Bill Text: IL HB1460 | 2013-2014 | 98th General Assembly | Chaptered

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Bill Title: Creates the Motor Vehicle Ancillary Products Act. Provides that each ancillary product provider intending to issue or sell ancillary product contracts in the State shall file a registration with the Director of Insurance and designate a person in the State for service of process. Provides that each ancillary product provider shall pay to the Director a fee upon initial registration and every year thereafter. Provides that other than the ancillary product provider registration requirements in the provision requiring ancillary product provider registration, ancillary product providers and related ancillary product contract sellers, administrators, and other persons marketing, selling, offering to sell, or issuing ancillary product contracts are exempt from any licensing requirements of the State to conduct ancillary product contract business. Sets forth provisions concerning ancillary product provider financial requirements; ancillary product contract receipt requirements; disclosures; ancillary protection product warranties; reimbursement insurance policies; ancillary product contract exemption from insurance laws; prohibited acts; record keeping; cancellation of reimbursement insurance policies; obligations of reimbursement insurance policy insurers; enforcement provisions; premium taxes; applicability; and severability. Amends the Illinois Insurance Code to provide that the Code shall not be construed to apply to ancillary product contracts under the Motor Vehicle Ancillary Products Act. Effective January 1, 2014.

Spectrum: Moderate Partisan Bill (Democrat 5-1)

Status: (Passed) 2013-08-09 - Public Act . . . . . . . . . 98-0222 [HB1460 Detail]

Download: Illinois-2013-HB1460-Chaptered.html

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Public Act 098-0222
HB1460 Enrolled LRB098 07451 RPM 37519 b
AN ACT concerning insurance.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Service Contract Act is amended by changing
Section 5 as follows:
(215 ILCS 152/5)
Sec. 5. Definitions.
"Department" means the Department of Insurance.
"Director" means the Director of Insurance.
"Road hazard" means a hazard that is encountered while
driving a motor vehicle, including, but not limited to,
potholes, rocks, wood debris, metal parts, glass, plastic,
curbs, and composite scraps.
"Service Contract" means a contract or agreement whereby a
service contract provider undertakes for a specified period of
time, for separate and identifiable consideration, to perform
the repair, replacement, or maintenance, or indemnification
for such services, of any automobile, system, or consumer
product in connection with the operational or structural
failure due to a defect in materials or workmanship, or normal
wear and tear, with or without additional provision for
incidental payment or indemnity under limited circumstances,
for related expenses, including, but not limited to, towing,

rental, and emergency road service. Service contracts may
provide for:
(1) the repair, replacement, or maintenance of such
property for damage resulting from power surges and
accidental damage from handling; .
(2) the repair or replacement of tires or wheels, or
both, on a motor vehicle damaged as the result of coming
into contact with road hazards;
(3) the removal of dents, dings, or creases on a motor
vehicle that can be repaired using the process of paintless
dent removal without affecting the existing paint finish
and without replacing vehicle body panels, sanding,
bonding, or painting;
(4) the repair of chips or cracks in or the replacement
of motor vehicle windshields as a result of damage caused
by road hazards;
(5) the replacement of a motor vehicle key or key-fob
in the event that the key or key-fob becomes inoperable or
is lost or stolen;
(6) a protective chemical, substance, device, or
system that (A) is installed on or applied to a motor
vehicle, (B) is designed to prevent loss or damage to a
motor vehicle from a specific cause, and (C) includes a
written product warranty providing for payment to or on
behalf of the warranty holder's incidental costs in the
event that the product fails to prevent loss or damage as

specified; the reimbursement of incidental costs under the
warranty must be tied to the purchase of a physical product
that is formulated or designed to make the specified loss
or damage less likely to occur; or
(7) other services that may be approved by the
Director, if not inconsistent with other provisions of this
Act.
Service contracts shall not include:
(i) contracts of limited duration that provide for
scheduled maintenance only; .
(ii) fuel additives, oil additives, or other chemical
products applied to the engine, transmission, or fuel
system of a motor vehicle;
(iii) coverage for the repair or replacement, or both,
of damage to the interior surfaces of a vehicle, or for
repair or replacement, or both, of damage to the exterior
paint or finish of a vehicle; however, such coverage may be
offered in connection with the sale of a protective
chemical, device, or system described in item (6) of this
definition.
"Service contract holder" means the person who purchases a
service contract or a permitted transferee.
"Service contract provider" means a person who is
contractually obligated to the service contract holder under
the terms of the service contract. A service contract provider
does not include an insurer.

"Service contract reimbursement insurance policy" means a
policy of insurance that is issued to the service contract
provider to provide reimbursement to the service contract
provider or to pay on behalf of the service contract provider
all covered contractual obligations incurred by the service
contract provider under the terms and conditions of the insured
service contracts issued or sold by the service contract
provider.
"System" means the heating, cooling, plumbing, electrical,
ventilation, or any other similar system of a home.
(Source: P.A. 90-711, eff. 8-7-98.)