2023 Illinois Compiled Statutes › Chapter 215 - INSURANCE › 215 ILCS 5/ - Illinois Insurance Code. › Article XXIII - Fire And Marine Insurance

(215 ILCS 5/Art. XXIII heading)
ARTICLE XXIII.  
		FIRE AND MARINE INSURANCE
(215 ILCS 5/393) (from Ch. 73, par. 1005)
Sec. 393. 
		Scope of
article.
This article shall apply to all companies authorized to transact the
kind or kinds of business enumerated in Class 3 of Section 4.
(Source: Laws 1937, p. 696.)
(215 ILCS 5/393.1) (from Ch. 73, par. 1005.1)
Sec. 393.1. 
		Unearned premium reserve. 
		(1) Every insurance company authorized in this State to transact any of
the kinds of business described in Class 3 of Section 4 shall maintain an
unearned premium reserve on all policies in force which reserve shall be
charged as a liability. The portions of the gross premiums in force, after
deducting bona fide reinsurance in authorized companies, which shall be
held as a premium reserve, shall never be less in the aggregate than the
company's actual liability to all its insureds for the return of gross
unearned premiums. In the calculation of the company's actual liability to
all its insureds, the reserve shall be computed pursuant to the method
commonly referred to as the monthly pro rata method; provided, however,
that the Director may require that such reserve shall be equal to the
unearned portions of the gross premiums in force, after deducting
reinsurance in authorized companies, in which case the reserve shall be
computed on each respective risk from the date of the issuance of the
policy.
(2) Before any reinsurance may qualify as a deduction from a company's
unearned premium reserve, the accepting company shall assume full liability
for the amount of coverage which the ceding company guaranteed for the
portions of premiums which it ceded to the accepting company.
(Source: Laws 1967, p. 1745.)
(215 ILCS 5/393a) (from Ch. 73, par. 1005a)
Sec. 393a. 
		
		Group professional liability insurance defined.)  Group
professional liability insurance is declared to be that form of liability
insurance covering not less than 10 employees of any public school
district, nonprofit organization or other organization operating an
elementary or secondary school, including, but not limited to, nursery and
kindergarten programs, or of any public, nonprofit or other institution of
higher education for all sums for which such employees may become liable
for rendering, failing to render, or as a consequence of rendering or
failing to render professional services in such employment.
However, such coverage shall not include intentional acts or omissions
in violation of any law or court order.
Such coverage shall
be written under a master policy issued to
any governmental corporation, unit, agency or department thereof, or to
any corporation, copartnership,
individual employer, or to any association upon application of an executive
officer or trustee of such
association having a constitution or by-laws and formed in good faith for
purposes other than that of
obtaining insurance, where officers, members, employees of members or classes
or departments thereof,
may be insured for their individual benefit.
(Source: P.A. 79-685.)
(215 ILCS 5/393b) (from Ch. 73, par. 1005b)
Sec. 393b. 
		
		Group
professional liability insurance authorized.)
Any insurance company authorized to write group professional liability insurance in this
State shall have power to issue group professional liability policies.
No policy of group
professional liability insurance may be issued or delivered in this State unless
a copy of the form thereof shall have been filed with the Director of
Insurance and approved by it
and it contains in substance
the provisions required by Sections 393c through 393f of this
Article.
(Source: P.A. 79-685.)
(215 ILCS 5/393c) (from Ch. 73, par. 1005c)
Sec. 393c. 
		
		"Entire contract" specified.)
Each group professional liability insurance policy shall provide that the policy, the
application of the employer, or executive officer or trustee of any
association, and the individual applications, if any, of the employees,
members or employees of members insured shall constitute the entire
contract between the parties, and that all statements made by the employer,
or the executive officer or trustee, or by the individual employees,
members or employees of members shall, in the absence of fraud, be deemed
representations and not warranties, and that no such statement shall be
used in defense to a claim under the policy, unless it is contained in a
written application.
(Source: P.A. 79-685.)
(215 ILCS 5/393d) (from Ch. 73, par. 1005d)
Sec. 393d. 
		
		Certificates required.)
Each group professional liability insurance policy shall provide that the insurer will
issue to the employer, or to the executive officer or trustee of the
association, for delivery to the employee, member or employee of a member,
who is insured under such policy, an individual certificate setting forth a
statement as to the insurance protection to which he is entitled and to
whom payable.
(Source: P.A. 79-685.)
(215 ILCS 5/393e) (from Ch. 73, par. 1005e)
Sec. 393e. 
		
		New
members of group.)
Each group professional liability insurance policy shall provide that to the group or
class thereof originally insured shall be added from time to time all new
employees of the employer, members of the association or employees of
members eligible to and applying for insurance in such group or class but
participation in the group plan shall not be required as a condition of
employment, nor shall any member not participating in the plan be coerced
or discriminated against.
(Source: P.A. 79-685.)
(215 ILCS 5/393f) (from Ch. 73, par. 1005f)
Sec. 393f. 
		
		Conversion rights.)
Each group professional liability insurance policy shall provide that any member of the
group shall have the right to convert his group policy to an individual
standard policy of insurance in the same company as offered by the insurer
to the non-group insureds upon termination of his connection with the group
extending to him the same limits of coverage.
(Source: P.A. 79-685.)
(215 ILCS 5/393g) (from Ch. 73, par. 1005g)
Sec. 393g. 
		
		Cancellation restricted.)
An insurer may not cancel the insurance of an individual member of a
group covered by a group professional liability insurance policy except for the
non-payment of premium by such member or unless the insurance for the
entire group is cancelled.  In such cases notice of cancellation as provided
in like non-group policies shall be given to each member.
(Source: P.A. 79-685.)
(215 ILCS 5/395) (from Ch. 73, par. 1007)
Sec. 395. 
		Reserves for marine and inland marine. 
		In the case of policies
of marine or inland navigation or transportation insurance the unearned
premium reserve, to be charged as a liability, shall be fifty per centum of
the amount of the premiums upon risks covering not more than one passage
not terminated and shall be upon a pro rata basis for all other policies.
(Source: Laws 1937, p. 696.)
(215 ILCS 5/396) (from Ch. 73, par. 1008)
Sec. 396. 
		
		Loss and
loss expense reserves.
(1) Every company authorized to transact in this State any of the kinds
of business described in Class 3 of Section 4 shall, at all times, maintain
reserves in an amount estimated in the aggregate to provide for the payment
of all losses and claims incurred, whether reported or unreported, which
are unpaid and for which such company may be liable, and to provide for the
expenses of adjustment or settlement of such losses and claims. For the
purpose of such reserves, the company shall keep a complete and itemized
record showing all losses and claims on which it has received notice,
including all notices received by it of the occurrence of any event which
may result in a loss. Such record shall be opened in chronological receipt
order, with each notice of loss or claim identified by appropriate number
or coding.
(2) Whenever the loss and loss expense experience of such company shows
the reserves, calculated in accordance with the foregoing provisions, to be
inadequate, the Director may require such company to maintain additional
reserves.
(Source: Laws 1967, p. 1819.)
(215 ILCS 5/397) (from Ch. 73, par. 1009)
Sec. 397. 
		
		Standard fire policy.) The Director of Insurance shall
promulgate such rules and regulations as may be necessary to effect
uniformity in all basic policies of fire and lightning insurance issued
in this State, to the end that there be concurrency of contract where
two or more companies insure the same risk.
(Source: P.A. 80-1441.)
(215 ILCS 5/397.05) (from Ch. 73, par. 1009.05)
Sec. 397.05. 
		Standard fire policy; appraisal. 
		When an insured
requests an appraisal under a policy of fire and extended coverage
insurance, as defined in subsection (b) of Section 143.13, and the
insured's full amount of appraised loss is upheld by agreement of the
appraisers or the umpire, then the insured's appraisal fee and umpire's
appraisal fee shall be paid by the insurer.
(Source: P.A. 87-681.)
(215 ILCS 5/397.1) (from Ch. 73, par. 1009.1)
Sec. 397.1. 
		
		Certificate regarding payment of taxes and expenses on
property sustaining loss.
(a) It shall be unlawful for any company transacting insurance business
in this State to pay a claim of an insured property owner for loss by fire
or explosion to a structure located in this State where the amount
recoverable for loss to the structure under a policy exceeds $25,000, until
the insurance company receives the certificate required by this Section. A
notice, to the State's Attorney of the county where the structure is
located, of the insurers intent to pay a claim shall include the name of
the property owner, the address of the property, its legal description, the
permanent real estate index number that identifies the property for
purposes of taxation, and the amount of the claim to be paid.
(b) For purposes of this Section, the following definitions are
applicable:
(1) "Insured property owner" is a person named as an     insured who is the owner, title-holder or mortgagee of a structure, the holder of an interest secured by the structure, the beneficiary of a land trust owning or holding title to a structure, the lessee of a structure with a contractual obligation for property taxes, or the assignee of any such person.
(2) "Amount recoverable" is the dollar amount payable     under all insurance policies for loss to the structure.
(3) "Proceeds" is the dollar amount payable for loss     to the structure under an insurance policy.
(4) "Delinquent property taxes" are those property     taxes on the property which are delinquent pursuant to Section 21-15, 21-20, or 21-25 of the Property Tax Code, including those delinquent taxes on property forfeited under Section 21-225 of the Property Tax Code, as of the date of loss.
In determining delinquent property taxes under this     Section, the amount of property taxes for which a certificate of error has been issued pursuant to Section 14-10 or 14-20 of the Property Tax Code shall not be considered delinquent.
(5) "Incurred demolition expense" is:  a. the cost of     demolishing or removing a structure from property by or at the expense of a unit of local government if the demolition or removal occurs on a date preceding the later of (i) the acceptance by the insurance company of a Proof of Loss for an agreed amount of proceeds, or  (ii) the date of receipt by the unit of local government of a request for execution of the certificate required by this Section; or b. the amount estimated by the unit of local government when it receives a request to execute the certificate required by this Section; or c. the amount ordered to be withheld by a court within 28 days after a unit of local government receives a request for execution of the certificate required by this Section.  The unit of local government must be a party to such proceeding.
Incurred demolition expense shall be determined under     subparagraph a. whenever possible.  In determining the incurred demolition expense under subparagraph b., the unit of local government shall make its estimate and execute the certificate within 30 days after receiving a request for execution.  If the unit of local government shall fail within 30 days to execute the certificate, as required by subparagraph a., the company can proceed to make payment of the claim as if the certificate had been received showing no unpaid demolition costs. The request for execution may be served personally, and may be proven by a written receipt signed by the local official as of the date the request was made or by service on the local official by certified mail, return receipt requested. A court order under subparagraph c. shall supersede an estimate under subparagraph b.
(6) "Property" is the lot on which the structure is     located.
(7) "Structure" is a building.
(8) "Claim" is the demand by an insured for payment     under an insurance policy or policies.
(9) "Proof of Loss" is the document on which an     insured formally presents his claim to an insurance company.
(10) "Certificate" is the executed form prescribed by     the Director of Insurance.
(11) "Executed" means signed by the appropriate     official or unit of government.
(c) For any claim to which this Section is applicable, an insured
property owner must submit one of the following to the insurance
company:
(1) a certificate that with respect to the property     there are:
a. no delinquent property taxes, and
b. no unpaid incurred demolition expenses;
(2) a certificate setting forth with respect to the     property:
a. the amount of unpaid delinquent property taxes,
b. the amount of unpaid incurred demolition         expense, and
c. a direction by an insured property owner to         the insurance company to pay the unpaid delinquent property taxes and unpaid incurred demolition expenses.
(d) (1) Except as provided in paragraph (2) of this     subsection (d), if a certificate is submitted pursuant to paragraph (2) of subsection (c) of this Section, the insurance company shall pay the unpaid delinquent property taxes and unpaid incurred demolition expense from the proceeds payable by issuing  a draft or check payable to the appropriate tax collector or unit of local government.
Any proceeds remaining shall be paid to the insured     property owner.
(2) In the event incurred demolition expense is     determined by estimation under paragraph (5) of subsection (b) of this Section in cities of over 2,000,000, the insurance company shall hold the amount estimated until an amended certificate executed by the appropriate local government official is submitted stating (i) that no demolition expense will be incurred or (ii) the actual unpaid incurred demolition expense. The insurance company shall then issue a draft or check payable to the unit of local government for the actual unpaid incurred demolition expense. Any proceeds remaining shall be paid to the insured property owner.
In determining the amount of proceeds remaining under     this paragraph, the insured property owner shall receive interest on the amount withheld from the date the certificate is executed as provided in Section 2 of the Interest Act.
(e) If, under this Section, the proceeds payable are less than the
amount of the unpaid delinquent property taxes and unpaid incurred
demolition expense, unpaid property taxes shall be paid first.
(f) If incurred demolition expense withheld pursuant to
subparagraphs b. or c. of paragraph 5 of subsection (b) of this Section
exceeds the ultimate cost of demolition, the excess shall first be
applied to unpaid delinquent property taxes.  Any amount of proceeds
remaining shall be paid to the insured property owner.
(g) Nothing in this Section shall be construed as:
(1) making an insurance company liable for any amount     in excess of the proceeds payable under its insurance policy unless the insurance company shall have made payment to the named insured without satisfying the requirements of this Section;
(2) making a unit of local government or tax     collector an insured under an insurance policy; or
(3) creating an obligation for an insurance company     to pay unpaid delinquent property taxes or unpaid incurred demolition expense other than as provided in subsection (d) of this Section.
(h) An insurance company making a payment of proceeds under this
Section for unpaid delinquent taxes or unpaid incurred demolition
expense shall be entitled to the full benefit of such payment, including
subrogation rights and other rights of assignment.
(i) Unpaid property taxes and unpaid incurred demolition expense for
a claim for loss to a structure occurring after the issuance of a tax
deed pursuant to Section 22-40 of the Property Tax Code shall not include any
unpaid property tax or unpaid demolition expense arising before the issuance of
the tax deed.
(j) The county collector shall be designated as the local
official who shall execute the certificate required by this Section regarding
delinquent property taxes.  The village clerk or city clerk in incorporated
areas and the official in charge of the county building department in
unincorporated areas shall be designated as
the local official who shall execute the certificate required by this Section
regarding demolition expenses.
(k) A fee not to exceed $5 may be charged by a unit of local
government for execution of the certificate required by this Section.
(l) This Section shall retroactively apply to any policy issued or renewed
on or after January 1, 1978 for which a claim subject to this Section remains
unpaid as of the effective date of this amendatory Act of 1978.
(Source: P.A. 87-507; 88-667, eff. 9-16-94; 88-670, eff. 12-2-94.)
(215 ILCS 5/399) (from Ch. 73, par. 1011)
Sec. 399. 
		Combination policies. 
		Two or more companies authorized to transact business in this State
may issue a combination or group form of policy, using a distinctive
title therefor, which title shall appear at the head of such policy
followed by the titles of the companies obligated thereupon, and which
policy shall be executed by the officers of each such companies;
provided, that before such companies shall issue such combination or
group policy, the title of such proposed policy and the terms of the
additional provisions thereof, hereby authorized, shall have been filed
with the Director, which terms, in addition to the provisions of the
standard policy and not inconsistent therewith, shall provide
substantially under a separate title therein, as follows:
(a) that each company executing such policy shall be liable for the
full amount of any loss or damage, according to the terms of the policy,
or a specific percentage thereof;
(b) that service of process, or of any notice or proof of loss
required by the said policy, upon any of the companies executing the
same shall be deemed to be service upon all; and provided further that
the unearned premium liability on each policy so issued shall be
maintained by each of such companies on the basis of the liability of
each to the insured thereunder.
(Source: Laws 1937, p. 696.)
(215 ILCS 5/400) (from Ch. 73, par. 1012)
Sec. 400. 
		Supplemental or comprehensive contracts. 
		Forms for supplemental contracts or comprehensive contracts whereby
the property described may be insured against one or more risks
specified in Class 2 or Class 3 of Section 4, in addition to the risk of
direct loss or damage by fire, and forms of fire policies on farm
property may be approved by the Director and their use in connection
with or in lieu of a standard fire insurance policy may be authorized by
the Director.
(Source: Laws 1937, p. 696.)
(215 ILCS 5/400.1) (from Ch. 73, par. 1012.1)
Sec. 400.1. Group or master policy-certificate inland marine
insurance authorized.
(1)  Any insurance company authorized to write inland
marine insurance in this State may issue group or master policy-certificate inland
marine policies which may include coverages incidental or supplemental to the
inland marine policy, if the insurer is authorized to write the class of coverage
which is incidental or supplemental.  No policy, certificate of insurance, memorandum
of insurance, application for insurance, endorsement or rider, may be issued
for delivery
in this State unless a copy of the form thereof shall have been filed with the Director
of Insurance and approved, or unless exempted from filing by such
rules and regulations as may be promulgated by the Director.
(2) The Director shall within 90 days after the filing of such forms disapprove
any such
form if the benefits provided therein are not reasonable in relation to
the premium charged, or
if it contains provisions that are unjust, unfair, inequitable, misleading,
deceptive, or
encourage misrepresentation of the coverage, or are contrary to any provision
of this 
Code, or any rule or regulation promulgated thereunder.  The Director may,
upon written notice
within such waiting period to the company which made the filing, extend
such waiting period for
an additional 30 days.  A filing shall be deemed to meet the requirements
of this Section unless
disapproved by the Director within the waiting period or the extension thereof.
(3) If the Director notifies the insurer that the form is disapproved,
the insurer shall not
issue or use such form.  In such notice the Director shall specify the reason
for his disapproval.
The company may request a hearing on such disapproval within 30 days after
receipt of such
disapproval.  The Director shall grant a hearing subsequent to the receipt
of such request.
(4) The Director may, at any time after a hearing held not less than 20
days after written
notice to the insurer, withdraw his approval of any such form on any ground set forth in
subsection (2) above.  The written notice of such hearing shall state the
reason for the proposed
withdrawal.
(5) It is not lawful for the insurer to issue such forms or use them after
the effective
date of such withdrawal.
(6) The Director may at any time require the filing of the schedules of premium rates
used or to be used in connection with the specific policy filings required.
(7) The Director shall promulgate such rules and regulations as he may
deem necessary to
provide for the filing and review of premium rates schedules, and for the
disapproval of those
he may deem to be inadequate, excessive or unfairly discriminatory.
(8) Any order or final determination of the Director under the provisions
of this Section
shall be subject to judicial review.
(Source: P.A. 100-863, eff. 8-14-18.)