Bill Text: IL HB3072 | 2017-2018 | 100th General Assembly | Enrolled
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Amends the Illinois Insurance Code in a provision concerning vehicle protection products. Amends the definition of "vehicle protection product" by including protective chemicals and substances and excluding fuel additives, oil additives, or other chemical products applied to the engine, transmission, or fuel system of a motor vehicle. Provides that no vehicle protection products sold or offered for sale in the State shall be subject to the provisions of the Code or the Service Contract Act unless offered as a service contract under the terms of the Service Contract Act. Amends the Service Contract Act. In provisions concerning the definition of "service contract", makes changes concerning service contract coverage related to protective chemicals, substances, devices, or systems. Establishes requirements for refunds of vehicle protection products. Makes other changes.
Spectrum: Bipartisan Bill
Status: (Passed) 2017-08-22 - Public Act . . . . . . . . . 100-0272 [HB3072 Detail]
Download: Illinois-2017-HB3072-Enrolled.html
Bill Title: Amends the Illinois Insurance Code in a provision concerning vehicle protection products. Amends the definition of "vehicle protection product" by including protective chemicals and substances and excluding fuel additives, oil additives, or other chemical products applied to the engine, transmission, or fuel system of a motor vehicle. Provides that no vehicle protection products sold or offered for sale in the State shall be subject to the provisions of the Code or the Service Contract Act unless offered as a service contract under the terms of the Service Contract Act. Amends the Service Contract Act. In provisions concerning the definition of "service contract", makes changes concerning service contract coverage related to protective chemicals, substances, devices, or systems. Establishes requirements for refunds of vehicle protection products. Makes other changes.
Spectrum: Bipartisan Bill
Status: (Passed) 2017-08-22 - Public Act . . . . . . . . . 100-0272 [HB3072 Detail]
Download: Illinois-2017-HB3072-Enrolled.html
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1 | AN ACT concerning regulation.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 5. The Illinois Insurance Code is amended by | ||||||
5 | changing Section 155.39 as follows:
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6 | (215 ILCS 5/155.39)
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7 | Sec. 155.39. Vehicle protection products.
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8 | (a) As used in this Section:
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9 | "Administrator" means a third party other than the | ||||||
10 | warrantor who is
designated by the warrantor to be responsible | ||||||
11 | for the administration of
vehicle protection product | ||||||
12 | warranties.
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13 | "Incidental costs" means expenses specified in the vehicle | ||||||
14 | protection
product warranty incurred by the warranty holder | ||||||
15 | related to the failure of the
vehicle protection product to | ||||||
16 | perform as provided in the warranty.
Incidental costs may | ||||||
17 | include, without limitation, insurance policy
deductibles, | ||||||
18 | rental vehicle charges, the difference between the actual value
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19 | of the stolen vehicle at the time of theft and the cost of a | ||||||
20 | replacement
vehicle, sales taxes, registration fees, | ||||||
21 | transaction fees, and mechanical
inspection fees.
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22 | "Vehicle protection product" means a protective chemical, | ||||||
23 | substance, vehicle protection device,
system, or service that |
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1 | is (i) installed on or applied to a vehicle , and (ii) is
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2 | designed to prevent loss or damage to a vehicle from a specific | ||||||
3 | cause , (iii)
includes a written warranty by a warrantor that | ||||||
4 | provides if the vehicle
protection product fails to prevent | ||||||
5 | loss or damage to a vehicle from a
specific cause, that the | ||||||
6 | warranty holder shall be paid specified incidental
costs by the | ||||||
7 | warrantor as a result of the failure of the vehicle protection
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8 | product to perform pursuant to the terms of the warranty, and | ||||||
9 | (iv) the
warrantor's liability is covered by a warranty | ||||||
10 | reimbursement insurance
policy . The term "vehicle protection | ||||||
11 | product"
shall include, without limitation, protective | ||||||
12 | chemicals, alarm systems, body part marking products,
steering | ||||||
13 | locks, window etch products, pedal and ignition locks, fuel and
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14 | ignition kill switches, and electronic, radio, and satellite | ||||||
15 | tracking devices. "Vehicle protection product" does not | ||||||
16 | include fuel additives, oil additives, or other chemical | ||||||
17 | products applied to the engine, transmission, or fuel system of | ||||||
18 | a motor vehicle.
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19 | "Vehicle protection product warrantor" or "warrantor"
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20 | means a person who is contractually obligated to the
warranty | ||||||
21 | holder under the terms of a the vehicle protection product | ||||||
22 | warranty .
"Warrantor" Warrantor does not include an authorized | ||||||
23 | insurer.
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24 | "Vehicle protection product warranty" means a written | ||||||
25 | warranty by a vehicle protection product warrantor that (i) is | ||||||
26 | included, for no separate and identifiable consideration, with |
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1 | the purchase of a vehicle protection product sold or offered | ||||||
2 | for sale in this State and (ii) provides if the vehicle | ||||||
3 | protection product fails to prevent loss or damage to a vehicle | ||||||
4 | from a specific cause, that the warranty holder shall be paid | ||||||
5 | specified incidental costs by the warrantor as a result of the | ||||||
6 | failure of the vehicle protection product to perform pursuant | ||||||
7 | to the terms of the warranty. | ||||||
8 | "Warranty reimbursement insurance policy" means a policy | ||||||
9 | of
insurance
issued to the vehicle protection product warrantor
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10 | to pay on behalf of the warrantor
all covered contractual | ||||||
11 | obligations incurred by the warrantor under the terms
and | ||||||
12 | conditions of the insured vehicle protection product | ||||||
13 | warranties sold by
the warrantor. The warranty reimbursement | ||||||
14 | insurance policy shall be issued by
an insurer authorized to do | ||||||
15 | business in this State that has filed its policy
form with the | ||||||
16 | Department.
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17 | (a-5) A vehicle protection product warrantor's liabilities | ||||||
18 | under a vehicle protection product warranty shall be covered by | ||||||
19 | a warranty reimbursement insurance policy. | ||||||
20 | (b) No vehicle protection product warranty sold or offered | ||||||
21 | for sale in this State
shall be subject to the provisions of | ||||||
22 | this Code. Vehicle protection product warranties are express | ||||||
23 | warranties and not insurance. | ||||||
24 | Vehicle protection product warrantors and related vehicle | ||||||
25 | protection
product sellers and warranty administrators | ||||||
26 | complying with this Section are
not required to comply with and |
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1 | are not subject to any other provision of this
Code. The | ||||||
2 | vehicle protection products' written warranties are express
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3 | warranties and not insurance.
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4 | (c) This Section applies to all vehicle protection products | ||||||
5 | sold or
offered for sale prior to, on, or after the effective | ||||||
6 | date of this amendatory
Act
of the 93rd General Assembly. The | ||||||
7 | enactment of this Section does not
imply that vehicle | ||||||
8 | protection products should have been subject to regulation
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9 | under this Code prior to the enactment of this Section. The | ||||||
10 | changes made to this Section by this amendatory Act of the | ||||||
11 | 100th General Assembly do not imply that vehicle protection | ||||||
12 | products and vehicle protection product warranties should have | ||||||
13 | been subject to regulation under this Code prior to this | ||||||
14 | amendatory Act of the 100th General Assembly.
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15 | (Source: P.A. 95-331, eff. 8-21-07.)
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16 | Section 10. The Service Contract Act is amended by changing | ||||||
17 | Sections 5 and 35 as follows:
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18 | (215 ILCS 152/5)
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19 | Sec. 5. Definitions.
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20 | "Department" means the Department of Insurance.
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21 | "Director" means the Director of Insurance.
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22 | "Road hazard" means a hazard that is encountered while | ||||||
23 | driving a motor vehicle, including, but not limited to, | ||||||
24 | potholes, rocks, wood debris, metal parts, glass, plastic, |
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1 | curbs, and composite scraps. | ||||||
2 | "Service contract" means a contract or agreement whereby a | ||||||
3 | service
contract provider
undertakes for a specified period of | ||||||
4 | time, for separate and identifiable
consideration, to
perform | ||||||
5 | the repair, replacement, or maintenance, or indemnification | ||||||
6 | for such
services, of
any automobile, system, or consumer | ||||||
7 | product in connection with the operational
or
structural | ||||||
8 | failure due to a defect in materials or workmanship, or normal | ||||||
9 | wear
and tear,
with or without additional provision for | ||||||
10 | incidental payment or indemnity under
limited
circumstances, | ||||||
11 | for related expenses, including, but not limited to, towing,
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12 | rental, and
emergency road service. Service contracts may | ||||||
13 | provide for: | ||||||
14 | (1) the repair,
replacement, or
maintenance of such | ||||||
15 | property for damage resulting from power surges and
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16 | accidental
damage from handling; | ||||||
17 | (2) the repair or replacement of tires or wheels, or | ||||||
18 | both, on a motor vehicle damaged as the result of coming | ||||||
19 | into contact with road hazards; | ||||||
20 | (3) the removal of dents, dings, or creases on a motor | ||||||
21 | vehicle that can be repaired using the process of paintless | ||||||
22 | dent removal without affecting the existing paint finish | ||||||
23 | and without replacing vehicle body panels, sanding, | ||||||
24 | bonding, or painting; | ||||||
25 | (4) the repair of chips or cracks in or the replacement | ||||||
26 | of motor vehicle windshields as a result of damage caused |
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1 | by road hazards; | ||||||
2 | (5) the replacement of a motor vehicle key or key-fob | ||||||
3 | in the event that the key or key-fob becomes inoperable or | ||||||
4 | is lost or stolen; | ||||||
5 | (6) the payment of specified incidental costs in the | ||||||
6 | event that a vehicle protection product a protective | ||||||
7 | chemical, substance, device, or system that (A) is | ||||||
8 | installed on or applied to a motor vehicle, (B) is designed | ||||||
9 | to prevent loss or damage to a motor vehicle from a | ||||||
10 | specific cause, and (C) includes a written product warranty | ||||||
11 | providing for payment to or on behalf of the warranty | ||||||
12 | holder's incidental costs in the event that the product | ||||||
13 | fails to prevent loss or damage as specified; the | ||||||
14 | reimbursement of incidental costs under the warranty must | ||||||
15 | be tied to the purchase of a physical product that is | ||||||
16 | formulated or designed to make the specified loss or damage | ||||||
17 | less likely to occur; or | ||||||
18 | (7) other services that may be approved by the | ||||||
19 | Director, if not inconsistent with other provisions of this | ||||||
20 | Act. | ||||||
21 | Service contracts shall not include: | ||||||
22 | (i) contracts of limited
duration
that provide for | ||||||
23 | scheduled maintenance only;
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24 | (ii) fuel additives, oil additives, or other chemical | ||||||
25 | products applied to the engine, transmission, or fuel | ||||||
26 | system of a motor vehicle; |
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1 | (iii) coverage for the repair or replacement, or both, | ||||||
2 | of damage to the interior surfaces of a vehicle, or for | ||||||
3 | repair or replacement, or both, of damage to the exterior | ||||||
4 | paint or finish of a vehicle; however, such coverage may be | ||||||
5 | offered in connection with the sale of a vehicle protection | ||||||
6 | product; and | ||||||
7 | (iv) a vehicle product protection warranty included, | ||||||
8 | for no separate and identifiable consideration, with the | ||||||
9 | purchase of a vehicle protection product protective | ||||||
10 | chemical, device, or system described in item (6) of this | ||||||
11 | definition . | ||||||
12 | "Service contract holder" means the person who purchases a | ||||||
13 | service
contract or a
permitted transferee.
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14 | "Service contract provider" means a person who is | ||||||
15 | contractually
obligated to the
service contract holder under | ||||||
16 | the terms of the service contract. A service
contract
provider | ||||||
17 | does not include an insurer.
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18 | "Service contract reimbursement insurance policy" means a | ||||||
19 | policy of
insurance that
is issued to the service contract | ||||||
20 | provider to provide reimbursement to the
service
contract | ||||||
21 | provider or to pay on behalf of the service contract provider | ||||||
22 | all
covered
contractual obligations incurred by the service | ||||||
23 | contract provider under the
terms and
conditions of the insured | ||||||
24 | service contracts issued or sold by the service
contract
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25 | provider.
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26 | "System" means the heating, cooling, plumbing, electrical, |
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1 | ventilation,
or any other similar
system of a home.
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2 | "Vehicle protection product" has the same meaning as that | ||||||
3 | term is defined in subsection (a) of Section 155.39 of the | ||||||
4 | Illinois Insurance Code. | ||||||
5 | "Vehicle protection product warranty" has the same meaning | ||||||
6 | as that term is defined in subsection (a) of Section 155.39 of | ||||||
7 | the Illinois Insurance Code. | ||||||
8 | (Source: P.A. 98-222, eff. 1-1-14.)
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9 | (215 ILCS 152/35)
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10 | Sec. 35. Cancellation and refunds. | ||||||
11 | (a) No service contract may be issued, sold, or offered for | ||||||
12 | sale in this State
unless the service
contract clearly states | ||||||
13 | that the service contract holder is allowed to cancel
the | ||||||
14 | service
contract. If the service contract holder elects | ||||||
15 | cancellation, the service
contract provider may
retain a | ||||||
16 | cancellation fee not to exceed the lesser of 10% of the service
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17 | contract price or
$50. The service contract cancellation | ||||||
18 | provision must provide that the service
contract may be | ||||||
19 | cancelled:
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20 | (1) within 30 days after its purchase if no service has | ||||||
21 | been provided
and that a full
refund of the service contract | ||||||
22 | consideration, less any cancellation fee stated
in the service
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23 | contract will be paid to the service contract holder; or
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24 | (2) at any other time and a pro rata refund of the service | ||||||
25 | contract
consideration for
the unexpired term of the service |
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1 | contract, based on the number of elapsed
months, miles,
hours, | ||||||
2 | or such other reasonably applicable measure which is clearly | ||||||
3 | disclosed
in
the service
contract, less the value of any | ||||||
4 | service received, and any cancellation fee
stated in the
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5 | service contract will be paid to the service contract holder.
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6 | (b) In the event of the cancellation of a service contract | ||||||
7 | that includes the coverage described in paragraph (6) of the | ||||||
8 | definition of "service contract" in Section 5 of this Act, the | ||||||
9 | service contract provider is not required to, but may, refund | ||||||
10 | the purchase price of the vehicle protection product. The | ||||||
11 | coverage described in paragraph (6) of the definition of | ||||||
12 | "service contract" in Section 5 of this Act may not be offered | ||||||
13 | as or within a service contract unless the service contract | ||||||
14 | clearly states whether the service contract holder is entitled | ||||||
15 | to a refund of the purchase price of the vehicle protection | ||||||
16 | product and, if applicable, the terms of such refund. | ||||||
17 | (Source: P.A. 90-711, eff. 8-7-98.)
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