Article IX – Provisions Applicable To All Companies

(215 ILCS 5/Art. IX heading)

ARTICLE IX.
PROVISIONS APPLICABLE TO ALL COMPANIES

 

(215 ILCS 5/132) (from Ch. 73, par. 744)

Sec. 132.
Market conduct and non-financial examinations.

(1) The Director, for the purposes of ascertaining the
non-financial business practices, performance, and operations of any
company, may make
examinations of:

• (a) any company transacting or being organized to transact business in this State;
• (b) any person engaged in or proposing to be engaged in the organization, promotion, or solicitation of shares or capital contributions to or aiding in the formation of a company;
• (c) any person having a contract, written or oral, pertaining to the management or control of a company as general agent, managing agent, or attorney-in-fact;
• (d) any licensed or registered producer, firm, or administrator, or any person, organization, or corporation making application for any licenses or registration;
• (e) any person engaged in the business of adjusting losses or financing premiums; or
• (f) any person, organization, trust, or corporation having custody or control of information reasonably related to the operation, performance, or conduct of a company or person subject to the jurisdiction of the Director.

(2) Every company or person being examined and its officers, directors,
and agents must provide to the Director convenient and free access at
all reasonable hours at its office or location to all books, records,
documents, and any or all papers relating to the
business, performance, operations, and affairs of the company. The
officers, directors, and
agents of the company or person must facilitate the examination and aid
in the examination so far as it is in their power to do so.

The Director and any authorized examiner have the power to administer
oaths and examine under oath
any person relative to the business of the company being examined.

(3) The examiners designated by the Director under Section 402 must
make a full and true report of every examination made by them, which
contains only facts ascertained from the books, papers, records, or documents,
and other evidence obtained by investigation
and examined by them or ascertained from the testimony of officers or
agents or other persons examined under oath concerning the business,
affairs, conduct, and performance of the
company or person. The report of
examination must be verified by the oath of the examiner in charge
thereof, and when so verified is prima facie evidence in any action or
proceeding in the
name of the State against the company, its officers, or agents upon the
facts stated therein.

(4) The Director must notify the company or person made the subject of
any examination hereunder of the
contents of the verified examination report before filing it and making the
report public of any matters relating thereto, and must afford the
company or person an opportunity to demand a hearing with reference to
the facts and other evidence therein contained.

The company or person may request a hearing within 10 days after
receipt of the examination report by giving the Director written notice
of that request, together with a statement of its objections. The
Director must then conduct a hearing in accordance with Sections 402 and
403. He must issue a written order based upon the examination report and
upon the hearing within 90 days after the report is filed or within 90
days after the hearing.

If the examination reveals that the company is operating in violation
of any law, regulation, or prior order, the Director in the written
order may require the company or person to take any action he considers
necessary or appropriate in accordance with the report of examination
or any hearing thereon. The order is subject to judicial review under
the Administrative Review Law.
The Director may withhold any report from public
inspection for such time as he may deem proper and may, after filing the
same, publish any part or all of the report as he considers to be in the
interest of the public, in one or more newspapers in this State, without
expense to the company.

(5) Any company which or person who violates or aids and abets any
violation of a written order issued under this Section shall be guilty
of a business offense and may be fined not more than $5,000. The penalty
shall be paid into the General Revenue fund of the State of Illinois.

(Source: P.A. 87-108.)

 

(215 ILCS 5/132.1) (from Ch. 73, par. 744.1)

Sec. 132.1.
Purpose.
The purpose of Sections 132.1 through 132.7 of
this Code is to provide an effective system for the financial examination
of the activities,
operations, financial condition, and affairs of all persons transacting the
business of insurance in this State and all persons otherwise subject to
the jurisdiction of the Director. The provisions are intended to enable the
Director to adopt a flexible system of examinations that directs resources
as may be deemed appropriate and necessary for the administration of the
insurance and insurance related laws of this State.

(Source: P.A. 87-108.)

 

(215 ILCS 5/132.2) (from Ch. 73, par. 744.2)

Sec. 132.2.
Definitions.
As used in Sections 132.1 through 132.7, the
terms set forth in this Section have the following meanings:

“Company” means any person engaging in or proposing or attempting
to engage in any transaction or kind of insurance or surety business and
any person or group of persons who may otherwise be subject to the
administrative, regulatory, or taxing authority of the Director.

“Examiner” means any individual or firm having been authorized by the
Director to conduct an examination under this Code.

“Insurer” means any company licensed or authorized by the Director to
provide any insurance contracts, whether by indemnity, guaranty,
suretyship, or otherwise; including, but not limited to, those companies
licensed or authorized by the Director under the following Acts:

• (1) The Voluntary Health Services Plans Act.
• (2) (Blank).
• (3) The Dental Service Plan Act.
• (4) (Blank).
• (5) The Farm Mutual Insurance Company Act of 1986.
• (6) The Limited Health Service Organization Act.
• (7) The Health Maintenance Organization Act.

“Person” means any individual, aggregation of individuals, trust,
association, partnership, or corporation, or any affiliate thereof.

(Source: P.A. 90-372, eff. 7-1-98; 90-655, eff. 7-30-98.)

 

(215 ILCS 5/132.3) (from Ch. 73, par. 744.3)

Sec. 132.3.
Authority, scope, and scheduling of examinations.

(a) The Director or any of his examiners may conduct an examination of
any company as often as the Director, in his sole discretion, deems
appropriate, but shall, at a minimum, conduct an examination of every
insurer authorized or licensed in this State not less frequently than once
every 5 years. In scheduling and determining the nature, scope, and
frequency of the examinations, the Director shall consider the results of
financial statement analyses and ratios, changes in management or
ownership, actuarial opinions, reports of independent certified public
accountants and other criteria set forth in the Examiners’ Handbook adopted
by the National Association of Insurance Commissioners and in effect when
the Director exercises discretion under this subsection.

(b) For purposes of completing an examination of any company, the
Director may examine or investigate any person, or the business of any
person, insofar as the examination or investigation is, in the sole
discretion of the Director, necessary or material to the examination of the
company.

(c) In lieu of an examination of any foreign or alien insurer authorized
or licensed in this
State, the Director may accept an examination report on the company as
prepared by the insurance department for the company’s state of domicile or
port-of-entry state until January 1, 1994. Thereafter, those reports may
only be accepted if (1) the insurance department was at the time of the
examination accredited under the National Association of Insurance
Commissioners’ Financial Regulation Standards and Accreditation Program,
(2) the examination is performed under the supervision of an accredited
insurance department or with the participation of one or more examiners
who are employed by an accredited state insurance department, and who,
after a review of the examination work papers and report, state under oath
that the examination was performed in a manner consistent with the
standards and procedures required by their insurance department, or (3) the
Director otherwise determines that the examination was performed in a manner
substantially similar to the standards and procedures required by Sections
132.1 through 132.6 of this Code.

(Source: P.A. 89-97, eff. 7-7-95.)

 

(215 ILCS 5/132.4) (from Ch. 73, par. 744.4)

Sec. 132.4.
Conduct of examinations.

(a) Upon determining that an examination should be conducted, the
Director or his designee shall issue an examination warrant appointing one
or more examiners to perform the examination and instructing them as to the
scope of the examination. In conducting the examination, the examiner
shall observe those guidelines and
procedures set forth in the Examiners’ Handbook adopted by the National
Association of Insurance Commissioners. The Director may also employ other
guidelines or procedures as the Director may deem appropriate.

(b) Every company or person from whom information is sought and its
officers, directors, and agents must provide to the examiners appointed
under subsection (a) timely, convenient, and free access, at all reasonable
hours at its offices, to all books, records, accounts, papers, documents,
and any or all computer or other recordings relating to the property,
assets, business, and affairs of the company being examined. The officers,
directors, employees, and agents of the company or person must facilitate
the examination and aid in the examination so far as it is in their power
to do so. The refusal of any company or its officers, directors,
employees, and agents to submit to examination or to comply with any
reasonable written request of the examiners shall be grounds for
suspension, refusal, or nonrenewal of any license or authority held by
the company to engage in an insurance or other business subject to the
Director’s jurisdiction. Any proceedings for suspension, revocation, or
refusal of any license or authority shall be conducted under the procedures
set forth in Section 401.1 of this Code. Evidence of refusal to submit to
examination or to comply with reasonable written requests of examiners
shall establish a rebuttable presumption that the conduct of the company’s
business and affairs is hazardous to its policyholders and the public
and may cause irreparable loss and injury to others so long as the refusal
to submit or to comply with the examination continues.

(c) The Director or any of his examiners shall have the power to issue
subpoenas, to administer oaths, and to examine under oath any person as to
any matter pertinent to the examination. Subpoenas may be enforced under
the provisions of Section 403 of this Code.

(d) When making an examination, the Director may retain, in consultation
with the company being examined, attorneys,
appraisers, independent actuaries, independent certified public
accountants, or other professionals and specialists as examiners, the cost
of which shall be borne by the company that is the subject of the examination.

(e) Nothing contained in this Act shall be construed to limit the
Director’s authority to terminate or suspend any examination in order to
pursue other legal or regulatory action under the insurance laws of this
State. Findings of fact and conclusions made in the course of any
examination shall be prima facie evidence in any legal or regulatory action.

(f) Nothing contained in this Code shall be construed to limit the
Director’s authority to use and, if appropriate, to make public any final
or preliminary examination report, any examiner or company work papers or
other documents, or any other information discovered or developed during
the course of any examination in the furtherance of any legal or regulatory
action that the Director may, in his sole discretion, deem appropriate.

(Source: P.A. 87-108.)

 

(215 ILCS 5/132.5) (from Ch. 73, par. 744.5)

Sec. 132.5. Examination reports.

(a) General description. All examination reports shall be comprised of
only facts appearing upon the books, records, or other documents of the
company, its agents, or other persons examined or as ascertained from the
testimony of its officers, agents, or other persons examined concerning its
affairs and the conclusions and recommendations as the examiners find
reasonably warranted from those facts.

(b) Filing of examination report. No later than 60 days following
completion of the examination, the examiner in charge shall file with the
Department a verified written report of examination under oath. Upon
receipt of the verified report, the Department shall transmit the report to
the company examined, together with a notice that affords the company examined
a reasonable opportunity of not more than 30 days to make a written
submission or rebuttal with respect to any matters contained in the examination report.

(c) Adoption of the report on examination. Within 30 days of the end of the
period allowed for the receipt of written submissions or rebuttals, the
Director shall fully consider and review the report, together with any
written submissions or rebuttals and any relevant portions of the examiners
work papers and enter an order:

• (1) Adopting the examination report as filed or with modification or corrections. If the examination report reveals that the company is operating in violation of any law, regulation, or prior order of the Director, the Director may order the company to take any action the Director considers necessary and appropriate to cure the violation.
• (2) Rejecting the examination report with directions to the examiners to reopen the examination for purposes of obtaining additional data, documentation, or information and refiling under subsection (b).
• (3) Calling for an investigatory hearing with no less than 20 days notice to the company for purposes of obtaining additional documentation, data, information, and testimony.

(d) Order and procedures. All orders entered under paragraph (1) of
subsection (c) shall be accompanied by findings and conclusions resulting
from the Director’s consideration and review of the examination report,
relevant examiner work papers, and any written submissions or rebuttals.
The order shall be considered a final administrative decision and may be
appealed in accordance with the Administrative Review Law. The order shall
be served upon the company by certified mail, together with a copy of the
adopted examination report. Within 30 days of the issuance of the adopted
report, the company shall file affidavits executed by each of its directors
stating under oath that they have received a copy of the adopted report and
related orders.

Any hearing conducted under paragraph (3) of subsection (c) by the
Director or an authorized representative shall be conducted as a
nonadversarial confidential investigatory proceeding as necessary for the
resolution of any inconsistencies, discrepancies, or disputed issues
apparent upon the face of the filed examination report or raised by or as a
result of the Director’s review of relevant work papers or by the written
submission or rebuttal of the company.
Within 20 days of the conclusion of any hearing, the Director shall enter
an order under paragraph (1) of subsection (c).

The Director shall not appoint an examiner as an authorized
representative to conduct the hearing. The hearing shall proceed
expeditiously with discovery by the company limited to the examiner’s work
papers that tend to substantiate any assertions set forth in any written
submission or rebuttal. The Director or his representative may issue
subpoenas for the attendance of any witnesses or the production of any
documents deemed relevant to the investigation, whether under the control
of the Department, the company, or other persons. The documents produced
shall be included in the record, and testimony taken by the Director or his
representative shall be under oath and preserved for the record. Nothing
contained in this Section shall require the Department to disclose any
information or records that would indicate or show the existence or content
of any investigation or activity of a criminal justice agency.

The hearing shall proceed with the Director or his representative
posing questions to the persons subpoenaed. Thereafter the company and the
Department may present testimony relevant to the investigation.
Cross-examination shall be conducted only by the Director or his representative.
The company and the Department shall be permitted to make closing
statements and may be represented by counsel of their choice.

(e) Publication and use. Upon the adoption of the examination report
under paragraph (1) of subsection (c), the Director shall continue to hold
the content of the examination report as private and confidential
information for a period of 35 days, except to the extent provided in
subsection (b). Thereafter, the Director may open the report for public
inspection so long as no court of competent jurisdiction has stayed its publication.

Nothing contained in this Code shall prevent or be construed as
prohibiting the Director from disclosing the content of an examination
report, preliminary examination report or results, or any matter relating
thereto, to the insurance department of any other state or country or to law
enforcement officials of this or any other state or agency of the federal
government at any time, so long as the agency or office receiving the
report or matters relating thereto agrees in writing to hold it
confidential and in a manner consistent with this Code.

In the event the Director determines that regulatory action is
appropriate as a result of any examination, he may initiate any
proceedings or actions as provided by law.

(f) Confidentiality of ancillary information. All working papers,
recorded information, documents, and copies
thereof produced by, obtained by, or disclosed to the Director or any other
person in the course of any examination must be given confidential
treatment, are not subject to subpoena, and may not be made public by the
Director or any other persons, except to the extent provided in subsection
(e). Access may also be granted to the National Association of Insurance Commissioners.
Those parties must agree in writing before receiving the information to
provide to it the same confidential treatment as required by this Section,
unless the prior written consent of the company to which it pertains has been obtained.

This subsection (f) applies to market conduct examinations described in Section 132 of this Code.

(g) Disclosure. Nothing contained in this Code shall prevent or be construed as prohibiting the Director from disclosing the information described in subsections (e) and (f) to the Illinois Insurance Guaranty Fund regarding any member company defined in Section 534.5 if the member company has an authorized control level event as defined in Section 35A-25. The Director may disclose the information described in this subsection so long as the Fund agrees in writing to hold that information confidential, in a manner consistent with this Code, and uses that information to prepare for the possible liquidation of the member company. Access to the information disclosed by the Director to the Fund shall be limited to the Fund’s staff and its counsel. The Board of Directors of the Fund may have access to the information disclosed by the Director to the Fund once the member company is subject to a delinquency proceeding under Article XIII subject to any terms and conditions established by the Director.

(Source: P.A. 102-929, eff. 5-27-22.)

 

(215 ILCS 5/132.6) (from Ch. 73, par. 744.6)

Sec. 132.6.
Conflict of interest.

(a) No examiner may be appointed by the Director if that examiner,
either directly or indirectly, has a conflict of interest, is affiliated with the
management of, or owns a pecuniary interest in any person subject to
examination. This Section shall not be construed to automatically preclude
an examiner from being:

• (1) A policyholder or claimant under an insurance policy.
• (2) A grantor of a mortgage or similar instrument on the examiner’s residence to a regulated entity if done under customary terms and in the ordinary course of business.
• (3) An investment owner in shares of regulated diversified investment companies.
• (4) A settlor or beneficiary of a “blind trust” into which any otherwise impermissible holdings have been placed.

(b) Notwithstanding the provisions of this Section, the Director may
retain from time to time, on an individual basis, qualified actuaries,
certified public accountants, or other similar individuals who are
independently practicing their professions, even though those persons may
from time to time be similarly
employed or retained by persons subject to examination under this Code.

(Source: P.A. 87-108.)

 

(215 ILCS 5/132.7) (from Ch. 73, par. 744.7)

Sec. 132.7.
Immunity from liability.

(a) No cause of action shall arise nor shall any liability be imposed
against the Director, the Director’s authorized representatives, or any
examiner appointed by the Director for any statements made or conduct
performed in good faith while carrying out the provisions of this Code.

(b) No cause of action shall arise, nor shall any liability be imposed
against any person for the act of communicating or delivering information
or data to the Director or the Director’s authorized representative or
examiner in the course of an examination if the act of communication or
delivery was performed in good faith and without fraudulent intent or the
intent to deceive.

(c) This Section does not abrogate or modify in any way any common law
or statutory privilege or immunity heretofore enjoyed by any person
identified in subsection (a).

(d) Persons identified in subsection (a) shall be entitled to an award
of attorney’s fees and costs if they are a prevailing party in a civil
action for libel, slander, or any other relevant tort arising out
of their activities in carrying out the provisions of this Code and the
party bringing the action was not substantially justified in doing so. For
purposes of this Section a proceeding is “substantially justified” if it
has a reasonable basis in law or fact at the time that it was initiated.

(Source: P.A. 87-108.)

 

(215 ILCS 5/133) (from Ch. 73, par. 745)

Sec. 133.
Books, records, accounts and vouchers.

(1) Every domestic company shall keep its books, records, documents,
accounts and vouchers in such manner that its financial condition,
affairs and operations can be
ascertained and so that its financial statements filed with the Director
can be readily verified and its compliance with the law determined and may
cause any or all such books, records, documents, accounts and vouchers to
be photographed or reproduced on film. Any such photographs,
microphotographs, optical imaging, or film reproductions of any original
books, records,
documents, accounts and vouchers shall for all purposes be considered the
same as the originals thereof and a transcript, exemplification or
certified copy of any such photograph, microphotograph, optical imaging, or
film reproduction
shall for all purposes be deemed to be a transcript, exemplification or
certified copy of the original. Any original so reproduced may thereafter
be disposed of or destroyed if provision is made for preserving and
examining such reproductions.

(2) All such original books, records, documents, accounts and vouchers,
or such reproductions thereof, of the home office of any domestic company
or of any principal United States office of a foreign or alien company
located in this State shall be preserved and kept available in this State
for the purpose of examination and until authority to destroy or otherwise
dispose of such records is secured from the Director. Such original records
may, however, be kept and maintained outside this State if, according to a
plan adopted by the company’s board of directors and approved by the
Director, it maintains suitable records in lieu thereof. Every domestic
company shall keep its securities within the State of Illinois except where:

• (a) on deposit with other states of the United States of America, or political subdivision thereof; or
• (b) on deposit with foreign countries where the company is licensed to transact an insurance business; or
• (c) where requisite for the normal transaction of the company’s business and approved by the Director.

(3) Any domestic company may maintain with a corporation, qualified to
administer trusts in this State under the Corporate Fiduciary Act and that
has an
office in this State at which the account is maintained,
for its securities, a limited
agency, custodial or depository account, or other type of account for the
safekeeping of those securities, collecting the income from those securities
and providing supportive accounting services relating to such safekeeping
and collection, provided, the domestic company maintains full investment
discretion over those securities. Such a corporation in safekeeping such
securities shall have all the powers, rights, duties and responsibilities
as it has for holding securities in its fiduciary accounts under the
Securities in Fiduciary Accounts Act.

(4) Any director, officer, agent or employee of any company who destroys
any such books, records or documents without the authority of the Director
in violation of this section or who fails to keep the books, records,
documents, accounts and vouchers required by this section shall be guilty
of a business offense and shall be fined not more than $5000.00.

(Source: P.A. 88-364; 89-437, eff. 12-15-95.)

 

(215 ILCS 5/134) (from Ch. 73, par. 746)

Sec. 134.
Falsification of Records-Sentence.

Any officer, director, agent or employee of any company who makes or
causes to be made any false entry in any book, report or statement of such
company with intent to injure or defraud such company, or any other company
or person, or to deceive any officer of such company, or the Director or
any agent or examiner appointed to examine the affairs of such company and
any person who with like intent aids or abets any officer, director, agent
or employee in any violation of this Section shall be guilty of a Class 4
felony.

(Source: P.A. 77-2830.)

 

(215 ILCS 5/136) (from Ch. 73, par. 748)

Sec. 136. Annual statement.

(1) Every company authorized to do business in this State or accredited by
this State shall submit to the Director by March 1st in each year
its financial statement for the year ending December 31st immediately preceding in such manner and in such form as
prescribed by the Director, which shall conform substantially to the
form of statement adopted by the National Association of Insurance
Commissioners. Unless the Director provides otherwise, the annual statement is
to be prepared in accordance with the annual statement instructions and the
Accounting Practices and Procedures Manual adopted by the National Association
of Insurance Commissioners. The Director shall have power to make such
modifications and additions in this form as he may deem desirable
or necessary to ascertain the condition and affairs of the company. The
Director shall have authority to extend the time for filing any statement by
any company for reasons which he considers good and sufficient. In every
statement the admitted assets shall be shown at the actual values as of the
last day of the preceding year, in accordance with Section 126.7.
The statement
shall be verified by oaths of the president and secretary of the company or, in
their absence, by 2 other principal officers. In addition, any company may be
required by the Director, when he considers that action to be necessary and
appropriate for the protection of policyholders, creditors, shareholders, or
claimants, to file, within 60 days after mailing to the company a notice that
such is required, a supplemental summary statement as of the last day of any
calendar month occurring during the 100 days next preceding the mailing of such
notice designated by him on forms prescribed and furnished by the Director. The
Director may require supplemental summary statements to be certified by an
independent actuary deemed competent by the Director or by an independent
certified public accountant.

(2) The statement of an alien company shall embrace only its
condition and transactions in the United States and shall be verified by
the oaths of its resident manager or principal representative in the
United States, except that in the case of any life company organized
under the laws of Canada or any province thereof, the statement may be
verified by the oaths of any of its principal officers designated for
that purpose by its board of directors.

(3) For the information of the public generally the Director shall
cause an abstract of the information contained in the annual statement
to be made available to the public as soon as practicable after filing
with the Department, by printing those abstracts in pamphlet tabular form
for free general distribution by the Department, or by such other
publication in the city of Springfield or in the city of Chicago as may
be reasonably necessary more fully to inform the public of the financial
condition of companies transacting business in this State.

(4) Each domestic, foreign, and alien insurer authorized to
do business in this State or accredited by this State shall participate
in the National Association of Insurance Commissioners’ Insurance Regulatory
Information System, including the payment of all fees and charges of the
system. Each company shall, on or before March 1 of each year, file with the
National Association of Insurance Commissioners a copy of its annual financial
statement along with any additional filings prescribed by the Director for the
preceding year. The statement filed with the National Association of Insurance
Commissioners shall be in the same format and scope as that required by this
Code and shall include a signed jurat page and actuarial certification. Any
amendments and addendums to the annual statement shall also be filed with the
National Association of Insurance Commissioners. Each company shall also file
with the National Association of Insurance Commissioners annual and quarterly
financial statement information in computer readable format as required by the
Insurance Regulatory Information System.
Failure of a company to file financial statement information in computer
readable format shall subject the company to the provisions of Section 139.

(5) All financial analysis ratios and examination synopsis concerning
insurance companies that are submitted to the Director by the National
Association of Insurance Commissioners’ Insurance Regulatory Information
System are confidential and may not be disclosed by the Director.

(6) Every property and casualty insurance company doing business in this State, unless otherwise exempted by the Director, shall annually submit the opinion of an appointed actuary entitled “Statement of Actuarial Opinion”. This opinion shall be filed in accordance with the appropriate National Association of Insurance Commissioners Property and Casualty Annual Statement Instructions.

• (a) Every property and casualty insurance company domiciled in this State that is required to submit a Statement of Actuarial Opinion shall annually submit an Actuarial Opinion Summary, written by the company’s appointed actuary. This Actuarial Opinion Summary shall be filed in accordance with the appropriate National Association of Insurance Commissioners Property and Casualty Annual Statement Instructions and shall be considered as a document supporting the Actuarial Opinion required in this subsection (6). Each foreign and alien property and casualty company authorized to do business in this State shall provide the Actuarial Opinion Summary upon request.
• (b) An Actuarial Report and underlying workpapers as required by the appropriate National Association of Insurance Commissioners Property and Casualty Annual Statement Instructions shall be prepared to support each Actuarial Opinion. If the insurance company fails to provide a supporting Actuarial Report or workpapers at the request of the Director or the Director determines that the supporting Actuarial Report or workpapers provided by the insurance company is otherwise unacceptable to the Director, the Director may engage a qualified actuary at the expense of the company to review the opinion and the basis for the opinion and prepare the supporting Actuarial Report or workpapers.
• (c) The appointed actuary shall not be liable for damages to any person (other than the insurance company and the Director) for any act, error, omission, decision, or conduct with respect to the actuary’s opinion, except in cases of fraud or willful misconduct on the part of the appointed actuary.
• (d) The Statement of Actuarial Opinion shall be provided with the Annual Statement in accordance with the appropriate National Association of Insurance Commissioners Property and Casualty Annual Statement Instructions and shall be treated as a public document. Documents, materials, or other information in the possession or control of the Director that are considered an Actuarial Report, workpapers, or Actuarial Opinion Summary provided in support of the opinion, and any other material provided by the company to the Director in connection with the Actuarial Report, workpapers or Actuarial Opinion Summary, must be given confidential treatment, are not subject to subpoena, and may not be made public by the Director or any other persons. This paragraph (d) shall not be construed to limit the Director’s authority to release the documents to the Actuarial Board for Counseling and Discipline (ABCD), so long as the material is required for the purpose of professional disciplinary proceedings and that the ABCD establishes procedures satisfactory to the Director for preserving the confidentiality of the documents, nor shall this paragraph (d) be construed to limit the Director’s authority to use the documents, materials or other information in furtherance of any regulatory or legal action brought as part of the Director’s official duties. Neither the Director nor any person who received documents, materials, or other information while acting under the authority of the Director shall be permitted or required to testify in any private civil action concerning any confidential documents, materials, or information subject to this subsection (6). Except where another provision of this Code expressly prohibits a disclosure of confidential information to the specific officials or organizations described in this subsection, the Director may:
• (i) share documents, materials, or other information, including the confidential and privileged documents, materials or information subject to this paragraph (d) with the insurance department of any other state or country or with law enforcement officials of this or any other state or agency of the federal government at any time, as long as the agency or office receiving the document, material, or other information agrees in writing to hold it confidential and in a manner consistent with this Code;
• (ii) receive documents, materials, or information, including otherwise confidential and privileged documents, materials, or information, from the National Association of Insurance Commissioners and its affiliates and subsidiaries, and from regulatory and law enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material, or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material, or information; and
• (iii) enter into agreements governing sharing and use of information consistent with paragraph (d).
• (e) No waiver of any applicable privilege or claim of confidentiality in the documents, materials or information shall occur as a result of disclosure to the Director under this Section or as a result of sharing as authorized in subparagraphs (i), (ii), and (iii) of paragraph (d) of subsection (6) of this Section. All 2008 Annual Statements, which are filed in 2009, and all subsequent Annual Statement filings shall be done in accordance with subsection (6) of this Section. (Source: P.A. 96-145, eff. 8-7-09; 97-486, eff. 1-1-12.)

 

(215 ILCS 5/137) (from Ch. 73, par. 749)

Sec. 137.

Every Insurance Company doing business in this state which is
required to file a statement or report with the Securities and Exchange
Commission, shall at the request of the Director, file a copy of such statement
or report with the Department.

(Source: P.A. 80-514.)

 

(215 ILCS 5/139) (from Ch. 73, par. 751)

Sec. 139. Penalties for late or false annual statement.

(1) Any company failing, without just cause, to file its financial
statements as required in this Code shall be required, after notice and
hearing, to pay a penalty of up to $1,000 for each day’s delay, to
be recovered by
the Director of Insurance of the State of Illinois using the notice and hearing procedure in subsection (2) of Section 403A of this Code, and the penalty so
recovered shall be paid into the General Revenue fund of the State of
Illinois. The Director may reduce the penalty if the company demonstrates
to the Director that the imposition of the penalty would constitute a financial
hardship to the company.

Any statement which is not materially complete when filed
shall
not be considered to have been properly filed until those deficiencies
which make the filing incomplete have been corrected and filed.

(2) Any director, officer, agent or employee of any company, who
subscribes to, makes or concurs in making or publishing any annual or other
statement required by law, knowing the same to contain any material
statement which is false shall, after notice and hearing, be guilty of a
business offense and shall be fined not more than $50,000.

The penalty shall be paid into the General Revenue fund of the State of
Illinois.

(Source: P.A. 98-910, eff. 7-1-15.)

 

(215 ILCS 5/140) (from Ch. 73, par. 752)

Sec. 140.

Vouchers
for disbursements.

No domestic company shall make any disbursement of one hundred dollars
or more unless the same be evidenced by a voucher or receipt signed or
check endorsed by or on behalf of the person receiving the money and
describing the consideration for the payment, and if the expenditure be in
connection with any matter pending before any legislative or public body or
before any department or officer of any state or government the voucher
shall describe the nature of the matter and the interest of the company
therein, or if such voucher cannot be obtained, the expenditure shall be
evidenced by affidavit describing its character and object and stating the
reasons for not obtaining such voucher, receipt or check.

(Source: Laws 1937, p. 696.)

 

(215 ILCS 5/141) (from Ch. 73, par. 753)

Sec. 141.
Agency contracts.
(1) Any domestic company which
contracts with any person (different legal entities,
directly or indirectly owned or controlled by the same person shall be
considered as a person within the meaning of this Section) whereby such
person is granted the right or privilege to solicit, procure, write or
produce a major part of the insurance business for such company and collect
premiums therefor shall file such contract with the Director within 15
days from the execution of such contract or within 60 days following the
end of any calendar quarter in which such person produces a major portion
of the company’s insurance business. For purposes of this Section, any
person who produces in excess of five percent (5%) of a company’s insurance
premium volume during any one calendar quarter shall be deemed as having been
granted the privilege of producing a major portion of such company’s
business. Failure of the Director to disapprove any such contract within
thirty days after the same shall be filed with him, shall constitute his
approval thereof. A company may continue to accept business from such
person until such contract is disapproved by the Director. Such
disapproval shall be in writing, stating the reasons
therefor and a copy thereof delivered to the company.

(2) The Director shall not approve any such contract which

(a) subjects the company to excessive charges for expenses or
commissions;

(b) vests in the agent or agency company any control over the management
of the affairs of the insurance company to the exclusion of the board of
directors of the insurance company;

(c) gives to such person, the right to solicit, procure, write or produce
a major part of the insurance business for such insurance company and collect
and hold the premiums for such unreasonable period as may jeopardize the
security of policyholders; or

(d) fails to require such person to make available to the Director or
his designees all books, records and documents pertaining to such person’s
insurance business.

(3) The Director shall not approve any contract with any person if such
person or its officers and directors are of known bad character or have
been affiliated directly or indirectly through ownership, control,
management, reinsurance transactions or other insurance or business
relationships with any person or persons known to have been involved in the
improper manipulation of assets, accounts or reinsurance.

(4) The Director, for the purpose of ascertaining the assets, conditions
and affairs of any person having a contract as provided in subsection (1),
may examine the books, records, documents and assets of such person.

(5) The Director may, after a hearing held pursuant to Section 401,
withdraw his approval of any agency contract theretofore approved by him,
if he finds that the basis of his original approval no longer exist, or
that the contract has, in actual operation, shown itself to be subject to
disapproval on any of the grounds referred to in subsections (2) and (3) above.

(Source: P.A. 84-714.)

 

(215 ILCS 5/141a) (from Ch. 73, par. 753a)

Sec. 141a.
Managing general agents and retrospective compensation
agreements.

(a) As used in this Section, the following terms have the following
meanings:

“Actuary” means a person who is a member in good standing of the American
Academy of Actuaries.

“Gross direct written premium” means direct premium including policy and
membership fees, net of returns and cancellations, and prior to any cessions.

“Insurer” means any person duly licensed in this State as an insurance
company pursuant to Articles II, III, III 1/2, IV, V, VI, and
XVII of this Code.

“Managing general agent” means any person, firm, association, or
corporation, either separately or together with affiliates, that:

• (1) manages all or part of the insurance business of an insurer (including the management of a separate division, department, or underwriting office), and
• (2) acts as an agent for the insurer whether known as a managing general agent, manager, or other similar term, and
• (3) with or without the authority produces, directly or indirectly, and underwrites:
• (A) within any one calendar quarter, an amount of gross direct written premium equal to or more than 5% of the policyholders’ surplus as reported in the insurer’s last annual statement, or
• (B) within any one calendar year, an amount of gross direct written premium equal to or more than 8% of the policyholders’ surplus as reported in the insurer’s last annual statement, and either
• (4) has the authority to bind the company in settlement of individual claims in amounts in excess of $500, or
• (5) has the authority to negotiate reinsurance on behalf of the insurer.

Notwithstanding the provisions of items (1) through (5), the following
persons shall not be considered to be managing general agents for the
purposes of this Code:

• (1) An employee of the insurer;
• (2) A U.S. manager of the United States branch of an alien insurer;
• (3) An underwriting manager who, pursuant to a contract meeting the standards of Section 141.1 manages all or part of the insurance operations of the insurer, is affiliated with the insurer, subject to Article VIII 1/2, and whose compensation is not based on the volume of premiums written;
• (4) The attorney or the attorney in fact authorized and acting for or on behalf of the subscriber policyholders of a reciprocal or inter-insurance exchange, under the terms of the subscription agreement, power of attorney, or policy of insurance or the attorney in fact for any Lloyds organization licensed in this State.

“Retrospective compensation
agreement” means any arrangement, agreement, or contract having as its
purpose the actual or constructive retention by the insurer of a fixed
proportion of the gross premiums, with the balance of the premiums,
retained actually or constructively by the agent or the producer of the
business, who assumes to pay therefrom all losses, all subordinate
commission, loss adjustment expenses, and his profit, if any, with other
provisions of the arrangement, agreement, or contract being auxiliary or
incidental to that purpose.

“Underwrite” means to accept or reject risk on behalf of the insurer.

(b) Licensure of managing general agents.

• (1) No person, firm, association, or corporation shall act in the capacity of a managing general agent with respect to risks located in this State for an insurer licensed in this State unless the person is a licensed producer or a registered firm in this State under Article XXXI of this Code or a licensed third party administrator in this State under Article XXXI 1/4 of this Code.
• (2) No person, firm, association, or corporation shall act in the capacity of a managing general agent with respect to risks located outside this State for an insurer domiciled in this State unless the person is a licensed producer or a registered firm in this State under Article XXXI of this Code or a licensed third party administrator in this State under Article XXXI 1/4 of this Code.
• (3) The managing general agent must provide a surety bond for the benefit of the insurer in an amount equal to the greater of $100,000 or 5% of the gross direct written premium underwritten by the managing general agent on behalf of the insurer. The bond shall provide for a discovery period and prior notification of cancellation in accordance with the rules of the Department unless otherwise approved in writing by the Director.
• (4) The managing general agent must maintain an errors and omissions policy for the benefit of the insurer with coverage in an amount equal to the greater of $1,000,000 or 5% of the gross direct written premium underwritten by the managing general agent on behalf of the insurer.
• (5) Evidence of the existence of the bond and the errors and omissions policy must be made available to the Director upon his request.

(c) No person, firm, association, or corporation acting in the capacity
of a managing general agent shall place business with an insurer unless
there is in force a written contract between the parties that sets forth
the responsibilities of each party, that, if both parties share
responsibility for a particular function, specifies the division of
responsibility, and that contains the following minimum provisions:

• (1) The insurer may terminate the contract for cause upon written notice to the managing general agent. The insurer may suspend the underwriting authority of the managing general agent during the pendency of any dispute regarding the cause for termination.
• (2) The managing general agent shall render accounts to the insurer detailing all transactions and remit all funds due under the contract to the insurer on not less than a monthly basis.
• (3) All funds collected for the account of an insurer shall be held by the managing general agent in a fiduciary capacity in a bank that is a federally or State chartered bank and that is a member of the Federal Deposit Insurance Corporation. This account shall be used for all payments on behalf of the insurer; however, the managing general agent shall not have authority to draw on any other accounts of the insurer. The managing general agent may retain no more than 3 months estimated claims payments and allocated loss adjustment expenses.
• (4) Separate records of business written by the managing general agent will be maintained. The insurer shall have access to and the right to copy all accounts and records related to its business in a form usable by the insurer, and the Director shall have access to all books, bank accounts, and records of the managing general agent in a form usable to the Director.
• (5) The contract may not be assigned in whole or part by the managing general agent.
• (6) The managing general agent shall provide to the company audited financial statements required under paragraph (1) of subsection (d).
• (7) That appropriate underwriting guidelines be followed, which guidelines shall stipulate the following:
• (A) the maximum annual premium volume;
• (B) the basis of the rates to be charged;
• (C) the types of risks that may be written;
• (D) maximum limits of liability;
• (E) applicable exclusions;
• (F) territorial limitations;
• (G) policy cancellation provisions; and
• (H) the maximum policy period.
• (8) The insurer shall have the right to: (i) cancel or nonrenew any policy of insurance subject to applicable laws and regulations concerning those actions; and (ii) require cancellation of any subproducer’s contract after appropriate notice.
• (9) If the contract permits the managing general agent to settle claims on behalf of the insurer:
• (A) all claims must be reported to the company in a timely manner.
• (B) a copy of the claim file must be sent to the insurer at its request or as soon as it becomes known that the claim:
• (i) has the potential to exceed an amount determined by the company;
• (ii) involves a coverage dispute;
• (iii) may exceed the managing general agent’s claims settlement authority;
• (iv) is open for more than 6 months; or
• (v) is closed by payment of an amount set by the company.
• (C) all claim files will be the joint property of the insurer and the managing general agent. However, upon an order of liquidation of the insurer, the files shall become the sole property of the insurer or its estate; the managing general agent shall have reasonable access to and the right to copy the files on a timely basis.
• (D) any settlement authority granted to the managing general agent may be terminated for cause upon the insurer’s written notice to the managing general agent or upon the termination of the contract. The insurer may suspend the settlement authority during the pendency of any dispute regarding the cause for termination.
• (10) Where electronic claims files are in existence, the contract must address the timely transmission of the data.
• (11) If the contract provides for a sharing of interim profits by the managing general agent and the managing general agent has the authority to determine the amount of the interim profits by establishing loss reserves, controlling claim payments, or by any other manner, interim profits will not be paid to the managing general agent until one year after they are earned for property insurance business and until 5 years after they are earned on casualty business and in either case, not until the profits have been verified.
• (12) The managing general agent shall not:
• (A) Bind reinsurance or retrocessions on behalf of the insurer, except that the managing general agent may bind facultative reinsurance contracts under obligatory facultative agreements if the contract with the insurer contains reinsurance underwriting guidelines including, for both reinsurance assumed and ceded, a list of reinsurers with which automatic agreements are in effect, the coverages and amounts or percentages that may be reinsured, and commission schedules.
• (B) Appoint any producer without assuring that the producer is lawfully licensed to transact the type of insurance for which he is appointed.
• (C) Without prior approval of the insurer, pay or commit the insurer to pay a claim over a specified amount, net of reinsurance, that shall not exceed 1% of the insurer’s policyholders’ surplus as of December 31 of the last completed calendar year.
• (D) Collect any payment from a reinsurer or commit the insurer to any claim settlement with a reinsurer without prior approval of the insurer. If prior approval is given, a report must be promptly forwarded to the insurer.
• (E) Permit its subproducer to serve on its board of directors.
• (F) Employ an individual who is also employed by the insurer.
• (13) The contract may not be written for a term of greater than 5 years.

(d) Insurers shall have the following duties:

• (1) The insurer shall have on file the managing general agent’s audited financial statements as of the end of the most recent fiscal year prepared in accordance with Generally Accepted Accounting Principles. The insurer shall notify the Director if the auditor’s opinion on those statements is other than an unqualified opinion. That notice shall be given to the Director within 10 days of receiving the audited financial statements or becoming aware that such opinion has been given.
• (2) If a managing general agent establishes loss reserves, the insurer shall annually obtain the opinion of an actuary attesting to the adequacy of loss reserves established for losses incurred and outstanding on business produced by the managing general agent, in addition to any other required loss reserve certification.
• (3) The insurer shall periodically (at least semiannually) conduct an on-site review of the underwriting and claims processing operations of the managing general agent.
• (4) Binding authority for all reinsurance contracts or participation in insurance or reinsurance syndicates shall rest with an officer of the insurer, who shall not be affiliated with the managing general agent.
• (5) Within 30 days of entering into or terminating a contract with a managing general agent, the insurer shall provide written notification of the appointment or termination to the Director. Notices of appointment of a managing general agent shall include a statement of duties that the applicant is expected to perform on behalf of the insurer, the lines of insurance for which the applicant is to be authorized to act, and any other information the Director may request.
• (6) An insurer shall review its books and records each quarter to determine if any producer has become a managing general agent. If the insurer determines that a producer has become a managing general agent, the insurer shall promptly notify the producer and the Director of that determination, and the insurer and producer must fully comply with the provisions of this Section within 30 days of the notification.
• (7) The insurer shall file any managing general agent contract for the Director’s approval within 45 days after the contract becomes subject to this Section. Failure of the Director to disapprove the contract within 45 days shall constitute approval thereof. Upon expiration of the contract, the insurer shall submit the replacement contract for approval. Contracts filed under this Section shall be exempt from filing under Sections 141, 141.1 and 131.20a.
• (8) An insurer shall not appoint to its board of directors an officer, director, employee, or controlling shareholder of its managing general agents. This provision shall not apply to relationships governed by Article VIII 1/2 of this Code.

(e) The acts of a managing general agent are considered to be the acts
of the insurer on whose behalf it is acting. A managing general agent may
be examined in the same manner as an insurer.

(f) Retrospective compensation agreements for business written under
Section 4 of this Code in Illinois and outside of Illinois by an insurer
domiciled in this State must be filed for approval.
The standards for approval shall be as set forth under Section 141
of this Code.

(g) Unless specifically required by the Director, the provisions of this
Section shall not apply to arrangements between a managing general agent not
underwriting any risks located in Illinois and a foreign insurer domiciled in
an NAIC accredited state that has adopted legislation substantially similar to
the NAIC Managing General Agents Model Act. “NAIC accredited state” means a
state or territory of the United States having an insurance regulatory agency
that maintains an accredited status granted by the National Association of
Insurance Commissioners.

(h) If the Director determines that a managing general agent
has not materially complied with this Section or any regulation or
order promulgated hereunder, after notice and opportunity to be heard, the
Director may order a penalty in an amount not exceeding $100,000 for each
separate violation and may order the revocation or suspension of the producer’s
license. If it is found that because of the material noncompliance the
insurer
has suffered any loss or damage, the Director may maintain a civil action
brought by or on behalf of the insurer and its policyholders and creditors for
recovery of compensatory damages for the benefit of the insurer and its
policyholders
and creditors or other appropriate relief. This subsection (h) shall not be
construed to prevent any other person from taking civil action against a
managing general agent.

(i) If an Order of Rehabilitation or Liquidation is entered
under Article XIII and
the receiver appointed under that Order determines that the managing general
agent or any other person has not materially complied with this Section or any
regulation or Order promulgated hereunder and the insurer suffered any loss
or damage therefrom, the receiver may maintain a civil action for recovery of
damages or other appropriate sanctions for the benefit of the insurer.

Any decision, determination, or order of the Director under this
subsection shall be subject to judicial review under the Administrative
Review Law.

Nothing contained in this subsection shall affect the right of the
Director to impose any other penalties provided for in this Code.

Nothing contained in this subsection is intended to or shall in any
manner limit or restrict the rights of policyholders, claimants, and auditors.

(j) A domestic company shall not during any calendar year write,
through a managing general agent or managing general agents, premiums in an
amount equal to or greater than its capital and surplus as of the preceding
December 31st unless the domestic company requests in writing the Director’s
permission to do so and the Director has either approved the request or has
not disapproved the request within 45 days after the Director received the
request.

No domestic company with less than $5,000,000 of capital and surplus may
write any business through a managing general agent unless the domestic company
requests in writing the Director’s permission to do so and the Director has
either approved the request or has not disapproved the request within 45 days
after the Director received the request.

(Source: P.A. 93-32, eff. 7-1-03.)

 

(215 ILCS 5/141b)

Sec. 141b. Third party access to files. Any contract with a third party (“administrator”) to provide claim services for a property and casualty company must contain the following provisions:

• (1) Upon liquidation or rehabilitation of the insurer, the files and any data related thereto become the sole property of the estate. The administrator shall have reasonable access and right to copy files at the administrator’s expense.
• (2) In the event electronic files are used, the administrator must keep all data in such a format that it is easily separated from other data maintained by the administrator and timely transferred to the liquidator upon the entry of an order or liquidation. “Timely transferred”, in this context, means the claim file data must be transferred to the liquidator within 10 days after the entry of an order of liquidation.

The provisions of this Section shall apply to all contracts entered into after the effective date of this amendatory Act of the 100th General Assembly, and any existing contracts shall have one year to come into compliance with this Section.

(Source: P.A. 100-410, eff. 8-25-17.)

 

(215 ILCS 5/141.01) (from Ch. 73, par. 753.01)

Sec. 141.01.

No company authorized to do business in Illinois shall cancel,
terminate or refuse to renew any policy on the ground that the company’s
contract with the agent through whom such policy was obtained has been terminated.
This provision shall not alter any contract between the agent and the company
regarding ownership of expirations where the agent is able to place the
policy with another insurer with similar coverage to the satisfaction of the insured.

(Source: P.A. 80-1374.)

 

(215 ILCS 5/141.02) (from Ch. 73, par. 753.02)

Sec. 141.02.
(1) Definitions.
For purposes of this Section an independent
insurance agent is any licensed agent representing an insurance company
on an independent contractor basis and not as an employee. This term shall
include only those agents not obligated by contract to place insurance accounts
with any insurance company or group of companies. This Section shall only
apply to contracts which have been effective for more than one year between
an independent insurance agent and any company authorized in this State
for the purpose of transacting the kind or kinds
of business enumerated in Class 2 or Class 3 of Section 4 of this Code,
except accident and health insurance.

(2) Rehabilitation. In an effort to avoid termination, the company and
agent may endeavor to reach mutual agreement on a written plan for rehabilitation
for a period of time agreed by them. Any written plan agreed upon shall
identify the problem areas and specify what the agent must do in an effort
to avoid termination.

(3) Notice of Termination. Contracts between the independent insurance
agent and any company shall not be terminated by the company
except by signed mutual agreement at the time of written termination
notice or unless the company provides 180 days written notice to the
independent insurance agent prior to the effective date
of termination. The effective date of termination shall be 180 days from
the date of mailing of the termination notice. The company must maintain
proof of mailing of the termination notice on a recognized U.S. Post Office form.

(4) Renewals following termination. A. During the 180 days notice or
other mutually agreed time period
the independent insurance agent shall not write or bind any new business
on behalf of the terminating company without specific written approval.

B. The terminating company shall, following the date of
termination, renew all policies
written by the independent insurance agent for one policy term or for a period
of one year if the policy period is longer than one year unless:

(a) the policies do not meet the insurer’s underwriting standards; or

(b) the independent insurance agent notifies the insurer in writing that
the policy has been placed with another insurer.

C. If a renewal policy does not meet the underwriting requirements, the terminating
insurer must give the independent insurance agent 60 days notice of its
intention not to renew.

D. The rate of commission and renewal terms shall
be in accordance with those in effect immediately prior to termination.
The commission must be paid only through the first renewal subsequent to
the effective date of the termination.

(5) Paragraphs (1) through (4) of this Section shall not apply to
terminations for abandonment, insolvency
of the terminating company, gross and willful misconduct, refusal, suspension,
revocation or termination of the agent’s license by the Director of Insurance,
sale or material change of ownership of agency, fraud, material misrepresentation
or failure to pay such independent insurance agent’s account less the
independent insurance agent’s commission and any disputed items within 30 days after
written demand by the company.

(Source: P.A. 85-334.)

 

(215 ILCS 5/141.03) (from Ch. 73, par. 753.03)

Sec. 141.03.

Insurance companies authorized to do business in this
State shall not refuse to do business with an independent insurance agent
representing an insurance company as an independent contractor and not as
an employee solely on account of the volume of insurance written by that
agent prior to affiliation with such company.

(Source: P.A. 84-742.)

 

(215 ILCS 5/141.1) (from Ch. 73, par. 753.1)

Sec. 141.1.
Management contracts and service agreements.
All agreements
or contracts under which any person, organization or corporation is delegated
management duties or control of any domestic company, or which transfer a
substantial part of any major function of a domestic company such as adjustment
of losses, production of business, investment of assets or general servicing
of the company’s business must be filed with the Department on or before the
effective date of such contract or agreement. The Director may upon notice
review these arrangements entered by foreign companies.

There shall be exempted from the filing requirement of this Section contracts
by groups of affiliated companies on a “pooled” funds basis or service company
management basis, where costs to the individual member companies are charged on
an actually incurred or closely estimated basis. However, these contracts must
be reduced to written form.

Sections 141.1, 141.2, and 141.3 shall not apply to any power of attorney
or other authority authorized by Section 67 of this Code.

(Source: P.A. 91-357, eff. 7-29-99.)

 

(215 ILCS 5/141.2) (from Ch. 73, par. 753.2)

Sec. 141.2.

Grounds
for disapproval.

The Director must disapprove any such management contract or service
agreement if, at any time, he finds:

(1) that the service or management charges are based upon criteria
unrelated either to the managed company’s profits or to the reasonable
customary and usual charges for such services or are based on factors
unrelated to the value of such services to the company; or

(2) that management personnel or other employees of the insurance
company are to be performing management functions and receiving any
remuneration therefor through the management or service contract in
addition to the compensation by way of salary received directly from the
insurance company for their services; or

(3) that the contract would transfer substantial control of the company
or any of the powers vested in the board of directors, by statute, articles
of incorporation or by-laws, or substantially all of the basic functions of
the insurance company management; or

(4) that the contract contains provisions which would be clearly
detrimental to the best interests of policyholders, stockholders or members
of the company; or

(5) that the officers and directors of the management firm are of known
bad character or have been affiliated, directly or indirectly, through
ownership, control, management, reinsurance transactions or other insurance
or business relations with any person or persons known to have been
involved in the improper manipulation of assets, accounts or reinsurance.

If the Director disapproves of any management contract or service
agreement, notice of such action shall be given to the company assigning
the reasons therefor in writing. The Director shall grant any party to the
contract a hearing upon request according to Article XXIV of this Code.

(Source: P.A. 77-1040.)

 

(215 ILCS 5/141.3) (from Ch. 73, par. 753.3)

Sec. 141.3.
Supplement to annual statement.

Any company which has a management contract shall file with its annual
statement a supplement on forms prescribed by the Director which discloses
the following: Salaries, commissions, or any valuable consideration paid to
each officer and director of the management company or to any shareholder
who owns, directly or indirectly, 10% of the shares of either the managed
insurance company or the management company.

Any changes in the officers or directors of the managing company are to
be reported to the Director in accordance with Section 155.04.

(Source: Laws 1967, p. 1818.)

 

(215 ILCS 5/141.4)

Sec. 141.4.
Disclosure of material transactions.

(a) An insurer domiciled in this State shall file a report with the Director
disclosing material acquisitions and dispositions of assets or material
nonrenewals, cancellations, or revisions of ceded reinsurance agreements unless
the acquisitions and dispositions of assets or the material nonrenewals,
cancellations, or revisions of ceded reinsurance agreements have been otherwise
submitted to the Director for review, approval, or information purposes. The
report must be filed no later than 15 days after the end of the calendar month
in which a reportable transaction occurs. A copy of the report, including any
exhibits or other attachments filed as a part of the report, shall be filed
with the National Association of Insurance Commissioners. All reports
obtained by or disclosed to the Director under this Section shall be given
confidential treatment and shall not be subject to subpoena and shall not be
made public by the Director, the National Association of Insurance
Commissioners, or any other person, except to insurance departments of other
states, without the prior written consent of the insurer to which it pertains
unless the Director, after giving the insurer who would be affected notice and
an opportunity to be heard,
determines that the interests of policyholders, shareholders, or the public
will be served by publication, in which event the Director may publish all or
any part in the manner the Director may deem appropriate.

(b) Asset acquisitions or dispositions that are not material do not have to
be reported under this Section. For purposes of this Section, a material
acquisition (or the aggregate of any series of related acquisitions during any
30 day
period) or disposition (or the aggregate of any series
of related dispositions during any 30 day period) is one that is nonrecurring
and not in the ordinary course of business and involves
more than 5% of
the reporting insurer’s total admitted assets as reported in its most recent
statutory financial statement filed with the Director. Asset acquisitions
subject to this Section include, but are not limited to,
every purchase, lease, exchange, merger,
consolidation, succession, or other acquisition other than the construction or
development of real property by or for the reporting insurer or the acquisition
of materials for that purpose. Asset dispositions subject to this Section
include, but are not limited to,
every sale, lease, exchange, merger, consolidation, mortgage,
hypothecation, assignment (whether for the benefit of creditors or otherwise),
abandonment, destruction, or other disposition. All of the following
information shall be disclosed in the report of a material acquisition or
disposition of assets:

• (1) Date of the transaction.
• (2) Manner of acquisition or disposition.
• (3) Description of the assets involved.
• (4) Nature and amount of the consideration received or given.
• (5) Purpose of, or reason for, the transaction.
• (6) Manner by which the amount of consideration was determined.
• (7) Gain or loss recognized or realized as a result of the transaction.
• (8) Name of the person from whom the assets were acquired or to whom they were disposed.

Insurers shall report acquisitions and dispositions on a nonconsolidated
basis
unless the insurer is part of a consolidated group of insurers that utilizes a
pooling arrangement or a 100% reinsurance
agreement that affects the solvency and integrity of the insurer’s reserves
and the insurer ceded substantially all of its direct and assumed business to
the
pool. An insurer is deemed to have
ceded substantially all of its direct and assumed business to a pool if the
insurer has less than $1,000,000 total direct plus assumed written premiums
during a calendar year that are not subject to a pooling
arrangement and the net income of the business not subject to the pooling
arrangement represents less than 5% of the insurer’s capital and
surplus.

(c) Ceded reinsurance agreement nonrenewals, cancellations, or revisions
that are not material do not have to be reported under this Section. For
purposes of this Section, a material nonrenewal, cancellation, or revision is
one that affects:

• (1) For property and casualty business, including accident and health business written by a property and casualty insurer:
• (A) more than 50% of the insurer’s total ceded written premium; or
• (B) more than 50% of the insurer’s total ceded indemnity and loss adjustment reserves.
• (2) For life, annuity, and accident and health business: more than 50% of the total reserve credit taken for business ceded, on an annual basis, as indicated in the insurer’s most recent annual statement.
• (3) Property and casualty or life, annuity, and accident and health business:
• (A) an authorized reinsurer representing more than 10% of total cession is replaced by one or more unauthorized reinsurers; or
• (B) previously established collateral requirements have been reduced or waived as respects one or more unauthorized reinsurer representing collectively more than 10% of a total cession.

With respect to property and casualty business, including accident and health
business written by a property and casualty insurer, no filing shall be
required if the insurer’s total ceded written premium represents, on an
annualized basis, less than 10% of its total written premium for direct and
assumed business. With respect to life, annuity, and accident and health
business, no filing shall be required if the total reserve credit taken for
business ceded represents, on an annualized basis, less than 10% of the
statutory reserve requirement prior to any cession.

All of the following information shall be disclosed in the report of a
material nonrenewal, cancellation, or revision of ceded reinsurance agreements:

• (1) Effective date of the nonrenewal, cancellation or revision.
• (2) The description of the transaction with an identification of the initiator thereof.
• (3) Purpose of, or reason for, the transaction.
• (4) The identity of the replacement insurers, if applicable.

Insurers shall report all material nonrenewals, cancellations, or revisions
of ceded reinsurance agreements on a nonconsolidated basis unless the insurer
is
part of a
consolidated group of insurers that utilizes a pooling arrangement or 100%
reinsurance agreement that affects the solvency and integrity of the
insurer’s reserves and the insurer ceded substantially all of its direct and
assumed business to the pool. An insurer is deemed to have ceded substantially
all
of its direct and
assumed business to a pool if the insurer has less than $1,000,000 of total
direct plus assumed written premiums during a calendar year that are not
subject to the pooling arrangement and the net income of the
business not subject to the pooling arrangement represents less
than 5% of the insurer’s capital and surplus.

(Source: P.A. 89-97, eff. 7-7-95.)

 

(215 ILCS 5/142) (from Ch. 73, par. 754)

Sec. 142.

Notice of
amendment or change in by-laws.
Subject to the provisions of section 292.1 applicable to fraternal
benefit societies, notice of any amendment or change in a company’s by-laws
setting forth such amendment or change, certified by its president,
secretary, or officer corresponding thereto, shall be delivered to the
Director within thirty days after such amendment or change.

(Source: P.A. 86-753.)

 

(215 ILCS 5/143) (from Ch. 73, par. 755)

Sec. 143. Policy forms.

(1) Life, accident and health. No company
transacting the kind or kinds of business enumerated in Classes 1 (a), 1
(b) and 2 (a) of Section 4 shall issue or deliver in this State a policy
or certificate of insurance or evidence of coverage, attach an
endorsement or rider thereto,
incorporate by reference bylaws or other matter therein or use an
application blank in this State until the form and content of such
policy, certificate, evidence of coverage, endorsement, rider, bylaw or
other matter
incorporated by reference or application blank has been filed electronically
with the Director, either through the System for Electronic Rate and Form Filing (SERFF) or as otherwise prescribed by the Director, and
approved by the Director. Any such endorsement or rider
that unilaterally reduces benefits and is to be attached to a
policy subsequent to the date the policy is
issued must be filed with, reviewed, and formally approved by the
Director prior to the date it is attached to a policy issued or
delivered in this State. It shall be the duty of the Director to disapprove or withdraw
any such policy, certificate, endorsement, rider,
bylaw or other matter incorporated by reference or application blank
filed if it contains deficiencies, provisions which encourage
misrepresentation or are unjust, unfair, inequitable, ambiguous,
misleading, inconsistent, deceptive, contrary to law or to the public
policy of this State, or contains exceptions and conditions that
unreasonably or deceptively affect the risk purported to be assumed in
the general coverage of the policy. In all cases the Director shall
approve, withdraw, or disapprove any such form within 60 days after submission
unless the Director extends by not more than an additional 30 days the
period within which the form shall be approved, withdrawn, or disapproved by
giving written notice to the insurer of such extension before expiration
of the initial 60 days period. The Director shall withdraw approval
of a policy, certificate, evidence of coverage, endorsement, rider,
bylaw, or other matter incorporated
by reference or application blank if it is subsequently determined that such
policy, certificate, evidence of coverage, endorsement, rider, bylaw,
other matter, or application
blank is misrepresentative, unjust, unfair, inequitable, ambiguous, misleading,
inconsistent, deceptive, contrary to law or public policy of this State,
or contains exceptions or conditions which unreasonably or deceptively affect
the risk purported to be assumed in the general coverage of the policy or
evidence of coverage.

If a previously approved policy, certificate, evidence of
coverage, endorsement, rider, bylaw
or other matter incorporated by reference or application blank is withdrawn
for use, the Director shall serve upon the company an order of withdrawal
of use, either personally or by mail, and if by mail, such service shall
be completed if such notice be deposited in the post office, postage prepaid,
addressed to the company’s last known address specified in the records
of the Department of Insurance. The order of withdrawal of use shall take
effect 30 days from the date of mailing but shall be stayed if within the
30-day period a written request for hearing is filed with the Director.
Such hearing shall be held at such time and place as designated in the order
given by the Director. The hearing may be held either in the City of Springfield,
the City of Chicago or in the county where the principal business address
of the company is located.
The action of the Director in
disapproving or withdrawing such form shall be subject to judicial review under
the
Administrative Review Law.

This subsection shall not apply to riders or endorsements issued or
made at the request of the individual policyholder relating to the
manner of distribution of benefits or to the reservation of rights and
benefits under his life insurance policy.

(2) Casualty, fire, and marine. The Director shall require the
filing of all policy forms issued or delivered by any company transacting
the kind or
kinds of business enumerated in Classes 2 (except Class 2 (a)) and 3 of
Section 4 in an electronic format either through the System for Electronic Rate and Form Filing (SERFF) or as otherwise prescribed and approved by the Director. In addition, he may require the filing of any
generally used riders, endorsements, certificates, application blanks, and
other matter
incorporated by reference in any such policy or contract of insurance.
Companies that are members of an organization, bureau, or association may
have the same filed for them by the organization, bureau, or association. If
the Director shall find from an examination of any such policy form,
rider, endorsement, certificate, application blank, or other matter
incorporated by
reference in any such policy so filed that it (i) violates any provision of
this Code, (ii) contains inconsistent, ambiguous, or misleading clauses, or
(iii) contains exceptions and conditions that will unreasonably or deceptively
affect the risks that are purported to be assumed by the policy, he
shall order the company or companies issuing these forms to discontinue
their use. Nothing in this subsection shall require a company
transacting the kind or kinds of business enumerated in Classes 2
(except Class 2 (a)) and 3 of Section 4 to obtain approval of these forms
before they are issued nor in any way affect the legality of any
policy that has been issued and found to be in conflict with this
subsection, but such policies shall be subject to the provisions of
Section 442.

(3) This Section shall not apply (i) to surety contracts or fidelity
bonds, (ii) to policies issued to an industrial insured as defined in Section
121-2.08 except for workers’ compensation policies, nor (iii) to riders
or
endorsements prepared to meet special, unusual,
peculiar, or extraordinary conditions applying to an individual risk.

(Source: P.A. 102-775, eff. 5-13-22.)

 

(215 ILCS 5/143.01) (from Ch. 73, par. 755.01)

(Text of Section before amendment by P.A. 102-982)

Sec. 143.01.

(a) A provision in a policy of vehicle insurance described in Section 4
excluding coverage for bodily injury to members of the family of the
insured shall not be applicable when a third party acquires a right
of contribution against a member of the injured person’s family.

(b) A provision in a policy of vehicle insurance excluding coverage for
bodily injury to members of the family of the insured shall not be applicable
when any person not in the household of the insured was driving the vehicle
of the insured involved in the accident which is the subject of the claim or lawsuit.

This subsection (b) applies to any action filed on or after its effective date.

(Source: P.A. 83-1132.)

(Text of Section after amendment by P.A. 102-982)

Sec. 143.01.
(a) A provision in a policy of vehicle insurance described in Section 4
excluding coverage for bodily injury to members of the family of the
insured shall not be applicable when a third party acquires a right
of contribution against a member of the injured person’s family.

(b) A provision in a policy of vehicle insurance excluding coverage for
bodily injury to members of the family of the insured shall not be applicable
when any person not in the household of the insured was driving the vehicle
of the insured involved in the crash which is the subject of the claim or lawsuit.

This subsection (b) applies to any action filed on or after its effective date.

(Source: P.A. 102-982, eff. 7-1-23.)

 

(215 ILCS 5/143.1) (from Ch. 73, par. 755.1)

Sec. 143.1.
Periods of limitation tolled.
Whenever any policy or contract
for insurance, except life, accident and health, fidelity and surety, and
ocean marine policies, contains a provision limiting the period within which
the insured may bring suit, the running of such period is tolled from the
date proof of loss is filed, in whatever form is required by the policy,
until the date the claim is denied in whole or in part.

(Source: P.A. 82-352.)

 

(215 ILCS 5/143.10) (from Ch. 73, par. 755.10)

Sec. 143.10.

No company shall cancel or refuse to issue or renew a policy
on the sole basis that the insured or applicant for such policy was previously
refused issuance or renewal of a policy by any insurer, or such insured’s
policy was cancelled on a prior date by any insurer.

(Source: P.A. 80-1374.)

 

(215 ILCS 5/143.10a) (from Ch. 73, par. 755.10a)

Sec. 143.10a.
Loss Information.

(1) All companies issuing policies to
which Section 143.11 of this Code applies, except for those defined in
subsections (a), (b) and (c) of
Section 143.13 of this Code and to which subsection (o) of Section 19 of
the Workers’ Compensation Act applies, shall on or after January 1, 1987,
provide the following loss information for the 3 previous policy years to
the first named insured within 30 days of the insured’s request. At the
written request of the insured, the company shall send the loss information
directly to the insured’s producer. In
addition, the company shall also send the loss information at the
same time as any notice of cancellation or nonrenewal, except where the
policy has been cancelled for nonpayment of premium, material
misrepresentations or fraud on the part of the insured:

• (a) On closed claims, date and description of occurrence, and total amounts of payments;
• (b) On open claims, date and description of occurrence, total amount of payments and total reserves, if any; and
• (c) For any occurrence not included in (a) or (b) of this subsection (1), the date and description of occurrence and total reserves, if any.

(2) Should a named insured be required by a prospective insurer to
provide detailed loss information in addition to that required under
subsection (1) of this Section, the named insured may mail
or deliver a written request to the insurer for such additional
information, including specific loss reserves. No prospective insurer shall
request, however, more detailed information than required by it to
underwrite the same line or class of insurance. The insurer shall provide
such information to the first named insured as soon as possible, but in no
event later than 20 days of receipt of such request.
Coverage under the existing policy
shall automatically be extended at the same terms and conditions by the
same number of days it takes the insurer to provide the insured with this
additional information.

(3) The Director may promulgate regulations to exclude the automatic
providing of the loss information at the time of cancellation or renewal as
outlined in subsection (1) of this Section for any line or class of
insurance where it can be shown that the information is not needed for that
line or class of insurance.

(4) If a company fails to provide the information as required by this
Section with such frequency so as to indicate a practice of refusing to
provide such information, such failure shall constitute an unfair trade
practice as defined in Section 424 and subject to those hearing and penalty
provisions as set forth in Sections 425 through 434.

(5) Information provided under subsection (2) of this Section shall not
be subject to discovery by any party other than the insured, the insurer,
and the prospective insurer.

(Source: P.A. 93-155, eff. 7-10-03.)

 

(215 ILCS 5/143.10b) (from Ch. 73, par. 755.10b)

Sec. 143.10b.
Loss information, private passenger automobile.

(1) All companies issuing a “policy of automobile insurance” as defined
in paragraph (a) of Section 143.13 of this Code shall, on or after January 1,
1990, provide the following loss information for the 5 previous
policy years to the named insured within 30 days of the insured’s written
request:

• (a) on closed claims, date and description of occurrence, and total amount of payments;
• (b) on open claims, date and description of occurrence and total amount of payments;
• (c) for any occurrence not included in (a) or (b) of this subsection, the date and description of occurrence.

(2) If a company fails to provide the information as required by this
Section with such frequency so as to indicate a practice of refusing to
provide such information, such failure shall constitute an unfair trade
practice as defined in Section 424 and subject to those hearing and penalty
provisions as set forth in Sections 425 through 434 of this Code.

(Source: P.A. 90-196, eff. 1-1-98.)

 

(215 ILCS 5/143.10c) (from Ch. 73, par. 755.10c)

Sec. 143.10c.

No insurance company that is authorized to do business
in this State and which issues policies for personal multiperil property
coverage, commonly known as homeowners insurance, may refuse to issue or
renew a homeowners insurance policy to the owner or tenant of any single
family dwelling, or to any owner of or tenant residing in a multi-unit
residential dwelling which contains from 2 to 4 units in a single building,
solely on the grounds that a space heater is being used inside the dwelling.

For purposes of this Section space heater means a heat radiating
device used to warm rooms of
a house or apartment and which is approved by Underwriters’ Laboratories
and uses gas, electricity or oil as its primary source of energy.

(Source: P.A. 86-174; 86-1028.)

 

(215 ILCS 5/143.10d)

Sec. 143.10d. Claim information for a dog-related incident.

(a) An insurance company offering homeowner’s insurance coverage or renter’s insurance coverage that issues a policy or contract insuring against liability for injury to a person or injury to or destruction of property arising out of the ownership, lease, or rental of residential property shall, to the best of their ability, for any claim involving a dog-related incident, record circumstances relating to the incident, including, but not limited to:

• (1) the breed of dog, and, if the breed was made by visual identification, who made the identification: the adjuster, the owner, or the insured;
• (2) where the owner or insured obtained the dog from: a pet store, a breeder, an animal shelter or rescue, a friend or acquaintance, or found the dog as a stray;
• (3) the sex of the dog and whether the dog was spayed or neutered;
• (4) whether the person injured by the dog was observed engaging in teasing, tormenting, battering, assaulting, injuring, or otherwise provoking the dog;
• (5) the type of injury sustained by the victim, such as a bite or fall;
• (6) whether the incident occurred on the insured’s property or another location; and
• (7) any obedience training or previous claims or past complaints against the dog.

(b) This information shall be collected for a 2-year period beginning on January 1, 2022 and shall be reported annually to the Department. The Department shall make the information available on the Department’s website by July 1, 2023 and shall update the information each July 1 through July 1, 2024. The information or data collected by the Department shall not be released or published in any way that violates the confidentiality or proprietary status or nature of the data.

(Source: P.A. 102-328, eff. 1-1-22.)

 

(215 ILCS 5/143.11) (from Ch. 73, par. 755.11)

Sec. 143.11.
Cancellation Provisions.
All companies authorized to
transact in this State the kinds of business enumerated in Section 4 of
the “Illinois Insurance Code” shall include in their policies, except
life, accident and health, fidelity and surety, and ocean marine policies,
a cancellation provision setting out the manner in which such policies may be
cancelled. However, nothing contained in Section 143.12 through Section
143.24 shall apply to contracts of reinsurance or to contracts procured
by agents under the authority of Section 445.

(Source: P.A. 80-1365.)

 

(215 ILCS 5/143.11a) (from Ch. 73, par. 755.11a)

Sec. 143.11a.
Termination of Lines of Business.
No company
authorized to transact, in this State, the kinds of business enumerated in
Section 4 of this Code, except life, accident and
health, fidelity and surety, and ocean marine policies, may terminate any
line of insurance without notifying the Director of the action as well as
reasons for the action, 90 days before termination of any policy is
effective. The notice shall include all data relied upon by the company as
the basis for such action and shall disclose whether the company offers and
will continue to offer such kinds of insurance in any other State. For the
purposes of
this Section, termination of a line of
insurance shall mean cancellation or non-renewal of a substantial portion
of any type of business for the purpose of withdrawing from the market.

(Source: P.A. 84-1431.)

 

(215 ILCS 5/143.11b)

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,
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
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
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
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.

(Source: P.A. 93-713, eff. 1-1-05.)

 

(215 ILCS 5/143.12) (from Ch. 73, par. 755.12)

Sec. 143.12.
“Short rate” cancellation.
Notice required.
No agent, broker or other representative or employee of any insurance
company shall recommend, advise, suggest or require the cancellation of
any insurance policy of the insurer which he represents, or of any other
insurer at any time other than the policy anniversary or expiration
date, unless he informs the insured in writing of the additional cost of
such cancellation before the insured is requested or required to take
action to cancel or terminate the policy which is then in force.

(Source: P.A. 79-686.)

 

(215 ILCS 5/143.12a) (from Ch. 73, par. 755.12a)

Sec. 143.12a.
Automobile insurance; pro rata refund of unearned premium.

(a) In the event of the cancellation of a policy of automobile
insurance, as defined in Section 143.13, by either the company or the
policyholder, the company shall refund the unearned premium pro rated to
the date of cancellation. In no event may the refund of unearned premium
be computed by use of a short rate table. Refund of the premium shall be
without prejudice to any claim arising
prior to the cancellation.

(b) The refund shall be made by the company within 30 days from the
following:

• (1) the date of the notice of cancellation by the company; or
• (2) the date the company receives the request for cancellation from the policyholder.

(Source: P.A. 86-1408.)

 

(215 ILCS 5/143.13) (from Ch. 73, par. 755.13)

Sec. 143.13.
Definition of terms used in Sections 143.11 through 143.24.

(a) “Policy of automobile insurance” means a policy delivered or
issued for delivery in this State, insuring a natural person as named
insured or one or more related individuals resident of the same
household and under which the insured vehicles therein designated are
motor vehicles of the private passenger, station wagon, or any other
4-wheeled motor vehicle with a load capacity of
1500 pounds or less which is not used in the occupation, profession or
business of the insured or not used as a public or livery conveyance for
passengers nor rented to others. Policy of automobile insurance shall also
mean a named non-owner’s automobile policy.

Policy of automobile insurance does not apply to policies of
automobile insurance issued under the Illinois Automobile Insurance
Plan, to any policy covering garages, automobile sales agencies, repair
shops, service stations or public parking place operation hazards. “Policy
of automobile insurance” does not include a policy, binder, or
application for
which the applicant gives or has given for the initial premium a check or
credit card charge that is subsequently dishonored for payment, unless the
check or credit card charge was dishonored through no fault of the payor.

(b) “Policy of fire and extended coverage insurance” means a policy
delivered or issued for delivery in this State, that includes but is not
limited to, the perils of fire and extended coverage, and covers real
property used principally for residential purposes up to and including a 4
family dwelling or any household or personal property that is usual or
incidental to the occupancy to any premises used for residential purposes.

(c) “All other policies of personal lines” means any other policy of
insurance issued to a natural person for personal or family protection.

(d) “Renewal” or “to renew” means
(1) any change to an entire
line of business in accordance with subsection b-5 of Section 143.17 and
(2)
the issuance and delivery by an
insurer of a policy superseding at the end of the policy period a policy
previously issued and delivered by the same insurer or the issuance and
delivery of a certificate or notice extending the term of a policy
beyond its policy period or term; however, any successive policies
issued by the same insurer to the same insured, for the same or similar
coverage, shall be considered a renewal policy.

Any policy with a policy period or term of less than 6 months or any
policy with no fixed expiration date shall be considered as if written
for successive policy periods or terms of 6 months for the purpose of
“renewal” or “to renew” as defined in this paragraph (d) and for the purpose
of any non-renewal notice required by Section 143.17 of this Code.

(e) “Nonpayment of premium” means failure of the named insured to
discharge, when due, any of his obligations in connection with the
payment of premiums or any installment of such premium that is payable
directly to the insurer or to its agent. Premium shall mean the premium
that is due for an individual policy which shall not include any membership
dues or other consideration required to be a member of any organization in
order to be eligible for such
policy. The term
“nonpayment of premium” does not include a check, credit card
charge, or money order that an applicant gives or has given to any person for
the
initial premium payment for a policy, binder, or application
and that is subsequently dishonored for payment, and any policy,
binder, or application in connection therewith is void and of no effect and not
subject to the cancellation provisions of this Code.

(f) “A policy delivered or issued for delivery in this State” shall
include but not be limited to all binders of insurance, whether written
or oral, and all applications bound for future delivery by a duly
licensed resident agent. A written binder of insurance issued for a term
of 60 days or less, which contains on its face a specific inception and
expiration date and which a copy has been furnished to the insured, shall
not be subject to the non-renewal requirements of Section 143.17 of this
Code.

(g) “Cancellation” or “cancelled” means the termination
of a policy by an insurer prior to the expiration date of the policy. A
policy of automobile or fire and extended coverage insurance which expires
by its own terms on the policy expiration date unless advance premiums are
received by the insurer for succeeding policy periods shall not be considered
“cancelled” or a “cancellation” effected by the insurer in the event such
premiums are not paid on or before the policy expiration date.

(h) “Commercial excess and umbrella liability policy” means a policy
written over one or more underlying policies for an insured:

• (1) that has at least 25 full-time employees at the time the commercial excess and umbrella liability policy is written and procures the insurance of any risk or risks, other than life, accident and health, and annuity contracts, as described in clauses (a) and (b) of Class 1 of Section 4 and clause (a) of Class 2 of Section 4, by use of the services of a full-time employee acting as an insurance manager or buyer; or
• (2) whose aggregate annual premiums for all property and casualty insurance on all risks is at least $50,000.
  (Source: P.A. 91-552, eff. 8-14-99; 91-597, eff. 1-1-00; 92-16, eff.

6-28-01.)

 

(215 ILCS 5/143.13a)

Sec. 143.13a. Coverage for permissive drivers. Any policy of private passenger automobile insurance must provide the same limits of bodily injury liability, property damage liability, uninsured and underinsured motorist bodily injury, and medical payments coverage to all persons insured under that policy, whether or not an insured person is a named insured or permissive user under the policy. If the policy insures more than one private passenger automobile, the limits available to the permissive user shall be the limits associated with the vehicle used by the permissive user when the loss occurs.

(Source: P.A. 95-395, eff. 1-1-08.)

 

(215 ILCS 5/143.14) (from Ch. 73, par. 755.14)

Sec. 143.14. Notice of cancellation.

(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 at the last mailing
address known by the company.
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. Notification shall also be sent to the insured’s broker if known, or the agent of
record, if known, and to the mortgagee or lien holder listed on the policy. 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.

(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.

(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
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.

(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.

(Source: P.A. 100-475, eff. 1-1-18.)

 

(215 ILCS 5/143.15) (from Ch. 73, par. 755.15)

Sec. 143.15. Mailing of cancellation notice. All notices of
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; however, if cancellation is for nonpayment of premium, the notice of cancellation must be mailed at least 10 days before the effective date of the cancellation to the last mailing address known to the company. All
notices of cancellation to the named insured shall include a specific explanation of
the reason or reasons for cancellation. For purposes of this Section, the mortgagee or lien holder, if known, may opt to accept notification electronically.

(Source: P.A. 100-475, eff. 1-1-18.)

 

(215 ILCS 5/143.16) (from Ch. 73, par. 755.16)

Sec. 143.16. Mailing of cancellation notice. All notices of
cancellation of insurance to which Section
143.11 applies, except for those 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 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. 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. All such notices shall
include a specific explanation of the reason or reasons for cancellation
and shall be mailed to the named insured at the last mailing address known to the company. For purposes of this Section, the mortgagee or lien holder, if known, may opt to accept notification electronically.

(Source: P.A. 100-475, eff. 1-1-18.)

 

(215 ILCS 5/143.16a) (from Ch. 73, par. 755.16a)

Sec. 143.16a.
Cancellation of Casualty policies.
No policy
to which Section 143.11 applies, except for those defined in subsection (a)
or (b) of Section 143.13, that has been in
effect for 60 days may be cancelled except for one
of the following reasons:

(a) Nonpayment of premium;

(b) The policy was obtained through a material misrepresentation;

(c) Any insured violated any of the terms and conditions of the policy;

(d) The risk originally accepted has measurably increased;

(e) Certification to the Director of the loss of reinsurance by the
insurer which provided coverage to the
insurer for all or a substantial part of the underlying risk insured; or

(f) A determination by the Director that the continuation of the policy
could place the insurer in violation of the insurance laws of this State.

(Source: P.A. 84-1005.)

 

(215 ILCS 5/143.16b) (from Ch. 73, par. 755.16b)

Sec. 143.16b.
Premium Refunds for Drought Insurance.
Whenever a person
has submitted payment of premium for the purchase of drought insurance
described in clause (b) of Class 3 of Section 4 of this Code to an insurer
or one of its subsidiaries, employees, agents, or producers, the insurer
shall have a duty, within 10 business days of receipt of such premium
payment, to either:

(a) refund the premium payment in full; or

(b) accept the premium payment, and provide to the person who has offered
such payment policy coverage in full conformity with representations of any
application, declaration, binder, or contract of policy coverage issued by
the insurer or one of its subsidiaries, employees, agents or producers.

This Section shall not apply to insurance provided, guaranteed or
reinsured pursuant to the Federal Crop Insurance Program.

(Source: P.A. 86-285.)

 

(215 ILCS 5/143.17) (from Ch. 73, par. 755.17)

Sec. 143.17. Notice of intention not to renew.

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. The nonrenewal shall not become effective until at least 30 days from the proof of mailing date of the notice to the name insured. Notification shall also be sent to the insured’s
broker, if known, or the agent of record, if known, and to the last known mortgagee or lien
holder. For purposes of this Section, the mortgagee or lien holder, insured’s broker, or the agent of record may opt to accept notification electronically. 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.

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.

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
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. Notice shall also be sent to the insured’s broker, if known, or the
agent of record.

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.

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.

e. In all notices of intention not to renew any policy of insurance,
as defined in Section 143.11 the company shall provide the named insured a specific
explanation of the reasons for nonrenewal.

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.

(Source: P.A. 100-475, eff. 1-1-18.)

 

(215 ILCS 5/143.17a) (from Ch. 73, par. 755.17a)

Sec. 143.17a. Notice of intention not to renew.

(a) A company intending to nonrenew any policy of insurance to which Section 143.11 applies, except for those defined in subsections (a), (b), (c), and (h) of Section 143.13, must mail written notice to the named insured at least 60 days prior to the expiration date of the current policy. The notice to the named insured shall provide a specific explanation of the reasons for nonrenewal. A company may not extend the current policy period for purposes of providing notice of its intention not to renew required under this subsection (a).

(b) A company intending to renew any policy of insurance to which Section 143.11 applies, except for those defined in subsections (a), (b), (c), and (h) of Section 143.13, with an increase in premium of 30% or more or with changes in deductibles or coverage that materially alter the policy must mail or deliver to the named insured written notice of such increase or change in deductible or coverage at least 60 days prior to the renewal or anniversary date. If a company has failed to provide notice of intention to renew required under this subsection (b) at least 60 days prior to the renewal or anniversary date, but does so no less than 31 days prior to the renewal or anniversary date, the company may extend the current policy at the current terms and conditions for the period of time needed to equal the 60 day time period required to provide notice of intention to renew by this subsection (b). 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 any change in exposure or reinsurance costs not considered in the quotation.

(c) A company that has failed to provide notice of intention to nonrenew under subsection (a) of this Section and has failed to provide notice of intention to renew as prescribed under subsection (b) of this Section must renew the expiring policy under the same terms and conditions for an additional year or until the effective date of any similar insurance is procured by the insured, whichever is earlier. The company may increase the renewal premium. However, such increase must be less than 30% of the expiring term’s premium and notice of such increase must be delivered to the named insured on or before the date of expiration of the current policy period.

(d) Under subsection (a), the company shall maintain proof of mailing of the notice of intention not to renew to the named insured 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. Under subsections (b) and (c), proof of mailing or proof of receipt of the notice of intention to renew to the named insured may be proven by a sworn affidavit by the company 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. For all notice requirements under this Section, notice shall also be sent to the named insured’s producer, if known, or the producer of record. Notification shall also be sent to the mortgagee or lien holder listed on the policy.

(e) Renewal of a policy does not constitute a waiver or estoppel with respect to grounds for cancellation that existed before the effective date of such renewal.

(f) For purposes of this Section, the named insured’s producer, if known, or the producer of record and the mortgagee or lien holder may opt to accept notification electronically.

(Source: P.A. 100-475, eff. 1-1-18.)

 

(215 ILCS 5/143.18) (from Ch. 73, par. 755.18)

Sec. 143.18.

Liability of Company or Agents Regarding Statements
Made In Notices Or Information.
There shall be no liability on the part of and no cause of action of
any nature shall arise against any company, its authorized
representative, its agents, its employees, or any firm, person or
corporation furnishing to the company information as to reasons for
cancellation, or nonrenewal, for any statement made by any of them in
any written notice of cancellation or nonrenewal, or any other
communications, oral or written, specifying the reasons for cancellation
or nonrenewal, or for the providing of information pertaining thereto.

(Source: P.A. 79-686.)

 

(215 ILCS 5/143.19) (from Ch. 73, par. 755.19)

(Text of Section before amendment by P.A. 102-982)

Sec. 143.19. Cancellation of automobile insurance policy; grounds. After a policy of automobile insurance as defined in Section
143.13(a) has been effective for 60 days, or if such policy is a renewal
policy, the insurer shall not exercise its option to cancel such policy
except for one or more of the following reasons:

• a. Nonpayment of premium;
• b. The policy was obtained through a material misrepresentation;
• c. Any insured violated any of the terms and conditions of the policy;
• d. The named insured failed to disclose fully his motor vehicle accidents and moving traffic violations for the preceding 36 months if called for in the application;
• e. Any insured made a false or fraudulent claim or knowingly aided or abetted another in the presentation of such a claim;
• f. The named insured or any other operator who either resides in the same household or customarily operates an automobile insured under such policy:
• 1. has, within the 12 months prior to the notice of cancellation, had his driver’s license under suspension or revocation;
• 2. is or becomes subject to epilepsy or heart attacks, and such individual does not produce a certificate from a physician testifying to his unqualified ability to operate a motor vehicle safely;
• 3. has an accident record, conviction record (criminal or traffic), physical, or mental condition which is such that his operation of an automobile might endanger the public safety;
• 4. has, within the 36 months prior to the notice of cancellation, been addicted to the use of narcotics or other drugs; or
• 5. has been convicted, or had pretrial release revoked, during the 36 months immediately preceding the notice of cancellation, for any felony, criminal negligence resulting in death, homicide or assault arising out of the operation of a motor vehicle, operating a motor vehicle while in an intoxicated condition or while under the influence of drugs, being intoxicated while in, or about, an automobile or while having custody of an automobile, leaving the scene of an accident without stopping to report, theft or unlawful taking of a motor vehicle, making false statements in an application for an operator’s or chauffeur’s license or has been convicted or pretrial release has been revoked for 3 or more violations within the 12 months immediately preceding the notice of cancellation, of any law, ordinance, or regulation limiting the speed of motor vehicles or any of the provisions of the motor vehicle laws of any state, violation of which constitutes a misdemeanor, whether or not the violations were repetitions of the same offense or different offenses;
• g. The insured automobile is:
• 1. so mechanically defective that its operation might endanger public safety;
• 2. used in carrying passengers for hire or compensation (the use of an automobile for a car pool shall not be considered use of an automobile for hire or compensation);
• 3. used in the business of transportation of flammables or explosives;
• 4. an authorized emergency vehicle;
• 5. changed in shape or condition during the policy period so as to increase the risk substantially; or
• 6. subject to an inspection law and has not been inspected or, if inspected, has failed to qualify.

Nothing in this Section shall apply to nonrenewal.

(Source: P.A. 100-201, eff. 8-18-17; 101-652, eff. 1-1-23; 102-1104, eff. 1-1-23.)

(Text of Section after amendment by P.A. 102-982)

Sec. 143.19. Cancellation of automobile insurance policy; grounds. After a policy of automobile insurance as defined in Section
143.13(a) has been effective for 60 days, or if such policy is a renewal
policy, the insurer shall not exercise its option to cancel such policy
except for one or more of the following reasons:

• a. Nonpayment of premium;
• b. The policy was obtained through a material misrepresentation;
• c. Any insured violated any of the terms and conditions of the policy;
• d. The named insured failed to disclose fully his motor vehicle crashes and moving traffic violations for the preceding 36 months if called for in the application;
• e. Any insured made a false or fraudulent claim or knowingly aided or abetted another in the presentation of such a claim;
• f. The named insured or any other operator who either resides in the same household or customarily operates an automobile insured under such policy:
• 1. has, within the 12 months prior to the notice of cancellation, had his driver’s license under suspension or revocation;
• 2. is or becomes subject to epilepsy or heart attacks, and such individual does not produce a certificate from a physician testifying to his unqualified ability to operate a motor vehicle safely;
• 3. has a crash record, conviction record (criminal or traffic), physical, or mental condition which is such that his operation of an automobile might endanger the public safety;
• 4. has, within the 36 months prior to the notice of cancellation, been addicted to the use of narcotics or other drugs; or
• 5. has been convicted, or had pretrial release revoked, during the 36 months immediately preceding the notice of cancellation, for any felony, criminal negligence resulting in death, homicide or assault arising out of the operation of a motor vehicle, operating a motor vehicle while in an intoxicated condition or while under the influence of drugs, being intoxicated while in, or about, an automobile or while having custody of an automobile, leaving the scene of a crash without stopping to report, theft or unlawful taking of a motor vehicle, making false statements in an application for an operator’s or chauffeur’s license or has been convicted or pretrial release has been revoked for 3 or more violations within the 12 months immediately preceding the notice of cancellation, of any law, ordinance, or regulation limiting the speed of motor vehicles or any of the provisions of the motor vehicle laws of any state, violation of which constitutes a misdemeanor, whether or not the violations were repetitions of the same offense or different offenses;
• g. The insured automobile is:
• 1. so mechanically defective that its operation might endanger public safety;
• 2. used in carrying passengers for hire or compensation (the use of an automobile for a car pool shall not be considered use of an automobile for hire or compensation);
• 3. used in the business of transportation of flammables or explosives;
• 4. an authorized emergency vehicle;
• 5. changed in shape or condition during the policy period so as to increase the risk substantially; or
• 6. subject to an inspection law and has not been inspected or, if inspected, has failed to qualify.

Nothing in this Section shall apply to nonrenewal.

(Source: P.A. 101-652, eff. 1-1-23; 102-982, eff. 7-1-23; 102-1104, eff. 1-1-23.)

 

(215 ILCS 5/143.19.1) (from Ch. 73, par. 755.19.1)

(Text of Section before amendment by P.A. 102-982)

Sec. 143.19.1. Limits on exercise of right of nonrenewal. After a
policy of automobile insurance, as defined in
Section 143.13, has been effective or renewed for 5 or more years, the
company shall not exercise its right of non-renewal unless:

• a. The policy was obtained through a material misrepresentation; or
• b. Any insured violated any of the terms and conditions of the policy; or
• c. The named insured failed to disclose fully his motor vehicle accidents and moving traffic violations for the preceding 36 months, if such information is called for in the application; or
• d. Any insured made a false or fraudulent claim or knowingly aided or abetted another in the presentation of such a claim; or
• e. The named insured or any other operator who either resides in the same household or customarily operates an automobile insured under such a policy:
• 1. Has, within the 12 months prior to the notice of non-renewal had his drivers license under suspension or revocation; or
• 2. Is or becomes subject to epilepsy or heart attacks, and such individual does not produce a certificate from a physician testifying to his unqualified ability to operate a motor vehicle safely; or
• 3. Has an accident record, conviction record (criminal or traffic), or a physical or mental condition which is such that his operation of an automobile might endanger the public safety; or
• 4. Has, within the 36 months prior to the notice of non-renewal, been addicted to the use of narcotics or other drugs; or
• 5. Has been convicted or pretrial release has been revoked, during the 36 months immediately preceding the notice of non-renewal, for any felony, criminal negligence resulting in death, homicide or assault arising out of the operation of a motor vehicle, operating a motor vehicle while in an intoxicated condition or while under the influence of drugs, being intoxicated while in or about an automobile or while having custody of an automobile, leaving the scene of an accident without stopping to report, theft or unlawful taking of a motor vehicle, making false statements in an application for an operators or chauffeurs license, or has been convicted or pretrial release has been revoked for 3 or more violations within the 12 months immediately preceding the notice of non-renewal, of any law, ordinance or regulation limiting the speed of motor vehicles or any of the provisions of the motor vehicle laws of any state, violation of which constitutes a misdemeanor, whether or not the violations were repetitions of the same offense or different offenses; or
• f. The insured automobile is:
• 1. So mechanically defective that its operation might endanger public safety; or
• 2. Used in carrying passengers for hire or compensation (the use of an automobile for a car pool shall not be considered use of an automobile for hire or compensation); or
• 3. Used in the business of transportation of flammables or explosives; or
• 4. An authorized emergency vehicle; or
• 5. Changed in shape or condition during the policy period so as to increase the risk substantially; or
• 6. Subject to an inspection law and it has not been inspected or, if inspected, has failed to qualify; or
• g. The notice of the intention not to renew is mailed to the insured at least 60 days before the date of nonrenewal as provided in Section 143.17.
  (Source: P.A. 101-652, eff. 1-1-23.)

(Text of Section after amendment by P.A. 102-982)

Sec. 143.19.1. Limits on exercise of right of nonrenewal. After a
policy of automobile insurance, as defined in
Section 143.13, has been effective or renewed for 5 or more years, the
company shall not exercise its right of non-renewal unless:

• a. The policy was obtained through a material misrepresentation; or
• b. Any insured violated any of the terms and conditions of the policy; or
• c. The named insured failed to disclose fully his motor vehicle crashes and moving traffic violations for the preceding 36 months, if such information is called for in the application; or
• d. Any insured made a false or fraudulent claim or knowingly aided or abetted another in the presentation of such a claim; or
• e. The named insured or any other operator who either resides in the same household or customarily operates an automobile insured under such a policy:
• 1. Has, within the 12 months prior to the notice of non-renewal had his drivers license under suspension or revocation; or
• 2. Is or becomes subject to epilepsy or heart attacks, and such individual does not produce a certificate from a physician testifying to his unqualified ability to operate a motor vehicle safely; or
• 3. Has a crash record, conviction record (criminal or traffic), or a physical or mental condition which is such that his operation of an automobile might endanger the public safety; or
• 4. Has, within the 36 months prior to the notice of non-renewal, been addicted to the use of narcotics or other drugs; or
• 5. Has been convicted or pretrial release has been revoked, during the 36 months immediately preceding the notice of non-renewal, for any felony, criminal negligence resulting in death, homicide or assault arising out of the operation of a motor vehicle, operating a motor vehicle while in an intoxicated condition or while under the influence of drugs, being intoxicated while in or about an automobile or while having custody of an automobile, leaving the scene of a crash without stopping to report, theft or unlawful taking of a motor vehicle, making false statements in an application for an operators or chauffeurs license, or has been convicted or pretrial release has been revoked for 3 or more violations within the 12 months immediately preceding the notice of non-renewal, of any law, ordinance or regulation limiting the speed of motor vehicles or any of the provisions of the motor vehicle laws of any state, violation of which constitutes a misdemeanor, whether or not the violations were repetitions of the same offense or different offenses; or
• f. The insured automobile is:
• 1. So mechanically defective that its operation might endanger public safety; or
• 2. Used in carrying passengers for hire or compensation (the use of an automobile for a car pool shall not be considered use of an automobile for hire or compensation); or
• 3. Used in the business of transportation of flammables or explosives; or
• 4. An authorized emergency vehicle; or
• 5. Changed in shape or condition during the policy period so as to increase the risk substantially; or
• 6. Subject to an inspection law and it has not been inspected or, if inspected, has failed to qualify; or
• g. The notice of the intention not to renew is mailed to the insured at least 60 days before the date of nonrenewal as provided in Section 143.17.

(Source: P.A. 101-652, eff. 1-1-23; 102-982, eff. 7-1-23.)

 

(215 ILCS 5/143.19.2)

Sec. 143.19.2. Volunteer driver protection.

(a) For the purpose of this Section, “volunteer driver” means a person who transports by vehicle individuals or goods without compensation above reimbursement for expenses, where the driving services are performed for a nationally affiliated charitable nonprofit organization operating in Area Agencies on Aging areas number 3 or 12, as designated by the Department on Aging, that allows older individuals to transfer their automobiles to the organization in exchange for personal transportation services.

(b) An insurer may not refuse to issue vehicle insurance to a person solely because the applicant is a volunteer driver. An insurer may not impose a surcharge or otherwise increase the rate for a vehicle policy solely on the basis that the named insured or any member of the insured’s household or a person who customarily operates the insured’s vehicle is a volunteer driver. This Section shall not prohibit an insurer from taking any actions upon factors other than the volunteer status of the insured driver.

(Source: P.A. 97-285, eff. 8-9-11.)

 

(215 ILCS 5/143.19.3)

(Text of Section before amendment by P.A. 102-982)

Sec. 143.19.3. Prohibition of rate increase for persons involved in emergency use of vehicles.

(a) No insurer authorized to transact or transacting business in this State, or controlling or controlled by or under common control by or with an insurer authorized to transact or transacting business in this State, that sells a personal policy of automobile insurance in this State shall increase the policy premium, cancel the policy, or refuse to renew the policy solely because the insured or any other person who customarily operates an automobile covered by the policy has had an accident while operating an automobile in response to an emergency when the insured was responding to a call to duty as a volunteer EMS provider, as defined in Section 1-220 of the Illinois Vehicle Code.

(b) The provisions of subsection (a) also apply to all personal umbrella policies.

(Source: P.A. 100-657, eff. 8-1-18.)

(Text of Section after amendment by P.A. 102-982)

Sec. 143.19.3. Prohibition of rate increase for persons involved in emergency use of vehicles.

(a) No insurer authorized to transact or transacting business in this State, or controlling or controlled by or under common control by or with an insurer authorized to transact or transacting business in this State, that sells a personal policy of automobile insurance in this State shall increase the policy premium, cancel the policy, or refuse to renew the policy solely because the insured or any other person who customarily operates an automobile covered by the policy has been involved in a crash while operating an automobile in response to an emergency when the insured was responding to a call to duty as a volunteer EMS provider, as defined in Section 1-220 of the Illinois Vehicle Code.

(b) The provisions of subsection (a) also apply to all personal umbrella policies.

(Source: P.A. 102-982, eff. 7-1-23.)

 

(215 ILCS 5/143.19a) (from Ch. 73, par. 755.19a)

Sec. 143.19a.
No policy of insurance as defined in subsection a.
of Section
143.13 of this Act may
be cancelled where the sole basis for such cancellation is the payment by
the insurance company of a claim or claims against such policy.

(Source: P.A. 80-1127.)

 

(215 ILCS 5/143.19b) (from Ch. 73, par. 755.19b)

Sec. 143.19b.

No policy of insurance as defined in subsection (a) of
Section 143.13 of this Code may be nonrenewed where the sole basis for
nonrenewal was the reporting of a claim or claims against such policy and
such claim or claims were closed without payment.

(Source: P.A. 86-437.)

 

(215 ILCS 5/143.20) (from Ch. 73, par. 755.20)

Sec. 143.20.

Notice to Insured as to Eligibility of Illinois Automobile
Insurance Plan.

When a policy of automobile insurance is cancelled other than for
nonpayment of premium or in the event of the renewal of a policy of
automobile insurance to which Section 143.17 applies, the company shall
notify the named insured of his possible eligibility for insurance
through the Illinois Automobile Insurance Plan. Such notice shall
accompany or be included in the notice of cancellation or in the notice
of intent not to renew.

(Source: P.A. 80-1136.)

 

(215 ILCS 5/143.20a) (from Ch. 73, par. 755.20a)

Sec. 143.20a.
Cancellation of Fire and Marine Policies.
(1) Policies
covering property, except policies described in Section 143.13b, of this
Code, issued for the kinds of business enumerated in Class 3 of Section
4 of this Code may be cancelled 10 days following receipt of written notice
by the named insureds if the insured property is found to consist of one
or more of the following:

(a) Buildings to which, following a fire loss, permanent repairs have
not commenced within 60 days after satisfactory adjustment of loss, unless
such delay is a direct result of a labor dispute or weather conditions.

(b) Buildings which have been unoccupied 60 consecutive days, except
buildings which have a seasonal occupancy and buildings which are undergoing
construction, repair or reconstruction and are properly secured against
unauthorized entry.

(c) Buildings on which, because of their physical condition, there is
an outstanding order to vacate, an outstanding demolition order, or which
have been declared unsafe in accordance with applicable law.

(d) Buildings on which heat, water, sewer service or public lighting have
not been connected for 30 consecutive days or more.

(2) All notices of cancellation under this Section shall be sent by
certified mail and regular mail to the address of record of the named insureds.

(3) All cancellations made pursuant to this Section shall be
on a pro rata basis.

(Source: P.A. 86-437.)

 

(215 ILCS 5/143.21) (from Ch. 73, par. 755.21)

Sec. 143.21.

Cancellation of Fire and Extended Coverage Policy –
Grounds. After a policy of fire and extended coverage insurance, as defined
in paragraph (b) of Section 143.13, has been effective for 60 days, or if
such policy is a renewal policy, the company shall not exercise its right
to cancel except for one or more of the following reasons:

a. For nonpayment of premium;

b. When a policy was obtained by misrepresentation or fraud; or

c. For any act which measurably increases the risk originally
accepted.

(Source: P.A. 86-437.)

 

(215 ILCS 5/143.21.1) (from Ch. 73, par. 755.21.1)

Sec. 143.21.1.

After a policy of fire and extended coverage, as defined
in Section 143.13, has been effective or renewed for 5 or more years, the
company shall not exercise its right of non-renewal unless:

1. The policy was obtained by misrepresentation or fraud; or

2. The risk originally accepted has measurably increased; or

3. The insured has received 60 days notice of the intention of the company
not to renew as provided in Section 143.17.

(Source: P.A. 80-1126.)

 

(215 ILCS 5/143.21a) (from Ch. 73, par. 755.21a)

Sec. 143.21a.

Nonrenewal of Fire and Extended Coverage
Policy – Grounds. A policy of fire and extended coverage
insurance, as defined in subsection (b) of Section 143.13,
may not be nonrenewed for any of the following reasons:

• (a) age of property,
• (b) location of property,
• (c) age, sex, race, color, ancestry, marital status, or occupation of occupants.

(Source: P.A. 91-357, eff. 7-29-99.)

 

(215 ILCS 5/143.21b) (from Ch. 73, par. 755.21b)

Sec. 143.21b.
No policy of insurance as defined in subsection b.
of
Section 143.13 of this Act may be cancelled where the sole basis for
such cancellation is the payment by the insurance company of a claim or
claims against such policy.

(Source: P.A. 80-1364.)

 

(215 ILCS 5/143.21c) (from Ch. 73, par. 755.21c)

Sec. 143.21c.
Earthquake insurance; notice.
In response to
all applications for homeowners insurance, pursuant to subsection
(b) of Section 143.13 of this Act, received by the insurance
company for coverage on property located in the New Madrid
Seismic Zone, as defined by the United States Geological Survey
in Illinois, susceptible to Modified Mercalli intensity VII or
greater damage, information shall be provided by the insurance
company to the applicant regarding the availability of insurance
for loss caused by earthquake.

(Source: P.A. 86-1197; 87-322.)

 

(215 ILCS 5/143.22) (from Ch. 73, par. 755.22)

Sec. 143.22.

Notice to Insured as to Eligibility of Illinois Fair Plan
Association. When a policy containing fire and extended coverage insurance is
cancelled or nonrenewed other than for nonpayment of premium or evidence
of incendiarism and if the location of the insured property is within the
State of Illinois the company shall notify the named insured of
his eligibility for the FAIR Plan and shall explain the procedure to
make application to the FAIR Plan. Such notice shall accompany or be
included in the notice of cancellation or the notice of intent not to
renew.

(Source: P.A. 86-437.)

 

(215 ILCS 5/143.23) (from Ch. 73, par. 755.23)

Sec. 143.23.
Cancellation and Nonrenewal Policies – Hearing.
A named insured who wishes to appeal the reasons for cancellation
or nonrenewal pursuant to Sections 143.16a and 143.19 through 143.24,
shall at least 20 days prior to the effective date of cancellation or
nonrenewal, mail or deliver to the Director of Insurance a written request
for a hearing which shall clearly state the basis for the appeal. This
Section does not apply to cancellation in the case of nonpayment of
premium. The notice of cancellation or nonrenewal to which this Section
applies shall advise the named insured of his right to appeal and the
procedure to follow for such appeal.

Within 10 days after receipt of request for a hearing and upon 10 days
notice to the parties, the Director shall call a hearing. Within 20
days of conclusion of the hearing, the Director shall issue his written
findings to the parties. The policy will remain in force until such
time as the Director has given his findings. If the Director finds for
the named insured, he shall order the insurer to rescind its notice of
cancellation, or in the case of a nonrenewal order the notice of
nonrenewal withdrawn. If the Director finds for the Company he shall
order that the cancellation or nonrenewal be effective at least 30 days
from the date of his order. The company is
entitled to a premium for any extension of coverage and such extension
may be contingent upon the payment of the premium.

Costs of the hearing may be assessed against the losing party but
shall not exceed $100.

(Source: P.A. 86-437; 87-757.)

 

(215 ILCS 5/143.23a) (from Ch. 73, par. 755.23a)

Sec. 143.23a.

When any person has filed a complaint with the Director
alleging cancellation, non-renewal or refusal to issue a fire and extended
coverage policy, as defined in Section 143.13 of this Code, by any insurer,
such person, upon written request to the insurer, to which the insurer shall
respond within 21 days, shall have access to the complete file of such insurer
pertaining to such person’s application or policy. There shall be no liability
on the part of, and no cause of action shall rise against, any insurer or
authorized representative, or its agents or employees, or the director or
his authorized representative for any statement made by them or any information
contained in the files revealed in compliance with the provisions of this Section.

(Source: P.A. 80-1374.)

 

(215 ILCS 5/143.24) (from Ch. 73, par. 755.24)

Sec. 143.24. Limited Nonrenewal of Automobile Insurance Policy. A policy of automobile insurance, as defined in subsection (a) of Section
143.13, may not be nonrenewed for any of the following reasons:

a. Age;

b. Sex;

c. Race;

d. Color;

e. Creed;

f. Ancestry;

g. Occupation;

h. Marital Status;

i. Employer of the insured;

j. Physical disability as defined in Section 143.24a of this Act.

(Source: P.A. 99-143, eff. 7-27-15.)

 

(215 ILCS 5/143.24a) (from Ch. 73, par. 755.24a)

Sec. 143.24a.
(a) No insurer, licensed to issue a policy of automobile
insurance, as defined in subsection (a) of Section 143.13, shall fail or
refuse to accept an application from a person with a physical disability for such
insurance, refuse to issue such insurance to an applicant with a physical disability therefor
solely because of a physical disability, or issue or cancel such insurance under
conditions less favorable to persons with physical disabilities than
persons without physical disabilities; nor shall a physical disability itself constitute a condition or risk for
which a higher premium may be required of a person with a physical disability for such insurance.

(b) As used in this Section, “physical disability” refers only to
an impairment of physical ability because of amputation or loss of
function which impairment
has been compensated for, when necessary, by vehicle equipment adaptation
or modification; or an impairment of hearing which
impairment has been compensated for, when necessary, either by sensory
equipment adaptation or modification, or an impairment of
speech; provided, that the insurer may require an applicant with a physical disability for such insurance on the renewal of such insurance
to furnish proof that he or she has qualified for a new or renewed drivers
license since the occurrence of the disabling condition.

(Source: P.A. 99-143, eff. 7-27-15.)

 

(215 ILCS 5/143.24b) (from Ch. 73, par. 755.24b)

(Text of Section before amendment by P.A. 102-982)

Sec. 143.24b.

Any insurer insuring any person or
entity against damages
arising out of a vehicular accident shall disclose the dollar amount of
liability coverage under the insured’s personal private passenger
automobile liability insurance policy upon receipt of the
following: (a) a certified letter from a claimant or any attorney
purporting to represent any claimant which requests such disclosure and
(b) a brief description of the nature and extent of the injuries,
accompanied by a statement of the amount of medical bills incurred to date
and copies of medical records. The disclosure shall be confidential and available
only to the claimant, his attorney and personnel
in the office of the attorney entitled to access to the claimant’s files.
The insurer shall forward the information to the party requesting it by
certified mail, return receipt requested, within 30 days of receipt of the request.

(Source: P.A. 85-1209.)

(Text of Section after amendment by P.A. 102-982)

Sec. 143.24b.
Any insurer insuring any person or
entity against damages
arising out of a vehicular crash shall disclose the dollar amount of
liability coverage under the insured’s personal private passenger
automobile liability insurance policy upon receipt of the
following: (a) a certified letter from a claimant or any attorney
purporting to represent any claimant which requests such disclosure and
(b) a brief description of the nature and extent of the injuries,
accompanied by a statement of the amount of medical bills incurred to date
and copies of medical records. The disclosure shall be confidential and available
only to the claimant, his attorney and personnel
in the office of the attorney entitled to access to the claimant’s files.
The insurer shall forward the information to the party requesting it by
certified mail, return receipt requested, within 30 days of receipt of the request.

(Source: P.A. 102-982, eff. 7-1-23.)

 

(215 ILCS 5/143.24c)

Sec. 143.24c.
Hate crimes; coverage refusal.

(a) This Section applies to policies of insurance
if the insured or proposed insured is
(1) an individual, (2) a religious
organization described in clause (i) of subparagraph (A) of paragraph (1) of
subsection
(b) of Section 170 of Title 26 of the United States Code, (3) an educational
organization
described in clause (ii) of subparagraph (A) of paragraph (1) of subsection (b)
of Section
170 of Title 26 of the United States Code, or (4) any other nonprofit
organization
described in
clause (vi) of subparagraph (A) of paragraph (1) of subsection (b) of Section
170 of Title 26 of the
United States Code that is organized and operated for religious, charitable, or
educational
purposes.

(b) An insurer issuing policies subject to this Section may not cancel,
refuse to issue, or refuse to
renew the policy solely on the basis that one or more claims have been made
against any
policy during the preceding 60 months for a loss that is the result of a hate
crime
committed against the person or property insured if the insured provides
evidence to the insurer that the act causing the loss is identified as a hate
crime on a police report.

(c) As it relates to this Section, if determined by a law enforcement
agency, a
“hate crime” may include any of the following:

• (1) By force or threat of force, willfully injuring, intimidating, interfering with, oppressing, or threatening any other person in the free exercise or enjoyment of any right or privilege secured to him or her by the Constitution or laws of this State or by the Constitution or laws of the United States because of the other person’s race, color, religion, ancestry, national origin, disability, gender, or sexual orientation or because he or she perceives that the other person has one or more of those characteristics. This offense, however, does not include speech alone, except upon a showing that the speech itself threatened violence against a specific person or group of persons and that the defendant had the apparent ability to carry out the threat.
• (2) Knowingly defacing, damaging, or destroying the real or personal property of any other person for the purpose of intimidating or interfering with the free exercise or enjoyment of any right or privilege secured to the other person by the Constitution or laws of this State or by the Constitution or laws of the United States because of the other person’s race, color, religion, ancestry, national origin, disability, gender, or sexual orientation or because he or she perceives that the other person has one or more of those characteristics.

(d) Nothing in this Section prevents an insurer subject to this Section from
taking
any of the actions specified in subsection (b) on the basis of criteria not
otherwise made
invalid by this Section or any other law or rule.

(Source: P.A. 92-669, eff. 1-1-03.)

 

(215 ILCS 5/143.24d)

Sec. 143.24d. (Repealed).

(Source: P.A. 98-864, eff. 1-1-15. Repealed by P.A. 100-439, eff. 8-25-17.)

 

(215 ILCS 5/143.25) (from Ch. 73, par. 755.25)

Sec. 143.25.

The Director of insurance may order any of the
following if it is determined to be in the public interest:

(a) Some or all companies issuing policies of insurance as defined
in subsections (a) and (b) of Section 143.13 annually disclose by postal
zip code area the number of policies applied for, the number of policies
issued including renewals, the number of policies cancelled or nonrenewed for some
or all areas of the State, and loss data.

(b) The Illinois FAIR Plan created by Article XXXIII of the Code
annually disclose by postal zip code area the number of policies it has
written including renewals and cancellations for some or all areas of
the State.

(c) The Illinois FAIR Plan created by Article XXXIII annually
disclose by classification the earned premiums and losses of the Plan.

(Source: P.A. 81-217.)

 

(215 ILCS 5/143.25a) (from Ch. 73, par. 755.25a)

Sec. 143.25a.

Prior to the first renewal of any policy of automobile
insurance as defined in subsection (a) of Section 143.13 of this Code, an
insurance company shall notify an individual planning to purchase such
renewal policy of the availability of higher deductibles for collision and
comprehensive coverage and that a premium savings could result if the
higher deductibles were purchased.

(Source: P.A. 86-783.)

 

(215 ILCS 5/143.26) (from Ch. 73, par. 755.26)

Sec. 143.26.

No company issuing policies of automobile insurance, as defined
in Section 143.13 of this Code, in this State, and no officer, director,
agent, clerk, employee or broker of such company shall cancel or refuse
to issue or renew a policy of automobile insurance to any applicant for
such insurance solely on the grounds that an agent or broker for such company
is not located in geographical proximity to the residence of the applicant.

(Source: P.A. 80-1369.)

 

(215 ILCS 5/143.26a) (from Ch. 73, par. 755.26a)

Sec. 143.26a.
Automobile insurance sales requirements.

(a) Every company authorized to issue policies of automobile insurance
as defined in Section 143.13 must, upon request, provide the names
and addresses of its authorized producers reasonably determined to be
located nearest to the residence of the person making the request.

(b) No company or authorized licensed producer may refuse to accept
an application for automobile insurance from any applicant solely on the
grounds that the applicant is eligible for placement only under the
Illinois Automobile Insurance Plan.

(Source: P.A. 86-1408.)

 

(215 ILCS 5/143.27) (from Ch. 73, par. 755.27)

Sec. 143.27.

No insurance company may give to any named insured any notice
of cancellation or nonrenewal of a policy of fire and extended coverage
insurance, as defined in subsection (b) of Section 143.13, covering property
which is capable of being rehabilitated, without allowing the named insured
a reasonable period of time in which to repair defects in the insured property
or relevant portion thereof, to an extent reasonably sufficient to facilitate
continued coverage thereon. The time reasonably allowable therefor (which
in no event shall exceed ninety days) and the degree of sufficiency of such
rehabilitative efforts which insurance companies shall accept, may be determined
by a certificate from a licensed contractor or architect and such rehabilitative
efforts shall be in compliance with local municipal building codes. The
notice of need for repair shall be from the insurance company, which may
be sent to the insured at any time during the policy term, and which notice
shall commence the time period established under this Section.

(Source: P.A. 81-857.)

 

(215 ILCS 5/143.28) (from Ch. 73, par. 755.28)

Sec. 143.28.

The rates and premium charges for all
policies of automobile insurance, as described in sub-section (a) of
Section 143.13 of this Code, shall include appropriate reductions for
insured automobiles which are equipped with anti-theft mechanisms or
devices approved by the Director.
To implement the provisions of this
Section, the Director shall promulgate rules and regulations.

(Source: P.A. 91-798, eff. 7-9-00; 92-125, eff. 7-20-01.)

 

(215 ILCS 5/143.29) (from Ch. 73, par. 755.29)

(Text of Section before amendment by P.A. 102-982)

Sec. 143.29.
(a) The rates and premium charges for every policy of automobile
liability insurance shall include appropriate reductions as determined
by the insurer for any insured
over age 55 upon successful completion of the National Safety Council’s
Defensive Driving Course or a motor vehicle accident prevention course, including an eLearning course, that
is found by the Secretary of State to meet or exceed the standards of the
National Safety Council’s Defensive Driving Course’s 8 hour classroom safety
instruction program.

(b) The premium reduction shall remain in effect for the qualifying insured
for a period of 3 years from the date of successful completion of the accident
prevention course, except that the insurer may elect to apply the premium
reduction beginning either with the last effective date of the policy or
the next renewal date of the policy if the reduction will result in a savings
as though applied over a full 3 year period. An insured who has completed
the course of instruction prior to July 1, 1982 shall receive the insurance
premium reduction
for only the period remaining within the 3 years from course completion.
The period of premium reduction for an insured who has repeated the accident
prevention course shall be based upon the last such course the insured has
successfully completed.

(c) Any accident prevention course approved by the Secretary of State
under this Section shall be taught by an instructor approved by the Secretary
of State, shall consist of at least 8 hours of classroom or eLearning equivalent instruction and
shall provide for a certificate of completion. Records of certification
of course completion shall be maintained in a manner acceptable to the Secretary
of State.

(d) Any person claiming eligibility for a rate or premium reduction shall
be responsible for providing to his insurance company the information necessary
to determine eligibility.

(e) This Section shall not apply to:

• (1) any motor vehicle which is a part of a fleet or is used for commercial purposes unless there is a regularly assigned principal operator.
• (2) any motor vehicle subject to a higher premium rate because of the insured’s previous motor vehicle claim experience or to any motor vehicle whose principal operator has been convicted of violating any of the motor vehicle laws of this State, until that operator shall have maintained a driving record free of accidents and moving violations for a continuous one year period, in which case such driver shall be eligible for a reduction the remaining 2 years of the 3 year period.
• (3) any motor vehicle whose principal operator has had his drivers license revoked or suspended for any reason by the Secretary of State within the previous 36 months.
• (4) any policy of group automobile insurance under which premiums are broadly averaged for the group rather than determined individually.
  (Source: P.A. 102-397, eff. 1-1-22.)

(Text of Section after amendment by P.A. 102-982)

Sec. 143.29.
(a) The rates and premium charges for every policy of automobile
liability insurance shall include appropriate reductions as determined
by the insurer for any insured
over age 55 upon successful completion of the National Safety Council’s
Defensive Driving Course or a motor vehicle crash prevention course, including an eLearning course, that
is found by the Secretary of State to meet or exceed the standards of the
National Safety Council’s Defensive Driving Course’s 8 hour classroom safety
instruction program.

(b) The premium reduction shall remain in effect for the qualifying insured
for a period of 3 years from the date of successful completion of the crash
prevention course, except that the insurer may elect to apply the premium
reduction beginning either with the last effective date of the policy or
the next renewal date of the policy if the reduction will result in a savings
as though applied over a full 3 year period. An insured who has completed
the course of instruction prior to July 1, 1982 shall receive the insurance
premium reduction
for only the period remaining within the 3 years from course completion.
The period of premium reduction for an insured who has repeated the crash
prevention course shall be based upon the last such course the insured has
successfully completed.

(c) Any crash prevention course approved by the Secretary of State
under this Section shall be taught by an instructor approved by the Secretary
of State, shall consist of at least 8 hours of classroom or eLearning equivalent instruction and
shall provide for a certificate of completion. Records of certification
of course completion shall be maintained in a manner acceptable to the Secretary
of State.

(d) Any person claiming eligibility for a rate or premium reduction shall
be responsible for providing to his insurance company the information necessary
to determine eligibility.

(e) This Section shall not apply to:

• (1) any motor vehicle which is a part of a fleet or is used for commercial purposes unless there is a regularly assigned principal operator.
• (2) any motor vehicle subject to a higher premium rate because of the insured’s previous motor vehicle claim experience or to any motor vehicle whose principal operator has been convicted of violating any of the motor vehicle laws of this State, until that operator shall have maintained a driving record free of crashes and moving violations for a continuous one year period, in which case such driver shall be eligible for a reduction the remaining 2 years of the 3 year period.
• (3) any motor vehicle whose principal operator has had his drivers license revoked or suspended for any reason by the Secretary of State within the previous 36 months.
• (4) any policy of group automobile insurance under which premiums are broadly averaged for the group rather than determined individually.

(Source: P.A. 102-397, eff. 1-1-22; 102-982, eff. 7-1-23.)

 

(215 ILCS 5/143.30) (from Ch. 73, par. 755.30)

Sec. 143.30.
Selection of glass replacement or glass repair companies.

With reference to every policy of automobile insurance as defined in
Section 143.13(a):

(a) An automobile insurer authorized to do business in this State shall
not unreasonably restrict access to automobile glass repair or replacement
facilities by
its policyholders.

(b) An automobile insurer may enter into an agreement or agreements with
automobile glass repair or replacement facilities for the purpose of
containing the cost of automobile glass repair or replacement claims.

(c) An insurer, or a producer acting on its behalf, shall disclose to an
insured, either orally or in writing, that the insured may freely choose an
automobile glass repair or replacement facility.

(d) No such insurance company, producer, or adjuster may engage in any
act or practice of intimidation, coercion, or threat against any insured
person to use a particular facility to provide such services.

(e) If a policyholder selects an automobile glass repair or replacement
facility, the insurer shall provide payment to the facility based on a
competitive price, as established by that insurer through competitive bids
or market surveys to determine a fair and reasonable market price for
similar services. Reasonable deviation from this market price is allowed
based on the facts in each case.

(Source: P.A. 87-1110.)

 

(215 ILCS 5/143.31)

Sec. 143.31.
Uniform medical claim and billing forms.

(a) The Director shall prescribe by rule, after consultation with providers
of health care or treatment, insurers, hospital, medical, and dental service
corporations, and other prepayment organizations, insurance claim and billing
forms that the Director determines will provide for uniformity and simplicity
in insurance claims handling. The claim forms shall include, but need not be
limited to, information regarding the medical diagnosis, treatment, and
prognosis of the patient, together with the details of charges incident to the
providing of care, treatment, or services, sufficient for the purpose of
meeting the proof requirements of an insurance policy or a hospital, medical,
or dental service contract.

(b) An insurer or a provider of health care treatment may not refuse to
accept a claim or bill submitted on duly promulgated uniform claim and billing
forms. An insurer, however, may accept claims and bills submitted on any other
form.

(c) Accident and health insurer explanation of benefits paid statements or
claims summary statements sent to an insured by the accident and health insurer
shall be in a format and written in a manner that promotes understanding by
the
insured by setting forth all of the following:

• (1) The total dollar amount submitted to the insurer for payment.
• (2) Any reduction in the amount paid due to the application of any co-payment or deductible, along with an explanation of the amount of the co-payment or deductible applied under the insured’s policy.
• (3) Any reduction in the amount paid due to the application of any other policy limitation or exclusion set forth in the insured’s policy, along with an explanation thereof.
• (4) The total dollar amount paid.
• (5) The total dollar amount remaining unpaid.

(d) The Director may issue an order directing an accident and health insurer
to comply with subsection (c).

(e) An accident and health insurer does not violate subsection (c) by using
a document that the accident and health insurer is required to use by the
federal government or the State.

(f) The adoption of uniform claim forms and uniform billing forms by the
Director under this Section does not preclude an insurer, hospital, medical, or
dental service corporation, or other prepayment organization from obtaining any
necessary additional information regarding a claim from the claimant, provider
of health care or treatment, or certifier of coverage, as may be required.

(g) On and after January 1, 1996 when billing insurers or otherwise filing
insurance claims with insurers subject to this Section, providers of health
care or treatment, medical services, dental services, pharmaceutical services,
or medical equipment must use the uniform claim and billing forms adopted by
the Director under this Section.

(Source: P.A. 91-357, eff. 7-29-99.)

 

(215 ILCS 5/143.32)

(Text of Section before amendment by P.A. 102-982)

Sec. 143.32.
Replacement of child restraint systems.
A policy of
automobile
insurance, as defined in Section 143.13, that is amended, delivered, issued, or
renewed
after the effective date of this amendatory Act of the 91st General Assembly
must include
coverage for replacement of a child restraint system that was in use by a child
during an
accident to which coverage is applicable. As used in this Section, “child
restraint system”
has the meaning given that term in the Child Passenger Restraint Act.

(Source: P.A. 91-749, eff. 6-2-00.)

(Text of Section after amendment by P.A. 102-982)

Sec. 143.32. Replacement of child restraint systems. A policy of
automobile
insurance, as defined in Section 143.13, that is amended, delivered, issued, or
renewed
after the effective date of this amendatory Act of the 91st General Assembly
must include
coverage for replacement of a child restraint system that was in use by a child
during a crash to which coverage is applicable. As used in this Section, “child
restraint system”
has the meaning given that term in the Child Passenger Restraint Act.

(Source: P.A. 102-982, eff. 7-1-23.)

 

(215 ILCS 5/143.33)

Sec. 143.33. Electronic posting of policies.

(a) Policies and endorsements used by a company for transacting insurance as classified in Class 2 and Class 3 of Section 4 of this Code that do not contain personally identifiable information may be mailed, issued, delivered, or posted on the insurer’s Internet website. If the insurer elects to post the insurance policies and endorsements on its Internet website in lieu of mailing, issuing, or delivering them to the insured, then the insurer must comply with all of the following conditions:

• (1) The policy and endorsements must be easily accessible to the insured and the producer of record and remain that way for as long as the policy is in force;
• (2) After the expiration of the policy, the insurer must archive its expired policies and endorsements for the longer of 5 years or other period required by law, and make them available upon request;
• (3) The policies and endorsements must be posted in a manner that enables the insured and the producer of record to print and save the policy and endorsements using programs or applications that are widely available on the Internet and free to use;
• (4) At the time of issuance of the original policy and any renewals of that policy, the insurer provides to the insured in the manner it customarily provides declarations pages to the insured, and to the producer of record, the following information clearly displayed in or simultaneously with a declarations page:
• (A) a description of the exact policy and endorsement forms purchased by the insured;
• (B) a method by which the insured may obtain from the insurer, upon request and without charge, a paper copy of their policy and endorsements; and
• (C) the Internet address where their policy and endorsements are posted.
• (5) The insurer provides to the insured in the manner it customarily provides declarations pages to the insured, and to the producer of record, notice of any changes to the forms or endorsements; the insured’s right to obtain from the insurer, upon request and without charge, a paper copy of these forms or endorsements; and the Internet address where these forms or endorsements are posted.

(b) Nothing in this Section shall prevent an insurer that posts its policies and endorsements electronically in accordance with this Section from offering a discount to an insured who elects to receive notices and documents electronically in accordance with the provisions of the federal Electronic Signatures in Global and National Commerce Act.

(c) Nothing in this Section affects the timing or content of any disclosure or other document required to be provided or made available to any insured under any statute, rule, regulation, or rule of law.

(Source: P.A. 98-521, eff. 8-23-13.)

 

(215 ILCS 5/143.34)

Sec. 143.34. Electronic notices and documents.

(a) As used in this Section:

“Delivered by electronic means” includes:

• (1) delivery to an electronic mail address at which a party has consented to receive notices or documents; or
• (2) posting on an electronic network or site accessible via the Internet, mobile application, computer, mobile device, tablet, or any other electronic device, together with separate notice of the posting, which shall be provided by electronic mail to the address at which the party has consented to receive notice or by any other delivery method that has been consented to by the party.

“Party” means any recipient of any notice or document required as part of an insurance transaction, including, but not limited to, an applicant, an insured, a policyholder, or an annuity contract holder.

(b) Subject to the requirements of this Section, any notice to a party or any other document required under applicable law in an insurance transaction or that is to serve as evidence of insurance coverage may be delivered, stored, and presented by electronic means so long as it meets the requirements of the Uniform Electronic Transactions Act.

(c) Delivery of a notice or document in accordance with this Section shall be considered equivalent to any delivery method required under applicable law, including delivery by first class mail; first class mail, postage prepaid; certified mail; certificate of mail; or certificate of mailing.

(d) A notice or document may be delivered by electronic means by an insurer to a party under this Section if:

• (1) the party has affirmatively consented to that method of delivery and has not withdrawn the consent;
• (2) the party, before giving consent, is provided with a clear and conspicuous statement informing the party of:
• (A) the right of the party to withdraw consent to have a notice or document delivered by electronic means, at any time, and any conditions or consequences imposed in the event consent is withdrawn;
• (B) the types of notices and documents to which the party’s consent would apply;
• (C) the right of a party to have a notice or document delivered in paper form; and
• (D) the procedures a party must follow to withdraw consent to have a notice or document delivered by electronic means and to update the party’s electronic mail address;
• (3) the party:
• (A) before giving consent, is provided with a statement of the hardware and software requirements for access to, and retention of, a notice or document delivered by electronic means; and
• (B) consents electronically, or confirms consent electronically, in a manner that reasonably demonstrates that the party can access information in the electronic form that will be used for notices or documents delivered by electronic means as to which the party has given consent; and
• (4) after consent of the party is given, the insurer, in the event a change in the hardware or software requirements needed to access or retain a notice or document delivered by electronic means creates a material risk that the party will not be able to access or retain a subsequent notice or document to which the consent applies:
• (A) provides the party with a statement that describes:
• (i) the revised hardware and software requirements for access to and retention of a notice or document delivered by electronic means; and
• (ii) the right of the party to withdraw consent without the imposition of any condition or consequence that was not disclosed at the time of initial consent; and
• (B) complies with paragraph (2) of this subsection (d).

(e) Delivery of a notice or document in accordance with this Section does not affect requirements related to content or timing of any notice or document required under applicable law.

(f) If a provision of this Section or applicable law requiring a notice or document to be provided to a party expressly requires verification or acknowledgment of receipt of the notice or document, the notice or document may be delivered by electronic means only if the method used provides for verification or acknowledgment of receipt.

(g) The legal effectiveness, validity, or enforceability of any contract or policy of insurance executed by a party may not be denied solely because of the failure to obtain electronic consent or confirmation of consent of the party in accordance with subparagraph (B) of paragraph (3) of subsection (d) of this Section.

(h) A withdrawal of consent by a party does not affect the legal effectiveness, validity, or enforceability of a notice or document delivered by electronic means to the party before the withdrawal of consent is effective.

A withdrawal of consent by a party is effective within a reasonable period of time after receipt of the withdrawal by the insurer.

Failure by an insurer to comply with paragraph (4) of subsection (d) of this Section and subsection (j) of this Section may be treated, at the election of the party, as a withdrawal of consent for purposes of this Section.

(i) This Section does not apply to a notice or document delivered by an insurer in an electronic form before the effective date of this amendatory Act of the 99th General Assembly to a party who, before that date, has consented to receive notice or document in an electronic form otherwise allowed by law.

(j) If the consent of a party to receive certain notices or documents in an electronic form is on file with an insurer before the effective date of this amendatory Act of the 99th General Assembly and, pursuant to this Section, an insurer intends to deliver additional notices or documents to the party in an electronic form, then prior to delivering such additional notices or documents electronically, the insurer shall:

• (1) provide the party with a statement that describes:
• (A) the notices or documents that shall be delivered by electronic means under this Section that were not previously delivered electronically; and
• (B) the party’s right to withdraw consent to have notices or documents delivered by electronic means without the imposition of any condition or consequence that was not disclosed at the time of initial consent; and
• (2) comply with paragraph (2) of subsection (d) of this Section.

(k) An insurer shall deliver a notice or document by any other delivery method permitted by law other than electronic means if:

• (1) the insurer attempts to deliver the notice or document by electronic means and has a reasonable basis for believing that the notice or document has not been received by the party; or
• (2) the insurer becomes aware that the electronic mail address provided by the party is no longer valid.

(l) A producer shall not be subject to civil liability for any harm or injury that occurs as a result of a party’s election to receive any notice or document by electronic means or by an insurer’s failure to deliver a notice or document by electronic means unless the harm or injury is caused by the willful and wanton misconduct of the producer.

(m) This Section shall not be construed to modify, limit, or supersede the provisions of the federal Electronic Signatures in Global and National Commerce Act, as amended.

(n) Nothing in this Section shall prevent an insurer from posting on the insurer’s Internet site any standard policy and any endorsements to such a policy that does not contain personally identifiable information, in accordance with Section 143.33 of this Code, in lieu of delivery to a policyholder, insured, or applicant for insurance by any other method.

(Source: P.A. 102-38, eff. 6-25-21.)

 

(215 ILCS 5/143a) (from Ch. 73, par. 755a)

(Text of Section from P.A. 102-775)

Sec. 143a. Uninsured and hit and run motor vehicle coverage.

(1) 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 that is designed for use on public highways and that
is either required to be registered in this State or is principally garaged
in this State shall be renewed, delivered, or issued for delivery
in this State unless coverage is provided therein or
supplemental thereto, in limits for bodily injury or death set forth in
Section 7-203 of the Illinois Vehicle Code for the
protection of persons insured thereunder who are legally entitled to
recover damages from owners or operators of uninsured motor vehicles and
hit-and-run motor vehicles because of bodily injury, sickness or
disease, including death, resulting therefrom. Uninsured motor vehicle
coverage does not apply to bodily injury, sickness, disease, or death resulting
therefrom, of an insured while occupying a motor vehicle owned by, or furnished
or available for the regular use of the insured, a resident spouse or resident
relative, if that motor vehicle is not described in the policy under which a
claim is made or is not a newly acquired or replacement motor vehicle covered
under the terms of the policy. The limits for any coverage for any vehicle
under the policy may not be aggregated with the limits for any similar
coverage, whether provided by the same insurer or another insurer, applying to
other motor vehicles, for purposes of determining the total limit of insurance
coverage available for bodily injury or death suffered by a person in any one
accident. No
policy shall be renewed, delivered, or issued for delivery in this
State unless it is provided therein that any dispute
with respect to the coverage and the amount of damages shall be submitted
for arbitration to the
American Arbitration Association and be subject to its rules for the conduct
of arbitration hearings
as to all matters except medical opinions. As to medical opinions, if the
amount of damages being sought is equal to or less than the amount provided for
in Section 7-203 of the Illinois Vehicle Code, then the current American
Arbitration Association Rules shall apply. If the amount being sought in an
American Arbitration Association case exceeds that amount as set forth in
Section 7-203 of the Illinois Vehicle Code, then the Rules of Evidence that
apply in the circuit court for placing medical opinions into evidence shall
govern. Alternatively, disputes with respect to damages and the coverage shall
be
determined in the
following
manner: Upon the insured requesting arbitration, each party to the
dispute shall select an arbitrator and the 2 arbitrators so named
shall select a third arbitrator. If such arbitrators are not selected
within 45 days from such request, either party may request that the
arbitration be submitted to the American Arbitration Association.
Any decision made by the arbitrators shall be binding for the amount of
damages not exceeding $75,000 for bodily injury to or
death of any one person, $150,000 for bodily injury to or death of 2 or more
persons in any one motor vehicle accident,
or the corresponding policy limits for bodily injury or death, whichever is
less.
All 3-person arbitration cases proceeding in accordance with any uninsured
motorist
coverage conducted in this State in
which the claimant is only seeking monetary damages up to the limits
set forth in Section 7-203 of the Illinois Vehicle Code
shall be subject to the following rules:

• (A) If at least 60 days’ written notice of the intention to offer the following documents in evidence is given to every other party, accompanied by a copy of the document, a party may offer in evidence, without foundation or other proof:
• (1) bills, records, and reports of hospitals, doctors, dentists, registered nurses, licensed practical nurses, physical therapists, and other healthcare providers;
• (2) bills for drugs, medical appliances, and prostheses;
• (3) property repair bills or estimates, when identified and itemized setting forth the charges for labor and material used or proposed for use in the repair of the property;
• (4) a report of the rate of earnings and time lost from work or lost compensation prepared by an employer;
• (5) the written opinion of an opinion witness, the deposition of a witness, and the statement of a witness that the witness would be allowed to express if testifying in person, if the opinion or statement is made by affidavit or by certification as provided in Section 1-109 of the Code of Civil Procedure;
• (6) any other document not specifically covered by any of the foregoing provisions that is otherwise admissible under the rules of evidence.
• Any party receiving a notice under this paragraph (A) may apply to the arbitrator or panel of arbitrators, as the case may be, for the issuance of a subpoena directed to the author or maker or custodian of the document that is the subject of the notice, requiring the person subpoenaed to produce copies of any additional documents as may be related to the subject matter of the document that is the subject of the notice. Any such subpoena shall be issued in substantially similar form and served by notice as provided by Illinois Supreme Court Rule 204(a)(4). Any such subpoena shall be returnable not less than 5 days before the arbitration hearing.
• (B) Notwithstanding the provisions of Supreme Court Rule 213(g), a party who proposes to use a written opinion of an expert or opinion witness or the testimony of an expert or opinion witness at the hearing may do so provided a written notice of that intention is given to every other party not less than 60 days prior to the date of hearing, accompanied by a statement containing the identity of the witness, his or her qualifications, the subject matter, the basis of the witness’s conclusions, and his or her opinion.
• (C) Any other party may subpoena the author or maker of a document admissible under this subsection, at that party’s expense, and examine the author or maker as if under cross-examination. The provisions of Section 2-1101 of the Code of Civil Procedure shall be applicable to arbitration hearings, and it shall be the duty of a party requesting the subpoena to modify the form to show that the appearance is set before an arbitration panel and to give the time and place set for the hearing.
• (D) The provisions of Section 2-1102 of the Code of Civil Procedure shall be applicable to arbitration hearings under this subsection.

(2) No policy insuring
against loss resulting from liability imposed by law for property damage
arising out of the ownership, maintenance, or use of a motor vehicle shall
be renewed, delivered, or issued for delivery in this State with respect
to any private passenger or recreational motor vehicle that is
designed for use on public highways and that is either required to be
registered in this State or is principally garaged in this State, unless coverage is made available in the amount of the actual
cash value of the motor vehicle described in the policy or the corresponding policy limit for uninsured motor vehicle property damage coverage,
whichever is less, subject to a maximum $250 deductible, for the protection of
persons insured thereunder who are legally entitled to recover damages from
owners or operators of uninsured motor vehicles and hit-and-run motor
vehicles because of property damage to the motor vehicle described in the
policy.

There shall be no liability imposed under the uninsured motorist
property damage coverage required by this subsection if the owner or
operator of the at-fault uninsured motor vehicle or hit-and-run motor
vehicle cannot be identified. This subsection shall not apply to any
policy which does not provide primary motor vehicle liability insurance for
liabilities arising from the maintenance, operation, or use of a
specifically insured motor vehicle.

Each insurance company providing motor vehicle property damage liability
insurance shall advise applicants of the availability of uninsured motor
vehicle property damage coverage, the premium therefor, and provide a brief
description of the coverage. That information
need be given only once and shall not be required in any subsequent renewal,
reinstatement or reissuance, substitute, amended, replacement or
supplementary policy. No written rejection shall be required, and
the absence of a premium payment for uninsured motor vehicle property damage
shall constitute conclusive proof that the applicant or policyholder has
elected not to accept uninsured motorist property damage coverage.

An insurance company issuing uninsured motor vehicle
property damage coverage may provide that:

• (i) Property damage losses recoverable thereunder shall be limited to damages caused by the actual physical contact of an uninsured motor vehicle with the insured motor vehicle.
• (ii) There shall be no coverage for loss of use of the insured motor vehicle and no coverage for loss or damage to personal property located in the insured motor vehicle.
• (iii) Any claim submitted shall include the name and address of the owner of the at-fault uninsured motor vehicle, or a registration number and description of the vehicle, or any other available information to establish that there is no applicable motor vehicle property damage liability insurance.

Any dispute with respect to the coverage and the amount of
damages shall be submitted for
arbitration to the American Arbitration Association and be subject to its
rules for the conduct of arbitration hearings or for determination in
the following manner: Upon the insured requesting arbitration, each party
to the dispute shall select an arbitrator and the 2 arbitrators so named
shall select a third arbitrator. If such arbitrators are not selected
within 45 days from such request, either party may request that the
arbitration be submitted to the American Arbitration Association.
Any arbitration proceeding under this subsection seeking recovery for
property damages shall be
subject to the following rules:

• (A) If at least 60 days’ written notice of the intention to offer the following documents in evidence is given to every other party, accompanied by a copy of the document, a party may offer in evidence, without foundation or other proof:
• (1) property repair bills or estimates, when identified and itemized setting forth the charges for labor and material used or proposed for use in the repair of the property;
• (2) the written opinion of an opinion witness, the deposition of a witness, and the statement of a witness that the witness would be allowed to express if testifying in person, if the opinion or statement is made by affidavit or by certification as provided in Section 1-109 of the Code of Civil Procedure;
• (3) any other document not specifically covered by any of the foregoing provisions that is otherwise admissible under the rules of evidence.
• Any party receiving a notice under this paragraph (A) may apply to the arbitrator or panel of arbitrators, as the case may be, for the issuance of a subpoena directed to the author or maker or custodian of the document that is the subject of the notice, requiring the person subpoenaed to produce copies of any additional documents as may be related to the subject matter of the document that is the subject of the notice. Any such subpoena shall be issued in substantially similar form and served by notice as provided by Illinois Supreme Court Rule 204(a)(4). Any such subpoena shall be returnable not less than 5 days before the arbitration hearing.
• (B) Notwithstanding the provisions of Supreme Court Rule 213(g), a party who proposes to use a written opinion of an expert or opinion witness or the testimony of an expert or opinion witness at the hearing may do so provided a written notice of that intention is given to every other party not less than 60 days prior to the date of hearing, accompanied by a statement containing the identity of the witness, his or her qualifications, the subject matter, the basis of the witness’s conclusions, and his or her opinion.
• (C) Any other party may subpoena the author or maker of a document admissible under this subsection, at that party’s expense, and examine the author or maker as if under cross-examination. The provisions of Section 2-1101 of the Code of Civil Procedure shall be applicable to arbitration hearings, and it shall be the duty of a party requesting the subpoena to modify the form to show that the appearance is set before an arbitration panel and to give the time and place set for the hearing.
• (D) The provisions of Section 2-1102 of the Code of Civil Procedure shall be applicable to arbitration hearings under this subsection.

(3) For the purpose of the coverage, the term “uninsured motor
vehicle” includes, subject to the terms and conditions of the coverage,
a motor vehicle where on, before or after the accident date the
liability insurer thereof is unable to make payment with respect to the
legal liability of its insured within the limits specified in the policy
because of the entry by a court of competent jurisdiction of an order of
rehabilitation or liquidation by reason of insolvency on or after the
accident date. An insurer’s extension of coverage, as provided in this
subsection, shall be applicable to all accidents occurring after July
1, 1967 during a policy period in which its insured’s uninsured motor
vehicle coverage is in effect. Nothing in this Section may be construed
to prevent any insurer from extending coverage under terms and
conditions more favorable to its insureds than is required by this Section.

(4) In the event of payment to any person under the coverage
required by this Section and subject to the terms and conditions of the
coverage, the insurer making the payment shall, to the extent thereof,
be entitled to the proceeds of any settlement or judgment resulting from
the exercise of any rights of recovery of the person against any person
or organization legally responsible for the property damage, bodily
injury or death for which the payment is made, including the proceeds
recoverable from the assets of the insolvent insurer. With respect to
payments made by reason of the coverage described in subsection (3), the
insurer making such payment shall not be entitled to any right of recovery
against the tortfeasor in excess of the proceeds recovered from the assets
of the insolvent insurer of the tortfeasor.

(5) This amendatory Act of 1967 (Laws of Illinois 1967, page 875) shall not be construed to terminate
or reduce any insurance coverage or any right of any party under this
Code in effect before July 1, 1967. Public Act 86-1155 shall not
be construed to terminate or reduce any insurance coverage or any right of
any party under this Code in effect before its effective date.

(6) Failure of the motorist from whom the claimant is legally
entitled to recover damages to file the appropriate forms with the
Safety Responsibility Section of the Department of Transportation within
120 days of the accident date shall create a rebuttable presumption that
the motorist was uninsured at the time of the injurious occurrence.

(7) An insurance carrier may upon good cause require the
insured to commence a legal action against the owner or operator of an
uninsured motor vehicle before good faith negotiation with the carrier. If
the action is commenced at the request of the insurance carrier, the
carrier shall pay to the insured, before the action is commenced, all court
costs, jury fees and sheriff’s fees arising from the action.

The changes made by Public Act 90-451 apply to all policies of
insurance amended, delivered, issued, or renewed on and after January 1, 1998 (the effective
date of Public Act 90-451).

(8) The changes made by Public Act 98-927 apply to all policies of
insurance amended, delivered, issued, or renewed on and after January 1, 2015 (the effective
date of Public Act 98-927).

(Source: P.A. 102-775, eff. 5-13-22.)

(Text of Section from P.A. 102-982)

Sec. 143a. Uninsured and hit and run motor vehicle coverage.

(1) 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 that is designed for use on public highways and that
is either required to be registered in this State or is principally garaged
in this State shall be renewed, delivered, or issued for delivery
in this State unless coverage is provided therein or
supplemental thereto, in limits for bodily injury or death set forth in
Section 7-203 of the Illinois Vehicle Code for the
protection of persons insured thereunder who are legally entitled to
recover damages from owners or operators of uninsured motor vehicles and
hit-and-run motor vehicles because of bodily injury, sickness or
disease, including death, resulting therefrom. Uninsured motor vehicle
coverage does not apply to bodily injury, sickness, disease, or death resulting
therefrom, of an insured while occupying a motor vehicle owned by, or furnished
or available for the regular use of the insured, a resident spouse or resident
relative, if that motor vehicle is not described in the policy under which a
claim is made or is not a newly acquired or replacement motor vehicle covered
under the terms of the policy. The limits for any coverage for any vehicle
under the policy may not be aggregated with the limits for any similar
coverage, whether provided by the same insurer or another insurer, applying to
other motor vehicles, for purposes of determining the total limit of insurance
coverage available for bodily injury or death suffered by a person in any one
crash. No
policy shall be renewed, delivered, or issued for delivery in this
State unless it is provided therein that any dispute
with respect to the coverage and the amount of damages shall be submitted
for arbitration to the
American Arbitration Association and be subject to its rules for the conduct
of arbitration hearings
as to all matters except medical opinions. As to medical opinions, if the
amount of damages being sought is equal to or less than the amount provided for
in Section 7-203 of the Illinois Vehicle Code, then the current American
Arbitration Association Rules shall apply. If the amount being sought in an
American Arbitration Association case exceeds that amount as set forth in
Section 7-203 of the Illinois Vehicle Code, then the Rules of Evidence that
apply in the circuit court for placing medical opinions into evidence shall
govern. Alternatively, disputes with respect to damages and the coverage shall
be
determined in the
following
manner: Upon the insured requesting arbitration, each party to the
dispute shall select an arbitrator and the 2 arbitrators so named
shall select a third arbitrator. If such arbitrators are not selected
within 45 days from such request, either party may request that the
arbitration be submitted to the American Arbitration Association.
Any decision made by the arbitrators shall be binding for the amount of
damages not exceeding $75,000 for bodily injury to or
death of any one person, $150,000 for bodily injury to or death of 2 or more
persons in any one motor vehicle crash,
or the corresponding policy limits for bodily injury or death, whichever is
less.
All 3-person arbitration cases proceeding in accordance with any uninsured
motorist
coverage conducted in this State in
which the claimant is only seeking monetary damages up to the limits
set forth in Section 7-203 of the Illinois Vehicle Code
shall be subject to the following rules:

• (A) If at least 60 days’ written notice of the intention to offer the following documents in evidence is given to every other party, accompanied by a copy of the document, a party may offer in evidence, without foundation or other proof:
• (1) bills, records, and reports of hospitals, doctors, dentists, registered nurses, licensed practical nurses, physical therapists, and other healthcare providers;
• (2) bills for drugs, medical appliances, and prostheses;
• (3) property repair bills or estimates, when identified and itemized setting forth the charges for labor and material used or proposed for use in the repair of the property;
• (4) a report of the rate of earnings and time lost from work or lost compensation prepared by an employer;
• (5) the written opinion of an opinion witness, the deposition of a witness, and the statement of a witness that the witness would be allowed to express if testifying in person, if the opinion or statement is made by affidavit or by certification as provided in Section 1-109 of the Code of Civil Procedure;
• (6) any other document not specifically covered by any of the foregoing provisions that is otherwise admissible under the rules of evidence.
• Any party receiving a notice under this paragraph (A) may apply to the arbitrator or panel of arbitrators, as the case may be, for the issuance of a subpoena directed to the author or maker or custodian of the document that is the subject of the notice, requiring the person subpoenaed to produce copies of any additional documents as may be related to the subject matter of the document that is the subject of the notice. Any such subpoena shall be issued in substantially similar form and served by notice as provided by Illinois Supreme Court Rule 204(a)(4). Any such subpoena shall be returnable not less than 5 days before the arbitration hearing.
• (B) Notwithstanding the provisions of Supreme Court Rule 213(g), a party who proposes to use a written opinion of an expert or opinion witness or the testimony of an expert or opinion witness at the hearing may do so provided a written notice of that intention is given to every other party not less than 60 days prior to the date of hearing, accompanied by a statement containing the identity of the witness, his or her qualifications, the subject matter, the basis of the witness’s conclusions, and his or her opinion.
• (C) Any other party may subpoena the author or maker of a document admissible under this subsection, at that party’s expense, and examine the author or maker as if under cross-examination. The provisions of Section 2-1101 of the Code of Civil Procedure shall be applicable to arbitration hearings, and it shall be the duty of a party requesting the subpoena to modify the form to show that the appearance is set before an arbitration panel and to give the time and place set for the hearing.
• (D) The provisions of Section 2-1102 of the Code of Civil Procedure shall be applicable to arbitration hearings under this subsection.

(2) No policy insuring
against loss resulting from liability imposed by law for property damage
arising out of the ownership, maintenance, or use of a motor vehicle shall
be renewed, delivered, or issued for delivery in this State with respect
to any private passenger or recreational motor vehicle that is
designed for use on public highways and that is either required to be
registered in this State or is principally garaged in this State and
is not covered by collision insurance under the provisions of such
policy, unless coverage is made available in the amount of the actual
cash value of the motor vehicle described in the policy or $15,000
whichever is less, subject to a $250 deductible, for the protection of
persons insured thereunder who are legally entitled to recover damages from
owners or operators of uninsured motor vehicles and hit-and-run motor
vehicles because of property damage to the motor vehicle described in the
policy.

There shall be no liability imposed under the uninsured motorist
property damage coverage required by this subsection if the owner or
operator of the at-fault uninsured motor vehicle or hit-and-run motor
vehicle cannot be identified. This subsection shall not apply to any
policy which does not provide primary motor vehicle liability insurance for
liabilities arising from the maintenance, operation, or use of a
specifically insured motor vehicle.

Each insurance company providing motor vehicle property damage liability
insurance shall advise applicants of the availability of uninsured motor
vehicle property damage coverage, the premium therefor, and provide a brief
description of the coverage. That information
need be given only once and shall not be required in any subsequent renewal,
reinstatement or reissuance, substitute, amended, replacement or
supplementary policy. No written rejection shall be required, and
the absence of a premium payment for uninsured motor vehicle property damage
shall constitute conclusive proof that the applicant or policyholder has
elected not to accept uninsured motorist property damage coverage.

An insurance company issuing uninsured motor vehicle
property damage coverage may provide that:

• (i) Property damage losses recoverable thereunder shall be limited to damages caused by the actual physical contact of an uninsured motor vehicle with the insured motor vehicle.
• (ii) There shall be no coverage for loss of use of the insured motor vehicle and no coverage for loss or damage to personal property located in the insured motor vehicle.
• (iii) Any claim submitted shall include the name and address of the owner of the at-fault uninsured motor vehicle, or a registration number and description of the vehicle, or any other available information to establish that there is no applicable motor vehicle property damage liability insurance.

Any dispute with respect to the coverage and the amount of
damages shall be submitted for
arbitration to the American Arbitration Association and be subject to its
rules for the conduct of arbitration hearings or for determination in
the following manner: Upon the insured requesting arbitration, each party
to the dispute shall select an arbitrator and the 2 arbitrators so named
shall select a third arbitrator. If such arbitrators are not selected
within 45 days from such request, either party may request that the
arbitration be submitted to the American Arbitration Association.
Any arbitration proceeding under this subsection seeking recovery for
property damages shall be
subject to the following rules:

• (A) If at least 60 days’ written notice of the intention to offer the following documents in evidence is given to every other party, accompanied by a copy of the document, a party may offer in evidence, without foundation or other proof:
• (1) property repair bills or estimates, when identified and itemized setting forth the charges for labor and material used or proposed for use in the repair of the property;
• (2) the written opinion of an opinion witness, the deposition of a witness, and the statement of a witness that the witness would be allowed to express if testifying in person, if the opinion or statement is made by affidavit or by certification as provided in Section 1-109 of the Code of Civil Procedure;
• (3) any other document not specifically covered by any of the foregoing provisions that is otherwise admissible under the rules of evidence.
• Any party receiving a notice under this paragraph (A) may apply to the arbitrator or panel of arbitrators, as the case may be, for the issuance of a subpoena directed to the author or maker or custodian of the document that is the subject of the notice, requiring the person subpoenaed to produce copies of any additional documents as may be related to the subject matter of the document that is the subject of the notice. Any such subpoena shall be issued in substantially similar form and served by notice as provided by Illinois Supreme Court Rule 204(a)(4). Any such subpoena shall be returnable not less than 5 days before the arbitration hearing.
• (B) Notwithstanding the provisions of Supreme Court Rule 213(g), a party who proposes to use a written opinion of an expert or opinion witness or the testimony of an expert or opinion witness at the hearing may do so provided a written notice of that intention is given to every other party not less than 60 days prior to the date of hearing, accompanied by a statement containing the identity of the witness, his or her qualifications, the subject matter, the basis of the witness’s conclusions, and his or her opinion.
• (C) Any other party may subpoena the author or maker of a document admissible under this subsection, at that party’s expense, and examine the author or maker as if under cross-examination. The provisions of Section 2-1101 of the Code of Civil Procedure shall be applicable to arbitration hearings, and it shall be the duty of a party requesting the subpoena to modify the form to show that the appearance is set before an arbitration panel and to give the time and place set for the hearing.
• (D) The provisions of Section 2-1102 of the Code of Civil Procedure shall be applicable to arbitration hearings under this subsection.

(3) For the purpose of the coverage, the term “uninsured motor
vehicle” includes, subject to the terms and conditions of the coverage,
a motor vehicle where on, before, or after the date of the crash the
liability insurer thereof is unable to make payment with respect to the
legal liability of its insured within the limits specified in the policy
because of the entry by a court of competent jurisdiction of an order of
rehabilitation or liquidation by reason of insolvency on or after the
date of the crash. An insurer’s extension of coverage, as provided in this
subsection, shall be applicable to all crashes occurring after July
1, 1967 during a policy period in which its insured’s uninsured motor
vehicle coverage is in effect. Nothing in this Section may be construed
to prevent any insurer from extending coverage under terms and
conditions more favorable to its insureds than is required by this Section.

(4) In the event of payment to any person under the coverage
required by this Section and subject to the terms and conditions of the
coverage, the insurer making the payment shall, to the extent thereof,
be entitled to the proceeds of any settlement or judgment resulting from
the exercise of any rights of recovery of the person against any person
or organization legally responsible for the property damage, bodily
injury or death for which the payment is made, including the proceeds
recoverable from the assets of the insolvent insurer. With respect to
payments made by reason of the coverage described in subsection (3), the
insurer making such payment shall not be entitled to any right of recovery
against the tortfeasor in excess of the proceeds recovered from the assets
of the insolvent insurer of the tortfeasor.

(5) This amendatory Act of 1967 (Laws of Illinois 1967, page 875) shall not be construed to terminate
or reduce any insurance coverage or any right of any party under this
Code in effect before July 1, 1967. Public Act 86-1155 shall not
be construed to terminate or reduce any insurance coverage or any right of
any party under this Code in effect before its effective date.

(6) Failure of the motorist from whom the claimant is legally
entitled to recover damages to file the appropriate forms with the
Safety Responsibility Section of the Department of Transportation within
120 days of the date of the crash shall create a rebuttable presumption that
the motorist was uninsured at the time of the injurious occurrence.

(7) An insurance carrier may upon good cause require the
insured to commence a legal action against the owner or operator of an
uninsured motor vehicle before good faith negotiation with the carrier. If
the action is commenced at the request of the insurance carrier, the
carrier shall pay to the insured, before the action is commenced, all court
costs, jury fees and sheriff’s fees arising from the action.

The changes made by Public Act 90-451 apply to all policies of
insurance amended, delivered, issued, or renewed on and after January 1, 1998 (the effective
date of Public Act 90-451).

(8) The changes made by Public Act 98-927 apply to all policies of
insurance amended, delivered, issued, or renewed on and after January 1, 2015 (the effective
date of Public Act 98-927).

(Source: P.A. 102-982, eff. 7-1-23.)

 

(215 ILCS 5/143a-2) (from Ch. 73, par. 755a-2)

(Text of Section before amendment by P.A. 102-982)

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 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 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 indicating the applicant’s selection of
uninsured motorist coverage limits shall constitute sufficient evidence of
the applicant’s selection of uninsured motorist coverage limits. For purposes of this
Section any reproduction of the document 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.

(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.

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. 93-762, eff. 7-16-04.)

(Text of Section after amendment by P.A. 102-982)

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 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 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 indicating the applicant’s selection of
uninsured motorist coverage limits shall constitute sufficient evidence of
the applicant’s selection of uninsured motorist coverage limits. For purposes of this
Section any reproduction of the document 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.

(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 crash. 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.

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 crash. 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. 102-982, eff. 7-1-23.)

 

(215 ILCS 5/143b) (from Ch. 73, par. 755b)

Sec. 143b.

Any insurance carrier whose payment to its insured is reduced by a
deductible amount under a policy providing collision coverage is
subrogated to its insured’s entire collision loss claim including the
deductible amount unless the deductible amount has been otherwise
recovered by the insured, but if the deductible amount has been
otherwise recovered by the insured it shall not be included in the
subrogated loss claim and shall be excluded from the amount of loss
pleaded. If the deductible amount is included
in the subrogated loss
claim the insurance carrier shall pay the full pro rata deductible share to its
insured out of the net
recovery on the subrogated claim. Administrative
expenses of the insurance carrier
cannot be deducted from the gross recovery, and only incurred expenses of
the carrier, such as attorney’s fees, collection fees and adjuster’s fees,
may be deducted therefrom to determine the net recovery. When the insurance
carrier is recovering directly from a third party a claim by means of installments,
the insured shall receive his full
pro rata deductible share as soon as such amount is collected and before
any part of such recovery is applied to any other use.

(Source: P.A. 83-588.)

 

(215 ILCS 5/143c) (from Ch. 73, par. 755c)

Sec. 143c.

No insurance policy authorized under Class 1, 2 or 3 of Section
4 of this Code shall be delivered in this State unless the policyholder
or certificate holder is provided written notice of:

(1) the address of the complaint department of the insurance company; and

(2) the address of the Public Service Division of the Department of Insurance or its successor.

The Director may, by rule, exempt certain types of insurance policies from
the provisions of this Section whenever the application of this Section
in such cases would be unwarranted or unduly burdensome in view of any benefit
to the public.

(Source: P.A. 80-823.)

 

(215 ILCS 5/143d) (from Ch. 73, par. 755d)

Sec. 143d.
Customer affairs and information department.

(a) Every company licensed to issue policies of insurance as defined in
subsections (a) and (b) of Section 143.13 shall establish a customer
affairs and information department to respond to policyholder inquiries
and complaints. The department shall be staffed by an employee or
employees generally knowledgeable in the affairs and operations of the
company. The department shall be located in either the home, regional, or
branch office of the company and must, during regular business hours,
either maintain a toll free telephone number or permit policyholders to
call a designated telephone number at the company’s expense. The telephone
numbers shall be made available to policyholders in accordance with
Section 143(c).

(b) The customer affairs and information department shall provide
information and services that may reasonably be requested by policyholders
who are residents of this State and must respond promptly to complaints
made by policyholder. Companies must provide a written response to written
inquiries and complaints within 21 days of receipt.

(c) Records of the customer affairs and information department shall be
maintained in compliance with Department of Insurance regulations.

(Source: P.A. 86-1407.)

 

(215 ILCS 5/144) (from Ch. 73, par. 756)

Sec. 144.

Limitation
of risk.

(1) No company authorized to transact any of the kind of business
enumerated in Classes 2 and 3 of Section 4 in this State may expose itself
to any loss on any one risk or hazard to an amount exceeding 10% of its
admitted assets in excess of its liabilities excluding, in the case of a
stock company, its capital stock liability. No portion of any such risk or
hazard which has been reinsured in a domestic or an approved foreign or
alien company, in accordance with this Code, shall be included in
determining the limitation of risk prescribed herein.

(2) Any company transacting the kind of business enumerated in clause
(g) of Class 2 of Section 4 may expose itself to a risk or hazard in excess
of the amount prescribed in subsection (1) if it is protected in excess of
that amount by the following:

• (a) The co-suretyship of such a company similarly authorized; or
• (b) By deposit with it in pledge or conveyance to it in trust for its protection of property; or
• (c) By conveyance or mortgage for its protection; or
• (d) In case a suretyship obligation was made on behalf or on account of a fiduciary holding property in a trust capacity, by deposit or other disposition of a portion of the property so held in trust that no future sale, mortgage, pledge or other disposition can be made thereof without the consent of such company except by a judgment or order of a court of competent jurisdiction.

(3) A company designated in subsection (2) may also execute
transportation or warehouse bonds for United States Internal Revenue taxes
to an amount equal to 50% of its capital and surplus. When the penalty of
the suretyship obligation exceeds the amount of a judgment described
therein as appealed from and thereby secured, or exceeds the amount of the
subject matter in controversy or of the estate in the custody of the
fiduciary for the performance of whose duties it is conditioned, the bond
may be executed if the actual amount of the judgment or the subject matter
in controversy or estate not subject to supervision or control of the
surety is not in excess of such limitation. When the penalty of the
suretyship obligation executed for the performance of a contract exceeds
the contract price, the latter shall be taken as the basis for estimating
the limit of risk within the meaning of this Section.

(4) Whenever the ratio of the annual premium volume in proportion to the
policyholder surplus of any company transacting the kinds of business
authorized in Class 2 and Class 3 of Section 4 when reviewed in conjunction
with the kinds and nature of risks insured, the financial condition of the
company and its ownership including but not limited to the liquidity of
assets, relationship of surplus to liabilities and adequacy of outstanding
loss reserves, creates a condition such that the further assumption of
risks might be hazardous to policyholders, creditors or the general public,
then the Director may order such company to take one or more of the
following steps:

• (a) to reduce the loss exposure by reinsurance;
• (b) to reduce the volume of new business being accepted;
• (c) to suspend the writing of new business for a period not to exceed 3 months;
• (d) to increase and maintain the company’s surplus by a contribution to surplus which will raise the surplus for such a period of time and by such an amount as the Director may deem necessary and essential; or
• (e) to reduce general or acquisition expenses by specified methods.
• (f) (Blank).

(5) The provisions of this Section do not apply to domestic, foreign, and
alien Lloyds.

The company may, within 10 days after receipt of an Order of the
Director under this Section, request that the Director hold a hearing to
determine whether the Order of the Director should be modified in any way.
A request for a hearing by a company under this Section stays any Order of
the Director entered under this Section until such time as the Director has
entered an Order pursuant to the hearing.

(Source: P.A. 89-97, eff. 7-7-95; 90-794, eff. 8-14-98.)

 

(215 ILCS 5/144.1) (from Ch. 73, par. 756.1)

Sec. 144.1.

Insurance Sales by Insolvent or Impaired Companies
Prohibited.) (1) Unless allowed by the Director, no foreign or alien
company officer, director, trustee,
agent, or employee of such company may renew, issue or deliver or cause
to be renewed, issued or delivered, any policy, contract or certificate
of insurance in this State, nor may any domestic company, officer,
director, trustee, agent or employee of such company renew, issue or
deliver or cause to be renewed, issued or delivered, any policy,
contract or certificate of insurance, for which a premium is charged or
collected, when the company writing such insurance is insolvent or
impaired and the fact of such insolvency or impairment is known to the
company officer, director, trustee, agent or employee of such company. A
company is impaired when its assets are less than its capital, minimum
required surplus and all liabilities.

However, the existence of an impairment does not prevent the issuance
or renewal of a policy when an insured or owner exercises an option
granted to him under an existing policy to obtain new, renewed or
converted insurance coverage.

(2) Any company officer, director, trustee, agent, or employee of
such company violating this Section shall be guilty of a Class A
misdemeanor.

(Source: P.A. 82-498.)

 

(215 ILCS 5/144.2) (from Ch. 73, par. 756.2)

Sec. 144.2.
Notification of insurance business.

(a) Upon notice by the Director, a company having direct premium income must file with the Director supplemental
information regarding its
insurance business. The Director shall by rule
establish standards
to determine the companies to be given notice.

(b) The notice prescribed by this Section may require the company to provide
information concerning, but not limited to, the following:

• (1) adequacy of rates;
• (2) marketing methodology and acquisition expenses;
• (3) underwriting standards;
• (4) recordkeeping and statistical systems;
• (5) claim systems and claim reserving systems;
• (6) reinsurance; and
• (7) the general financial condition of the company.

(Source: P.A. 90-381, eff. 8-14-97.)

 

(215 ILCS 5/145) (from Ch. 73, par. 757)

Sec. 145.
Deposits.

When any company is required by the laws of this State or of any state
or country, or by other competent authority, to make a deposit with an
insurance supervising official or other financial officer and the company
desires to make such deposit in this State the Director shall accept such
deposit, if made in securities authorized for investment by Article VIII
of this Code. So long as the company continues solvent and complies with
the laws of this State it may collect the income on such securities. The
company may substitute therefor other like securities as prescribed by this
Code for deposit. If the value of securities deposited by any company shall
decline below the amount so required, the company shall make a further
deposit.

(Source: Laws 1959, p. 1431.)

 

(215 ILCS 5/146) (from Ch. 73, par. 758)

Sec. 146.

Withdrawal
of deposits.

(1) The Director shall at any time upon request release to a company any
portion of its deposit which is not required as a compliance with the
conditions of this Code.

(2) When all of the business of a company has been reinsured in
accordance with this Code and the assets thereof by contract assigned to
another company, the Director may deliver to the reinsured company or to
its assigns under the contract of reinsurance after one year from the
effective date of such reinsurance contract, all the securities deposited
by the reinsured company upon compliance with the following conditions:

(a) The reinsuring company under the reinsurance contract has assumed
all liabilities of every kind due and to become due which the deposit of
the reinsured company was made to secure or adequate provision has been
made therefor;

(b) The said reinsuring company shall have and maintain a deposit in
this State or with the department or official charged with the duty of
supervising the business of insurance in the state where it is incorporated
or, if an alien company, where it is entered, in securities authorized by
this Code as lawful investments of the company and in an amount and value
not less than the deposit formerly required of the reinsured company by
this Code; and

(c) The deposit of the said reinsuring company shall be such that it
will subsist for the security of all the obligations of the reinsuring
company.

(Source: Laws 1937, p. 696.)

 

(215 ILCS 5/147) (from Ch. 73, par. 759)

Sec. 147.

Deceptive
statements as to assets prohibited.

No company doing business in this State or agent thereof, shall state or
represent by advertisement in any newspaper, periodical, magazine or over
the radio, or by any sign, circular, card, policy of insurance or
certificate of renewal thereof or otherwise that any funds or assets are
owned by such company which are not actually owned by it and available for
the payment of losses and claims and held for the protection of its
policyholders and creditors.

(Source: Laws 1937, p. 696.)

 

(215 ILCS 5/147.1) (from Ch. 73, par. 759.1)

Sec. 147.1. Sale of insurance company shares.

(1) No shares of the capital stock of a domestic stock company shall be sold or
offered for sale to the public in this State by an issuer, underwriter,
dealer or controlling person in respect of such shares without first
procuring from the Director a permit so to do.

(2) Unless the context otherwise indicates the following terms as used
in this Section shall have the following meanings:

• (a) The word “issuer” shall mean every company which shall have issued or proposes to issue any such shares of capital stock.
• (b) The word “underwriter” shall mean any person who has purchased such shares of capital stock from an issuer or controlling person with a view to, or sells such shares of capital stock for an issuer or a controlling person in connection with, the distribution thereof, or participates or has a participation in the direct or indirect underwriting of such distribution; but such term shall not include a person whose interest is limited to a commission or discount from an underwriter or dealer not in excess of the usual and customary distributor’s or seller’s commission or discount or not in excess of any applicable statutory maximum commission or discount. An underwriter shall be deemed to be no longer an underwriter of an issue of shares of capital stock after he has completely disposed of his allotment of such shares or, if he did not purchase the shares, after he has ceased to sell such shares for the issuer or controlling person.
• (c) The word “dealer” shall mean any person other than an issuer, a controlling person, a bank organized under the banking laws of this State or of the United States, a trust company organized under the laws of this State, an insurance company or a salesman, who engages in this State, either for all or part of his time, directly or indirectly, as agent, broker or principal, in the business of offering, selling, buying and selling, or otherwise dealing or trading in shares of capital stock of insurance companies.
• (d) The words “controlling person” shall mean any person selling such shares of capital stock, or group of persons acting in concert in the sale of such shares, owning beneficially (and in the absence of knowledge, or reasonable grounds of belief, to the contrary, record ownership shall for the purposes hereof be presumed to be beneficial ownership) either:
• (i) 25% or more of the outstanding voting shares of the issuer of such shares where no other person owns or controls a greater percentage of such shares, or
• (ii) such number of outstanding number of shares of the issuer as would enable such person, or group of persons, to elect a majority of the Board of Directors of such issuer.
• (e) The word “salesman” shall mean an individual, other than an issuer, an underwriter, a dealer or a controlling person, employed or appointed or authorized by an issuer, an underwriter, a dealer or a controlling person to sell such shares in this State. The partners or officers of an issuer, an underwriter, a dealer or a controlling person shall not be deemed to be a salesman within the meaning of this definition.

(3) The provisions of this Section shall not apply to any of the
following transactions:

• (a) The sale in good faith, whether through a dealer or otherwise, of such shares by a vendor who is not an issuer, underwriter, dealer or controlling person in respect of such shares, and who, being the bona fide owner of such shares deposes thereof for his own account; provided, that such sale is not made directly or indirectly for the benefit of the issuer or of an underwriter or controlling person.
• (b) The sale, issuance or exchange by an issuer of its shares to or with its own shareholders, if no commission or other remuneration is paid or given directly or indirectly for or on account of the procuring or soliciting of such sale or exchange (other than a fee paid to underwriters based on their undertaking to purchase any shares not purchased by shareholders in connection with such sale or exchange), or the issuance by an issuer of its shares to a holder of convertible securities pursuant to a conversion provision granted at the time of issuance of such convertible securities, provided that no commission or other remuneration is paid or given directly or indirectly thereon on account of the procuring or soliciting of such conversion and no consideration from the holder in addition to the surrender or cancellation of the convertible security is required to effect the conversion.
• (c) The sale of such shares to any corporation, bank, savings institution, trust company, insurance company, building and loan association, dealer, pension fund or pension trust, employees profit sharing trust or to any association engaged as a substantial part of its business or operations in purchasing or holding securities, or to any trust in respect of which a bank or trust company is trustee or co-trustee.
• (d) The sale of such shares by an executor, administrator, guardian, receiver or trustee in insolvency or bankruptcy or at any judicial sale or at a public sale by auction held at an advertised time and place or the sale of such shares in good faith and not for the purpose of avoiding the provisions of this Section by a pledgee of such shares pledged for a bona fide debt.
• (e) Such other transaction as may be declared by ruling of the Director to be exempt from the provisions of this Section.

(4) Prior to the issuance of any permit under this Section, there shall
be delivered to the Director two copies of the following:

• (a) the prospectus which is to be used in connection with the sale of such shares;
• (b) the underwriting and selling agreements, if any;
• (c) the subscription agreement;
• (d) the depository agreement under which the subscription proceeds are to be held;
• (e) any and all other documents, agreements, contracts and other papers of whatever nature which are to be used in connection with or relative to the sale of such shares, which may be required by the Director.

(5) The Director shall within a reasonable time examine the documents
submitted to him and unless he finds from said documents that the sale of
said shares is inequitable or would work or tend to work a fraud or deceit
upon the purchasers thereof, he shall issue a permit authorizing the sale
of said shares.

(6) The Director shall have the power to prescribe such rules and
regulations relating to the sale, issuance, and offering of said shares as
will effectuate the purpose of this Section to the end that no inequity,
fraud or deceit will be perpetrated upon the purchasers thereof.

(7) If the Director finds that any of the provisions of this Section or
of the rules and regulations adopted pursuant hereto have been violated or
that the sale, issuance or offering of any such shares is inequitable or
works or tends to work a fraud or deceit upon the purchasers thereof he may
refuse to issue a permit to sell, issue or offer such shares or may, after
notice and hearing, revoke such permit. The action of the Director in
refusing, after due application therefor in form prescribed by the
Director, or revoking, any such permit shall be subject to judicial review
in the manner prescribed by the insurance laws of this State.

(8) Any person who violates any of the provisions of this Section shall
be guilty of a business offense and, upon conviction thereof shall be fined
not less than $1,000 nor more than the greater of either $5,000 or twice
the whole amount, received upon the sale of shares in violation of this
Section and may in addition, if a natural person, be convicted of a Class A
misdemeanor.

(Source: P.A. 99-642, eff. 7-28-16.)

 

(215 ILCS 5/147.2) (from Ch. 73, par. 759.2)

Sec. 147.2.

Civil remedies.) (A) Every sale of a security made in
violation of Sections 20, 32 or 147.1 of this Code or the rules and
regulations adopted pursuant thereto and every sale of any security for
which a prospectus is required to be filed with the Department which is
made without a copy of the prospectus as filed having been given to such
prospective purchaser prior to payment of all or part of the purchase
price shall be voidable at the election of the purchaser. Any person
who offers or sells a security by means of a prospectus or oral
communication which contains an untrue statement of a material fact or
omits to state a material fact necessary in order to make the
statements, in the light of the circumstances under which they were
made, not misleading, (the purchaser not knowing of such untruth or
omission), and who shall not sustain the burden of proof that he did not
know, and in the exercise of reasonable care could not have known, of
such untruth or omission, shall be liable to the person purchasing such
security from him, who may bring a civil action in any circuit court.
Upon tender to the seller or into court of the securities sold or, where
the securities were not received, of any contract made in respect of
such sale, the issuer, controlling person, underwriter, dealer or other
person by or on behalf of whom said sale was made, and each underwriter,
dealer or salesman who shall have participated or aided in any way in
making such sale, and in case such issuer, controlling person,
underwriter or dealer is a corporation or unincorporated association or
organization, each of its officers and directors (or persons performing
similar functions) who shall have participated or aided in making such
sale, shall be jointly and severally liable to such purchaser for (1)
the full amount paid, together with interest from the date of payment
for the securities sold at the legal rate of interest less any income or
other amounts received by such purchaser on such securities or for any
damages if he no longer owns the security and (2) the reasonable fees of
such purchaser’s attorney incurred in any action brought for recovery of
the amounts recoverable hereunder.

(B) Notice of any election provided for in subsection (A) of this
Section shall be given by the purchaser, within 6 months after the
purchaser shall have knowledge that the sale of the securities to him is
voidable, to each person from whom recovery will be sought, by
registered letter addressed to the person to be notified at his last
known address with proper postage affixed, or by personal service.

(C) No purchaser shall have any right or remedy under this Section
who shall fail, within 15 days from the date of receipt thereof, to
accept an offer to repurchase the securities purchased by him for a
price equal to the full amount paid therefor plus interest thereon and
less any income thereon as set forth in subsection (A) of this Section
or for damages if he no longer owns the security. Every offer of
repurchase provided for in this subsection shall be in writing, shall be
delivered to the purchaser or sent by registered mail addressed to the
purchaser at his last known address, and shall offer to repurchase the
securities sold for a price equal to the full amount paid therefor plus
interest thereon and less any income thereon as set forth in subsection
(A) of this Section. Such offer shall continue in force for 15 days
from the date on which it was received by the purchaser, shall advise
the purchaser of his rights and the period of time limited for
acceptance thereof, and shall contain such further information, if any,
as the Director may prescribe. Any agreement not to accept or refusing
or waiving any such offer made during or prior to said 15 days shall be
void.

(D) No action shall be brought for relief under this Section or upon
or because of any of the matters for which relief is granted by this
Section after 3 years from the date of sale.

(E) The term purchaser as used in this Section shall include the
personal representative or representatives of the purchaser.

(F) The term security does not include any insurance or endowment
policy or annuity contract under which an insurance company promises to
pay money either in a lump sum or periodically for life or for some
other specified period.

(G) The rights and remedies provided by this Act are in addition to
any other rights or remedies that may exist.

This Section shall not apply to insurance stock sales made prior to
the effective date of this Act.

(Source: P.A. 81-1509.)

 

(215 ILCS 5/147.3)

Sec. 147.3.
Issuance of capital notes by domestic companies.

(a) A domestic company may at any time or from time to time issue capital
notes pursuant to this Section in an aggregate principal amount not exceeding
(1) 25% of its total adjusted capital (including the aggregate
principal amount of outstanding capital notes and outstanding surplus notes or
guaranty fund certificates and guaranty capital shares) as of the end of the
immediately preceding calendar year less (2) the aggregate principal amount of
outstanding capital notes and outstanding surplus notes or guaranty fund
certificates and guaranty capital
shares; provided, however, that capital notes shall not be issued for an
aggregate principal amount that would cause the aggregate principal amount for
all of the insurer’s capital notes scheduled to mature in any calendar year to
exceed 5%, or the aggregate principal amount of all of the insurer’s
capital notes scheduled to mature in any 3 consecutive calendar years to
exceed 12%, of the insurer’s total adjusted capital as of the end of
the calendar year immediately preceding the issuance of the capital notes.
The aggregate amount of capital notes and surplus notes or guaranty fund
certificates and guaranty capital shares is at all times limited to
33 1/3% of total adjusted capital. Any aggregate amount in excess of
this
limit shall reduce the amount of capital notes included in the insurer’s total
adjusted capital.

(b) No insurer shall issue capital notes pursuant to this Section
unless the form and terms thereof shall have been approved by the Director.
The term of any capital note shall be no less than 5 years.

(c) An insurer with a capital note outstanding shall file a report with the
Director at the same time that the insurer files its Annual Statement and at
such other times as the Director determines necessary. The Director may by
rule establish times for and the content of these reports.

(d) The insurer shall not pay or redeem the principal amount of any capital
notes, make any sinking fund payment, or pay any interest on the notes, and
the principal, payment, and interest shall not become due or payable if, based
on the preceding year-end annual statement filed with the Director:

• (1)(A) The insurer’s total adjusted capital is less than the insurer’s company action level RBC or (B) the insurer’s total adjusted capital is less than the product of 1.25 and its company action level RBC and there is a negative trend, as determined in accordance with the Article IIA of this Code; or
• (2) the aggregate of all payments or redemptions made during a calendar year would, if made immediately prior to the preceding year-end, have caused (A) the insurer’s total adjusted capital to be less than the insurer’s company action level RBC or (B) the insurer’s total adjusted capital at such time to be less than the product of 1.25 and its company action level RBC and there is a negative trend, as determined in accordance with Article IIA of this Code.

Notwithstanding items (1) and (2), upon request by the insurer, the Director
may
approve, in whole or in part, any payment or redemption on the capital
notes if and at such time or times as in his or her judgment the financial
condition
of the insurer warrants. The amount of the redemptions or payments of
principal amounts of any capital notes that cannot be made as the result of
the provisions of this subsection may accumulate at the rate of interest of the
capital notes.

(e) Capital notes issued pursuant to this Section:

• (1) may provide (A) for interest payments at fixed or adjustable rates, sinking fund payments, and payments and redemptions of principal, in each case in accordance with the terms of the capital note and without the prior approval of the Director except to the extent that such approval is required pursuant to this subsection or subsection (d) of this Section, (B) that the capital notes automatically become due and payable in the event the insurer becomes subject to an order of rehabilitation, liquidation, or conservation granted pursuant to a proceeding under Article XIII of this Code, and (C) for such other features as the Director determines are appropriate for capital notes issued according to this Section; and
• (2) shall provide that if at the end of any calendar year the total amount of the insurer’s total adjusted capital (including the aggregate principal amount of outstanding capital notes and outstanding surplus notes or guaranty fund certificates and guaranty capital shares) is less than 3 times the aggregate principal amount of capital notes outstanding and surplus notes or guaranty fund certificates and guaranty capital shares, the Director may notify the insurer that the financial condition of the insurer does not warrant the payment or redemption or sinking fund payment, in whole or in part, on the capital notes. Such action by the Director shall, without any action on the part of the insurer or any other person, automatically defer payment or redemption until such time as the Director finds that the financial condition warrants payment or redemption. The amount of redemptions or payments of principal amounts of any capital notes so deferred may accumulate at the rate of interest of the capital notes.

(f) The outstanding principal of a capital note issued pursuant to this
Section shall be considered part of the insurer’s total adjusted capital, but
shall not be considered part of the insurer’s surplus; provided, however, (1)
that, in the case of any capital note maturing 15 years or less from the
year in which the capital note is issued, one-fifth of the aggregate principal
amount of the capital note shall be subtracted from total adjusted capital in
each year starting with the fifth year immediately preceding the calendar year
in which the capital note is scheduled to mature; and (2) that, in the case of
any capital note maturing more than 15 years from the year in which
the capital note is issued, one-tenth of the aggregate principal amount of the
capital note shall be subtracted from total adjusted capital in each year
starting with the tenth year immediately preceding the calendar year in which
the capital note is scheduled to mature, and further provided that, in no
event shall the amount included in total adjusted capital for any capital note
exceed the principal amount, at issue, of the outstanding capital note less the
aggregate of all sinking fund payments made on the capital note. The insurer
shall disclose the aggregate principal amount of capital notes
then outstanding as a liability on its financial statements filed with the
Director pursuant to this Code.

(g) As used in this Section, the terms “total adjusted capital”, “company
action level RBC”, and “authorized control level RBC” shall have the
meanings given those terms in Article IIA of this Code.

(Source: P.A. 90-831, eff. 8-14-97.)

 

(215 ILCS 5/148) (from Ch. 73, par. 760)

Sec. 148.

Contents
of advertisements as to financial condition.

(1) No company authorized to do business in this State shall cause to be
inserted in any newspaper, periodical, magazine or other publication, any
advertisement purporting to set forth in figures its financial standing
unless the figures exhibited in such advertisement correspond to the
figures contained in the next preceding verified statement made to the
Director and unless there is set forth either

(a) the total amount of the capital actually paid in, the total value of
the admitted assets owned, the total amount of the liabilities, including
therein the reserves required by law and the amount of the net surplus of
assets over liabilities actually available for the payment of losses and
claims and held for the protection of policyholders; or

(b) the capital paid in or the surplus, separately or combined.

(2) No alien company authorized to do business in this State shall cause
to be inserted in any newspaper, periodical or magazine any advertisement
purporting to set forth in figures its financial standing, unless the
figures exhibited in such advertisement correspond to the figures contained
in the next preceding verified statement made to the Director by the United
States Branch of such company and unless there is set forth the total
amount of the capital and assets held by its United States Branch, the
total amount of its liabilities, including therein the reserves required by
law and the total amount of the net surplus of assets over all liabilities
actually available for the payment of losses and claims and held for the
protection of its policyholders in the United States; provided that any
life company organized under the laws of the Dominion of Canada or any
province thereof may use in its advertising a statement of its total
business and condition in all countries if such statement is accompanied by
a statement showing the amount of its total assets and total liabilities in
the United States, corresponding to the figures contained in the next
preceding statement of such company filed with the Director.

(3) Any company violating any provision of this section, and any officer
or director thereof knowingly participating in or abetting such violation,
shall be guilty of a business offense and shall be required to pay a
penalty of not less than five hundred dollars nor more than one thousand
dollars, to be recovered in the name of the People of the State of Illinois
by the State’s Attorney of the county in which the violation occurs and the
penalty so recovered shall be paid into the county treasury.

(Source: P.A. 77-2699.)

 

(215 ILCS 5/149) (from Ch. 73, par. 761)

Sec. 149.
Misrepresentation and defamation prohibited.

(1) No company doing business in this State, and no officer, director,
agent, clerk or employee thereof, broker, or any other person, shall make,
issue or circulate or cause or knowingly permit to be made, issued or
circulated any estimate, illustration, circular, or verbal or written
statement of any sort misrepresenting the terms of any policy issued or to
be issued by it or any other company or the benefits or advantages promised
thereby or any misleading estimate of the dividends or share of the surplus
to be received thereon, or shall by the use of any name or title of any
policy or class of policies misrepresent the nature thereof.

(2) No such company or officer, director, agent, clerk or employee
thereof, or broker shall make any misleading representation or comparison
of companies or policies, to any person insured in any company for the
purpose of inducing or tending to induce a policyholder in any company to
lapse, forfeit, change or surrender his insurance, whether on a temporary
or permanent plan.

(3) No such company, officer, director, agent, clerk or employee
thereof, broker or other person shall make, issue or circulate or cause or
knowingly permit to be made, issued or circulated any pamphlet, circular,
article, literature or verbal or written statement of any kind which
contains any false or malicious statement calculated to injure any company
doing business in this State in its reputation or business.

(4) No such company, or officer, director, agent, clerk or employee
thereof, no agent, broker, solicitor, or company service representative,
and no other person, firm, corporation, or association of any kind or
character, shall make, issue, circulate, use, or utter, or cause or
knowingly permit to be made, issued, circulated, used, or uttered, any
policy or certificate of insurance, or endorsement or rider thereto, or
matter incorporated therein by reference, or application blanks, or any
stationery, pamphlet, circular, article, literature, advertisement or
advertising of any kind or character, visual, or aural, including radio
advertising and television advertising, or any other verbal or written
statement or utterance (a) which tends to create the impression or from
which it may be implied or inferred, directly or indirectly, that the
company, its financial condition or status, or the payment of its claims,
or the merits, desirability, or advisability of its policy forms or kinds
or plans of insurance are approved, endorsed, or guaranteed by the State of
Illinois or United States Government or the Director or the Department or
are secured by Government bonds or are secured by a deposit with the
Director, or (b) which uses or refers to any deposit with the Director or
any certificate of deposit issued by the Director or any facsimile,
reprint, photograph, photostat, or other reproduction of any such
certificate of deposit.

(5) Any company, officer, director, agent, clerk or employee thereof,
broker, or other person who violates any of the provisions of this Section,
or knowingly participates in or abets such violation, is guilty
of a
business offense and shall be required to pay a penalty of not less than
$200 nor more than $10,000, to be recovered in
the name of the People of the State of Illinois either by the Attorney
General or by the State’s Attorney of
the county in which the violation occurs. The penalty so recovered
shall
be paid into the county treasury if recovered by the State’s Attorney or
into the State treasury if recovered by the Attorney General.

(6) No company shall be held guilty of having violated any of the
provisions of this Section by reason of the act of any agent, solicitor or
employee, not an officer, director or department head thereof, unless an
officer, director or department head of such company shall have knowingly
permitted such act or shall have had prior knowledge thereof.

(7) Any person, association, organization, partnership, business trust
or corporation not authorized to transact an insurance business in this
State which disseminates in or causes to be disseminated in this State any
advertising, invitations to inquire, questionnaires or requests for
information designed to result in a solicitation for the purchase of
insurance by residents of this State is also subject to the sanctions of
this Section. The phrase “designed to result in a solicitation for the
purchase of insurance” includes but is not limited to:

• (a) the use of any form or document which provides either generalized or specific information or recommendations regardless of the insurance needs of the recipient or the availability of any insurance policy or plan; or
• (b) any offer to provide such information or recommendation upon subsequent contacts or solicitation either by the entity generating the material or some other person; or
• (c) the use of a coupon, reply card or request to write for further information; or
• (d) the use of an application for insurance or an offer to provide insurance coverage for any purpose; or
• (e) the use of any material which, regardless of the form and content used or the information imparted, is intended to result, in the generation of leads for further solicitations or the preparation of a mailing list which can be sold to others for such purpose.

(Source: P.A. 93-32, eff. 7-1-03.)

 

(215 ILCS 5/150.1) (from Ch. 73, par. 762.1)

Sec. 150.1.

No company doing business in this State shall enter into a
group contract for an annuity or pension plan to cover employees of the
State, its agencies, instrumentalities, political subdivisions or municipal
corporations prior to the time such employees are granted membership in any
established retirement system or pension fund, by whatever name called,
created by and operating pursuant to any of the provisions of the “Illinois
Pension Code” if such employees are eligible for coverage under such
statute; provided that this provision shall not apply to any contract
entered into by a company for such annuity or pension plan for any such
group of employees prior to the effective date of this amendatory Act.

(Source: Laws 1967, p. 3002.)

 

(215 ILCS 5/151) (from Ch. 73, par. 763)

Sec. 151.
Payment or acceptance of rebates prohibited.
(1) No company doing business in this State and no insurance agent or
broker shall offer, promise, allow, give, set off or pay, directly or
indirectly, any rebate of or part of the premium payable on the policy, or
on any policy or agent’s commission thereon or earnings, profits, dividends
or other benefits founded, arising, accruing or to accrue thereon or
therefrom, or any special advantage in date of policy or age of issue, or
any paid employment or contract for services of any kind or any other
valuable consideration or inducement to or for insurance on any risk in
this State, now or hereafter to be written, or for or upon any renewal of
any such insurance, which is not specified in the policy contract of
insurance, or offer, promise, give, option, sell, purchase any stocks,
bonds, securities or property or any dividends or profits accruing or to
accrue thereon, or other thing of value whatsoever as inducement to
insurance or in connection therewith, or any renewal thereof which is not
specified in the policy. Nothing in this Section shall prevent a company
from paying a bonus to policyholders or otherwise abating their premiums in
whole or in part out of surplus accumulated from nonparticipating insurance
nor prevent a company which transacts industrial life insurance on a weekly
payment plan from returning to policyholders who have made premium payments
for a period of at least one year directly to the company at its home or
district offices the percentage of premium which the company would
otherwise have paid for the weekly collection of such premium nor shall
this Section be construed to prevent the taking of a bona fide obligation,
with interest at six per centum per annum, in payment of any premium.

Nothing in this Section shall prevent a company from offering a child
passenger restraint system or a discount from the purchase price of a child
passenger restraint system to policyholders, when the purpose of such
restraint system is the safety of a child and compliance with the “Child
Passenger Protection Act”, approved June 27, 1983, as amended.

(2) No insured person or party or applicant for insurance shall directly
or indirectly receive or accept, or agree to receive or accept any rebate
of premium or of any part thereof or all or any part of any agent’s or
broker’s commission thereon, or any favor or advantage, or share in any
benefit to accrue under any policy of insurance, or any valuable
consideration or inducement, other than such as is specified in the policy.

(Source: P.A. 83-1320.)

 

(215 ILCS 5/152) (from Ch. 73, par. 764)

Sec. 152.

Rebates-
Penalties.

(1) Any company or any person violating any of the provisions of section
151 shall be guilty of a Class B misdemeanor.

(2) No agent or broker for any company doing business in this State
violating any of the provisions of section 151 shall be entitled to receive
any commission for the sale of any policy on which any rebate, as defined
in such section, shall have been given or offered, and if any such company
has paid any commission to any agent or broker for the sale of any policy
on which such rebate has been given or offered, the full amount thereof may
be recovered by such company from such agent or broker.

(3) No company shall be held guilty of having violated the provisions of
section 151 by reason of an act of any agent, general agent,
representative, broker or employee not an officer, director or department
head thereof, unless an officer, director or department head of such
company shall have knowingly permitted such act, or shall have had prior
knowledge thereof.

(Source: P.A. 77-2699.)

 

(215 ILCS 5/153) (from Ch. 73, par. 765)

Sec. 153.

Rebates-
Immunity from prosecution.

No person shall be excused from testifying or from producing any books,
papers, contracts, agreements or documents at the trial or hearing of any
person or company charged with violating any of the provisions of section
151 on the ground that such testimony or evidence may tend to incriminate
himself but no person shall be prosecuted for any act concerning which he
shall be compelled so to testify or produce evidence, documentary or
otherwise, and no testimony so given or evidence produced shall be received
against him upon any criminal investigation or proceeding except for
perjury committed in so testifying.

(Source: Laws 1937, p. 696.)

 

(215 ILCS 5/154) (from Ch. 73, par. 766)

Sec. 154.
Misrepresentations and false warranties.

No misrepresentation or false warranty made by the insured or in his
behalf in the negotiation for a policy of insurance, or breach of a
condition of such policy shall defeat or avoid the policy or prevent its
attaching unless such misrepresentation, false warranty or condition shall
have been stated in the policy or endorsement or rider attached thereto, or
in the written application therefor. No such misrepresentation
or false warranty shall defeat or avoid the policy unless it shall have
been made with actual intent to deceive or materially affects either the
acceptance of the risk or the hazard assumed by the company. With respect to
a policy of insurance as defined in subsection (a), (b), or (c) of
Section 143.13,
except life, accident and health, fidelity and surety, and ocean marine
policies,
a policy or
policy renewal shall not be rescinded after the policy has been in effect for
one year or one policy term, whichever is less. This Section
shall not apply to policies
of marine or transportation insurance.

(Source: P.A. 89-413, eff. 6-1-96.)

 

(215 ILCS 5/154.5) (from Ch. 73, par. 766.5)

Sec. 154.5.

Improper Claims Practices) It is an improper claims practice
for any domestic, foreign or alien company transacting business in this
State to commit any of the acts contained in Section 154.6 if:

(a) it is committed knowingly in violation of this Act or any rules promulgated
hereunder; or

(b) It has been committed with such frequency to indicate a persistent
tendency to engage in that type of conduct.

(Source: P.A. 80-926.)

 

(215 ILCS 5/154.6) (from Ch. 73, par. 766.6)

Sec. 154.6. Acts constituting improper claims practice. Any of the
following acts by a company, if committed without just cause and in
violation of Section 154.5, constitutes an improper claims practice:

(a) Knowingly misrepresenting to claimants and insureds relevant
facts or policy provisions relating to coverages at issue;

(b) Failing to acknowledge with reasonable promptness pertinent
communications with respect to claims arising under its policies;

(c) Failing to adopt and implement reasonable standards for the
prompt investigations and settlement of claims arising under its policies;

(d) Not attempting in good faith to effectuate prompt, fair and
equitable settlement of claims submitted in which liability has become
reasonably clear;

(e) Compelling policyholders to institute suits to recover amounts
due under its policies by offering substantially less than the amounts
ultimately recovered in suits brought by them;

(f) Engaging in activity which results in a disproportionate number
of meritorious complaints against the insurer received by the Insurance
Department;

(g) Engaging in activity which results in a disproportionate number
of lawsuits to be filed against the insurer or its insureds by
claimants;

(h) Refusing to pay claims without conducting a reasonable
investigation based on all available information;

(i) Failing to affirm or deny coverage of claims within a reasonable
time after proof of loss statements have been completed;

(j) Attempting to settle a claim for less than the amount to which a
reasonable person would believe the claimant was entitled, by reference
to written or printed advertising material accompanying or made part of
an application or establishing unreasonable caps or limits on paint
or materials
when estimating vehicle repairs;

(k) Attempting to settle claims on the basis of an application which
was altered without notice to, or knowledge or consent of, the insured;

(l) Making a claims payment to a policyholder or beneficiary
omitting the coverage under which each payment is being made;

(m) Delaying the investigation or payment of claims by requiring an
insured, a claimant, or the physicians of either to submit a preliminary
claim report and then requiring subsequent submission of formal proof of
loss forms, resulting in the duplication of verification;

(n) Failing in the case of the denial of a claim or the offer of a
compromise settlement to promptly provide a reasonable and accurate
explanation of the basis in the insurance policy or applicable law for
such denial or compromise settlement;

(o) Failing to provide forms necessary to present claims within 15
working days of a request with such explanations as are necessary to use
them effectively;

(p) Failing to adopt and implement reasonable standards to verify that
a repairer designated by the insurance company to provide an estimate,
perform repairs, or engage in any other service in connection with an
insured loss on a vehicle is duly licensed under Section 5-301 of the
Illinois Vehicle Code;

(q) Failing to provide as a persistent tendency a notification on any
written estimate prepared by an insurance company in connection with an
insured loss that Illinois law requires that vehicle repairers must be
licensed in accordance with Section 5-301 of the Illinois Vehicle Code;

(r) Failing to pay the replacement vehicle use or occupation tax, title, and transfer fees required by Section 154.9 of this Code;

(s) Engaging in any other acts which are in substance equivalent to
any of the foregoing.

(Source: P.A. 102-69, eff. 7-1-22.)

 

(215 ILCS 5/154.7) (from Ch. 73, par. 766.7)

Sec. 154.7.

Statement of Charges.) (1) Whenever the Director finds
that any company doing business in this State is engaging in any improper
claims practice as defined in Section 154.5, and that a proceeding in respect
thereto would be in the public interest, he shall issue and serve upon such
company a statement of the charges in that respect and a notice of hearing
thereon pursuant to Article XXIV, which notice shall set a hearing date
not less than 10 days from the date of the notice.

(2) The failure of a company to appear at a hearing after receipt of a
statement of the charges and notice of hearing is considered a waiver of
notice and hearing, a stipulation that the charges against the company are
true, immediately suspends such company’s Certificate of Authority for 30
days, and subjects the company to any other applicable provisions of
this Code. The Director must notify the company of any suspension or action
taken under this Section.

(Source: P.A. 80-926.)

 

(215 ILCS 5/154.8) (from Ch. 73, par. 766.8)

Sec. 154.8. Cease and desist order; suspension of certificate; civil penalty; judicial review.

(1) If, after a hearing pursuant to Section 154.7, the Director
finds that company has engaged in an improper claims practice, he shall
order such company to cease and desist from such practices and, in the
exercise of reasonable discretion, may suspend
the company’s certificate of authority for a period not to exceed 6
months or impose a civil penalty of up to $250,000, or both.
Pursuant to Section 401, the Director shall adopt reasonable rules
establishing standards for the implementation of this Section.

(2) Any order of the Director pursuant to this Section is subject to
judicial review under Section 407 of this Code.

(Source: P.A. 101-81, eff. 7-12-19.)

 

(215 ILCS 5/154.9)

Sec. 154.9. Payment of applicable use or occupation tax, title, and transfer fees on a private passenger total loss claim.

(a) When an insurer determines that an insured’s or third-party claimant’s private passenger automobile is a total loss that is covered under the terms of a personal automobile policy issued or renewed on or after July 1, 2022 by the insurer, the insurer shall pay any use or occupation tax imposed by the State or a unit of local government and title and transfer fees as provided for in this Section. As used in this Section, “private passenger vehicle” means a private passenger motor vehicle, station wagon, or any other 4-wheeled motor vehicle with a load capacity of 1,500 pounds or less that is not used in the occupation, profession, or business of the insured or third-party claimant, not used as a public or livery conveyance for passengers, nor rented to others.

(b) If the insurer elects to replace the insured vehicle, the insurer shall pay any use or occupation tax imposed by the State or a unit of local government tax and title and transfer fees on the replacement vehicle.

(c) If a cash settlement is provided for the total loss private passenger vehicle, the insurer shall reimburse the insured or third-party claimant for any use or occupation tax imposed by the State or a unit of local government and title and transfer fees if the replacement vehicle is purchased or leased within 30 days after the receipt of the cash settlement by the insured or third-party claimant and the insured or third-party claimant substantiates such purchase and the payment of such taxes and fees by submission of appropriate documentation to the insurer within 33 days after the receipt of the settlement or receipt of the required reimbursement form from the insurer, whichever is later.

• (1) With respect to leased vehicles, use or occupation taxes and title and transfer fees shall be deemed to be incurred by the insured or the third-party claimant at the time the lease is entered into, but only if such use or occupation taxes and title and transfer fees are included in the cost of the lease or are paid directly by the insured or third-party claimant.
• (2) The insurer is not required to reimburse the insured or third-party claimant for any use or occupation taxes and title or transfer fees in excess of the amount payable based on the value of the total loss vehicle at the time of the loss or for taxes and title or transfer fees not actually paid by the insured or third-party claimant.
• (3) In lieu of this reimbursement procedure, the insurer may directly pay the required amount of any use or occupation taxes and title and transfer fees to the claimant at the time of settlement.
• (4) If an insurer requires a particular form be used to apply for reimbursement of any use or occupation taxes and title or transfer fees, the form must be delivered to the insured or third-party claimant at or before the time of settlement.

(d) The Department may adopt rules establishing uniform standards for implementation of this Section, including, but not limited to, prescribing the method of determining the market value of the insured’s or third-party claimant’s vehicle.

(Source: P.A. 102-69, eff. 7-1-22.)

 

(215 ILCS 5/155) (from Ch. 73, par. 767)

Sec. 155.
Attorney fees.

(1) In any action by or against a company wherein
there is in issue the liability of a company on a policy or policies of
insurance or the amount of the loss payable thereunder, or for an unreasonable
delay in settling a claim, and it appears to the court that such action
or delay is vexatious and unreasonable, the court may allow as part of the
taxable costs in the action reasonable attorney fees, other costs, plus
an amount not to exceed any one of the following amounts:

• (a) 60% of the amount which the court or jury finds such party is entitled to recover against the company, exclusive of all costs;
• (b) $60,000;
• (c) the excess of the amount which the court or jury finds such party is entitled to recover, exclusive of costs, over the amount, if any, which the company offered to pay in settlement of the claim prior to the action.

(2) Where there are several policies insuring the same insured
against the same loss whether issued by the same or by different
companies, the court may fix the amount of the allowance so that the
total attorney fees on account of one loss shall not be increased by
reason of the fact that the insured brings separate suits on such policies.

(Source: P.A. 93-485, eff. 1-1-04.)

 

(215 ILCS 5/155.01) (from Ch. 73, par. 767.1)

Sec. 155.01.
Interlocking directorates – when prohibited.

Any person may be a director in two or more companies which are
competitors, provided no person at the same time shall be a director in
two or more companies where the effect may be to substantially lessen
competition generally or tend to create a monopoly. Whenever the Director
has reason to believe that there is a violation of this Section, the
Director shall proceed with respect to any person or company deemed by him
to be in violation of this Section, in accordance with the provisions of
Article XXIV and shall have power to issue an order directing such person
or company to cease and desist from such violation within such time, or
extension thereof, as may be specified by the Director. Any such order of
the Director shall be subject to review in accordance with the provisions
of Article XXIV.

(Source: Laws 1947, p. 1143.)

 

(215 ILCS 5/155.03) (from Ch. 73, par. 767.3)

Sec. 155.03.
Defense of ultra vires.

No company doing business in this State shall assert by way of defense
or otherwise, in any suit, action or claim arising directly or indirectly
out of the issuance or delivery of any policy or certificate of insurance,
that such company was without capacity or power to issue such policy or
certificate or that such policy or certificate is void, invalid or
unenforceable because of such lack of capacity, if the coverage under the
policy or certificate was afforded with the express knowledge or the
consent or acquiescence of the company.

(Source: Laws 1959, p. 1970.)

 

(215 ILCS 5/155.04) (from Ch. 73, par. 767.4)

Sec. 155.04.
Standards for companies and officials.

(1) The Director shall not approve any declaration of organization or
Articles of Incorporation or issue a Certificate of Authority to any
company until he has found that (a) the company has submitted a sound plan
of operation, and (b) the general character and experience of the
incorporators, directors and proposed officers is such as to assure
reasonable promise of a successful operation, based on the fact that such
persons are of known good character and that there is no good reason to
believe that they are affiliated, directly or indirectly, through
ownership, control, management, reinsurance transactions or other insurance
of business relations with any person or persons known to have been
involved in the improper manipulation of assets, accounts or reinsurance.
The Director may require, in substantially the same form, the information
required under Section 131.5 of this Code.

(2) All companies licensed to do business in this state must notify the
Director within 30 days of the appointment or election of any new officers
or directors.

(3) Except in cases where the Director deems that any officer or
director meets the standards set forth in this section, he shall, after
notice and hearing afforded to the officer or director, and after a finding
that the officer or director is incompetent or untrustworthy or of known
bad character, order the removal of the person. If a company does not
comply with a removal order within 30 days, the Director shall suspend that
company’s Certificate of Authority until such time as the order is complied
with.

(4) It shall be unlawful for a company to borrow money or
receive a
loan or advance from anyone convicted of a felony, anyone who is
untrustworthy or of known bad character or anyone convicted of a criminal
offense involving
the conversion or misappropriation of fiduciary funds or insurance
accounts, theft, deceit, fraud, misrepresentation or corruption.

(Source: P.A. 89-97, eff. 7-7-95.)

 

(215 ILCS 5/155.05) (from Ch. 73, par. 767.5)

Sec. 155.05.
Payment of insurance in burial benefits prohibited.

No company, officer, director, agent or broker and no other person,
firm, association or corporation shall advertise, solicit, negotiate,
issue, effect or deliver in this State any policy or contract of insurance
or any series or combination of related or separate contracts, assignments,
endorsements or agreements for the purpose of making, or as part of a plan
which has the effect of making the proceeds of the policy, in event of
death, payable other than in lawful money of the United States or for the
purpose or as part of a plan which has the effect of depriving the family
or representative of the deceased of the advantages of open competition and
unrestricted choice in the procuring and purchasing in the open market of
supplies and services in connection with the burial of the deceased.

(Source: Laws 1947, p. 1152.)

 

(215 ILCS 5/155.06) (from Ch. 73, par. 767.6)

Sec. 155.06.
Emergency by-laws may be adopted.

The board of directors of any domestic insurance company may adopt
emergency by-laws to be approved by the Director, which will become
operative during an emergency resulting from an attack upon the United
States by nuclear, chemical, bacteriological or biological weapons. The
emergency by-laws may include provisions relating to a line of succession
of the officers, the manner in which vacancies on the board of directors
shall be filled, how and when the emergency board of directors may transact
business, alternate locations for the principal and regional offices,
emergency maintenance of books and records, and any other measures
reasonably related to the interim management of company affairs. If
emergency by-laws are adopted, copies shall be sent to the shareholders, or
similar body in other than stock companies, who may repeal or modify them
at the annual meeting or at any special meeting called for that purpose.

(Source: Laws 1965, p. 418.)

 

(215 ILCS 5/155.07) (from Ch. 73, par. 767.7)

Sec. 155.07.
Change of location of offices.

Where an emergency exists, as defined in Section 155.06, the board of
directors of a domestic insurance company may change the location of the
company’s principal and regional offices, but must give written notice to
the Director within 10 days after such change stating the address of the
new and former locations.

(Source: Laws 1965, p. 418.)

 

(215 ILCS 5/155.08) (from Ch. 73, par. 767.8)

Sec. 155.08.
Statutory provisions operative during emergency.

In the event that any domestic company has not adopted emergency
by-laws, the following provisions shall become operative during an
emergency as defined in Section 155.06:

(1) The board of directors acting during such period may take any and
every action reasonably necessary to enable the company to meet the
exigencies of the emergency and to continue the business.

(2) A quorum of the emergency board of directors shall consist of a
majority of the available surviving directors. If less than three directors
are able to convene, company officers may temporarily substitute as acting
directors until formal elections can be conducted or the regular directors
become available to resume their duties.

(3) The line of succession of the officers for the purpose of filling
temporary vacancies of company offices and maintaining a quorum of three
acting directors on the board in time of emergency shall be president,
secretary, and treasurer followed by the vice-presidents ranked according
to their seniority in the company.

(Source: Laws 1965, p. 418.)

 

(215 ILCS 5/155.10) (from Ch. 73, par. 767.10)

Sec. 155.10.
(Repealed).

(Source: P.A. 86-1154; 86-1156. Repealed by P.A. 89-97, eff. 7-7-95.)

 

(215 ILCS 5/155.14) (from Ch. 73, par. 767.14)

Sec. 155.14.
(Repealed).

(Source: P.A. 77-305. Repealed by P.A. 89-97, eff. 7-7-95.)

 

(215 ILCS 5/155.15) (from Ch. 73, par. 767.15)

Sec. 155.15.
(Repealed).

(Source: P.A. 77-305. Repealed by P.A. 89-97, eff. 7-7-95.)

 

(215 ILCS 5/155.16) (from Ch. 73, par. 767.16)

Sec. 155.16.
(Repealed).

(Source: P.A. 77-305. Repealed by P.A. 89-97, eff. 7-7-95.)

 

(215 ILCS 5/155.17) (from Ch. 73, par. 767.17)

Sec. 155.17.

Every domestic or foreign company authorized to write insurance for
motor vehicle bodily injury shall not base the rates for such insurance
upon divisions or districts within any municipality which has a population
of 2,000,000 or more.

(Source: P.A. 77-1882.)

 

(215 ILCS 5/155.18) (from Ch. 73, par. 767.18)

(Text of Section WITH the changes made by P.A. 94-677, which has been held
unconstitutional)

Sec. 155.18. (a) This Section shall apply to insurance on risks based
upon negligence by a physician, hospital or other health care provider,
referred to herein as medical liability insurance. This Section shall not
apply to contracts of reinsurance, nor to any farm, county, district or
township mutual insurance company transacting business under an Act entitled
“An Act relating to local mutual district, county and township insurance
companies”, approved March 13, 1936, as now or hereafter amended, nor to
any such company operating under a special charter.

(b) The following standards shall apply to the making and use of rates
pertaining to all classes of medical liability insurance:

• (1) Rates shall not be excessive or inadequate nor shall they be unfairly discriminatory.
• (2) Consideration shall be given, to the extent applicable, to past and prospective loss experience within and outside this State, to a reasonable margin for underwriting profit and contingencies, to past and prospective expenses both countrywide and those especially applicable to this State, and to all other factors, including judgment factors, deemed relevant within and outside this State.
• Consideration may also be given in the making and use of rates to dividends, savings or unabsorbed premium deposits allowed or returned by companies to their policyholders, members or subscribers.
• (3) The systems of expense provisions included in the rates for use by any company or group of companies may differ from those of other companies or groups of companies to reflect the operating methods of any such company or group with respect to any kind of insurance, or with respect to any subdivision or combination thereof.
• (4) Risks may be grouped by classifications for the establishment of rates and minimum premiums. Classification rates may be modified to produce rates for individual risks in accordance with rating plans which establish standards for measuring variations in hazards or expense provisions, or both. Such standards may measure any difference among risks that have a probable effect upon losses or expenses. Such classifications or modifications of classifications of risks may be established based upon size, expense, management, individual experience, location or dispersion of hazard, or any other reasonable considerations and shall apply to all risks under the same or substantially the same circumstances or conditions. The rate for an established classification should be related generally to the anticipated loss and expense factors of the class.

(c) (1) Every company writing medical liability insurance shall file with
the Secretary of Financial and Professional Regulation the rates and rating schedules it uses for medical
liability insurance. A rate shall go into effect upon filing, except as otherwise provided in this Section.

(2) If (i) 1% of a company’s insureds within a specialty or 25 of the company’s insureds (whichever is greater) request a public hearing, (ii) the Secretary at his or her discretion decides to convene a public hearing, or (iii) the percentage increase in a company’s rate is greater than 6%, then the Secretary shall convene a public hearing in accordance with this paragraph (2). The Secretary shall notify the public of any application by an insurer for a rate increase to which this paragraph (2) applies. A public hearing under this paragraph (2) must be concluded within 90 days after the request, decision, or increase that gave rise to the hearing. The Secretary may, by order, adjust a rate or take any other appropriate action at the conclusion of the hearing.

(3) A rate filing shall occur upon a company’s commencement of medical liability insurance business in this State

and thereafter as often as the rates
are changed or amended.

(4) For the purposes of this Section, any change in premium to the company’s
insureds as a result of a change in the company’s base rates or a change
in its increased limits factors shall constitute a change in rates and shall
require a filing with the Secretary.

(5) It shall be certified in such filing by an officer of the company
and a qualified actuary that the company’s rates
are based on sound actuarial
principles and are not inconsistent with the company’s experience.
The Secretary may request any additional statistical data and other pertinent information necessary to determine the manner the company used to set the filed rates and the reasonableness of those rates. This data and information shall be made available, on a company-by-company basis, to the general public.

(d) If after
a public hearing the Secretary finds:

• (1) that any rate, rating plan or rating system violates the provisions of this Section applicable to it, he shall issue an order to the company which has been the subject of the hearing specifying in what respects such violation exists and, in that order, may adjust the rate;
• (2) that the violation of any of the provisions of this Section by any company which has been the subject of the hearing was wilful or that any company has repeatedly violated any provision of this Section, he may take either or both of the following actions:
• (A) Suspend or revoke, in whole or in part, the certificate of authority of such company with respect to the class of insurance which has been the subject of the hearing.
• (B) Impose a penalty of up to $1,000 against the company for each violation. Each day during which a violation occurs constitutes a separate violation.

The burden is on the company to justify the rate or proposed rate at the public hearing.

(e) Every company writing medical liability insurance in this State shall offer to each of its medical liability insureds the option to make premium payments in quarterly installments as prescribed by and filed with the Secretary. This offer shall be included in the initial offer or in the first policy renewal occurring after the effective date of this amendatory Act of the 94th General Assembly, but no earlier than January 1, 2006.

(f) Every company writing medical liability insurance is encouraged, but not required, to offer the opportunity for participation in a plan offering deductibles to its medical liability insureds. Any plan to offer deductibles shall be filed with the Department.

(g) Every company writing medical liability insurance is encouraged, but not required, to offer their medical liability insureds a plan
providing premium discounts for participation in risk
management activities. Any
such plan shall be reported to the Department.

(h) A company writing medical liability insurance in Illinois must give 180 days’ notice before the company discontinues the writing of medical liability insurance in Illinois.

(Source: P.A. 94-677, eff. 8-25-05.)

(Text of Section WITHOUT the changes made by P.A. 94-677, which has been held
unconstitutional)

Sec. 155.18. (a) This Section shall apply to insurance on risks based
upon negligence by a physician, hospital or other health care provider,
referred to herein as medical liability insurance. This Section shall not
apply to contracts of reinsurance, nor to any farm, county, district or
township mutual insurance company transacting business under an Act entitled
“An Act relating to local mutual district, county and township insurance
companies”, approved March 13, 1936, as now or hereafter amended, nor to
any such company operating under a special charter.

(b) The following standards shall apply to the making and use of rates
pertaining to all classes of medical liability insurance:

• (1) Rates shall not be excessive or inadequate, as herein defined, nor shall they be unfairly discriminatory. No rate shall be held to be excessive unless such rate is unreasonably high for the insurance provided, and a reasonable degree of competition does not exist in the area with respect to the classification to which such rate is applicable.
• No rate shall be held inadequate unless it is unreasonably low for the insurance provided and continued use of it would endanger solvency of the company.
• (2) Consideration shall be given, to the extent applicable, to past and prospective loss experience within and outside this State, to a reasonable margin for underwriting profit and contingencies, to past and prospective expenses both countrywide and those especially applicable to this State, and to all other factors, including judgment factors, deemed relevant within and outside this State.
• Consideration may also be given in the making and use of rates to dividends, savings or unabsorbed premium deposits allowed or returned by companies to their policyholders, members or subscribers.
• (3) The systems of expense provisions included in the rates for use by any company or group of companies may differ from those of other companies or groups of companies to reflect the operating methods of any such company or group with respect to any kind of insurance, or with respect to any subdivision or combination thereof.
• (4) Risks may be grouped by classifications for the establishment of rates and minimum premiums. Classification rates may be modified to produce rates for individual risks in accordance with rating plans which establish standards for measuring variations in hazards or expense provisions, or both. Such standards may measure any difference among risks that have a probable effect upon losses or expenses. Such classifications or modifications of classifications of risks may be established based upon size, expense, management, individual experience, location or dispersion of hazard, or any other reasonable considerations and shall apply to all risks under the same or substantially the same circumstances or conditions. The rate for an established classification should be related generally to the anticipated loss and expense factors of the class.

(c) Every company writing medical liability insurance shall file with
the
Director of Insurance the rates and rating schedules it uses for medical
liability insurance.

• (1) This filing shall occur at least annually and as often as the rates are changed or amended.
• (2) For the purposes of this Section any change in premium to the company’s insureds as a result of a change in the company’s base rates or a change in its increased limits factors shall constitute a change in rates and shall require a filing with the Director.

(3) It shall be certified in such filing by an officer of the company
and a qualified actuary that the company’s rates
are based on sound actuarial
principles and are not inconsistent with the company’s experience.

(d) If after
a hearing the
Director finds:

• (1) that any rate, rating plan or rating system violates the provisions of this Section applicable to it, he may issue an order to the company which has been the subject of the hearing specifying in what respects such violation exists and stating when, within a reasonable period of time, the further use of such rate or rating system by such company in contracts of insurance made thereafter shall be prohibited;
• (2) that the violation of any of the provisions of this Section applicable to it by any company which has been the subject of hearing was wilful, he may suspend or revoke, in whole or in part, the certificate of authority of such company with respect to the class of insurance which has been the subject of the hearing.

(Source: P.A. 79-1434.)

 

(215 ILCS 5/155.18a)

(This Section was added by P.A. 94-677, which has been held unconstitutional)

Sec. 155.18a. Professional Liability Insurance Resource Center. The Secretary of Financial and Professional Regulation shall establish a Professional Liability Insurance Resource Center on the Department’s Internet website containing the name, telephone number, and base rates of each licensed company providing medical liability insurance and the name, address, and telephone number of each producer who sells medical liability insurance and the name of each licensed company for which the producer sells medical liability insurance. Each company and producer shall submit the information to the Department on or before September 30 of each year in order to be listed on the website. Hyperlinks to company websites shall be included, if available. The publication of the information on the Department’s website shall commence on January 1, 2006. The Department shall update the information on the Professional Liability Insurance Resource Center at least annually.

(Source: P.A. 94-677, eff. 8-25-05.)

 

(215 ILCS 5/155.19) (from Ch. 73, par. 767.19)

(Text of Section WITH the changes made by P.A. 94-677, which has been held
unconstitutional)

Sec. 155.19. All claims filed after December 31, 1976 with any insurer
and all suits filed after December 31, 1976 in any court in this State,
alleging liability on the part of any physician, hospital or other health
care provider for medically related injuries, shall be reported to the Secretary of Financial and Professional Regulation in such form and under such terms and conditions as may be
prescribed by the Secretary. In addition, and notwithstanding any other provision of law to the contrary, any insurer, stop loss insurer, captive insurer, risk retention group, county risk retention trust, religious or charitable risk pooling trust, surplus line insurer, or other entity authorized or permitted by law to provide medical liability insurance in this State shall report to the Secretary,
in such form and under such terms and conditions as may be
prescribed by the Secretary, all claims filed
after December 31, 2005 and all suits filed
after December 31, 2005 in any court in this State alleging liability on the part of any physician, hospital, or health
care provider for medically related injuries. Each clerk of the circuit court shall provide to the Secretary such information as the Secretary may deem necessary to verify the accuracy and completeness of reports made to the Secretary under this Section. The Secretary shall maintain complete and accurate
records of all claims and suits including their nature, amount, disposition
(categorized by verdict, settlement, dismissal, or otherwise and including disposition of any post-trial motions and types of damages awarded, if any, including but not limited to economic damages and non-economic damages) and other information as he may deem useful or desirable in observing and
reporting on health care provider liability trends in this State. Records received by the Secretary under this Section shall be available to the general public; however, the records made available to the general public shall not include the names or addresses of the parties to any claims or suits. The Secretary

shall release to appropriate disciplinary and licensing agencies any such
data or information which may assist such agencies in
improving the quality of health care or which may be useful to such agencies
for the purpose of professional discipline.

With due regard for appropriate maintenance of the confidentiality thereof,
the Secretary

shall

release, on an annual basis, to the Governor, the General
Assembly and the general public statistical reports based on such data and information.

If the Secretary finds that any entity required to report information in its possession under this Section has violated any provision of this Section by filing late, incomplete, or inaccurate reports, the Secretary may fine the entity up to $1,000 for each offense. Each day during which a violation occurs constitutes a separate offense.

The Secretary may promulgate such rules and regulations as may be necessary
to carry out the provisions of this Section.

(Source: P.A. 94-677, eff. 8-25-05.)

(Text of Section WITHOUT the changes made by P.A. 94-677, which has been held
unconstitutional)

Sec. 155.19. All claims filed after December 31, 1976 with any insurer
and all suits filed after December 31, 1976 in any court in this State,
alleging liability on the part of any physician, hospital or other health
care provider for medically related injuries, shall be reported to the
Director
of Insurance in such form and under such terms and conditions as may be
prescribed by the
Director. The
Director shall maintain complete and accurate
records of all such claims and suits including their nature, amount, disposition
and other information as he may deem useful or desirable in observing and
reporting on health care provider liability trends in this State. The Director
shall release to appropriate disciplinary and licensing agencies any such
data or information which may assist such agencies in
improving the quality of health care or which may be useful to such agencies
for the purpose of professional discipline.

With due regard for appropriate maintenance of the confidentiality thereof,
the
Director

may
release
from time to time to the Governor, the General
Assembly and the general public statistical reports based on such data and information.

The
Director may promulgate such rules and regulations as may be necessary
to carry out the provisions of this Section.

(Source: P.A. 79-1434.)

 

(215 ILCS 5/155.20) (from Ch. 73, par. 767.20)

Sec. 155.20.

All final arbitration decisions rendered in relation to disputes
or controversies arising out of injuries allegedly caused by reason of hospital
or health care provider malpractice shall be recognized by any insurance
company doing business in the State of Illinois and all findings of facts
relating to liability and awards of damages in relation thereto which are
a part of the final arbitration decision shall be binding on such insurance companies.

(Source: P.A. 79-1435.)

 

(215 ILCS 5/155.21) (from Ch. 73, par. 767.21)

Sec. 155.21. A company writing medical liability insurance shall not refuse
to offer insurance to a physician, hospital or other health care provider
on the grounds that the physician, hospital or health care provider has
entered or intends to enter an arbitration agreement pursuant to the Health Care

Arbitration Act.

As used in this Section, medical liability insurance means insurance on
risks based upon negligence by a physician, hospital or other health care provider.

(Source: P.A. 95-331, eff. 8-21-07.)

 

(215 ILCS 5/155.22) (from Ch. 73, par. 767.22)

Sec. 155.22.

No company authorized to transact in this State the kinds
of business described in Classes 2 and 3 of Section 4, and no officer, director,
agent, clerk, employee or broker of such company shall upon proper application
refuse to provide insurance solely on the basis of
the specific geographic location
of the risk sought to be insured unless
such refusal is for a business purpose which is not a mere pretext for
unfair discrimination.

(Source: P.A. 84-1431.)

 

(215 ILCS 5/155.22a)

Sec. 155.22a.
Coverage for subjects of abuse.

(a) No company authorized to
transact life, health,
disability income, or property and casualty insurance in this State may:

• (1) Deny, refuse to issue, refuse to renew, refuse to reissue, cancel, or otherwise terminate an insurance policy or restrict coverage on an individual because that individual is or has been the subject of abuse or because that individual seeks or has sought: (i) medical or psychological treatment for abuse; or (ii) protection or shelter from abuse;
• (2) Charge a different rate for the same coverage for an insurance policy because an individual insured under such policy has a history of or is a subject of abuse;
• (3) Deny a claim by an insured as a result of his or her status as being or having been a subject of abuse, except as otherwise permitted or required by the laws of this State; or
• (4) Ask an insured or an applicant for insurance whether that individual is or has been a subject of abuse or whether that individual seeks or has sought: (i) medical or psychological treatment specifically for abuse; or (ii) protection or shelter from abuse.

(b) No company authorized to transact life, health, disability
income,
or property and casualty
insurance in this State may fail to maintain strict confidentiality of
information, as defined in the Insurance Information and Privacy Protection
Article of this Code, relating to an applicant’s or insured’s abuse status or
to a medical or psychological condition that the company knows is
abuse-related. Disclosure of such abuse-related information shall be subject
to the disclosure limitations and conditions contained in Section 1014 of this
Code.

(c) Nothing in this Section shall be construed to prohibit a company
specified in subsection (a) from (i) refusing to insure, refusing to
continue to insure, limiting the amount, extent, or kind of coverage available
to an individual, or charging a different rate for the same coverage on the
basis of that individual’s physical or mental condition regardless of the
underlying cause of such condition; (ii) declining to issue a life
insurance policy
insuring an individual who is or has been the subject of abuse if the
perpetrator of the
abuse is the applicant or would be the owner of the insurance policy; or (iii)
inquiring about a physical or mental condition, even if that condition was
caused by or is related in any manner to
abuse.

(d) As used in this Section, “abuse” means the occurrence of one or more of
the following acts between family members, current or former household members,
or current or former intimate partners:

• (1) Attempting to cause or intentionally, knowingly, or recklessly causing another person, including a minor child, to be harassed or intimidated or subject to bodily injury, physical harm, rape, sexual assault, or involuntary sexual intercourse; or
• (2) Knowingly engaging in a course of conduct or repeatedly committing acts without proper authority that place the person toward whom such acts are directed, including a minor child, in a reasonable fear of bodily injury or physical harm; or
• (3) Subjecting another person, including a minor child, to false imprisonment.

(e) No company specified in subsection (a) above shall be held civilly or
criminally liable for any cause of action that may be brought because of
compliance with this Section. Nothing in
this Section, however, shall preclude the jurisdiction of any administrative
agency to carry out its statutory authority.

(Source: P.A. 93-200, eff. 1-1-04.)

 

(215 ILCS 5/155.22b)

Sec. 155.22b.
Rating, claims handling, and underwriting decisions.

(a) No company issuing a policy of property and casualty insurance may use
the fact that an applicant or insured incurred
bodily
injury as a result of a battery
or other violent act committed against him or her by a spouse or person in
the same household as a
sole reason for a rating, underwriting, or claims handling decision.

(b) If a policy excludes property coverage for intentional acts, the
insurer may not deny payment to an innocent co-insured who did not cooperate in
or contribute to the creation of the loss if the loss arose out of a pattern of
criminal domestic violence and the perpetrator of the loss is criminally
prosecuted for the act causing the loss. Payment to the innocent co-insured
may be limited to his or her ownership interest in the property as reduced by
any payments to a mortgagor or other secured interest.

(Source: P.A. 93-200, eff. 1-1-04.)

 

(215 ILCS 5/155.23) (from Ch. 73, par. 767.23)

Sec. 155.23.
Fraud reporting.

• (1) The Director is authorized to promulgate reasonable rules requiring insurers, as defined in Section 155.24, doing business in the State of Illinois to report factual information in their possession that is pertinent to suspected fraudulent insurance claims, fraudulent insurance applications, or premium fraud after he has made a determination that the information is necessary to detect fraud or arson. Claim information may include:
• (a) Dates and description of accident or loss.
• (b) Any insurance policy relevant to the accident or loss.
• (c) Name of the insurance company claims adjustor and claims adjustor supervisor processing or reviewing any claim or claims made under any insurance policy relevant to the accident or loss.
• (d) Name of claimant’s or insured’s attorney.
• (e) Name of claimant’s or insured’s physician, or any person rendering or purporting to render medical treatment.
• (f) Description of alleged injuries, damage or loss.
• (g) History of previous claims made by the claimant or insured.
• (h) Places of medical treatment.
• (i) Policy premium payment record.
• (j) Material relating to the investigation of the accident or loss, including statements of any person, proof of loss, and any other relevant evidence.
• (k) any facts evidencing fraud or arson.

The Director shall establish reporting requirements for application and
premium fraud information reporting by rule.

(2) The Director of Insurance may designate one or more data processing
organizations or governmental agencies to assist him in gathering such
information
and making
compilations thereof, and may by rule establish the form and procedure
for gathering and compiling such information. The rules may name any
organization or agency designated by the Director to provide this service,
and may in such case provide for a fee to be paid by the
reporting insurers
directly to the designated organization or agency to cover any of the costs
associated with providing this service. After determination by the
Director of substantial
evidence of false
or fraudulent claims, fraudulent applications, or premium fraud, the
information shall be forwarded by the Director
or the Director’s designee to the proper law enforcement agency
or prosecutor. Insurers shall have
access to, and may use, the information compiled under the
provisions
of this Section. Insurers shall release
information to, and shall cooperate with, any law enforcement agency
requesting such information.

In the absence of malice, no insurer, or person who
furnishes
information on its behalf, is liable for damages in a civil action or subject
to criminal prosecution for any oral or written statement made or any other
action taken that is necessary to supply information required pursuant to
this Section.

(Source: P.A. 92-233, eff. 1-1-02.)

 

(215 ILCS 5/155.24) (from Ch. 73, par. 767.24)

Sec. 155.24.
Motor Vehicle Theft and Motor Insurance Fraud
Reporting and Immunity Law.

(a) As used in this Section:

• (1) “authorized governmental agency” means the Illinois State Police, a local governmental police department, a county sheriff’s office, a State’s Attorney, the Attorney General, a municipal attorney, a United States district attorney, a duly constituted criminal investigative agency of the United States government, the Illinois Department of Insurance, the Illinois Department of Professional Regulation and the office of the Illinois Secretary of State;
• (2) “relevant” means having a tendency to make the existence of any information that is of consequence to an investigation of motor vehicle theft or insurance fraud investigation or a determination of such issue more probable or less probable than it would be without such information;
• (3) information will be “deemed important” if within the sole discretion of the authorized governmental agency such information is requested by that authorized governmental agency;
• (4) “Illinois authorized governmental agency” means an authorized governmental agency as defined in item (1) that is a part of the government of the State of Illinois or any of the counties or municipalities of this State or any other authorized entity; and
• (5) For the purposes of this Section and Section 155.23, “insurer” means insurance companies, insurance support organizations, self-insured entities, and other providers of insurance products and services doing business in the State of Illinois.

(b) Upon written request to an insurer by an authorized governmental agency,
an insurer or agent authorized by an insurer to act on its behalf shall
release to the requesting authorized governmental agency any or all relevant
information deemed important to the authorized governmental agency which
the insurer may possess relating to any specific motor vehicle theft or motor
vehicle insurance fraud. Relevant information may include, but is not limited
to:

• (1) Insurance policy information relevant to the motor vehicle theft or motor vehicle insurance fraud under investigation, including any application for such a policy.
• (2) Policy premium payment records which are available.
• (3) History of previous claims made by the insured.
• (4) Information relating to the investigation of the motor vehicle theft or motor vehicle insurance fraud, including statements of any person, proofs of loss and notice of loss.

(c) When an insurer knows or reasonably believes to know the identity
of a person whom it has reason to believe committed a criminal or fraudulent
act relating to a motor vehicle theft or a motor vehicle insurance claim
or has knowledge of such a criminal or fraudulent act which is reasonably
believed not to have been reported to an authorized governmental agency,
then for the purpose of notification and investigation, the insurer or an
agent authorized by an insurer to act on its behalf shall notify an authorized
governmental agency of such knowledge or reasonable belief and provide any
additional relevant information in accordance with subsection
(b) of this Section. When the motor vehicle
theft or motor vehicle claim that gives rise to the suspected criminal or
fraudulent act has already generated an incident report to an Illinois
authorized governmental agency, the insurer shall report the suspected
criminal or fraudulent act to that agency. When no prior
incident report has been made, the insurer shall report the suspected criminal
or
fraudulent act to the Attorney General or State’s Attorney in the county or
counties where the incident is claimed to have occurred. When the incident
that gives rise to the suspected criminal or fraudulent act is claimed to have
occurred outside the State of Illinois, but the suspected criminal or
fraudulent act occurs within the State of Illinois, the insurer shall make the
report to the Attorney General or State’s Attorney in the county or counties
where the suspected criminal or fraudulent act occurred. When the fraud occurs
in multiple counties the report shall also be sent to the Attorney General.

(d) When an insurer provides any of the authorized governmental agencies
with notice pursuant to this Section it shall be deemed sufficient notice
to all authorized governmental agencies for the purpose of this Act.

(e) The authorized governmental agency provided with information pursuant
to this Section may release or provide such information to any other authorized
governmental agency.

(f) Any insurer providing information to an authorized governmental agency
pursuant to this Section shall have the right to request and receive relevant
information from such authorized governmental agency, and receive within
a reasonable time after the completion of the investigation, not to exceed
30 days, the information requested.

(g) Any information furnished pursuant to this Section shall be privileged
and not a part of any public record. Except as otherwise provided by law,
any authorized governmental agency, insurer, or an agent authorized by an
insurer to act on its behalf which receives any information furnished pursuant
to this Section, shall not release such information to public inspection.
Such evidence or information shall not be subject to subpoena duces tecum
in a civil or criminal proceeding unless, after reasonable notice to any
insurer, agent authorized by an insurer to act on its behalf and authorized
governmental agency which has an interest in such information and a hearing,
the court determines that the public interest and any ongoing investigation
by the authorized governmental agency, insurer, or any agent authorized
by an insurer to act on its behalf will not be jeopardized by obedience to
such a subpoena duces tecum.

(h) No insurer, or agent authorized by an insurer on its behalf, authorized
governmental agency or their respective employees shall be subject to any
civil or criminal liability in a cause of action of any kind for releasing
or receiving any information pursuant to this Section. Nothing herein is
intended to or does in any way or manner abrogate or lessen the common and
statutory law privileges and immunities of an insurer, agent authorized
by an insurer to act on its behalf or authorized governmental agency or
any of their respective employees.

(Source: P.A. 102-538, eff. 8-20-21.)

 

(215 ILCS 5/155.25) (from Ch. 73, par. 767.25)

Sec. 155.25.
Reports by certain property and casualty insurers.

(A) The Director shall promulgate rules and regulations which shall
require, at the request of the Director, any insurer licensed to write medical
liability insurance in this State to file a report on a form furnished by the
Director showing its direct experience in this State. All experience shall
be on a direct basis, prior to reinsurance, and shall be required only in
the aggregate. Individual claim reports shall not be required.

(B) The reports required under subsection (A) shall include the
following data for the previous year ending on the 31st of December:

• (1) Direct premium written for the prior 12 months.
• (2) Direct premium earned for the prior 12 months.
• (3) (a) Incurred claims by accident year, showing the most recent 8 accident years, and a subtotal combining all accident years prior to the most recent 8, valued as of the most recent December 31, valued as of the prior December 31, each developed as the sum of, and with figures provided for under division (b) of this paragraph (3).
• (b) Show for each such item, the difference between 2 valuations:
• (i) dollar amount of claim payments, cumulated from the beginning of each accident year, where the dollar amount of claim payments shall be separately reported for closed claims under paragraph (3) (a) and for open and reopened claims under paragraph (3) (a), plus
• (ii) reserves for reported claims as of the valuation dates, open or reopened, plus
• (iii) reserves for claims incurred but not reported as the valuation dates, plus
• (iv) any other loss reserves carried by the company as of the valuation dates and not reported in (3) (ii) or (3) (iii).
• (v) number of claims, cumulated from the beginning of each accident year, showing the most recent 8 accident years, and a subtotal combining all accident years prior to the most recent 8 valued as of the most recent December 31, land valued as of the prior December 31, with figures provided for the number of closed claims under paragraph (3) (a) and the number of open and unopened claims under paragraph (3) (a). Show for each such item, the difference between the 2 valuations.
• (4) Actual incurred expenses allocated separately to loss adjustment, commissions, or other acquisition costs, general office expenses, taxes, licenses and fees, and all other expenses.
• (5) Net underwriting gain or loss.

(Source: P.A. 87-1090.)

 

(215 ILCS 5/155.25a) (from Ch. 73, par. 767.25a)

Sec. 155.25a.

Notwithstanding the provisions of subsection (D) of
Section 123B-9, a purchasing group may purchase insurance providing for a
group aggregate limit from an insurer licensed to write medical liability
insurance in this State if (1) such group is domiciled in Illinois and all
or substantially all of such group’s members are residents of Illinois, (2)
each insured in the purchasing group is specifically informed prior to
issuance of the policy to such insured of the existence of the group
aggregate limit, and (3) either (a) the amount of the group aggregate limit
is determined by the Director in his discretion to be sufficiently high
(when considered in conjunction with other factors such as each individual
insured’s per claim limit and each individual insured’s aggregate limit),
such that the risk that the group aggregate limit will be exhausted is not
substantial, or (b) (i) each individual insured’s aggregate limit is not
more than 300% of such individual insured’s per claim limit and (ii) the
group aggregate limit (at the time of the insured’s claim) is equal to or
exceeds the amount set forth in the following table:

Number of Insureds	Required Purchasing
in Purchasing	Group Aggregate Limit
Group
Less than 10	Individual claim limit X
	Number of Insureds
10 to 24	The sum of (i) 3 X the
	individual claim limit,
	plus (ii) the individual
	claim limit X the Number
	of Insureds X 2/3
25 to 50	The sum of (i) 7 X the
	individual claim
	limit, plus (ii) the individual
	claim limit X the Number of
	Insureds X 1/2
Over 50	The sum of (i) 17 X the individual
	claim limit, plus (ii) the
	individual claim limit X the
	Number of Insureds X 3/10.

(Source: P.A. 86-632.)

 

(215 ILCS 5/155.26) (from Ch. 73, par. 767.26)

Sec. 155.26.

No insurance company authorized to do business in
Illinois may increase the premium rates for a renewal policy which insures
an individual with a personal lines automobile insurance policy against any
loss or liability resulting from or incident to the ownership, maintenance
or use of any motor vehicle if the sole basis for the proposed increase is
that the insured was convicted of no more than one offense for speeding
where such speeding was not in
excess of 10 miles an hour over the posted speed limit, and no claim
for recovery of damages or loss has been paid by the insurer because of such offense.

(Source: P.A. 85-332.)

 

(215 ILCS 5/155.27) (from Ch. 73, par. 767.27)

Sec. 155.27.

No insurance company authorized to transact business in
this State may impose a surcharge upon an applicant for
a policy of automobile insurance or refuse to insure the applicant solely
based upon the identity of the
applicant’s prior automobile insurance carrier, unless the applicant fails
to provide the company with the applicant’s
loss experience with the prior carrier within 21 calendar days after the
application for automobile insurance is filed.

(Source: P.A. 86-1408.)

 

(215 ILCS 5/155.28) (from Ch. 73, par. 767.28)

Sec. 155.28.

(a) Any individual who is a potential applicant for a
policy of personal automobile insurance as defined in subsection (a) of
Section 143.13 of this Code shall be provided an oral estimate of premium
charges based on the information provided to an insurance producer or
designated representative who maintains an office within any municipality
with 500,000 or more inhabitants. Such an estimate shall be given
by any such insurance producer or designated representative of an insurer but
shall not be binding.

(b) No such insurer, insurance producer or designated representative
shall require that an individual described in subsection (a) of this
Section shall be present in person in order to obtain the estimate
described in subsection (a).

(c) Nothing in this Section shall be construed to prohibit an insurer,
insurance producer or designated representative from requiring that an
individual be present in person to complete a final application for a
policy of personal automobile insurance as defined in subsection (a) of
Section 143.13 of this Code.

(Source: P.A. 86-1408.)

 

(215 ILCS 5/155.29) (from Ch. 73, par. 767.29)

Sec. 155.29.

(a) Purpose. The purpose of this Section
is to regulate the use of
aftermarket crash parts by requiring disclosure when any use of
an aftermarket non-original equipment manufacturer’s crash part is proposed and by
requiring that the manufacturers of such aftermarket crash parts be identified.

(b) Definitions. As used in this Section the following terms have
the following meanings:

“Aftermarket crash part” means a replacement for any of the nonmechanical
sheet metal or plastic parts that generally constitute the exterior of a
motor vehicle, including inner and outer panels.

“Non-original equipment manufacturer (Non-OEM) aftermarket crash part”
means an aftermarket crash part not made for or by the manufacturer of the motor vehicle.

“Repair facility” means any motor vehicle dealer, garage, body shop, or
other commercial entity that undertakes the repair or replacement of those
parts that generally constitute the exterior of a motor vehicle.

“Installer” means an individual who actually does the work of replacing
or repairing parts of a motor vehicle.

(c) Identification. Any aftermarket crash part supplied by a
non-original equipment manufacturer for use in this State after the
effective date of this Act shall have affixed thereto or inscribed thereon
the logo or name of its
manufacturer. The manufacturer’s logo or name shall be visible after
installation whenever practicable.

(d) Disclosure. No insurer shall specify the use of non-OEM
aftermarket crash parts in the repair of an insured’s motor vehicle, nor
shall any repair facility or installer use non-OEM aftermarket crash parts
to repair a vehicle unless the customer is advised of that fact in
writing. In all instances where an insurer intends that non-OEM
aftermarket crash parts be used in the repair of a motor vehicle, the
insurer shall provide the customer with the following information:

• (1) a written estimate that clearly identifies each non-OEM aftermarket crash part; and
• (2) a disclosure settlement incorporated into or attached to the estimate that reads as follows: “This estimate has been prepared based on the use of crash parts supplied by a source other than the manufacturer of your motor vehicle. Warranties applicable to these replacement parts are provided by the manufacturer or distributor of these parts rather than the manufacturer of your vehicle.”

(Source: P.A. 86-1234; 86-1475.)

 

(215 ILCS 5/155.30) (from Ch. 73, par. 767.30)

Sec. 155.30.

For purposes of determining premium rates to be charged
for personal multi-peril property insurance policies covering real property
used principally for residential purposes or any household or personal
property that is usual or incidental to the occupancy of any premises used
for residential purposes (commonly known as “homeowners” or “renters”
insurance), an insurance company authorized to do business in this State
shall not treat a child placed in the household by the Illinois Department
of Children and Family Services or a private child welfare agency
differently from a natural or adopted child of the policy owner. An
insurance company authorized to do business in this State shall not
consider a policy owner’s acceptance of the placement of a foster child in
his or her household as a use of the family dwelling for a business purpose.

(Source: P.A. 86-1482.)

 

(215 ILCS 5/155.31)

Sec. 155.31.
Day care and group day care homes; coverage.

(a) No insurer providing insurance coverage, as defined in subsection (b)
of
Section 143.13 of this Code, shall nonrenew or cancel an insurance policy on a
day care home or group day care home, as defined in the Child Care Act of 1969,
solely on the basis that the insured operates a duly licensed day care home or
group day care home on the insured premises.

(b) An insurer providing such insurance coverage to a licensed day care home
or licensed group day care home may provide such coverage with a separate
policy or endorsement to a policy of fire and extended coverage insurance, as
defined in subsection (b) of Section 143.13.

(c) Notwithstanding subsections (a) and (b) of this Section, the insurer
providing such coverage shall be allowed to cancel or nonrenew an insurance
policy on a day care home or group day care home based upon the authority
provided under Sections 143.21 and 143.21.1 of this Code.

(Source: P.A. 90-401, eff. 1-1-98; 90-655, eff. 7-30-98.)

 

(215 ILCS 5/155.32)

Sec. 155.32.
Policy explanations; language other than English.

(a) A company, as defined in Section 132.2 of this Code, may conduct
transactions in a language other than English through an employee or agent
acting as interpreter or through an interpreter provided by the customer.

(b) An insurance carrier licensed to provide insurance as defined in
subsections
(a) and (b) of Section 143.13 of this Code may provide insurance policies,
endorsements, riders, and any explanatory or advertising material in a language
other than English. In the event of a dispute or complaint regarding the
insurance or advertising material, the English language version of the
insurance coverage shall control the resolution of the dispute or
complaint.

(Source: P.A. 92-578, eff. 6-26-02.)

 

(215 ILCS 5/155.33)

Sec. 155.33.

Illinois Health Insurance Portability and
Accountability Act.
The provisions of this Code are subject to the Illinois Health Insurance
Portability and Accountability Act as provided in Section 15 of that Act.

(Source: P.A. 90-30, eff. 7-1-97; 90-655, eff. 7-30-98.)

 

(215 ILCS 5/155.34)

Sec. 155.34.
(Repealed).

(Source: P.A. 90-655, eff. 7-30-98. Repealed by P.A. 93-502, eff.
1-1-04.)

 

(215 ILCS 5/155.35)

Sec. 155.35.
Insurance compliance self-evaluative privilege.

(a) To encourage insurance companies and persons conducting activities
regulated under this Code, both to conduct voluntary internal audits of their
compliance programs and management systems and to assess and improve compliance
with State and federal statutes, rules, and orders, an insurance compliance
self-evaluative privilege is recognized to protect the confidentiality of
communications relating to voluntary internal compliance audits. The General
Assembly hereby finds and declares that protection of insurance consumers is
enhanced by companies’ voluntary compliance with this State’s insurance and
other laws and that the public will benefit from incentives to identify and
remedy insurance and other compliance issues. It is further declared that
limited expansion of the protection against disclosure will encourage voluntary
compliance and improve insurance market conduct quality and that the voluntary
provisions of this Section will not inhibit the exercise of the regulatory
authority by those entrusted with protecting insurance consumers.

(b)(1) An insurance compliance self-evaluative audit document is privileged
information and is not admissible as evidence in any legal action in any
civil, criminal, or administrative proceeding, except as provided in
subsections (c) and (d) of this Section. Documents, communications, data,
reports, or other information created as a result of a claim involving personal
injury or workers’ compensation made against an insurance policy are not
insurance compliance self-evaluative audit documents and are admissible as
evidence in civil proceedings as otherwise provided by applicable rules of
evidence or civil procedure, subject to any applicable statutory or common law
privilege, including but not limited to the work product doctrine, the
attorney-client privilege, or the subsequent remedial measures exclusion.

(2) If any company, person, or entity performs or directs the performance
of an insurance compliance audit, an officer or employee involved with the
insurance compliance audit, or any consultant who is hired for the purpose of
performing the insurance compliance audit, may not be examined in any civil,
criminal, or administrative proceeding as to the insurance compliance audit or
any insurance compliance self-evaluative audit document, as defined in this
Section. This subsection (b)(2) does not apply if the privilege set forth in
subsection (b)(1) of this Section is determined under subsection (c) or (d) not
to apply.

(3) A company may voluntarily submit, in connection with examinations
conducted under this Article, an insurance compliance self-evaluative audit
document to the Director, or his or her designee, as a confidential document
under subsection (f) of Section 132.5 of this Code without waiving the
privilege set forth in this Section to which the company would otherwise be
entitled;
provided, however, that the provisions in subsection (f) of Section 132.5
permitting the Director to make confidential documents public pursuant to
subsection (e) of Section 132.5 and access to the National Association of
Insurance Commissioners shall not apply to the insurance compliance
self-evaluative audit
document so voluntarily submitted. Nothing contained in this subsection shall
give the Director any authority to compel a company to disclose involuntarily
or otherwise provide an insurance compliance self-evaluative audit document.

(c)(1) The privilege set forth in subsection (b) of this Section does not
apply to the extent that it is expressly waived by the company that prepared
or caused to be prepared the insurance compliance self-evaluative audit
document.

(2) In a civil or administrative proceeding, a court of record may, after
an in camera review, require disclosure of material for which the privilege set
forth in subsection (b) of this Section is asserted, if the court determines
one of the following:

• (A) the privilege is asserted for a fraudulent purpose;
• (B) the material is not subject to the privilege; or
• (C) even if subject to the privilege, the material shows evidence of noncompliance with State and federal statutes, rules and orders and the company failed to undertake reasonable corrective action or eliminate the noncompliance within a reasonable time.

(3) In a criminal proceeding, a court of record may, after an in camera
review, require disclosure of material for which the privilege described in
subsection (b) of this Section is asserted, if the court determines one of the
following:

• (A) the privilege is asserted for a fraudulent purpose;
• (B) the material is not subject to the privilege;
• (C) even if subject to the privilege, the material shows evidence of noncompliance with State and federal statutes, rules and orders and the company failed to undertake reasonable corrective action or eliminate such noncompliance within a reasonable time; or
• (D) the material contains evidence relevant to commission of a criminal offense under this Code, and all of the following factors are present:
• (i) the Director, State’s Attorney, or Attorney General has a compelling need for the information;
• (ii) the information is not otherwise available; and
• (iii) the Director, State’s Attorney, or Attorney General is unable to obtain the substantial equivalent of the information by any means without incurring unreasonable cost and delay.

(d)(1) Within 30 days after the Director, State’s Attorney, or Attorney
General makes a written request by certified mail for disclosure of an
insurance compliance self-evaluative audit document under this subsection, the
company that
prepared or caused the document to be prepared may file with the appropriate
court a petition requesting an in camera hearing on whether the insurance
compliance self-evaluative audit document or portions of the document are
privileged under this Section or subject to disclosure. The court has
jurisdiction over a petition filed by a company under this subsection
requesting an in camera hearing on whether the insurance compliance
self-evaluative audit document or portions of the document are privileged or
subject
to disclosure. Failure by the company to file a petition waives the privilege.

(2) A company asserting the insurance compliance self-evaluative privilege
in response to a request for disclosure under this subsection shall include in
its request for an in camera hearing all of the information set forth in
subsection (d)(5) of this Section.

(3) Upon the filing of a petition under this subsection, the court shall
issue an order scheduling, within 45 days after the filing of the petition, an
in camera hearing to determine whether the insurance compliance self-evaluative
audit document or portions of the document are privileged under this Section or
subject to disclosure.

(4) The court, after an in camera review, may require disclosure of
material for which the privilege in subsection (b) of this Section is asserted
if the court determines, based upon its in camera review, that any one of the
conditions set forth in subsection (c)(2)(A) through (C) is applicable as to a
civil or administrative proceeding or that any one of the conditions set forth
in subsection (c)(3)(A) through (D) is applicable as to a criminal proceeding.
Upon making such a determination, the court may only compel the disclosure of
those portions of an insurance compliance self-evaluative audit document
relevant to issues in dispute in the underlying proceeding.
Any compelled disclosure will not be considered to be a public document or be
deemed to be a waiver of the privilege for any other civil, criminal, or
administrative proceeding. A party unsuccessfully opposing disclosure may
apply to the court for an appropriate order protecting the document from
further disclosure.

(5) A company asserting the insurance compliance self-evaluative privilege
in response to a request for disclosure under this subsection (d) shall provide
to the Director, State’s Attorney, or Attorney General, as the case may be, at
the time of
filing any objection to the disclosure, all of the following information:

• (A) The date of the insurance compliance self-evaluative audit document.
• (B) The identity of the entity conducting the audit.
• (C) The general nature of the activities covered by the insurance compliance audit.
• (D) An identification of the portions of the insurance compliance self-evaluative audit document for which the privilege is being asserted.

(e) (1) A company asserting the insurance compliance self-evaluative
privilege set forth in subsection (b) of this Section has the burden of
demonstrating the applicability of the privilege. Once a company has
established the applicability of the privilege, a party
seeking disclosure under subsections (c)(2)(A) or (C) of this Section has the
burden of proving that the privilege is asserted for
a fraudulent purpose or that the company failed to
undertake reasonable corrective action or eliminate the noncompliance with a
reasonable time. The Director, State’s Attorney, or Attorney General seeking
disclosure under subsection (c)(3) of this Section has the burden of proving
the elements set forth in subsection (c)(3) of this Section.

(2) The parties may at any time stipulate in proceedings under subsections
(c) or (d) of this Section to entry of an order directing that specific
information contained in an insurance compliance self-evaluative audit document
is or is not subject to the privilege provided under subsection (b) of this
Section.

(f) The privilege set forth in subsection (b) of this Section shall not
extend to any of the following:

• (1) documents, communications, data, reports, or other information required to be collected, developed, maintained, reported, or otherwise made available to a regulatory agency pursuant to this Code, or other federal or State law, rule, or order;
• (2) information obtained by observation or monitoring by any regulatory agency; or
• (3) information obtained from a source independent of the insurance compliance audit.

(g) As used in this Section:

• (1) “Insurance compliance audit” means a voluntary, internal evaluation, review, assessment, or audit not otherwise expressly required by law of a company or an activity regulated under this Code, or other State or federal law applicable to a company, or of management systems related to the company or activity, that is designed to identify and prevent noncompliance and to improve compliance with those statutes, rules, or orders. An insurance compliance audit may be conducted by the company, its employees, or by independent contractors.
• (2) “Insurance compliance self-evaluative audit document” means documents prepared as a result of or in connection with and not prior to an insurance compliance audit. An insurance compliance self-evaluation audit document may include a written response to the findings of an insurance compliance audit. An insurance compliance self-evaluative audit document may include, but is not limited to, as applicable, field notes and records of observations, findings, opinions, suggestions, conclusions, drafts, memoranda, drawings, photographs, computer-generated or electronically recorded information, phone records, maps, charts, graphs, and surveys, provided this supporting information is collected or developed for the primary purpose and in the course of an insurance compliance audit. An insurance compliance self-evaluative audit document may also include any of the following:
• (A) an insurance compliance audit report prepared by an auditor, who may be an employee of the company or an independent contractor, which may include the scope of the audit, the information gained in the audit, and conclusions and recommendations, with exhibits and appendices;
• (B) memoranda and documents analyzing portions or all of the insurance compliance audit report and discussing potential implementation issues;
• (C) an implementation plan that addresses correcting past noncompliance, improving current compliance, and preventing future noncompliance; or
• (D) analytic data generated in the course of conducting the insurance compliance audit.
• (3) “Company” has the same meaning as provided in Section 2 of this Code.

(h) Nothing in this Section shall limit, waive, or abrogate the scope or
nature of any statutory or common law privilege including, but not limited to,
the work product doctrine, the attorney-client privilege, or the subsequent
remedial measures exclusion.

(Source: P.A. 90-499, eff. 8-19-97; 90-655, eff. 7-30-98.)

 

(215 ILCS 5/155.36)

Sec. 155.36. Managed Care Reform and Patient Rights Act. Insurance
companies that transact the kinds of insurance authorized under Class 1(b) or
Class 2(a) of Section 4 of this Code shall comply
with Sections 45, 45.1, 45.2, 65, 70, and 85, subsection (d) of Section 30, and the definition of the term “emergency medical
condition” in Section
10 of the Managed Care Reform and Patient Rights Act.

(Source: P.A. 101-608, eff. 1-1-20; 102-409, eff. 1-1-22.)

 

(215 ILCS 5/155.37)

Sec. 155.37.
Drug formulary; notice.
Insurance
companies that transact the kinds of insurance authorized under Class 1(b) or
Class 2(a) of Section 4 of this Code and provide coverage for prescription
drugs through the use of a drug formulary must notify insureds of any change in
the formulary. A company may comply with this Section by posting changes in
the formulary on its website.

(Source: P.A. 92-440, eff. 8-17-01; 92-651, eff. 7-11-02.)

 

(215 ILCS 5/155.38)

Sec. 155.38.
(Repealed).

(Source: P.A. 92-651, eff. 7-11-02. Repealed by P.A.
93-114, eff. 10-1-03.)

 

(215 ILCS 5/155.39)

Sec. 155.39. Vehicle protection products.

(a) As used in this Section:

“Administrator” means a third party other than the warrantor who is
designated by the warrantor to be responsible for the administration of
vehicle protection product warranties.

“Incidental costs” means expenses specified in the vehicle protection
product warranty incurred by the warranty holder related to the failure of the
vehicle protection product to perform as provided in the warranty.
Incidental costs may include, without limitation, insurance policy
deductibles, rental vehicle charges, the difference between the actual value
of the stolen vehicle at the time of theft and the cost of a replacement
vehicle, sales taxes, registration fees, transaction fees, and mechanical
inspection fees.

“Vehicle protection product” means a protective chemical, substance, device,
system, or service that is (i) installed on or applied to a vehicle and (ii)
designed to prevent loss or damage to a vehicle from a specific cause. The term “vehicle protection product”
shall include, without limitation, protective chemicals, alarm systems, body part marking products,
steering locks, window etch products, pedal and ignition locks, fuel and
ignition kill switches, and electronic, radio, and satellite tracking devices. “Vehicle protection product” does not include fuel additives, oil additives, or other chemical products applied to the engine, transmission, or fuel system of a motor vehicle.

“Vehicle protection product warrantor” or “warrantor”
means a person who is contractually obligated to the
warranty holder under the terms of a vehicle protection product warranty.
“Warrantor” does not include an authorized insurer.

“Vehicle protection product warranty” means a written warranty by a vehicle protection product warrantor that (i) is included, for no separate and identifiable consideration, with the purchase of a vehicle protection product sold or offered for sale in this State and (ii) provides if the vehicle protection product fails to prevent loss or damage to a vehicle from a specific cause, that the warranty holder shall be paid specified incidental costs by the warrantor as a result of the failure of the vehicle protection product to perform pursuant to the terms of the warranty.

“Warranty reimbursement insurance policy” means a policy of
insurance
issued to the vehicle protection product warrantor
to pay on behalf of the warrantor
all covered contractual obligations incurred by the warrantor under the terms
and conditions of the insured vehicle protection product warranties sold by
the warrantor. The warranty reimbursement insurance policy shall be issued by
an insurer authorized to do business in this State that has filed its policy
form with the Department.

(a-5) A vehicle protection product warrantor’s liabilities under a vehicle protection product warranty shall be covered by a warranty reimbursement insurance policy.

(b) No vehicle protection product warranty sold or offered for sale in this State
shall be subject to the provisions of this Code. Vehicle protection product warranties are express warranties and not insurance.

Vehicle protection product warrantors and related vehicle protection
product sellers and warranty administrators are
not required to comply with and are not subject to any other provision of this
Code.

(c) This Section applies to all vehicle protection products sold or
offered for sale prior to, on, or after the effective date of this amendatory
Act
of the 93rd General Assembly. The enactment of this Section does not
imply that vehicle protection products should have been subject to regulation
under this Code prior to the enactment of this Section. The changes made to this Section by this amendatory Act of the 100th General Assembly do not imply that vehicle protection products and vehicle protection product warranties should have been subject to regulation under this Code prior to this amendatory Act of the 100th General Assembly.

(Source: P.A. 100-272, eff. 1-1-18.)

 

(215 ILCS 5/155.40)

Sec. 155.40. Auto insurance; application; false address.

(a) An applicant for a policy of insurance that insures against any loss or
liability resulting from or incident to the ownership, maintenance, or use of a
motor vehicle shall not provide to the insurer to which the application for
coverage is made any address for the applicant other than the address
at which the applicant resides.

(b) A person who knowingly violates this Section is guilty of a business
offense. The penalty is a fine of not less than $1,001 and not more than
$1,200.

(Source: P.A. 95-331, eff. 8-21-07.)

 

(215 ILCS 5/155.41)

Sec. 155.41. Slave era policies.

(a) The General Assembly finds and declares all of the
following:

• (1) Insurance policies from the slavery era have been discovered in the archives of several insurance companies, documenting insurance coverage for slaveholders for damage to or death of their slaves, issued by a predecessor insurance firm. These documents provide the first evidence of ill-gotten profits from slavery, which profits in part capitalized insurers whose successors remain in existence today.
• (2) Legislation has been introduced in Congress for the past 10 years demanding an inquiry into slavery and its continuing legacies.
• (3) The Director of Insurance and the Department of Insurance are entitled to seek information from the files of insurers licensed and doing business in this State, including licensed Illinois subsidiaries of international insurance corporations, regarding insurance policies issued to slaveholders by predecessor corporations. The people of Illinois are entitled to significant historical information of this nature.

(b) The Department shall request and obtain information from
insurers licensed and doing business in this State regarding any
records of slaveholder insurance policies issued by any predecessor
corporation during the slavery era.

(c) The Department shall obtain the names of any
slaveholders or slaves described in those insurance records, and
shall make the information available to the public and the
General Assembly.

(d) Any insurer licensed and doing business in this State
shall research and report to the Department with respect to any
records within the insurer’s possession or knowledge relating to
insurance policies issued to slaveholders that provided coverage for
damage to or death of their slaves.

(e) Descendants of slaves, whose ancestors were defined as
private property, dehumanized, divided from their families, forced to
perform labor without appropriate compensation or benefits, and
whose ancestors’ owners were compensated for damages by insurers, are
entitled to full disclosure.

(Source: P.A. 95-331, eff. 8-21-07.)

 

(215 ILCS 5/155.42)

Sec. 155.42. Identity theft insurance consumer fact sheet. The Department shall develop an appropriate consumer fact sheet to be provided to consumers, either via the Department’s
website or by hard copy if requested, regarding identity theft insurance. The fact sheet shall include at a minimum, information on what is generally covered under identity theft insurance and on how to protect himself or herself from
identity theft.

(Source: P.A. 96-167, eff. 1-1-10.)

 

(215 ILCS 5/155.43)

Sec. 155.43. Misrepresentation of Senior-Specific Certification.

(a) No insurance producer shall use a senior-specific certification or professional designation that indicates or implies in such a way as to mislead a purchaser or prospective purchaser that the insurance producer has a special certification or training in advising or servicing seniors in connection with the solicitation, sale, or purchase of a life insurance or annuity product or in the provision of advice as to the value of or the advisability of purchasing or selling a life insurance or annuity product, either directly or indirectly through publications, writings, or by issuing or promulgating analyses or reports related to a life insurance or annuity product.

(b) “Use of senior-specific certifications or professional designations” includes, but is not limited to, all of the following:

• (1) Use of a certification or professional designation by an insurance producer who has not actually earned or is otherwise ineligible to use such certification or designation.
• (2) Use of a nonexistent or self-conferred certification or professional designation.
• (3) Use of a certification or professional designation that indicates or implies a level of occupational qualifications obtained through education, training, or experience that the insurance producer using the certification or designation does not have.
• (4) Use of a certification or professional designation that was obtained from a certifying or designating organization that:
• (i) is primarily engaged in the business of instruction in sales or marketing;
• (ii) does not have reasonable standards or procedures for assuring the competency of its certificate holders or designees;
• (iii) does not have reasonable standards or procedures for monitoring and disciplining its certificate holders or designees for improper or unethical conduct; or
• (iv) does not have reasonable continuing education requirements for its certificate holders or designees in order to maintain the certificate or designation.

(c) There is a rebuttable presumption that a certifying or designating organization is not disqualified under this Section if the certification or designation issued from the organization does not primarily apply to sales or marketing and if the organization or the certification or designation in question has been accredited by any of the following entities:

• (i) the American National Standards Institute;
• (ii) the National Commission for Certifying Agencies; or
• (iii) any organization included on the list “Accrediting Agencies Recognized for Title IV Purposes” prepared by the United States Department of Education.

(d) In determining whether a combination of words or an acronym standing for a combination of words constitutes a certification or professional designation indicating or implying that a person has a special certification or training in advising or servicing seniors, the Department of Insurance shall consider all of the following:

• (1) Use of one or more words, such as “senior”, “retirement”, “elder”, or like words combined with one or more words, such as “certified”, “registered”, “chartered”, “advisor”, “specialist”, “consultant”, “planner”, or like words in the name of the certification or professional designation.
• (2) The manner in which the words listed in paragraph (1) of subsection (b) are combined.

(e) For purposes of this Section, a job title within an organization that is licensed or registered by a State or federal financial services regulatory agency is not a certification or professional designation, unless it is used in a manner that would confuse or mislead a reasonable consumer, if the job title indicates seniority or standing within the organization or specifies an individual’s area of specialization within the organization. For purposes of this subsection (e), “financial services regulatory agency” includes, but is not limited to, an agency that regulates insurers, insurance producers, broker-dealers, investment advisers, or investment companies.

(Source: P.A. 97-527, eff. 8-23-11.)

 

(215 ILCS 5/155.44)

Sec. 155.44. Financial requirements; large deductible agreements for workers’ compensation insurance.

(a) An insurer shall:

• (1) require full collateralization of the outstanding obligations owed under a large deductible agreement by using one of the following methods:
• (A) a surety bond issued by a surety insurer authorized to transact business by the Department and whose financial strength and size ratings from A.M. Best Company are not less than “A” and “V”, respectively;
• (B) an irrevocable letter of credit issued by a financial institution with an office physically located within the State and the deposits of which are federally insured; or
• (C) cash or securities held in trust by a third party or by the insurer and subject to a trust agreement for the express purpose of securing the policyholder’s obligation under a large deductible agreement, provided that if the assets are held by the insurer those assets are not commingled with the insurer’s other assets; and
• (2) limit the size of the policyholder’s obligations under a large deductible agreement to no greater than 20% of the total net worth of the policyholder at each policy inception, as determined by an audited financial statement as of the most recently available fiscal year end.

(b) As used in this Section, “insurer” means any insurer authorized to issue a workers’ compensation policy covering risks located in this State that has an A.M. Best Company rating below “A-” and does not have at least $200,000,000 in surplus.

(c) As used in this Section, “large deductible agreement” means any combination of one or more policies, endorsements, contracts, or security agreements which provide for the policyholder to bear the risk of loss of $100,000 or greater per claim or occurrence covered under a policy of workers’ compensation insurance and which may be subject to the aggregate limit of policyholder reimbursement obligations.

(d) Except when approved by the Director of Insurance, any insurer determined to be in a financially hazardous condition pursuant to Article XII 1/2 or XIII of this Code by the Director of Insurance in this State or the equivalent in any other state is prohibited from issuing or renewing a policy that includes a large deductible agreement.

(e) This Section applies to large deductible agreements issued or renewed by any insurer on or after January 1, 2016.

(Source: P.A. 99-369, eff. 8-14-15.)

 

(215 ILCS 5/155.45)

Sec. 155.45. Certificates of insurance.

(a) In this Section:

• “Certificate of insurance” means a document prepared by an insurer or insurance producer as evidence of property or casualty insurance coverage. “Certificate of insurance” does not include a policy of insurance, an insurance binder, a policy endorsement, or a motor vehicle insurance identification or information card.
• “Department” means the Department of Insurance.
• “Director” means the Director of Insurance.
• “Insurance producer” means a person required to be licensed under the laws of this State to sell, solicit, or negotiate insurance.
• “Insurer” means a company, firm, partnership, association, order, society, or system making any kind or kinds of insurance and shall include associations operating as Lloyds, reciprocal or inter-insurers, or individual underwriters.
• “Person” means any individual, aggregation of individuals, trust, association, partnership, or corporation, or any affiliate thereof.
• “Property or casualty insurance” means the kinds of insurance described in either or both Class 2 or Class 3 of Section 4 of this Code.

(b) This Section applies to a certificate of insurance that is
issued in connection with a contract related to property,
operations, or risks located in this State, regardless of the location of
the policyholder, insurer, insurance producer, or person that
requests or requires the issuance of the certificate of insurance.

(c) The use of a certificate of insurance form that is unfair, misleading, or deceptive or
violates any law
is an unfair and deceptive act or practice in the business of
insurance under Article XXVI of this Code.

(d) A certificate of insurance may not amend, extend, or alter the coverage provided under, or
confer to a person any rights in addition to the rights
expressly provided in,
the policy of property or casualty insurance to which the certificate
of insurance refers.

(e) A person may not prepare, issue, request, or
require the issuance of a certificate of insurance that:

• (1) contains false or misleading information concerning the policy of property or casualty insurance to which the certificate of insurance refers; or
• (2) alters, amends, or extends the coverage provided by the policy of property or casualty insurance to which the certificate of insurance refers.

(f) A certificate of insurance may not contain a
warranty that the policy of property or casualty insurance to which
the certificate of insurance refers complies with the insurance or
indemnification requirements of a contract. The inclusion of a contract number or contract description
in a certificate of insurance does not warrant that the policy of
property or casualty insurance to which the certificate of insurance
refers complies with the insurance or indemnification requirements
of the contract.

(g) A person is not entitled to notice of, cancellation of, nonrenewal of, or
a material change in
a policy of property or casualty insurance unless the person has
notice rights under the terms of the policy of property or casualty
insurance or an endorsement to the policy.
The terms and conditions of notice described in this subsection
(g) are governed by the policy of property or casualty insurance or
an endorsement to the policy and are not altered by a certificate of
insurance.

(h) A certificate of insurance or any other document that is
prepared, issued, requested, or required in violation of this Section
is void.

(i) The Director may refer a matter to the Department of Financial and Professional Regulation for review pursuant to the rules of that department if the Director has reason to believe that a certificate of
insurance form as described in subsection (c) of this Section has been provided by a
financial institution.

(j) The Director may examine and investigate the
activities of a person that the Director reasonably believes has
violated the provisions of this Section. The Director shall have the power to enforce the provisions of this Section and impose any authorized penalty or remedy as provided under Section 401 of this Code upon any person who violates the provisions of this Section.

(k) The Department may adopt rules to
implement the provisions of this Section.

(Source: P.A. 98-819, eff. 1-1-15.)

 

(215 ILCS 5/155.46)

Sec. 155.46. Prohibition on denial of coverage or increase in premiums for living organ donors.

(a) As used in this Section:

“Human organ” means all or part of a human’s liver, pancreas, kidney, intestine, lung, blood, plasma, skin, or bone marrow.

“Living organ donor” means an individual who has donated all or part of a human organ and is not deceased.

“Disability insurance policy” means a contract under which an entity promises to pay a person a sum of money if an illness or injury resulting in a disability prevents that person from working.

“Life insurance policy” means a contract under which an entity promises to pay a designated beneficiary a sum of money upon the death of the insured.

“Long-term care insurance policy” means a contract for which the only insurance protection provided under the contract is coverage of qualified long-term care services.

(b) Notwithstanding any other provision of law, it is unlawful to refuse to insure, to refuse to continue to insure, to limit the amount, extent, or kind of coverage available for life insurance, disability insurance, or long-term care insurance to an individual, or to charge an individual a different rate for the same coverage, solely because of the individual’s status as a living organ donor.

(c) With respect to all other conditions, persons who are living organ donors shall be subject to the same standards of sound actuarial principles or actual or reasonably anticipated experience as are persons who are not organ donors.

(Source: P.A. 101-179, eff. 1-1-20.)

 

(215 ILCS 5/155.47)

Sec. 155.47. Prohibited practices relating to substance use disorder treatment.

(a) As used in this Section, “recovery support”, “substance use disorder”, and “treatment” have the meanings set forth in the Substance Use Disorder Act.

(b) A company authorized to transact life insurance in this State may not, based solely on whether an individual has participated in a substance use treatment or recovery support program no less than 5 years before application:

• (1) deny coverage to the individual;
• (2) limit the amount, extent, or kind of coverage available to the individual; or
• (3) charge the individual or a group to which the individual belongs a rate that is different from the rate charged to other individuals or groups, respectively, for the same coverage, unless the charge is based on sound underwriting or actuarial principles reasonably related to actual or anticipated loss experience for a particular risk.

(Source: P.A. 102-107, eff. 1-1-22.)

 

(215 ILCS 5/155.48)

Sec. 155.48. Prohibited practices relating to prescription for or obtainment of opioid antagonist.

(a) As used in this Section, “opioid antagonist” means any drug that binds to opioid receptors and blocks or otherwise inhibits the effects of opioids acting on those receptors to reverse the effects of an opioid overdose.

(b) A company authorized to transact life insurance in this State may not, based solely on whether an individual has been prescribed or has obtained through a standing order an opioid antagonist:

• (1) deny coverage to the individual;
• (2) limit the amount, extent, or kind of coverage available to the individual; or
• (3) charge the individual or a group to which the individual belongs a rate that is different from the rate charged to other individuals or groups, respectively, for the same coverage, unless the charge is based on sound underwriting or actuarial principles reasonably related to actual or anticipated loss experience for a particular risk.

(Source: P.A. 102-107, eff. 1-1-22.)