Current through Register Vol. 48, No. 12, March 22, 2024
a) Forms
1) All companies must file, using the System
for Electronic Rate and Form Filing (SERFF):
A) Copies of all policy forms and, for mutual
companies, a separate proxy signature line for the insured to sign, if
applicable;
B) Copies of generally
used endorsement forms on these kinds of business;
C) Copies of all application forms used on
these kinds of business, including a separate proxy signature line for the
insured to sign, if applicable;
D)
A copy of the declaration page, in non-individualized, template form, absent
personal policyholder information; and
E) A copy of the policy jacket, if used by
the company.
2) All
filings must be accompanied by a forms submission letter that includes:
A) The name of the advisory organization or
company making the filing;
B)
Descriptive title, form number, and edition identification of the
forms;
C) Information as to what
class and clause the coverage is written under:
D) Identification of all applicable
endorsements and applications as to the policy forms for which the endorsements
and applications are used;
E)
Notification as to whether the filing is new or supersedes a present filing.
Identification of all changes in all superseding filings, as well as
identification of all superseded forms, is required; and
F) Effective date of use.
3) No form will be approved until
the rates, rules and minimum premiums for use with the form have been accepted
for filing.
4) Disclosure
A) All insurance applications and
certificates shall contain, in a type size and ink color to make it
predominant, the following:
WARNING
PURCHASING THIS COVERAGE MAY VOID OR LIMIT OTHER INSURANCE SUCH
AS A HOMEOWNERS POLICY OR FIRE POLICY COVERING YOUR CONTENTS. PLEASE READ ANY
SUCH POLICIES YOU HAVE.
B)
On applications, the above described warning shall appear immediately above the
space provided for the applicant's signature.
C) Upon prior approval of the Director, the
above warning may be modified using substantially similar wording to convey the
intent and purpose of the warning.
5) Each certificate shall:
A) Display the name and address of the master
policyholder and the certificate holder;
B) Provide that loss payments shall be made
to all insureds as their interest may appear at the time of loss for property
pledged as collateral for loans;
C)
Provide for repair or replacement of the damaged property, or in the event of a
cash settlement, provide that payment shall be made to the creditor to reduce
or extinguish the unpaid indebtedness with any excess payable to the purchaser
when insuring property purchased or sold under the terms of any open end charge
account or closed end installment sales contract;
D) Include a specific description of all
insured items and the specific amount of coverage for each item, except that:
i) An itemized listing on the certificate is
not required if records are maintained in sufficient detail and in a form
readily available to the Director or his or her designee to permit verification
of every item insured and the amount of insurance applicable to each
item;
ii) When insurance is
provided on a replacement cost basis, a specific amount of insurance is not
required; and
iii) Items pledged as
collateral for loans not related to the purchase or sale of these items may be
collectively rather than specifically described, and one amount of coverage may
be shown for the entire collateral;
E) Contain the following provisions of the
master policy:
i) Perils insured
against;
ii) Cancellation
provisions; and
iii) All provisions
applicable to claims;
F)
Contain wording advising that it is necessary to refer to the master policy for
the entire text of the contract and state where, in the State of Illinois, the
master policy may be seen; and
G)
Contain the provisions set forth in subsection (c).
6) Each master policy shall be maintained
within the State of Illinois and shall be available for inspection on the
Department's website.
b)
Rates
1) Each company shall file with the
Director each rate, rule and minimum premium before it is used in the State of
Illinois.
2) All filings must be
submitted using SERFF and must include:
A)
The name of the advisory organization or company making the filing;
B) Identification of the rule with the manual
or kind of insurance to which it applies;
C) Notification as to whether the filing is
new or supersedes a present filing. Identification of all changes in all
superseding filings, as well as identification of all superseded filings, is
required. The preferred format is to underline the new wording and overstrike
the deleted or changed language and give an explanation for the changes being
made, but alternative methods of indicating changes will also be accepted;
and
D) The effective date of
use.
3) Insurers may
authorize attorneys, consulting firms, or other authorized third parties to
submit rate filings to the Department, as long as the filing includes a notice,
signed by an authorized company officer, giving authority for the entity to act
on the insurer's behalf on any issues related to the filing.
4) All company rate filings in SERFF must
include the Company Rate Information, which shall include:
A) Overall % Indicated Change;
B) Overall % Rate Impact - This is the
statewide average percentage change to the accepted rates for the coverages
included for each company;
C)
Written premium change for this program - This is the statewide change in
written premium based on the proposed overall percentage rate impact for each
company;
D) Number of policyholders
affected for this program - This is the number of policyholders affected by the
overall percentage rate impact for each company;
E) Written premium for this program - This is
the statewide written premium for each company;
F) Maximum % Change;
G) Minimum % Change.
5) The Director may require the filing of
statistical data and any other pertinent information necessary to determine the
manner of promulgation and the acceptability or unacceptability of a filing for
rules, minimum premiums, rates, forms or any combination of these. All rates
and minimum premiums shall be based upon sound actuarial principles. Rates
shall not be inadequate, excessive or unfairly discriminatory.
6) Companies under the same ownership or
general management shall make separate individual filings for each company
wishing to use the material. Companies shall not file collectively as a
group.
7) Minimum premiums may be
established for use with master policies, but shall not be used for premiums
charged on certificates of insurance. Certificate holders may not be charged a
premium that is greater than the premium developed by multiplying the rate
times the amount of coverage provided for said certificate holder.
c) Coverage Acceptance or
Rejection by Insured Certificate Holder
1)
Insureds shall be allowed 15 days after receiving a certificate of insurance to
determine if the coverage is to remain in effect or is to be cancelled without
any premium being earned.
2) If
loss occurs after the insured has signed an application for the coverage and
before or during the 15 days and the insured has not given the insurer or the
master policyholder evidence of his rejection of the coverage, the loss shall
be paid and the premiums shall be charged for the time coverage is in force.
Making any claim during this period of time constitutes acceptance of the
coverage by the insured.
3) If,
during the 15 days following the insured's receipt of the certificate of
insurance, the insured chooses to reject the subject coverage and no loss has
been claimed by the insured, the coverage shall be cancelled as of its
effective date and without any premium being charged. Any premium that may have
been paid shall, in the event of rejection of the coverage, be returned to the
insured. After cancellation, no claims may be made under the subject
coverage.
4) Computation of earned
premium for cancellation by an insured certificate holder, other than as
described in this subsection (c), may be on a short-rate basis. The short-rate
change shall not be more than 10% in excess of the earned premium computed on a
pro-rata basis.
5) When coverage is
revised or cancelled and rewritten, earned premium shall be computed on a
pro-rata basis. Coverage shall continue without interruption and the revised or
rewritten coverage shall be charged rates not to exceed those charged prior to
the revision or rewriting.
d) Insurable Items and Determination of
Amounts of Coverage
1) The amounts of
insurance provided applicable to items pledged as collateral for loans or
purchased or sold under the terms of any closed end transaction shall be
exclusive of:
A) insurance
premiums;
B) interest, carrying or
finance charges;
C) service
charges;
D) warranty charges;
and
E) other charges added to the
net price of the items.
2) The items to be insured shall only be
tangible property.
e)
Revolving Charge Accounts
The company shall maintain sufficient records to provide
satisfactory evidence for the Director or his or her designee to determine that
for each group policy written the average amount of insurance for the debtor of
each group is at least equal to or greater than the value of tangible property
insured for the debtors.