Bill Text: IL HB1954 | 2017-2018 | 100th General Assembly | Chaptered


Bill Title: Amends the Illinois Insurance Code. Makes a technical change in a Section concerning the short title.

Spectrum: Slight Partisan Bill (Democrat 2-1)

Status: (Passed) 2017-09-08 - Public Act . . . . . . . . . 100-0475 [HB1954 Detail]

Download: Illinois-2017-HB1954-Chaptered.html



Public Act 100-0475
HB1954 EnrolledLRB100 04579 SMS 14585 b
AN ACT concerning regulation.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Insurance Code is amended by
changing Sections 132.5, 143.14, 143.15, 143.16, 143.17, and
143.17a as follows:
(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.
(Source: P.A. 87-108.)
(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 and the mortgage or
lien holder, 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 A copy of all such notices 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
at the last mailing address known to the company. 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. 93-713, eff. 1-1-05.)
(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 and mortgagee or lien
holder, if known, at 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. 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. For
purposes of this Section, the mortgagee or lien holder, if
known, may opt to accept notification electronically.
(Source: P.A. 93-713, eff. 1-1-05.)
(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 and mortgagee or lien holder, if
known, at the last mailing address known to the company.
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. For purposes of this
Section, the mortgagee or lien holder, if known, may opt to
accept notification electronically.
(Source: P.A. 93-713, eff. 1-1-05.)
(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 An exact and
unaltered copy of such notice 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 at the last
mailing address known by the company. 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. The notice of
nonrenewal and the proof of mailing shall be effected on the
same date.
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 An exact and unaltered copy of the
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. 93-713, eff. 1-1-05.)
(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. In all notices of intention not to
renew any policy of insurance, as defined in Section 143.11,
the company 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, an exact
and unaltered copy of the notice to the named insured shall
also be sent to the named insured's producer, if known, or the
producer of record. Notification For notices of intention to
not renew, an exact and unaltered copy of the notice to the
named insured shall also be sent to the mortgagee or lien
holder listed on the policy at the last mailing address known
by the company.
(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. 95-533, eff. 6-1-08.)
Section 99. Effective date. This Act takes effect January
1, 2018.
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