il-v50i40-50-ill-adm-code-919: 50 Ill. Adm. Code 919 — Improper Claims Practice

1) Heading of the Part: Improper Claims Practice 2) Code Citation: 50 Ill. Adm. Code 919 3) Section Numbers: Proposed Actions: 919.40 Amendment 919.EXHIBIT A Amendment 4) Statutory 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]. 5) A Complete Description of the Subjects and Issues Involved: This rulemaking is filed pursuant to Section 5-15 of the Illinois Administrative Procedure Act and is only changing the address of the Department's Springfield Office to reflect the fact that the office is moving on September 23, 2026. Section 5-15 of the Illinois Administrative Procedure Act requires agencies to include a statement of how the proposed rule made under this Section satisfies the criteria established by subsections (a) and (b). The Department's address is used by the public to obtain information from the Department and/or make submissions or requests of the Department. These members of the public may include insurance companies, persons licensed by the Department, and Illinois insurance consumers. The address provided in the rules should be accurate, otherwise such persons may go to or send correspondence to the wrong address. The decision to relocate the Springfield office was an internal management decision. The private rights of individuals are not affected by Department rules containing the accurate address, although having the incorrect address in rule will cause unnecessary confusion and delay for people seeking information from and/or making submissions to the Department in person or via mail. It is in the public interest to have the Department's office address published in the Illinois Administrative Code be correct. 6) Published studies or reports, and sources of underlying data, used to compose this rulemaking: Not required for Section 5-15 notices. 7) Will this proposed rulemaking replace an emergency rule currently in effect? Not required for Section 5-15 notices. 8) Does this rulemaking contain an automatic repeal date? Not required for Section 5-15 notices. 9) Do these proposed amendments contain incorporations by reference? Not required for Section 5-15 notices. 10) Are there any other proposed rulemakings pending on this Part? Yes Section Numbers: Proposed Actions: Illinois Register Citations: 919.40 Amendment 50 Ill. Reg. 4617; March 27, 2026 910.80 Amendment 50 Ill. Reg. 4617; March 27, 2026 910.82 New Section 50 Ill. Reg. 4617; March 27, 2026 910.EXHIBIT A Repealed 50 Ill. Reg. 4617; March 27, 2026 11) Statement of Statewide Policy Objectives: Not required for Section 5-15 notices. 12) Time, Place, and Manner in which interested persons may comment on this proposed rulemaking: Persons who wish to comment on this proposed rulemaking may submit written comments no later than 14 days after the publication of this Notice to: Kathryn Williams Department of Insurance 115 S. LaSalle Street, 13 Floor Chicago IL 60603 (312) 814-8212 Kathryn.A.Williams@illinois.gov 13) Initial Regulatory Flexibility Analysis: Not required for Section 5-15 notices. A) Description of the type of small business, not for profit corporations or small municipalities subject to the proposed amendments: None B) Description of the proposed reporting, bookkeeping and other procedures required for compliance with the amendments: None C) Description of the types of professional skills necessary for compliance: None DEPARTMENT OF INSURANCE NOTICE OF PROPOSED AMENDMENTS 14) Small Business Economic Impact Analysis: Not required for Section 5-15 notices. 15) Regulatory Agenda on which this rulemaking was summarized: Not required for Section 5-15 notices. 16) Any other information or justification for the proposed rule or amendment that the agency believes would be helpful to the public regarding the proposed rule or amendment. For example, a discussion or analysis of the benefits of the proposed rule or amendment is projected to have on the Illinois public, consumers, investors or other similar groups. Not required for Section 5-15 notices. The full text of the Proposed Amendments begins on the next page: DEPARTMENT OF INSURANCE NOTICE OF PROPOSED AMENDMENTS TITLE 50: INSURANCE CHAPTER I: DEPARTMENT OF INSURANCE SUBCHAPTER l: PROVISIONS APPLICABLE TO ALL COMPANIES PART 919 IMPROPER CLAIMS PRACTICE Section 919.10 Authority 919.20 Scope and Purpose 919.30 Examinations 919.40 Definitions/Explanations 919.50 Required Practices for all Insurance Companies 919.60 Improper Practices or Procedures for all Insurance Companies 919.70 Required Claims Practices – Life, Accident and Health Companies 919.80 Required Claim Practices – Private Passenger Automobile – Property and Casualty Companies 919.90 Improper Practices or Procedures – Property and Casualty Companies 919.100 Severability Provision 919.EXHIBIT A Total Loss Automobile Claims 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; amended at 49 Ill. Reg. 1273, effective January 17, 2025; amended at 50 Ill. Reg. ______, effective ____________. Section 919.40 Definitions/Explanations "Code" means the Illinois Insurance Code [215 ILCS 5]. "Company" means any licensee of the Department of Insurance, including health maintenance organizations. "Days", for the purpose of this Part, means calendar days. "Department" means the Illinois Department of Insurance. "Director" means the Director of the Illinois Department of Insurance. "Documentation" means all pertinent communications, transactions, notes and work papers. All such communications, transactions, notes and work papers shall be properly dated and compiled in sufficient detail in order to allow for the reconstruction of all pertinent events relative to each claim file. Documentation shall include but not be limited to bills, explanations of benefits and worksheets. "First Party" means any individual, corporation, association, partnership, or other legal entity asserting a contractual right to payment under an insurance policy or insurance contract arising out of the contingency or loss covered by the policy or contract. "Insured" means, for the purposes of life, accident and health insurance or other health care or service plans, the party named on a contract as the individual, corporation or association with legal rights to the benefits provided by the contract. This includes certificate holders or subscribers to a group contract and enrollees of a health maintenance organization, any other type of health care or service plans, or third party administrator. For purposes of property and casualty insurance, the party named on the contract is the insured. "Non-Original Manufacturer" means any manufacturer other than the manufacturer of the original part. "Notice of Availability of the Department of Insurance", as required by this Part, shall be no less informative than the following: Part 919 of the Rules of the Illinois Department of Insurance requires that DEPARTMENT OF INSURANCE NOTICE OF PROPOSED AMENDMENTS our company advise you that, if you wish to take this matter up with the Illinois Department of Insurance, it maintains a Consumer Division in Chicago at 115 S. LaSalle St.Street, 13 Floor, Chicago, Illinois 60603 and in Springfield at 4800 Wabash Ave.320 West Washington Street, Springfield, Illinois 6271162767. "Notification of Loss" means communication, as required by the policy or that is otherwise acceptable by the insurer, from a claimant or insured to the insurer that identifies the claimant or insured and indicates that a loss has occurred or is about to occur. "Pertinent Communication", as used in Section 154.6(b) of the Code, means all correspondence, regardless of source or type, that is materially related to the handling of the claim. "Policy", for the purpose of this Part, means a policy, certificate or contract issued to Illinois residents, including a certificate of enrollment into a health maintenance organization or any other type of health care or service plan. "Private Passenger Automobile" means a vehicle insured under a policy of automobile insurance as defined in Section 143.13 of the Code. "Prompt Investigation", as used in Section 154.6(c) of the Code , means all activities of the company related directly or indirectly to the determination of liability based on claims under the coverage afforded by the policy and shall be evidenced by a bonafide effort to communicate with all insureds and claimants when liability is reasonably clear within 21 working days after a notification of loss. Evidence of bonafide effort to communicate with insureds and claimants shall be maintained in the company's claim files. "Reasonable Promptness", as used in Section 154.6(b) of the Code, means a maximum of 15 working days from receipt of communication from a claimant or insured. "Replacement Crash Parts", for purposes of this Part, means sheet metal or synthetic parts, e.g., plastic, fiberglass, etc., that constitute the exterior of a motor vehicle, including inner and outer panels. "Representative" means any person expressly authorized to act on behalf of the DEPARTMENT OF INSURANCE NOTICE OF PROPOSED AMENDMENTS insurer and any employee of the insurer who acts or appears to act on behalf of the insurer in matters relating to claims, including but not limited to independent contractors while performing claim services at the direction of the company. "Settlement of Claims", as used in Section 154.6(c) of the Code, shall pertain to all activities of the company or its representatives, relating directly or indirectly to the determination of the extent of liabilities due or potentially due under coverages afforded by the policy. Evidence of those activities shall be maintained in the company's claim files. "Third Party" refers to any individual, corporation, association, partnership or other legal entity asserting a claim against any individual, corporation, partnership or other legal entity insured under a policy. (Source: Amended at 50 Ill. Reg. ______, effective ____________) Section 919.EXHIBIT A Total Loss Automobile Claims 1) Total Loss Claims When you are involved in an automobile accident, one of the first things you may have to do is file a claim for damages to your vehicle. If your car is a total loss, this procedure can sometimes be confusing. Your automobile insurance policy requires both you and your insurance company to follow certain steps after a loss occurs. This publication summarizes those requirements and outlines your rights. The Illinois Department of Insurance has established regulations to protect you when you file an insurance claim. It is also important that you read your policy carefully so that you clearly understand your responsibilities. If you still have questions, you can contact our Consumer Services Section by phone at (866) 445-5364 or at one of the following locations: 4800 Wabash Ave.320 West Washington Street Springfield, Illinois 6271162767 OR 115 S. LaSalle St.Street, 13 Floor Chicago, Illinois 60603 2) Your Duties 1. You must immediately report all losses directly to your insurance producer or company. 2. If you suspect theft or vandalism, you must also report it immediately to the police. If you fail to do so, your company may deny your claim. 3. You must protect your automobile from further damage. For example, if you fail to cover a broken windshield and the upholstery is damaged by rain, your company can refuse to repair the seat. DEPARTMENT OF INSURANCE NOTICE OF PROPOSED AMENDMENTS 4. Most insurance policies require that, within 91 days after the loss, you must submit a sworn proof of loss. A sworn proof of loss usually states the date of loss, how it happened, and for what purpose the automobile was being used. If you fail to submit a proof of loss your company may deny your claim. 5. You must cooperate with the insurance company, submit to examination under oath, if so requested, and show them the damaged property. If you fail to cooperate your company may deny your claim. 6. You should review the Conditions section of your policy for other possible requirements. 3) Your Insurance Company's Duties When you file an automobile insurance claim, your insurance company has three options: 1) Replace the damaged or stolen property; 2) Repair the damaged property; or 3) Pay for the loss in cash. Insurance Department regulations require the company to follow certain standards for each option. 4) Replacement If the insurance company elects to replace your vehicle, the replacement must be a specific make and model comparable to your totalled vehicle, and it must be available in as good or better overall condition than your totalled vehicle. Replacement vehicles must be purchased through licensed dealers. Vehicles that are no more than three years old must be warranted. If you reject a replacement vehicle, the insurance company must pay only the amount it would have otherwise paid for the replacement vehicle including applicable taxes, transfer and title fees. The company must offer you the replacement vehicle and you must reject the offer. If you desire a replacement vehicle of similar value, this replacement method is also permitted. 5) Cash Settlement If the insurance company elects to make a cash settlement for your totalled vehicle, they must first determine its retail value. Companies normally use guide books or computerized data marketed by various sources. If your vehicle is not listed in one of these sources, the company can use written dealer quotes. Ordinarily, however, newspaper advertisements are not acceptable sources of market value. 6) Payment of Sales Tax If within 30 days of a cash settlement, you can prove that you have purchased another vehicle, the company must pay the applicable sales tax, transfer and title fees in an amount equivalent to the value of the total loss vehicle. If you purchase a vehicle with a market value less than the amount previously settled upon, the company must pay you only the amount of sales tax that you actually incurred and include transfer and title fees. Your insurance company must give you written notice of this procedure. 7) Betterment Deductions The insurance company is allowed to make deductions from the retail value if your automobile has old, unrepaired collision damages. There is no limit to the amount of the deduction. The insurance company can also make deductions for wear and tear, missing parts and rust, but the maximum deduction may not exceed $500.00. All deductions must be itemized and specified as to dollar amount. 8) Retaining Your Totalled Vehicle In an effort to minimize automobile "chop shop" crime, the Illinois Vehicle Code does not permit you the right to retain the salvage once your automobile has been deemed a total loss by your insurance company. The insurance company must take possession of DEPARTMENT OF INSURANCE NOTICE OF PROPOSED AMENDMENTS the vehicle, if the vehicle is eight model years or newer. 9) Right of Recourse If you cannot locate a replacement vehicle within 30 days of receiving a cash settlement, you may have some additional rights under your insurance contract. If you cannot purchase a substantially similar vehicle for the market value determined by the company, but you have located a substantially similar vehicle that costs more, the following procedures shall apply. 1) The company shall either pay you the difference between the original settlement and the amount of the substantially similar vehicle which you have located or attempt to purchase this vehicle for you; or 2) The company shall locate a comparable vehicle for you at the market value determined by the company at the time of settlement; or 3) The company shall conclude the loss settlement as provided under the appraisal section of the insurance policy. Your insurance company must give you written notice of this procedure once your vehicle has been determined a total loss. This chart should assist you in determining the retail value of your automobile. Value Make of Automobile Model Engine Size Type Transmission (Auto/Standard) Power Steering Power Brakes Power Windows Air Conditioner Vinyl Roof Cruise Control Tilt Wheel/Telescope Wheel Power Locks Power Seats AM/FM Radio Stereo/Tape Rear Defog Mileage: Low/High Subtotal Minus Deductible Total The above figure represents an average automobile. Your automobile may be worth more or less than the above figure because of options on the automobile which are not listed in a guide book or because of the excessive wear and tear or old unrepaired damage to the automobile. (Source: Amended at 50 Ill. Reg. ______, effective ____________)