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92_SB1046gms
State of Illinois
OFFICE OF THE GOVERNOR
Springfield, Illinois 62706
George H. Ryan
GOVERNOR
August 3, 2001
To the Honorable Members of
The Illinois Senate
92nd General Assembly
Pursuant to the authority vested in the Governor by
Article IV, Section 9(e) of the Illinois Constitution of
1970, and re-affirmed by the People of the State of Illinois
by popular referendum in 1974, and conforming to the standard
articulated by the Illinois Supreme Court in People ex rel.
Klinger v. Howlett, 50 Ill.2d 242 (1972), Continental
Illinois National Bank and Trust Co. v. Zagel, 78 Ill.2d 387
(1979), People ex rel. City of Canton v. Crouch, 79 Ill.2d
356 (1980), and County of Kane v. Carlson, 116 Ill.2d 186
(1987), that gubernatorial action be consistent with the
fundamental purposes and the intent of the bill, I hereby
return Senate Bill 1046, entitled "AN ACT in relation to
property," with my specific recommendations for change.
Senate Bill 1046 involves the very detailed and
complicated issue of insurance coverages required to be
provided to condominium associations in the State of
Illinois. The insurance industry requested an amendatory
veto to correct what they believe to be minor technical
errors in the bill. They have worked with the Chicago Bar
Association, the primary organization supporting this
legislation, to secure their support for these changes. The
three specific recommendations for change that they have made
are technical in nature and do not change the substance of
this legislation.
The first change makes it clear that the changes in
coverages are to be made on each condominium association
insurance policy during the calendar year 2002 at the time of
renewal of that policy. Without this clarification, it is
possible that insurance carriers would have to non-renew or
cancel their insurance coverages on condominium associations,
which would be unnecessarily disruptive and clearly not the
intent of the bill sponsors.
The second change involves clarification of the new
requirement that condominium association insurance coverage
include "coverage for municipal building code requirements".
This phrase is ambiguous and could result in insurance
coverages being substantially different throughout the State
of Illinois. The intent of this section is to make sure that
in the event of a covered loss by a condominium association,
the repairs are made consistent with the applicable building
code. Many times, these types of building code upgrades cost
more than if the property was restored to its original
condition. With this change the insurance coverage will
recognize the increased cost of construction due to building
code requirements.
The third change removes the provision that would require
a sixty-day notice to the condominium association in the
event of a cancellation of that insurance policy. This
section also would require certain notifications to the
individual condominium owners under certain circumstances.
This section seems to be inconsistent with current Illinois
law regarding cancellations of these types of insurance
policies. Section 5-143.16 of the Insurance Code already
covers this area of cancellation of insurance coverages.
Additionally, the condominium association appears to have the
primary responsibility of notifying individual members of
most coverage changes.
For these reasons, I hereby return Senate Bill 1046 with
the following recommendations for change:
on page 1, by replacing lines 8 and 9 with the following:
"(a) Required coverage. No policy of insurance
shall be issued or delivered to a condominium
association, and no policy of insurance issued to a
condominium association shall be renewed, unless the
insurance coverage under the policy includes the
following:"; and
on page 1 by replacing line 18 with the following:
"the increased costs of construction due to building
code requirements, at the time the"; and
on page 5, by deleting line 23 through 30; and
on page 5, line 31, before "Contractors", by inserting
the following:
"(i) Certificates of insurance.".
With these changes, Senate Bill 1046 will have my
approval. I respectfully request your concurrence.
Sincerely,
George H. Ryan
GOVERNOR