(215 ILCS 5/Art. IX.5 heading)
(215 ILCS 5/155.51) (from Ch. 73, par. 767.51)
Sec. 155.51. Purpose and scope.) (a) The purpose of this Article is to promote the public welfare by regulating credit life insurance and credit accident and health insurance. Nothing in this Article is intended to prohibit or discourage reasonable competition. The provisions of this Article are to be liberally construed.
(b) All life insurance and all accident and health insurance sold, or otherwise made effective, in connection with loans or other credit transactions of less than 10 years duration is subject to this Article. Such insurance sold in connection with a loan or other credit transaction of 10 years duration or more is not subject to this Article.
(Source: P.A. 79-930.)
(215 ILCS 5/155.52) (from Ch. 73, par. 767.52)
Sec. 155.52. Definitions.
For the purpose of this Article:
(a) "Credit life insurance" means insurance on the life of a debtor pursuant to or in connection with a specific loan or other credit transaction;
(b) "Credit Accident and health insurance" means insurance on a debtor to provide indemnity for payments becoming due on a specific loan or other credit transaction while the debtor is a person with a disability as defined in the policy;
(c) "Creditor" means the lender of money or vendor or lessor of goods, services, property, rights or privileges, for which payment is arranged through a credit transaction or any successor to the right, title or interest of any such lender, vendor or lessor, and an affiliate, associate or subsidiary of any of them or any director, officer or employee of any of them or any other person in any way associated with any of them;
(d) "Debtor" means a borrower of money or a purchaser or lessee of goods, services, property, rights or privileges for which payment is arranged through a credit transaction;
(e) "Indebtedness" means the total amount payable by a debtor to a creditor in connection with a loan or other credit transaction;
(f) "Director" means the Director of Insurance of the State of Illinois.
(Source: P.A. 99-143, eff. 7-27-15.)
(215 ILCS 5/155.53) (from Ch. 73, par. 767.53)
Sec. 155.53. Forms of credit life insurance and credit accident and health insurance.) Credit life insurance and credit accident and health insurance shall be issued only in the following forms:
(a) Individual policies of life insurance issued to debtors on the term plan;
(b) Individual policies of accident and health insurance issued to debtors on a term plan or disability benefit provisions in individual policies of credit life insurance;
(c) Group policies of life insurance issued to creditors providing insurance upon the lives of debtors on the term plan;
(d) Group policies of accident and health insurance issued to creditors on a term plan insuring debtors or disability benefit provisions in group credit life insurance policies to provide such coverage.
(Source: Laws 1959, p. 1140.)
(215 ILCS 5/155.54) (from Ch. 73, par. 767.54)
Sec. 155.54. Amount of credit life insurance and credit accident and health insurance.) (a) Credit Life Insurance
The amount of credit life insurance shall not exceed the initial indebtedness.
Where an indebtedness is repayable in substantially equal installments, the amount of insurance shall at no time exceed the scheduled or actual amount of unpaid indebtedness, whichever is greater.
(b) Credit Accident and Health Insurance
The total amount of indemnity payable by credit accident and health insurance in the event of disability, as defined in the policy, shall not exceed the aggregate of the periodic scheduled unpaid installments of the indebtedness and the amount of each periodic indemnity payment shall not exceed the original indebtedness divided by the number of periodic installments.
(Source: P.A. 79-930.)
(215 ILCS 5/155.55) (from Ch. 73, par. 767.55)
Sec. 155.55. Term of credit life insurance and credit accident and health insurance.
The term of any credit life insurance or credit accident and health insurance shall, subject to acceptance by the insurer, commence on the date when the debtor becomes obligated to the creditor, or the date from which interest or finance charges accrue, if later, except that, where a group policy provides coverage with respect to existing obligations, the insurance on a debtor with respect to such indebtedness shall commence on the effective date of the policy. Where evidence of insurability is required and such evidence is furnished more than 30 days after the date when the debtor becomes obligated to the creditor, the term of the insurance may commence on the date on which the insurer determines the evidence to be satisfactory, and in such event there shall be an appropriate refund or adjustment of any charge to the debtor for insurance. The term of such insurance shall not extend more than 15 days beyond the scheduled maturity date of the indebtedness except when extended without additional cost to the debtor. If the indebtedness is discharged due to renewal or refinancing prior to the scheduled maturity date, the insurance in force shall be terminated before any new insurance may be issued in connection with the renewed or refinanced indebtedness. In all cases of termination prior to scheduled maturity, a refund shall be paid or credited as provided in Section 155.58.
(Source: Laws 1959, p. 1140.)
(215 ILCS 5/155.56) (from Ch. 73, par. 767.56)
Sec. 155.56. Provisions of policies and certificates of insurance; disclosure to debtors. (a) All credit life insurance and credit accident and health insurance sold shall be evidenced by an individual policy, or in the case of group insurance by a certificate of insurance, which individual policy or group certificate of insurance shall be delivered to the debtor.
(b) Each individual policy or group certificate of credit life insurance, and/or credit accident and health insurance shall, in addition to other requirements of law, set forth, the name and home office address of the insurer, and the identity by name or otherwise of the person or persons insured, the rate or amount of payment, if any, by the debtor separately for credit life insurance and credit accident and health insurance, a description of the amount, term and coverage including any exceptions, limitations or restrictions, and shall state that the benefits shall be paid to the creditor to reduce or extinguish the unpaid indebtedness and, wherever the amount of insurance may exceed the unpaid indebtedness, that any such excess shall be payable to a beneficiary, other than the creditor, named by the debtor or to his estate.
(c) Said individual policy or group certificate of insurance shall be delivered to the insured debtor at the time the indebtedness is incurred except as hereinafter provided.
(d) If said individual policy or group certificate of insurance is not delivered to the debtor at the time the indebtedness is incurred, a copy of the application for such policy or a notice of proposed insurance, signed by the debtor and setting forth the name and home office address of the insurer, the identity by name or otherwise of the person or persons insured, the rate or amount of payment by the debtor, if any, separately for credit life insurance and credit accident and health insurance, a description of the amount, term and coverage provided, shall be delivered to the debtor at the time such indebtedness is incurred. The copy of the application for, or notice of proposed insurance shall refer exclusively to insurance coverage, and shall be separate and apart from the loan, sale or other credit statement of account, instrument or agreement, unless the information required by this subsection is prominently set forth therein. Upon acceptance of the insurance by the insurer and within 30 days of the date upon which the indebtedness is incurred, the insurer shall cause the individual policy or group certificate of insurance to be delivered to the debtor. Said application or notice of proposed insurance shall state that upon acceptance by the insurer, the insurance shall become effective as provided in Section 155.55.
(Source: Laws 1959, p. 1140.)
(215 ILCS 5/155.57) (from Ch. 73, par. 767.57)
Sec. 155.57. Filing, approval, and withdrawal of forms.
(a) All policies, certificates of insurance, notices of proposed insurance, applications for insurance, endorsements, and riders delivered or issued for delivery in this State and the schedules of premium rates pertaining thereto shall be filed with the Director.
(b) The Director shall within a reasonable time after the filing of any such policies, certificates of insurance, notices of proposed insurance, applications for insurance, endorsements, and riders, disapprove any such form if the benefits provided therein are not reasonable in relation to the premium charge, or if it contains provisions which are unjust, unfair, inequitable, misleading, deceptive, or encourage misrepresentation of the coverage, or are contrary to any provision of this Code or of any rule or regulation promulgated thereunder.
(c) If the Director notifies the insurer that the form is disapproved, it is unlawful thereafter for such insurer to issue or use such form. In such notice, the Director shall specify the reason for his disapproval and state that a hearing will be granted within 20 days after request in writing by the insurer. No such policy, certificate of insurance, notice of proposed insurance, nor any application, endorsement of rider, shall be issued or used until after it has been so filed and the Director has given his prior written approval thereto.
(d) The Director may at any time, after giving not less than 20 days prior written notice to the insurer, withdraw his approval of any such form on any ground set forth in subsection (b) above. The written notice of withdrawal shall state the reason for the action. The insurer may request a hearing within 10 days after receipt of the notice of withdrawal by giving the Director written notice of such request, together with a statement of its objections. The Director must then conduct a hearing in accordance with Sections 402 and 403. The withdrawal shall be stayed pending the issuance of the Director's orders following the hearing.
However, if it appears to the Director that the continued use of any such policy, certificate of insurance, notice of proposed insurance, application for insurance, endorsement, or rider by an insurer is hazardous to its policyholders or the public, the Director may take such action as is prescribed by Section 401.1.
(e) It is not lawful for the insurer to issue such forms or use them after the effective date of such withdrawal.
(f) If a group policy of credit life insurance or credit accident and health insurance has been or is delivered in another state before or after October 1, 1975 (the effective date of Public Act 79-930), the insurer shall be required to file only the group certificate and notice of proposed insurance delivered or issued for delivery in this State as specified in subsections (b) and (d) of Section 155.57 of this Article and such forms shall be approved by the Director if they conform with the requirements so specified in said subsections and if the schedules of premium rates applicable to the insurance evidenced by such certificate or notice are not in excess of the insurer's schedules of premium rates filed with the Director; provided, however, the premium rate in effect on existing group policies may be continued until the first policy anniversary date following October 1, 1975 (the effective date of Public Act 79-930).
(g) 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.)
(215 ILCS 5/155.58) (from Ch. 73, par. 767.58)
Sec. 155.58. Premiums and refunds.
(a) Each insurer issuing credit life insurance or credit accident and health insurance shall file with the Director its schedules of premium rates for use in connection with such insurance. Any insurer may revise such schedules from time to time, and shall file such revised schedules with the Director. No insurer shall issue any credit life insurance policy or credit accident and health insurance policy for which the premium rate exceeds that determined by the schedules of such insurer as then on file with the Director. The Director may require the filing of the schedule of premium rates for use in connection with and as a part of the specific policy filings as provided by Section 155.57.
(b) Each individual policy, group certificate or notice of proposed insurance shall provide that in the event of termination of the insurance prior to the scheduled maturity date of the indebtedness, any refund of an amount paid by the debtor for insurance shall be paid or credited promptly to the person entitled thereto; provided, however, that the Director shall prescribe a minimum refund and no refund which would be less than such minimum need be made. The formula to be used in computing such refund shall be filed with and approved by the Director.
(c) If a creditor requires a debtor to make any payment for credit life insurance or credit accident and health insurance and an individual policy or group certificate of insurance is not issued, the creditor shall immediately give written notice to such debtor and shall promptly make an appropriate credit to the account.
(d) The amount charged to a debtor for credit life or credit health and accident insurance shall not exceed the premium charged by the insurer, as computed at the time the charge to the debtor is determined.
(e) Nothing in this Article shall be construed to authorize any payments for insurance now prohibited under any statute, or rule thereunder, governing credit transactions.
(Source: Laws 1959, p. 1140.)
(215 ILCS 5/155.59) (from Ch. 73, par. 767.59)
Sec. 155.59. Issuance of policies.
All policies of credit life insurance and credit accident and health insurance shall be delivered or issued for delivery in this state only by an insurer authorized to do an insurance business herein, and shall be issued only through licensed agents or brokers.
(Source: Laws 1959, p. 1140.)
(215 ILCS 5/155.60) (from Ch. 73, par. 767.60)
Sec. 155.60. Claims.
(a) All claims shall be promptly reported to the insurer or its designated claim representative, and the insurer shall maintain adequate claim files. All claims shall be settled as soon as possible and in accordance with the terms of the insurance contract.
(b) All claims shall be paid either by draft drawn upon the insurer or by check of the insurer to the order of the claimant to whom payment of the claim is due pursuant to the policy provisions, or upon direction of such claimant to one specified.
(c) No plan or arrangement shall be used whereby any person, firm or corporation other than the insurer or its designated claim representative shall be authorized to settle or adjust claims. The creditor shall not be designated as claim representative for the insurer in adjusting claims; provided, that a group policyholder may, by arrangement with the group insurer, draw drafts or checks in payment of claims due to the group policyholder subjects to audit and review by the insurer.
(Source: Laws 1959, p. 1140.)
(215 ILCS 5/155.61) (from Ch. 73, par. 767.61)
Sec. 155.61. Existing insurance-Choice of insurer.
When credit life insurance or credit accident and health insurance is required as additional security for any indebtedness, the debtor shall, upon request to the creditor, have the option of furnishing the required amount of insurance through existing policies of insurance owned or controlled by him or of procuring and furnishing the required coverage through any insurer authorized to transact an insurance business within this state.
(Source: Laws 1959, p. 1140.)
(215 ILCS 5/155.62) (from Ch. 73, par. 767.62)
Sec. 155.62. Enforcement.
The Director may, issue such rules and regulations as he deems appropriate for the administration of this Article. Whenever the Director finds that there has been a violation of this Article or any rules or regulations issued pursuant thereto, and after written notice thereof and hearing given to the insurer or other person authorized or licensed by the Director, he shall set forth the details of his findings together with an order for compliance by a specified date. Such order shall be binding on the insurer and other person authorized or licensed by the Director on the date specified unless sooner withdrawn by the Director or a stay thereof has been ordered by a court of competent jurisdiction.
(Source: Laws 1959, p. 1140.)
(215 ILCS 5/155.63) (from Ch. 73, par. 767.63)
Sec. 155.63. Judicial review.
Any party to the proceeding affected by an order of the Director shall be entitled to judicial review by following the procedure set forth in Section 407 of the Illinois Insurance Code.
(Source: Laws 1959, p. 1140.)
(215 ILCS 5/155.64) (from Ch. 73, par. 767.64)
Sec. 155.64. Penalties.
In addition to any other penalty provided by law, any person who violates an order of the Director after it has become final, and while such order is in effect, shall, upon proof thereof to the satisfaction of the court, forfeit and pay to the State of Illinois a sum not to exceed $250.00 which may be recovered in a civil action, except that if such violation is found to be willful, the amount of such penalty shall be a sum not to exceed $1,000.00. The Director in his discretion, may revoke or suspend the license or certificate of authority of a person guilty of such violation. Such order for suspension or revocation shall be upon notice and hearing, and shall be subject to judicial review as provided in Section 155.63 of this Article.
(Source: Laws 1959, p. 1140.)
(215 ILCS 5/155.65) (from Ch. 73, par. 767.65)
Sec. 155.65. Separability provision.
If any provision of this Article, or the application of such provision to any person or circumstances, shall be held invalid, the remainder of the Article, and the application of such provision to any person or circumstances other than those as to which it is held invalid, shall not be affected thereby.
(Source: Laws 1959, p. 1140.)