It is an improper claims practice for any domestic, foreign or alien company transacting business in this State to commit any of the acts contained in Section 154.6 if:

(a) it is committed knowingly in violation of this Act or any rules promulgated hereunder; or(b) It has been committed with such frequency to indicate a persistent tendency to engage in that type of conduct.

215 ILCS 5/154.5

P.A. 80-926.

(215 ILCS 5/154.6) (from Ch. 73, par. 766.6)
Sec. 154.6. Acts constituting improper claims practice. Any of the following acts by a company, if committed without just cause and in violation of Section 154.5, constitutes an improper claims practice:
(a) Knowingly misrepresenting to claimants and insureds relevant facts or policy provisions relating to coverages at issue;
(b) Failing to acknowledge with reasonable promptness pertinent communications with respect to claims arising under its policies;
(c) Failing to adopt and implement reasonable standards for the prompt investigations and settlement of claims arising under its policies;
(d) Not attempting in good faith to effectuate prompt, fair and equitable settlement of claims submitted in which liability has become reasonably clear;
(e) Compelling policyholders to institute suits to recover amounts due under its policies by offering substantially less than the amounts ultimately recovered in suits brought by them;
(f) Engaging in activity which results in a disproportionate number of meritorious complaints against the insurer received by the Insurance Department;
(g) Engaging in activity which results in a disproportionate number of lawsuits to be filed against the insurer or its insureds by claimants;
(h) Refusing to pay claims without conducting a reasonable investigation based on all available information;
(i) Failing to affirm or deny coverage of claims within a reasonable time after proof of loss statements have been completed;
(j) Attempting to settle a claim for less than the amount to which a reasonable person would believe the claimant was entitled, by reference to written or printed advertising material accompanying or made part of an application or establishing unreasonable caps or limits on paint or materials when estimating vehicle repairs;
(k) Attempting to settle claims on the basis of an application which was altered without notice to, or knowledge or consent of, the insured;
(l) Making a claims payment to a policyholder or beneficiary omitting the coverage under which each payment is being made;
(m) Delaying the investigation or payment of claims by requiring an insured, a claimant, or the physicians of either to submit a preliminary claim report and then requiring subsequent submission of formal proof of loss forms, resulting in the duplication of verification;
(n) Failing in the case of the denial of a claim or the offer of a compromise settlement to promptly provide a reasonable and accurate explanation of the basis in the insurance policy or applicable law for such denial or compromise settlement;
(o) Failing to provide forms necessary to present claims within 15 working days of a request with such explanations as are necessary to use them effectively;
(p) Failing to adopt and implement reasonable standards to verify that a repairer designated by the insurance company to provide an estimate, perform repairs, or engage in any other service in connection with an insured loss on a vehicle is duly licensed under Section 5-301 of the Illinois Vehicle Code;
(q) Failing to provide as a persistent tendency a notification on any written estimate prepared by an insurance company in connection with an insured loss that Illinois law requires that vehicle repairers must be licensed in accordance with Section 5-301 of the Illinois Vehicle Code;
(r) Failing to pay the replacement vehicle use or occupation tax, title, and transfer fees required by Section 154.9 of this Code;
(s) Engaging in any other acts which are in substance equivalent to any of the foregoing.
(Source: P.A. 102-69, eff. 7-1-22.)

TITLE 50: INSURANCE
CHAPTER I: DEPARTMENT OF INSURANCE
SUBCHAPTER l: PROVISIONS APPLICABLE TO ALL COMPANIES
PART 919 IMPROPER CLAIMS PRACTICE
SECTION 919.90 IMPROPER PRACTICES OR PROCEDURES – PROPERTY AND CASUALTY COMPANIES

Section 919.90 Improper Practices or Procedures – Property and Casualty Companies

a) A claim shall not be denied on the basis of failure to exhibit property unless there is documentation of breach of the policy provisions in the claim file.

b) No company shall make any statement, written or oral, requiring a liability claimant to complete a proof of loss form, accident description, or release of claim for damages, which indicates that the claimant's rights may be impaired if such forms are not completed within a specified time, unless such statement is given for the purpose of notifying the claimant of the provisions of the statute of limitations.

c) No company shall advise liability claimants to make claims under their own policies in cases where liability is reasonably clear.

d) No company shall fail to effect settlement on first party claims on the basis that responsibility for payment should be assumed by other persons or insurers.

e) No company issuing a motor vehicle insurance policy covering damages to a motor vehicle shall abandon the salvage of a motor vehicle to a towing service and/or storage yard service in lieu of the towing and storage charges, without the agreed permission of the towing service or storage yard service.

f) No company shall deny a claim for storage charges on actual cash value fire and extended coverage losses when the personal property limits have been exhausted, if coverage exists under additional living expense.

(Source: Amended at 13 Ill. Reg. 1204, effective January 11, 1989)

AUTHORITY: Implementing Sections 154.5 and 154.6 of the Illinois Insurance Code [215 ILCS 5/154.5 and 154.6] and authorized by Section 401 of the Illinois Insurance Code [215 ILCS 5/401], Section 10 of the Voluntary Health Services Plans Act [215 ILCS 165/10], Section 25 of the Dental Service Plan Act [215 ILCS 110/25] and Section 5-3 of the Health Maintenance Organization Act [215 ILCS 125/5-3].

SOURCE: Filed June 17, 1974, effective July 1, 1974; amended at 2 Ill. Reg. 22, p. 77, effective May 22, 1978; new rules adopted at 3 Ill. Reg. 31, p. 93, effective August 4, 1979; old rules repealed 3 Ill. Reg. 32, p. 42, effective August 6, 1979; emergency amendment and codified at 7 Ill. Reg. 2755, effective February 28, 1983, for a maximum of 150 days; amended and codified at 7 Ill. Reg. 11489, effective October 1, 1983; amended at 10 Ill. Reg. 5125, effective March 17, 1986; amended at 13 Ill. Reg. 1204, effective January 11, 1989; amended at 26 Ill. Reg. 11915, effective July 22, 2002; amended at 27 Ill. Reg. 19287, effective December 10, 2003; amended at 28 Ill. Reg. 9253, effective July 1, 2004; amended at 38 Ill. Reg. 15600, effective July 2, 2014.

(215 ILCS 5/429) (from Ch. 73, par. 1036)
Sec. 429. Procedure as to unfair methods of competition and unfair or deceptive acts or practices which are not defined.
(1) Whenever the Director shall have reason to believe (a) that any person engaged in the business of insurance is engaging in this State in any method of competition or in any act or practice in the conduct of such business which is not defined in Section 424, as an unfair method of competition or an unfair or deceptive act or practice or that any person domiciled in or resident of this State engaged in the business of insurance is engaging in any other state, territory, province, possession, country, or district in which he or she is not licensed or otherwise authorized to transact business in any method of competition or in any act or practice in the conduct of such business which is not defined in Section 424, as an unfair method of competition or an unfair or deceptive act or practice, and (b) that such method of competition is unfair or that such act or practice is unfair or deceptive, or (c) that such unfair method of competition or such unfair or deceptive act or practice violates any of the provisions of this Code or any other law of this State, or (d) that a proceeding by him or her in respect thereto would be to the interest of the public, he or she may issue and serve upon such person a statement of the charges in that respect and a notice of a hearing thereon to be held at a time and place fixed in the notice, which shall not be less than 10 days after the date of the service thereof. Each such hearing shall be conducted in the same manner as the hearings provided for in Section 426. The Director shall, after such hearing, make a report in writing in which he or she shall state his or her findings as to the facts, and he or she shall serve a copy thereof upon such person.
(2) If such report charges a violation of this Article and if such method of competition, act, or practice has not been discontinued, the Director may, through the Attorney General of this State, at any time after the service of such report cause a complaint to be filed in the Circuit Court of Sangamon County or in the Circuit Court of this State within the county wherein the person resides or has his principal place of business, to enjoin and restrain such person from engaging in such method, act, or practice. The court shall have jurisdiction of the proceeding and shall have power to make and enter appropriate orders in connection therewith and to enter such orders as are ancillary to its jurisdiction or are necessary in its judgment to prevent injury to the public pendente lite.
(3) A transcript of the proceedings before the Director including all evidence taken and the report and findings shall be filed with such complaint. If either party shall apply to the court for leave to adduce additional evidence and shall show, to the satisfaction of the court, that such additional evidence is material and there were reasonable grounds for the failure to adduce such evidence in the proceedings before the Director the court may order such additional evidence to be taken before the Director and to be adduced upon the hearing in such manner and upon such terms and conditions as to the court may seem proper. The Director may modify his or her findings of fact or make new findings by reason of the additional evidence so taken, and he or she shall file such modified or new findings with the return of such additional evidence.
(4) If the court finds (a) that the method of competition complained of is unfair or that the act or practice complained of is unfair or deceptive, or (b) that such unfair method of competition or such unfair or deceptive act or practice is in violation of this Code or any other law of this State and (c) that the proceeding by the Director with respect thereto is to the interest of public and (d) that the findings of the Director are supported by the evidence, it shall enter an order enjoining and restraining the continuance of such method of competition, act, or practice.
(Source: P.A. 100-863, eff. 8-14-18.)

(215 ILCS 5/430) (from Ch. 73, par. 1037)
Sec. 430. Judicial review by intervenor. If the report of the Director does not charge a violation of this Article, then any party in interest who was an intervenor in the proceedings before the Director may within 35 days after the service of such report, cause a complaint to be filed in the Circuit Court of Sangamon County for a review of such report. Upon such review, the court shall have authority to issue appropriate orders and judgment in connection therewith, including, if the court finds that it is to the interest of the public, orders enjoining and restraining the continuance of any method of competition, act or practice which it finds, notwithstanding such report of the Director, constitutes a violation of this Article.
(Source: P.A. 79-1362.)

NEW INSURANCE LAW

(215 ILCS 5/154.9 new)

Sec. 154.9. Payment of applicable use or occupation tax, title, and transfer fees on a private passenger total loss

claim.

(a) When an insurer determines that an insured's or third-party claimant's private passenger automobile is a total

loss that is covered under the terms of a personal automobile policy issued or renewed on or after July 1, 2022 by the

insurer, the insurer shall pay any use or occupation tax imposed by the State or a unit of local government and title

and transfer fees as provided for in this Section. As used in this Section, "private passenger vehicle" means a private

passenger motor vehicle, station wagon, or any other 4-wheeled motor vehicle with a load capacity of 1,500 pounds or

less that is not used in the occupation, profession, or business of the insured or third-party claimant, not used as a public

or livery conveyance for passengers, nor rented to others.

(b) If the insurer elects to replace the insured vehicle, the insurer shall pay any use or occupation tax imposed by the

State or a unit of local government tax and title and transfer fees on the replacement vehicle.

(c) If a cash settlement is provided for the total loss private passenger vehicle, the insurer shall reimburse the

insured or third-party claimant for any use or occupation tax imposed by the State or a unit of local government and title

and transfer fees if the replacement vehicle is purchased or leased within 30 days after the receipt of the cash settlement

by the insured or third-party claimant and the insured or third-party claimant substantiates such purchase and the

payment of such taxes and fees by submission of appropriate documentation to the insurer within 33 days after the receipt

of the settlement or receipt of the required reimbursement form from the insurer, whichever is later.

(1) With respect to leased vehicles, use or occupation taxes and title and transfer fees shall be deemed to be

incurred by the insured or the third-party claimant at the time the lease is entered into, but only if such use or

occupation taxes and title and transfer fees are included in the cost of the lease or are paid directly by the

insured or third-party claimant.

(2) The insurer is not required to reimburse the insured or third-party claimant for any use or occupation taxes and title

or transfer fees in excess of the amount payable based on the value of the total loss vehicle at the time of the loss or for

taxes and title or transfer fees not actually paid by the insured or third-party claimant.

(3) In lieu of this reimbursement procedure, the insurer may directly pay the required amount of any use or occupation

taxes and title and transfer fees to the claimant at the time of settlement.

(4) If an insurer requires a particular form be used to apply for reimbursement of any use or occupation taxes and title

or transfer fees, the form must be delivered to the insured or third-party claimant at or before the time of settlement.

(d) The Department may adopt rules establishing uniform standards for implementation of this Section, including, but

not limited to, prescribing the method of determining the market value of the insured's or third-party claimant's vehicle.

Section 99. Effective date. This Act takes effect July 1, 2022.

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