notice, to the State's Attorney of the county 17 where the structure is located, of the insurers intent to pay 18 a claim shall include the name of the property owner, the 19 address of the property, its legal description, the permanent 20 real estate index number that identifies the property for 21 purposes of taxation, and the amount of the claim to be paid. 22 (b) For purposes of this Section, the following 23 definitions are applicable: 24 (1) "Insured property owner" is a person named as 25 an insured who is the owner, title-holder or mortgagee of 26 a structure, the holder of an interest secured by the 27 structure, the beneficiary of a land trust owning or 28 holding title to a structure, the lessee of a structure 29 with a contractual obligation for property taxes, or the 30 assignee of any such person. 31 (2) "Amount recoverable" is the dollar amount HB0496 Engrossed -2- LRB9101701JSpc 1 payable under all insurance policies for loss to the 2 structure. 3 (3) "Proceeds" is the dollar amount payable for 4 loss to the structure under an insurance policy. 5 (4) "Delinquent property taxes" are those property 6 taxes on the property which are delinquent pursuant to 7 Section 21-15, 21-20, or 21-25 of the Property Tax Code, 8 including those delinquent taxes on property forfeited 9 under Section 21-225 of the Property Tax Code, as of the 10 date of loss. 11 In determining delinquent property taxes under this 12 Section, the amount of property taxes for which a 13 certificate of error has been issued pursuant to Section 14 14-10 or 14-20 of the Property Tax Code shall not be 15 considered delinquent. 16 (5) "Incurred demolition expense" is: a. the cost 17 of demolishing or removing a structure from property by 18 or at the expense of a unit of local government if the 19 demolition or removal occurs on a date preceding the 20 later of (i) the acceptance by the insurance company of a 21 Proof of Loss for an agreed amount of proceeds, or (ii) 22 the date of receipt by the unit of local government of a 23 request for execution of the certificate required by this 24 Section; or b. the amount estimated by the unit of local 25 government when it receives a request to execute the 26 certificate required by this Section; or c. the amount 27 ordered to be withheld by a court within 28 days after a 28 unit of local government receives a request for execution 29 of the certificate required by this Section. The unit of 30 local government must be a party to such proceeding. 31 Incurred demolition expense shall be determined 32 under subparagraph a. whenever possible. In determining 33 the incurred demolition expense under subparagraph b., 34 the unit of local government shall make its estimate and HB0496 Engrossed -3- LRB9101701JSpc 1 execute the certificate within 30 days after receiving a 2 request for execution.If the unit of local government3shall fail within 30 days to execute the certificate, as4required by subparagraph a., the company can proceed to5make payment of the claim as if the certificate had been6received showing no unpaid demolition costs.The request 7 for execution may be served personally, and may be proven 8 by a written receipt signed by the local official as of 9 the date the request was made or by service on the local 10 official by certified mail, return receipt requested. A 11 court order under subparagraph c. shall supersede an 12 estimate under subparagraph b. 13 (6) "Property" is the lot on which the structure is 14 located. 15 (7) "Structure" is a building. 16 (8) "Claim" is the demand by an insured for payment 17 under an insurance policy or policies. 18 (9) "Proof of Loss" is the document on which an 19 insured formally presents his claim to an insurance 20 company. 21 (10) "Certificate" is the executed form prescribed 22 by the Director of Insurance. 23 (11) "Executed" means signed by the appropriate 24 official or unit of government. 25 (12) "Cost of securing property" means the cost by 26 or at the expense of a unit of local government required 27 to modify the property to prevent unauthorized access to 28 the property and to prevent additional damage to the 29 property from exposure to the elements. 30 (c) For any claim to which this Section is applicable, 31 an insured property owner must submit one of the following to 32 the insurance company: 33 (1) a certificate that with respect to the property 34 there are: HB0496 Engrossed -4- LRB9101701JSpc 1 a. no delinquent property taxes,and2 b. no unpaid incurred demolition expenses, and 3;4 c. no unpaid costs of securing the property; 5 (2) a certificate setting forth with respect to the 6 property: 7 a. the amount ofunpaiddelinquent property 8 taxes, 9 b. the amount of unpaid incurred demolition 10 expense or unpaid costs of securing the property, 11 and 12 c. a direction by the owner of theaninsured 13 propertyownerto the insurance company to pay the 14unpaiddelinquent property taxes and unpaid incurred 15 demolition expenses or unpaid costs of securing the 16 property. 17 (d) (1) Except as provided in paragraph (2) of this 18 subsection (d), if a certificate is submitted pursuant to 19 paragraph (2) of subsection (c) of this Section, the 20 insurance company shall pay theunpaiddelinquent 21 property taxes and unpaid incurred demolition expense or 22 unpaid costs of securing the property from the proceeds 23 payable by issuing a draft or check payable to the 24 appropriate tax collector or unit of local government. 25 Any proceeds remaining shall be paid to the insured 26 property owner. 27 (2) In the event incurred demolition expense is 28 determined by estimation under paragraph (5) of 29 subsection (b) of this Section in cities of over 30 2,000,000, the insurance company shall hold the amount 31 estimated until an amended certificate executed by the 32 appropriate local government official is submitted 33 stating (i) that no demolition expense will be incurred 34 or (ii) the actual unpaid incurred demolition expense. HB0496 Engrossed -5- LRB9101701JSpc 1 The insurance company shall then issue a draft or check 2 payable to the unit of local government for the actual 3 unpaid incurred demolition expense. Any proceeds 4 remaining shall be paid to the insured property owner. 5 In determining the amount of proceeds remaining 6 under this paragraph, the insured property owner shall 7 receive interest on the amount withheld from the date the 8 certificate is executed as provided in Section 2 of the 9 Interest Act. 10 (e) If, under this Section, the proceeds payable are 11 less than the amount of theunpaiddelinquent property taxes 12 and unpaid incurred demolition expense or unpaid costs of 13 securing the property, unpaid property taxes shall be paid 14 first. 15 (f) If incurred demolition expense withheld pursuant to 16 subparagraphs b. or c. of paragraph 5 of subsection (b) of 17 this Section exceeds the ultimate cost of demolition, the 18 excess shall first be applied tounpaiddelinquent property 19 taxes. Any amount of proceeds remaining shall be paid to the 20 insured property owner. 21 (g) Nothing in this Section shall be construed as: 22 (1) making an insurance company liable for any 23 amount in excess of the proceeds payable under its 24 insurance policy unless the insurance company shall have 25 made payment to the named insured without satisfying the 26 requirements of this Section; 27 (2) making a unit of local government or tax 28 collector an insured under an insurance policy; or 29 (3) creating an obligation for an insurance company 30 to payunpaiddelinquent property taxes,orunpaid 31 incurred demolition expense, or unpaid costs of securing 32 property other than as provided in subsection (d) of this 33 Section. 34 (h) An insurance company making a payment of proceeds HB0496 Engrossed -6- LRB9101701JSpc 1 under this Section forunpaiddelinquent taxes,orunpaid 2 incurred demolition expense, or unpaid costs of securing 3 property shall be entitled to the full benefit of such 4 payment, including subrogation rights and other rights of 5 assignment. 6 (i) Unpaid property taxes,andunpaid incurred 7 demolition expense, and unpaid costs of securing property for 8 a claim for loss to a structure occurring after the issuance 9 of a tax deed pursuant to Section 22-40 of the Property Tax 10 Code shall not include any unpaid property tax,orunpaid 11 demolition expense, and unpaid costs of securing property 12 arising before the issuance of the tax deed. 13 (j) The county collector shall be designated as the 14 local official who shall execute the certificate required by 15 this Section regarding delinquent property taxes. The 16 village clerk or city clerk in incorporated areas and the 17 official in charge of the county building department in 18 unincorporated areas shall be designated as the local 19 official who shall execute the certificate required by this 20 Section regarding demolition expenses and costs of securing 21 property. 22 (k) A fee not to exceed $5 may be charged by a unit of 23 local government for execution of the certificate required by 24 this Section. 25 (l) This Section shall retroactively apply to any policy 26 issued or renewed on or after January 1, 1978 for which a 27 claim subject to this Section remains unpaid as of the 28 effective date of this amendatory Act of 1978. 29 (Source: P.A. 87-507; 88-667, eff. 9-16-94; 88-670, eff. 30 12-2-94.)