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92_SB2147
LRB9216116EGfg
1 AN ACT in relation to insurance.
2 Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
4 Section 5. The Illinois Insurance Code is amended by
5 changing Section 225 as follows:
6 (215 ILCS 5/225) (from Ch. 73, par. 837)
7 Sec. 225. Prohibited Provisions for Life Insurance
8 Policies.
9 (1) After the effective date of this Code no policy of
10 life insurance may be issued or delivered in this State if it
11 includes any of the following provisions:
12 (a) A provision limiting the time within which any
13 action may be commenced to less than 3 years after the cause
14 of action accrues.
15 (b) A provision by which the policy purports to be
16 issued or take effect more than 6 months before the original
17 application for the insurance was made, but this provision
18 does not apply in any case of a transfer from one form of
19 policy to another in connection with which the policy owner
20 receives credit for any reserve accumulation under the form
21 of policy from which the transfer was made.
22 (c) A provision for any mode of settlement at maturity
23 after the expiration of the contestable period of the policy
24 of less value than the amount insured plus dividend
25 additions, if any, less any indebtedness to the company on or
26 secured by the policy, and less any premium that may by the
27 terms of the policy be deducted, except as permitted by
28 clause (c) of subsection (1) of Section 224.
29 (d) A provision for forfeiture of the policy for failure
30 to repay any loan on the policy, or to pay interest on such
31 loan, while the total indebtedness on the policy, including
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1 interest, is less than the loan value thereof.
2 (e) A provision to the effect that the agent soliciting
3 the insurance is the agent of the person insured under the
4 policy, or making the acts or representations of such agent
5 binding upon the person so insured under the policy.
6 (f) A provision limiting the amount payable under a
7 policy by reason of death occurring after the expiration of
8 the contestable period to less than the face amount thereof
9 on account of the kind or character of disease causing the
10 insured's death.
11 (2) The provisions of this section do not apply to
12 policies of reinsurance, nor to policies issued or granted
13 under the nonforfeiture provisions prescribed in clause (g)
14 of subsection (1) of Section 224.
15 (Source: P.A. 83-345.)