Bill Text: IL SB2819 | 2009-2010 | 96th General Assembly | Enrolled
Bill Title: Amends the Illinois Insurance Code. Deletes language that provides that moneys in the Insurance Financial Regulation Fund may be transferred to the Professions Indirect Cost Fund, as authorized under the Department of Professional Regulation Law of the Civil Administrative Code of Illinois.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Vetoed) 2010-11-19 - Bill Dead - Amendatory Veto [SB2819 Detail]
Download: Illinois-2009-SB2819-Enrolled.html
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1 | AN ACT concerning insurance.
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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 Sections 224 and 408.3 as follows:
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6 | (215 ILCS 5/224) (from Ch. 73, par. 836) | ||||||
7 | Sec. 224. Standard provisions for life policies. | ||||||
8 | (1) After the
first day of July, 1937, no policy of life | ||||||
9 | insurance other than
industrial, group or annuities and pure | ||||||
10 | endowments with or without
return of premiums or of premiums | ||||||
11 | and interest, may be issued or
delivered in this State, unless | ||||||
12 | such policy contains in substance the
following provisions: | ||||||
13 | (a) A provision that all premiums after the first shall | ||||||
14 | be payable
in advance either at the home office of the | ||||||
15 | company or to an agent of
the company, upon delivery of a | ||||||
16 | receipt signed by one or more of the
officers who shall be | ||||||
17 | designated in the policy, when such receipt is
requested by | ||||||
18 | the policyholder. | ||||||
19 | (b) A provision that the insured is entitled to a grace | ||||||
20 | period
either of 30 days or of one month within which the | ||||||
21 | payment of any
premium after the first may be made, subject | ||||||
22 | at the option of the
company to an interest charge not in | ||||||
23 | excess of 6% per annum for the
number of days of grace |
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1 | elapsing before the payment of the premium,
during which | ||||||
2 | period of grace the policy shall continue in force, but in
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3 | case the policy becomes a claim during the grace period | ||||||
4 | before the
overdue premium is paid, or the deferred | ||||||
5 | premiums of the current policy
year, if any, are paid, the | ||||||
6 | amount of such premium or premiums with
interest thereon | ||||||
7 | may be deducted in any settlement under the policy. | ||||||
8 | (c) A provision that the policy, together with the | ||||||
9 | application
therefor, a copy of which shall be endorsed | ||||||
10 | upon or attached to the
policy and made a part thereof, | ||||||
11 | shall constitute the entire contract
between the parties | ||||||
12 | and that after it has been in force during the
lifetime of | ||||||
13 | the insured a specified time, not later than 2 years from
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14 | its date, it shall be incontestable except for nonpayment | ||||||
15 | of premiums
and except at the option of the company, with | ||||||
16 | respect to provisions
relative to benefits in the event of | ||||||
17 | total and permanent disability, and
provisions which grant | ||||||
18 | additional insurance specifically against death
by | ||||||
19 | accident and except for violations of the conditions of the | ||||||
20 | policy
relating to naval or military service in time of war | ||||||
21 | or for violation of
an express condition, if any, relating | ||||||
22 | to aviation, (except riding as a
fare-paying passenger of a | ||||||
23 | commercial air line flying on regularly
scheduled routes | ||||||
24 | between definitely established airports) in which case
the | ||||||
25 | liability of the company shall be fixed at a definitely | ||||||
26 | determined
amount not less than the full reserve for the |
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1 | policy and any dividend
additions; provided that the | ||||||
2 | application therefor need not be attached
to or made a part | ||||||
3 | of any policy containing a clause making the policy
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4 | incontestable from date of issue. | ||||||
5 | (d) A provision that if it is found at any time before | ||||||
6 | final
settlement under the policy that the age of the | ||||||
7 | insured (or the age of
the beneficiary, if considered in | ||||||
8 | determining the premium) has been
misstated, the amount | ||||||
9 | payable under the policy shall be such as the
premium would | ||||||
10 | have purchased at the correct age or ages, according to
the | ||||||
11 | company's published rate at date of issue. | ||||||
12 | (e) A provision that the policy shall participate | ||||||
13 | annually in the
surplus of the company beginning not later | ||||||
14 | than the end of the third
policy year; and any policy | ||||||
15 | containing provision for annual
participation beginning at | ||||||
16 | the end of the first policy year, may also
provide that | ||||||
17 | each dividend be paid subject to the payment of the
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18 | premiums for the next ensuing year; and the insured under | ||||||
19 | any annual
dividend policy shall have the right each year | ||||||
20 | to have the dividend
arising from such participation either | ||||||
21 | paid in cash, or applied in
reduction of premiums, or | ||||||
22 | applied to the purchase of paid-up additional
insurance, or | ||||||
23 | be left to accumulate to the credit of the policy, with
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24 | interest at such rate as may be determined from time to | ||||||
25 | time by the
company, but not less than a guaranteed minimum | ||||||
26 | rate specified in the
policy, and payable at the maturity |
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1 | of the policy, but withdrawable on
any anniversary date, | ||||||
2 | subject to such further provisions as the policy may
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3 | provide regarding the application of dividends toward the | ||||||
4 | payment of any
premiums unpaid at the end of the grace | ||||||
5 | period; and if the insured fails
to notify the company in
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6 | writing of his election within the period of grace allowed | ||||||
7 | for the
payment of premium, the policy shall further | ||||||
8 | provide which of such
options are effective. | ||||||
9 | (f) A provision that after the policy has been in force | ||||||
10 | 3 full years
the company at any time, while the policy is | ||||||
11 | in force, will advance, on
proper assignment or pledge of | ||||||
12 | the policy and on the sole security
thereof, at a specified | ||||||
13 | maximum fixed or adjusted rate of interest in
accordance
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14 | with Section 229.5, a sum equal to, or at the
option of the | ||||||
15 | insured less than the amount required by Section 229.3
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16 | under the conditions specified thereby and with | ||||||
17 | notification as required
by Section 229.5; and that the | ||||||
18 | company will deduct
from such loan value any indebtedness | ||||||
19 | not already deducted in
determining such value and any | ||||||
20 | unpaid balance of the premium for the
current policy year, | ||||||
21 | and may collect interest in advance on the loan to
the end | ||||||
22 | of the current policy year; and any policy may also provide | ||||||
23 | that
if the interest on the loan is not paid when due it | ||||||
24 | shall be added to
the existing loan and shall bear interest | ||||||
25 | at the same rate. No
condition other than as provided | ||||||
26 | herein or in Sections 229.3 and 229.5 shall be
exacted as a |
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1 | prerequisite to any such loan. This clause shall not apply
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2 | to term insurance. | ||||||
3 | (g) A provision for nonforfeiture benefits and cash | ||||||
4 | surrender
values in accordance with the requirements of | ||||||
5 | paragraph (1) of Section
229.1 or, Section 229.2. | ||||||
6 | (h) A table showing in figures the loan values and the | ||||||
7 | options
available under the policy each year, upon default | ||||||
8 | in premium payments,
during at least the first 20 years of | ||||||
9 | the policy; the policy to contain
a provision that the | ||||||
10 | company will furnish upon request an extension of
such | ||||||
11 | table beyond the years shown in the policy. | ||||||
12 | (i) A provision that in event of default in premium | ||||||
13 | payments the
value of the policy is applied to the purchase | ||||||
14 | of other insurance as
provided in this Section, and if such | ||||||
15 | insurance is in force and the
original policy is not | ||||||
16 | surrendered to the company and cancelled, the
policy may be | ||||||
17 | reinstated within 3 years from such default, upon evidence
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18 | of insurability satisfactory to the company and payment of | ||||||
19 | arrears of
premiums and the payment or reinstatement of any | ||||||
20 | other indebtedness to
the company upon the policy, with | ||||||
21 | interest on the premiums
at a rate not exceeding 6% per | ||||||
22 | annum payable annually and with interest
on the | ||||||
23 | indebtedness at a rate not exceeding the rate prescribed by | ||||||
24 | Section
229.5. | ||||||
25 | (j) A provision that when a policy is a claim by the | ||||||
26 | death of the
insured settlement shall be made upon receipt |
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1 | of due proof of death . | ||||||
2 | Such proof shall be in writing and establish (1) the | ||||||
3 | fact and date of the insured's death, (2) the claimant's | ||||||
4 | identity, and (3) the claimant's interest and the extent | ||||||
5 | thereof. Such proof includes information and documents | ||||||
6 | necessary for the insurer to determine its liability, pay | ||||||
7 | the claim in compliance with all laws and regulations, and | ||||||
8 | be discharged from liability. A claimant shall not be | ||||||
9 | required to provide documents otherwise available to the | ||||||
10 | insurer. Settlement shall be made and
not later than 2 | ||||||
11 | months after the receipt of such proof. | ||||||
12 | (k) If the policy provides for payment of its proceeds | ||||||
13 | in
installments, a table showing the amount and period of | ||||||
14 | such installments
shall be included in the policy. | ||||||
15 | (l) Interest shall accrue on the proceeds payable | ||||||
16 | because of the
death of the insured, from date of death, at | ||||||
17 | the rate of 9% on the
total
amount payable or the face | ||||||
18 | amount if payments are to be made in
installments until the | ||||||
19 | total payment or first installment is paid,
unless payment | ||||||
20 | is made within fifteen (15) days from the date of receipt
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21 | by the company of due proof of loss. This provision need | ||||||
22 | not appear in
the policy, however, the company shall notify | ||||||
23 | the beneficiary at the
time of claim of this provision. The | ||||||
24 | payment of interest shall apply to
all policies now in | ||||||
25 | force, as well as those written after the effective
date of | ||||||
26 | this amendment. |
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1 | Due proof of loss shall consist of information and | ||||||
2 | documents necessary for the insurer to determine its | ||||||
3 | liability, pay the proceeds, and be discharged from | ||||||
4 | liability. An insurer may include a provision in the policy | ||||||
5 | describing proof of loss, provided that such provision is | ||||||
6 | not inconsistent with this subsection. | ||||||
7 | (m) Title on the face and on the back of the policy | ||||||
8 | briefly
describing its form. | ||||||
9 | (n) A provision, or a notice attached to the policy, to | ||||||
10 | the effect
that during a period of ten days from the date | ||||||
11 | the policy is delivered
to the policy owner, it may be | ||||||
12 | surrendered to the insurer together with
a written request | ||||||
13 | for cancellation of the policy and in such event, the
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14 | insurer will refund any premium paid therefor, including | ||||||
15 | any policy fees
or other charges. The Director may by rule | ||||||
16 | exempt specific types of
policies from the requirements of | ||||||
17 | this subsection. | ||||||
18 | (2) In the case of the replacement of life insurance, as | ||||||
19 | defined in the
rule promulgated by the Director, the replacing | ||||||
20 | insurer shall either (1)
delay the issuance of its policy for | ||||||
21 | not less than 20 days from the date
it has transmitted a policy | ||||||
22 | summary to the existing insurer, or (2) provide
in a form | ||||||
23 | titled "Notice Regarding Replacement of Life Insurance", as | ||||||
24 | well
as in its policy, or in a separate notice delivered with | ||||||
25 | the policy, that
the insured has the right to an unconditional | ||||||
26 | refund of all premiums paid,
and that such right may be |
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1 | exercised within a period of 20 days commencing
from the date | ||||||
2 | of delivery of such policy. Where option (2) is exercised,
the | ||||||
3 | replacing insurer shall also transmit a policy summary to the | ||||||
4 | existing
insurer within 3 working days after the date the | ||||||
5 | replacement policy is issued. | ||||||
6 | (3) Any of the foregoing provisions or portions thereof not
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7 | applicable to single premium or nonparticipating or term | ||||||
8 | policies shall
to that extent not be incorporated therein. This | ||||||
9 | Section shall not
apply to policies of reinsurance nor to | ||||||
10 | policies issued or granted
pursuant to the nonforfeiture | ||||||
11 | provisions prescribed in subparagraph (g)
of paragraph (1) of | ||||||
12 | this Section. | ||||||
13 | (Source: P.A. 92-139, eff. 7-24-01.)
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14 | (215 ILCS 5/408.3) (from Ch. 73, par. 1020.3)
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15 | Sec. 408.3. Insurance Financial Regulation Fund; uses. The | ||||||
16 | monies
deposited into the Insurance Financial
Regulation Fund | ||||||
17 | shall be used only for (i) payment of the expenses of the
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18 | Department, including related administrative expenses, | ||||||
19 | incurred in
analyzing, investigating and examining the | ||||||
20 | financial condition or control
of insurance companies and other | ||||||
21 | entities licensed or seeking to be
licensed by the Department, | ||||||
22 | including the collection, analysis and
distribution of | ||||||
23 | information on insurance premiums, other income, costs and
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24 | expenses, and (ii) to pay internal costs and expenses of the | ||||||
25 | Interstate
Insurance Receivership Commission allocated to this |
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1 | State and authorized and
admitted companies doing an insurance | ||||||
2 | business in this State under Article X of
the Interstate | ||||||
3 | Receivership Compact. All distributions and payments from the
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4 | Insurance Financial Regulation Fund shall be subject to | ||||||
5 | appropriation as
otherwise provided by law for
payment of such | ||||||
6 | expenses.
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7 | Sums appropriated under clause (ii) of the preceding | ||||||
8 | paragraph shall be
deemed to satisfy, pro tanto, the | ||||||
9 | obligations of insurers doing business in
this
State under | ||||||
10 | Article X of the Interstate Insurance Receivership Compact.
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11 | Nothing in this Code shall prohibit the General Assembly | ||||||
12 | from
appropriating funds from the General Revenue Fund to the | ||||||
13 | Department for the
purpose of administering this Code.
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14 | No fees collected pursuant to Section 408 of this Code | ||||||
15 | shall be used
for the regulation of pension funds or activities | ||||||
16 | by the Department in the
performance of its duties under | ||||||
17 | Article 22 of the Illinois Pension Code.
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18 | If at the end of a fiscal year the balance in the Insurance | ||||||
19 | Financial
Regulation Fund which remains unexpended or | ||||||
20 | unobligated exceeds the amount
of funds that the Director may | ||||||
21 | certify is needed for the purposes
enumerated in this Section, | ||||||
22 | then the General Assembly may appropriate that
excess amount | ||||||
23 | for purposes other than those enumerated in this Section.
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24 | Moneys in the Insurance Financial Regulation Fund may be | ||||||
25 | transferred to the Professions Indirect Cost Fund, as | ||||||
26 | authorized under Section 2105-300 of the Department of |
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1 | Professional Regulation Law of the Civil Administrative Code of | ||||||
2 | Illinois.
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3 | (Source: P.A. 94-91, eff. 7-1-05.)
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