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


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: (Engrossed) 2017-05-26 - Third Reading - Passed; 054-000-000 [HB1954 Detail]

Download: Illinois-2017-HB1954-Engrossed.html



HB1954 EngrossedLRB100 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 143.14 and 143.17 as follows:
6 (215 ILCS 5/143.14) (from Ch. 73, par. 755.14)
7 Sec. 143.14. Notice of cancellation.
8 (a) No notice of cancellation of any policy of insurance,
9to which Section 143.11 applies, shall be effective unless
10mailed by the company to the named insured and the mortgage or
11lien holder, at the last mailing address known by the company.
12The company shall maintain proof of mailing of such notice on a
13recognized U.S. Post Office form or a form acceptable to the U.
14S. Post Office or other commercial mail delivery service.
15Notification of the cancellation A copy of all such notices
16shall also be sent to the insured's broker if known, or the
17agent of record, if known, and to the mortgagee or lien holder
18listed on the policy at the last mailing address known to the
19company. For purposes of this Section, the mortgage or lien
20holder, insured's broker, if known, or the agent of record may
21opt to accept notification electronically.
22 (b) Whenever a financed insurance contract is cancelled,
23the insurer shall return whatever gross unearned premiums are

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1due under the insurance contract or contracts not to exceed the
2unpaid balance due the premium finance company directly to the
3premium finance company effecting the cancellation for the
4account of the named insured. The return premium must be mailed
5to the premium finance company within 60 days. The request for
6the unearned premium by the premium finance company shall be in
7the manner of a monthly account, current accounting by
8producer, policy number, unpaid balance and name of insured for
9each cancelled amount. In the event the insurance contract or
10contracts are subject to audit, the insurer shall retain the
11right to withhold the return of the portion of premium that can
12be identified to the contract or contracts until the audit is
13completed. Within 30 days of the completion of the audit, if a
14premium retained by the insurer after crediting the earned
15premium would result in a surplus, the insurer shall return the
16surplus directly to the premium finance company. If the audit
17should result in an additional premium due the insurer, the
18obligation for the collection of this premium shall fall upon
19the insurer and not affect any other contract or contracts
20currently being financed by the premium finance company for the
21named insured.
22 (c) Whenever a premium finance agreement contains a power
23of attorney enabling the premium finance company to cancel any
24insurance contract or contracts in the agreement, the insurer
25shall honor the date of cancellation as set forth in the
26request from the premium finance company without requiring the

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1return of the insurance contract or contracts. The insurer may
2mail to the named insured an acknowledgment of the notice of
3cancellation from the premium finance company but the named
4insured shall not incur any additional premium charge for any
5extension of coverage. The insurer need not maintain proof of
6mailing of this notice.
7 (d) All statutory regulatory and contractual restrictions
8providing that the insurance contract may not be cancelled
9unless the required notice is mailed to a governmental agency,
10mortgagee, lienholder, or other third party shall apply where
11cancellation is effected under a power of attorney under a
12premium finance agreement. The insurer shall have the right for
13a premium charge for this extension of coverage.
14(Source: P.A. 93-713, eff. 1-1-05.)
15 (215 ILCS 5/143.17) (from Ch. 73, par. 755.17)
16 Sec. 143.17. Notice of intention not to renew.
17 a. No company shall fail to renew any policy of insurance,
18as defined in subsections (a), (b), (c), and (h) of Section
19143.13, to which Section 143.11 applies, unless it shall send
20by mail to the named insured at least 30 days advance notice of
21its intention not to renew. The company shall maintain proof of
22mailing of such notice on a recognized U.S. Post Office form or
23a form acceptable to the U. S. Post Office or other commercial
24mail delivery service. Notification of the intention not to
25renew An exact and unaltered copy of such notice shall also be

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1sent to the insured's broker, if known, or the agent of record
2and to any the mortgagee or lien holder listed on the policy at
3the last mailing address known by the company. For purposes of
4this Section, the mortgagee or lien holder, insured's broker,
5or the agent of record may opt to accept notification
6electronically. However, where cancellation is for nonpayment
7of premium, the notice of cancellation must be mailed at least
810 days before the effective date of the cancellation.
9 b. This Section does not apply if the company has
10manifested its willingness to renew directly to the named
11insured. Such written notice shall specify the premium amount
12payable, including any premium payment plan available, and the
13name of any person or persons, if any, authorized to receive
14payment on behalf of the company. If no person is so
15authorized, the premium notice shall so state. The notice of
16nonrenewal and the proof of mailing shall be effected on the
17same date.
18 b-5. This Section does not apply if the company manifested
19its willingness to renew directly to the named insured.
20However, no company may impose changes in deductibles or
21coverage for any policy forms applicable to an entire line of
22business enumerated in subsections (a), (b), (c), and (h) of
23Section 143.13 to which Section 143.11 applies unless the
24company mails to the named insured written notice of the change
25in deductible or coverage at least 60 days prior to the renewal
26or anniversary date. An exact and unaltered copy of the notice

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1shall also be sent to the insured's broker, if known, or the
2agent of record.
3 c. Should a company fail to comply with (a) or (b) of this
4Section, the policy shall terminate only on the effective date
5of any similar insurance procured by the insured with respect
6to the same subject or location designated in both policies.
7 d. Renewal of a policy does not constitute a waiver or
8estoppel with respect to grounds for cancellation which existed
9before the effective date of such renewal.
10 e. In all notices of intention not to renew any policy of
11insurance, as defined in Section 143.11 the company shall
12provide a specific explanation of the reasons for nonrenewal.
13 f. For purposes of this Section, the insured's broker, if
14known, or the agent of record and the mortgagee or lien holder
15may opt to accept notification electronically.
16(Source: P.A. 93-713, eff. 1-1-05.)
17 Section 99. Effective date. This Act takes effect January
181, 2018.
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