Bill Amendment: IL HB3072 | 2017-2018 | 100th General Assembly

NOTE: For additional amemendments please see the Bill Drafting List

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Bill Title: INS CD-VEH PROTECTION PRODUCT

Status: 2017-08-22 - Public Act . . . . . . . . . 100-0272 [HB3072 Detail]

Download: Illinois-2017-HB3072-House_Amendment_001.html

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Rep. Robert Martwick

Filed: 4/26/2017

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AMENDMENT TO HOUSE BILL 3072
AMENDMENT NO. ______. Amend House Bill 3072 by replacing
everything after the enacting clause with the following:
"Section 5. The Illinois Insurance Code is amended by
changing Section 155.39 as follows:
(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

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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, vehicle protection device, system, or service that
is (i) installed on or applied to a vehicle, and (ii) is
designed to prevent loss or damage to a vehicle from a specific
cause, (iii) includes a written warranty by a warrantor that
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, and
(iv) the warrantor's liability is covered by a warranty
reimbursement insurance policy. 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"

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means a person who is contractually obligated to the warranty
holder under the terms of a the vehicle protection product
warranty. "Warrantor" 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.

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(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
complying with this Section are not required to comply with and
are not subject to any other provision of this Code. The
vehicle protection products' written warranties are express
warranties and not insurance.
(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. 95-331, eff. 8-21-07.)
Section 10. The Service Contract Act is amended by changing
Sections 5 and 35 as follows:

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(215 ILCS 152/5)
Sec. 5. Definitions.
"Department" means the Department of Insurance.
"Director" means the Director of Insurance.
"Road hazard" means a hazard that is encountered while
driving a motor vehicle, including, but not limited to,
potholes, rocks, wood debris, metal parts, glass, plastic,
curbs, and composite scraps.
"Service contract" means a contract or agreement whereby a
service contract provider undertakes for a specified period of
time, for separate and identifiable consideration, to perform
the repair, replacement, or maintenance, or indemnification
for such services, of any automobile, system, or consumer
product in connection with the operational or structural
failure due to a defect in materials or workmanship, or normal
wear and tear, with or without additional provision for
incidental payment or indemnity under limited circumstances,
for related expenses, including, but not limited to, towing,
rental, and emergency road service. Service contracts may
provide for:
(1) the repair, replacement, or maintenance of such
property for damage resulting from power surges and
accidental damage from handling;
(2) the repair or replacement of tires or wheels, or
both, on a motor vehicle damaged as the result of coming
into contact with road hazards;

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(3) the removal of dents, dings, or creases on a motor
vehicle that can be repaired using the process of paintless
dent removal without affecting the existing paint finish
and without replacing vehicle body panels, sanding,
bonding, or painting;
(4) the repair of chips or cracks in or the replacement
of motor vehicle windshields as a result of damage caused
by road hazards;
(5) the replacement of a motor vehicle key or key-fob
in the event that the key or key-fob becomes inoperable or
is lost or stolen;
(6) the payment of specified incidental costs in the
event that a vehicle protection product a protective
chemical, substance, device, or system that (A) is
installed on or applied to a motor vehicle, (B) is designed
to prevent loss or damage to a motor vehicle from a
specific cause, and (C) includes a written product warranty
providing for payment to or on behalf of the warranty
holder's incidental costs in the event that the product
fails to prevent loss or damage as specified; the
reimbursement of incidental costs under the warranty must
be tied to the purchase of a physical product that is
formulated or designed to make the specified loss or damage
less likely to occur; or
(7) other services that may be approved by the
Director, if not inconsistent with other provisions of this

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Act.
Service contracts shall not include:
(i) contracts of limited duration that provide for
scheduled maintenance only;
(ii) fuel additives, oil additives, or other chemical
products applied to the engine, transmission, or fuel
system of a motor vehicle;
(iii) coverage for the repair or replacement, or both,
of damage to the interior surfaces of a vehicle, or for
repair or replacement, or both, of damage to the exterior
paint or finish of a vehicle; however, such coverage may be
offered in connection with the sale of a vehicle protection
product; and
(iv) a vehicle product protection warranty included,
for no separate and identifiable consideration, with the
purchase of a vehicle protection product protective
chemical, device, or system described in item (6) of this
definition.
"Service contract holder" means the person who purchases a
service contract or a permitted transferee.
"Service contract provider" means a person who is
contractually obligated to the service contract holder under
the terms of the service contract. A service contract provider
does not include an insurer.
"Service contract reimbursement insurance policy" means a
policy of insurance that is issued to the service contract

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provider to provide reimbursement to the service contract
provider or to pay on behalf of the service contract provider
all covered contractual obligations incurred by the service
contract provider under the terms and conditions of the insured
service contracts issued or sold by the service contract
provider.
"System" means the heating, cooling, plumbing, electrical,
ventilation, or any other similar system of a home.
"Vehicle protection product" has the same meaning as that
term is defined in subsection (a) of Section 155.39 of the
Illinois Insurance Code.
"Vehicle protection product warranty" has the same meaning
as that term is defined in subsection (a) of Section 155.39 of
the Illinois Insurance Code.
(Source: P.A. 98-222, eff. 1-1-14.)
(215 ILCS 152/35)
Sec. 35. Cancellation and refunds.
(a) No service contract may be issued, sold, or offered for
sale in this State unless the service contract clearly states
that the service contract holder is allowed to cancel the
service contract. If the service contract holder elects
cancellation, the service contract provider may retain a
cancellation fee not to exceed the lesser of 10% of the service
contract price or $50. The service contract cancellation
provision must provide that the service contract may be

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cancelled:
(1) within 30 days after its purchase if no service has
been provided and that a full refund of the service contract
consideration, less any cancellation fee stated in the service
contract will be paid to the service contract holder; or
(2) at any other time and a pro rata refund of the service
contract consideration for the unexpired term of the service
contract, based on the number of elapsed months, miles, hours,
or such other reasonably applicable measure which is clearly
disclosed in the service contract, less the value of any
service received, and any cancellation fee stated in the
service contract will be paid to the service contract holder.
(b) In the event of the cancellation of a service contract
that includes the coverage described in paragraph (6) of the
definition of "service contract" in Section 5 of this Act, the
service contract provider is not required to, but may, refund
the purchase price of the vehicle protection product. The
coverage described in paragraph (6) of the definition of
"service contract" in Section 5 of this Act may not be offered
as or within a service contract unless the service contract
clearly states whether the service contract holder is entitled
to a refund of the purchase price of the vehicle protection
product and, if applicable, the terms of such refund.
(Source: P.A. 90-711, eff. 8-7-98.)".