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


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: (Enrolled) 2017-07-21 - Sent to the Governor [HB1954 Detail]

Download: Illinois-2017-HB1954-Enrolled.html



HB1954 EnrolledLRB100 04579 SMS 14585 b
1 AN ACT concerning regulation.
2 Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4 Section 5. The Illinois Insurance Code is amended by
5changing Sections 132.5, 143.14, 143.15, 143.16, 143.17, and
6143.17a as follows:
7 (215 ILCS 5/132.5) (from Ch. 73, par. 744.5)
8 Sec. 132.5. Examination reports.
9 (a) General description. All examination reports shall be
10comprised of only facts appearing upon the books, records, or
11other documents of the company, its agents, or other persons
12examined or as ascertained from the testimony of its officers,
13agents, or other persons examined concerning its affairs and
14the conclusions and recommendations as the examiners find
15reasonably warranted from those facts.
16 (b) Filing of examination report. No later than 60 days
17following completion of the examination, the examiner in charge
18shall file with the Department a verified written report of
19examination under oath. Upon receipt of the verified report,
20the Department shall transmit the report to the company
21examined, together with a notice that affords the company
22examined a reasonable opportunity of not more than 30 days to
23make a written submission or rebuttal with respect to any

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1matters contained in the examination report.
2 (c) Adoption of the report on examination. Within 30 days
3of the end of the period allowed for the receipt of written
4submissions or rebuttals, the Director shall fully consider and
5review the report, together with any written submissions or
6rebuttals and any relevant portions of the examiners work
7papers and enter an order:
8 (1) Adopting the examination report as filed or with
9 modification or corrections. If the examination report
10 reveals that the company is operating in violation of any
11 law, regulation, or prior order of the Director, the
12 Director may order the company to take any action the
13 Director considers necessary and appropriate to cure the
14 violation.
15 (2) Rejecting the examination report with directions
16 to the examiners to reopen the examination for purposes of
17 obtaining additional data, documentation, or information
18 and refiling under subsection (b).
19 (3) Calling for an investigatory hearing with no less
20 than 20 days notice to the company for purposes of
21 obtaining additional documentation, data, information, and
22 testimony.
23 (d) Order and procedures. All orders entered under
24paragraph (1) of subsection (c) shall be accompanied by
25findings and conclusions resulting from the Director's
26consideration and review of the examination report, relevant

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1examiner work papers, and any written submissions or rebuttals.
2The order shall be considered a final administrative decision
3and may be appealed in accordance with the Administrative
4Review Law. The order shall be served upon the company by
5certified mail, together with a copy of the adopted examination
6report. Within 30 days of the issuance of the adopted report,
7the company shall file affidavits executed by each of its
8directors stating under oath that they have received a copy of
9the adopted report and related orders.
10 Any hearing conducted under paragraph (3) of subsection (c)
11by the Director or an authorized representative shall be
12conducted as a nonadversarial confidential investigatory
13proceeding as necessary for the resolution of any
14inconsistencies, discrepancies, or disputed issues apparent
15upon the face of the filed examination report or raised by or
16as a result of the Director's review of relevant work papers or
17by the written submission or rebuttal of the company. Within 20
18days of the conclusion of any hearing, the Director shall enter
19an order under paragraph (1) of subsection (c).
20 The Director shall not appoint an examiner as an authorized
21representative to conduct the hearing. The hearing shall
22proceed expeditiously with discovery by the company limited to
23the examiner's work papers that tend to substantiate any
24assertions set forth in any written submission or rebuttal. The
25Director or his representative may issue subpoenas for the
26attendance of any witnesses or the production of any documents

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1deemed relevant to the investigation, whether under the control
2of the Department, the company, or other persons. The documents
3produced shall be included in the record, and testimony taken
4by the Director or his representative shall be under oath and
5preserved for the record. Nothing contained in this Section
6shall require the Department to disclose any information or
7records that would indicate or show the existence or content of
8any investigation or activity of a criminal justice agency.
9 The hearing shall proceed with the Director or his
10representative posing questions to the persons subpoenaed.
11Thereafter the company and the Department may present testimony
12relevant to the investigation. Cross-examination shall be
13conducted only by the Director or his representative. The
14company and the Department shall be permitted to make closing
15statements and may be represented by counsel of their choice.
16 (e) Publication and use. Upon the adoption of the
17examination report under paragraph (1) of subsection (c), the
18Director shall continue to hold the content of the examination
19report as private and confidential information for a period of
2035 days, except to the extent provided in subsection (b).
21Thereafter, the Director may open the report for public
22inspection so long as no court of competent jurisdiction has
23stayed its publication.
24 Nothing contained in this Code shall prevent or be
25construed as prohibiting the Director from disclosing the
26content of an examination report, preliminary examination

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1report or results, or any matter relating thereto, to the
2insurance department of any other state or country or to law
3enforcement officials of this or any other state or agency of
4the federal government at any time, so long as the agency or
5office receiving the report or matters relating thereto agrees
6in writing to hold it confidential and in a manner consistent
7with this Code.
8 In the event the Director determines that regulatory action
9is appropriate as a result of any examination, he may initiate
10any proceedings or actions as provided by law.
11 (f) Confidentiality of ancillary information. All working
12papers, recorded information, documents, and copies thereof
13produced by, obtained by, or disclosed to the Director or any
14other person in the course of any examination must be given
15confidential treatment, are not subject to subpoena, and may
16not be made public by the Director or any other persons, except
17to the extent provided in subsection (e). Access may also be
18granted to the National Association of Insurance
19Commissioners. Those parties must agree in writing before
20receiving the information to provide to it the same
21confidential treatment as required by this Section, unless the
22prior written consent of the company to which it pertains has
23been obtained.
24 This subsection (f) applies to market conduct examinations
25described in Section 132 of this Code.
26(Source: P.A. 87-108.)

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1 (215 ILCS 5/143.14) (from Ch. 73, par. 755.14)
2 Sec. 143.14. Notice of cancellation.
3 (a) No notice of cancellation of any policy of insurance,
4to which Section 143.11 applies, shall be effective unless
5mailed by the company to the named insured and the mortgage or
6lien holder, at the last mailing address known by the company.
7The company shall maintain proof of mailing of such notice on a
8recognized U.S. Post Office form or a form acceptable to the U.
9S. Post Office or other commercial mail delivery service.
10Notification A copy of all such notices shall also be sent to
11the insured's broker if known, or the agent of record, if
12known, and to the mortgagee or lien holder listed on the policy
13at the last mailing address known to the company. For purposes
14of this Section, the mortgage or lien holder, insured's broker,
15if known, or the agent of record may opt to accept notification
16electronically.
17 (b) Whenever a financed insurance contract is cancelled,
18the insurer shall return whatever gross unearned premiums are
19due under the insurance contract or contracts not to exceed the
20unpaid balance due the premium finance company directly to the
21premium finance company effecting the cancellation for the
22account of the named insured. The return premium must be mailed
23to the premium finance company within 60 days. The request for
24the unearned premium by the premium finance company shall be in
25the manner of a monthly account, current accounting by

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1producer, policy number, unpaid balance and name of insured for
2each cancelled amount. In the event the insurance contract or
3contracts are subject to audit, the insurer shall retain the
4right to withhold the return of the portion of premium that can
5be identified to the contract or contracts until the audit is
6completed. Within 30 days of the completion of the audit, if a
7premium retained by the insurer after crediting the earned
8premium would result in a surplus, the insurer shall return the
9surplus directly to the premium finance company. If the audit
10should result in an additional premium due the insurer, the
11obligation for the collection of this premium shall fall upon
12the insurer and not affect any other contract or contracts
13currently being financed by the premium finance company for the
14named insured.
15 (c) Whenever a premium finance agreement contains a power
16of attorney enabling the premium finance company to cancel any
17insurance contract or contracts in the agreement, the insurer
18shall honor the date of cancellation as set forth in the
19request from the premium finance company without requiring the
20return of the insurance contract or contracts. The insurer may
21mail to the named insured an acknowledgment of the notice of
22cancellation from the premium finance company but the named
23insured shall not incur any additional premium charge for any
24extension of coverage. The insurer need not maintain proof of
25mailing of this notice.
26 (d) All statutory regulatory and contractual restrictions

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1providing that the insurance contract may not be cancelled
2unless the required notice is mailed to a governmental agency,
3mortgagee, lienholder, or other third party shall apply where
4cancellation is effected under a power of attorney under a
5premium finance agreement. The insurer shall have the right for
6a premium charge for this extension of coverage.
7(Source: P.A. 93-713, eff. 1-1-05.)
8 (215 ILCS 5/143.15) (from Ch. 73, par. 755.15)
9 Sec. 143.15. Mailing of cancellation notice. All notices of
10cancellation of insurance as defined in subsections (a), (b)
11and (c) of Section 143.13 must be mailed at least 30 days prior
12to the effective date of cancellation to the named insured;
13however, if cancellation is for nonpayment of premium, the
14notice of cancellation must be mailed at least 10 days before
15the effective date of the cancellation to and mortgagee or lien
16holder, if known, at the last mailing address known to the
17company. All notices of cancellation to the named insured shall
18include a specific explanation of the reason or reasons for
19cancellation. However, where cancellation is for nonpayment of
20premium, the notice of cancellation must be mailed at least 10
21days before the effective date of the cancellation. For
22purposes of this Section, the mortgagee or lien holder, if
23known, may opt to accept notification electronically.
24(Source: P.A. 93-713, eff. 1-1-05.)

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1 (215 ILCS 5/143.16) (from Ch. 73, par. 755.16)
2 Sec. 143.16. Mailing of cancellation notice. All notices of
3cancellation of insurance to which Section 143.11 applies,
4except for those defined in subsections (a), (b) and (c) of
5Section 143.13 must be mailed at least 30 days prior to the
6effective date of cancellation during the first 60 days of
7coverage. After the coverage has been effective for 61 days or
8more, all notices must be mailed at least 60 days prior to the
9effective date of cancellation. However, where cancellation is
10for nonpayment of premium, the notice of cancellation must be
11mailed at least 10 days before the effective date of the
12cancellation. All such notices shall include a specific
13explanation of the reason or reasons for cancellation and shall
14be mailed to the named insured and mortgagee or lien holder, if
15known, at the last mailing address known to the company.
16However, where cancellation is for nonpayment of premium, the
17notice of cancellation must be mailed at least 10 days before
18the effective date of the cancellation. For purposes of this
19Section, the mortgagee or lien holder, if known, may opt to
20accept notification electronically.
21(Source: P.A. 93-713, eff. 1-1-05.)
22 (215 ILCS 5/143.17) (from Ch. 73, par. 755.17)
23 Sec. 143.17. Notice of intention not to renew.
24 a. No company shall fail to renew any policy of insurance,
25as defined in subsections (a), (b), (c), and (h) of Section

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1143.13, to which Section 143.11 applies, unless it shall send
2by mail to the named insured at least 30 days advance notice of
3its intention not to renew. The company shall maintain proof of
4mailing of such notice on a recognized U.S. Post Office form or
5a form acceptable to the U. S. Post Office or other commercial
6mail delivery service. The nonrenewal shall not become
7effective until at least 30 days from the proof of mailing date
8of the notice to the name insured. Notification An exact and
9unaltered copy of such notice shall also be sent to the
10insured's broker, if known, or the agent of record,if known,
11and to the last known mortgagee or lien holder at the last
12mailing address known by the company. For purposes of this
13Section, the mortgagee or lien holder, insured's broker, or the
14agent of record may opt to accept notification electronically.
15However, where cancellation is for nonpayment of premium, the
16notice of cancellation must be mailed at least 10 days before
17the effective date of the cancellation.
18 b. This Section does not apply if the company has
19manifested its willingness to renew directly to the named
20insured. Such written notice shall specify the premium amount
21payable, including any premium payment plan available, and the
22name of any person or persons, if any, authorized to receive
23payment on behalf of the company. If no person is so
24authorized, the premium notice shall so state. The notice of
25nonrenewal and the proof of mailing shall be effected on the
26same date.

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1 b-5. This Section does not apply if the company manifested
2its willingness to renew directly to the named insured.
3However, no company may impose changes in deductibles or
4coverage for any policy forms applicable to an entire line of
5business enumerated in subsections (a), (b), (c), and (h) of
6Section 143.13 to which Section 143.11 applies unless the
7company mails to the named insured written notice of the change
8in deductible or coverage at least 60 days prior to the renewal
9or anniversary date. Notice An exact and unaltered copy of the
10notice shall also be sent to the insured's broker, if known, or
11the agent of record.
12 c. Should a company fail to comply with (a) or (b) of this
13Section, the policy shall terminate only on the effective date
14of any similar insurance procured by the insured with respect
15to the same subject or location designated in both policies.
16 d. Renewal of a policy does not constitute a waiver or
17estoppel with respect to grounds for cancellation which existed
18before the effective date of such renewal.
19 e. In all notices of intention not to renew any policy of
20insurance, as defined in Section 143.11 the company shall
21provide the named insured a specific explanation of the reasons
22for nonrenewal.
23 f. For purposes of this Section, the insured's broker, if
24known, or the agent of record and the mortgagee or lien holder
25may opt to accept notification electronically.
26(Source: P.A. 93-713, eff. 1-1-05.)

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1 (215 ILCS 5/143.17a) (from Ch. 73, par. 755.17a)
2 Sec. 143.17a. Notice of intention not to renew.
3 (a) A company intending to nonrenew any policy of insurance
4to which Section 143.11 applies, except for those defined in
5subsections (a), (b), (c), and (h) of Section 143.13, must mail
6written notice to the named insured at least 60 days prior to
7the expiration date of the current policy. The notice to the
8named insured shall provide a specific explanation of the
9reasons for nonrenewal. In all notices of intention not to
10renew any policy of insurance, as defined in Section 143.11,
11the company shall provide a specific explanation of the reasons
12for nonrenewal. A company may not extend the current policy
13period for purposes of providing notice of its intention not to
14renew required under this subsection (a).
15 (b) A company intending to renew any policy of insurance to
16which Section 143.11 applies, except for those defined in
17subsections (a), (b), (c), and (h) of Section 143.13, with an
18increase in premium of 30% or more or with changes in
19deductibles or coverage that materially alter the policy must
20mail or deliver to the named insured written notice of such
21increase or change in deductible or coverage at least 60 days
22prior to the renewal or anniversary date. If a company has
23failed to provide notice of intention to renew required under
24this subsection (b) at least 60 days prior to the renewal or
25anniversary date, but does so no less than 31 days prior to the

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1renewal or anniversary date, the company may extend the current
2policy at the current terms and conditions for the period of
3time needed to equal the 60 day time period required to provide
4notice of intention to renew by this subsection (b). The
5increase in premium shall be the renewal premium based on the
6known exposure as of the date of the quotation compared to the
7premium as of the last day of coverage for the current year's
8policy, annualized. The premium on the renewal policy may be
9subsequently amended to reflect any change in exposure or
10reinsurance costs not considered in the quotation.
11 (c) A company that has failed to provide notice of
12intention to nonrenew under subsection (a) of this Section and
13has failed to provide notice of intention to renew as
14prescribed under subsection (b) of this Section must renew the
15expiring policy under the same terms and conditions for an
16additional year or until the effective date of any similar
17insurance is procured by the insured, whichever is earlier. The
18company may increase the renewal premium. However, such
19increase must be less than 30% of the expiring term's premium
20and notice of such increase must be delivered to the named
21insured on or before the date of expiration of the current
22policy period.
23 (d) Under subsection (a), the company shall maintain proof
24of mailing of the notice of intention not to renew to the named
25insured on one of the following forms: a recognized U.S. Post
26Office form or a form acceptable to the U.S. Post Office or

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1other commercial mail delivery service. Under subsections (b)
2and (c), proof of mailing or proof of receipt of the notice of
3intention to renew to the named insured may be proven by a
4sworn affidavit by the company as to the usual and customary
5business practices of mailing notice pursuant to this Section
6or may be proven consistent with Illinois Supreme Court Rule
7236. For all notice requirements under this Section, an exact
8and unaltered copy of the notice to the named insured shall
9also be sent to the named insured's producer, if known, or the
10producer of record. Notification For notices of intention to
11not renew, an exact and unaltered copy of the notice to the
12named insured shall also be sent to the mortgagee or lien
13holder listed on the policy at the last mailing address known
14by the company.
15 (e) Renewal of a policy does not constitute a waiver or
16estoppel with respect to grounds for cancellation that existed
17before the effective date of such renewal.
18 (f) For purposes of this Section, the named insured's
19producer, if known, or the producer of record and the mortgagee
20or lien holder may opt to accept notification electronically.
21(Source: P.A. 95-533, eff. 6-1-08.)
22 Section 99. Effective date. This Act takes effect January
231, 2018.
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