INS-IMPROPER CLAIMS PRACTICE

Illinois General Assembly - Full Text of HB4719

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104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
HB4719

Introduced , by Rep. Jaime M. Andrade, Jr.

SYNOPSIS AS INTRODUCED:

215 ILCS 5/154.6

from Ch. 73, par. 766.6
815 ILCS 505/2MMMM new

Amends the Illinois Insurance Code. In provisions concerning acts by
a company constituting improper claims practice, includes: (i) knowingly
taking advantage of the insured's physical infirmity, ignorance,
illiteracy, or inability to understand the language of the policy or any
associated agreements in order to obtain a favorable settlement of a claim
and (ii) willfully misrepresenting the status or outcome of an
investigation or failing to take any meaningful investigatory acts before
issuing a denial or offer of a compromise settlement. Provides that
committing any of the improper claims practice acts is a violation of the
Consumer Fraud and Deceptive Business Practices Act. Amends the Consumer
Fraud and Deceptive Business Practices Act to provide that a person who
commits an improper claims practice under the Illinois Insurance Code
commits an unlawful practice within the meaning of the Act.
LRB104 17900 BAB 31336 b

A BILL FOR

HB4719
LRB104 17900 BAB 31336 b
1

AN ACT concerning regulation.

2

Be it enacted by the People of the State of Illinois,
3
represented in the General Assembly:

4

Section 5.
The Illinois Insurance Code is amended by
5
changing Section 154.6 as follows:

6

(215 ILCS 5/154.6)

(from Ch. 73, par. 766.6)
7

Sec. 154.6.
Acts constituting improper claims practice.
8
Any of the following acts by a company, if committed without
9
just cause and in violation of Section 154.5, constitutes an
10
improper claims practice:
11

(a) Knowingly misrepresenting to claimants and
12

insureds relevant facts or policy provisions relating to
13

coverages at issue;
14

(b) Failing to acknowledge with reasonable promptness
15

pertinent communications with respect to claims arising
16

under its policies;
17

(c) Failing to adopt and implement reasonable
18

standards for the prompt investigations and settlement of
19

claims arising under its policies;
20

(d) Not attempting in good faith to effectuate prompt,
21

fair and equitable settlement of claims submitted in which
22

liability has become reasonably clear;
23

(e) Compelling policyholders to institute suits to

HB4719
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LRB104 17900 BAB 31336 b
1

recover amounts due under its policies by offering
2

substantially less than the amounts ultimately recovered
3

in suits brought by them;
4

(f) Engaging in activity which results in a
5

disproportionate number of meritorious complaints against
6

the insurer received by the Insurance Department;
7

(g) Engaging in activity which results in a
8

disproportionate number of lawsuits to be filed against
9

the insurer or its insureds by claimants;
10

(h) Refusing to pay claims without conducting a
11

reasonable investigation based on all available
12

information;
13

(i) Failing to affirm or deny coverage of claims
14

within a reasonable time after proof of loss statements
15

have been completed;
16

(j) Attempting to settle a claim for less than the
17

amount to which a reasonable person would believe the
18

claimant was entitled, by reference to written or printed
19

advertising material accompanying or made part of an
20

application or establishing unreasonable caps or limits on
21

paint or materials when estimating vehicle repairs;
22

(k) Attempting to settle claims on the basis of an
23

application which was altered without notice to, or
24

knowledge or consent of, the insured;
25

(l) Making a claims payment to a policyholder or
26

beneficiary omitting the coverage under which each payment

HB4719
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LRB104 17900 BAB 31336 b
1

is being made;
2

(m) Delaying the investigation or payment of claims by
3

requiring an insured, a claimant, or the physicians of
4

either to submit a preliminary claim report and then
5

requiring subsequent submission of formal proof of loss
6

forms, resulting in the duplication of verification;
7

(n) Failing in the case of the denial of a claim or the
8

offer of a compromise settlement to promptly provide a
9

reasonable and accurate explanation of the basis in the
10

insurance policy or applicable law for such denial or
11

compromise settlement;
12

(o) Failing to provide forms necessary to present
13

claims within 15 working days of a request with such
14

explanations as are necessary to use them effectively;
15

(p) Failing to adopt and implement reasonable
16

standards to verify that a repairer designated by the
17

insurance company to provide an estimate, perform repairs,
18

or engage in any other service in connection with an
19

insured loss on a vehicle is duly licensed under Section
20

5-301 of the Illinois Vehicle Code;
21

(q) Failing to provide as a persistent tendency a
22

notification on any written estimate prepared by an
23

insurance company in connection with an insured loss that
24

Illinois law requires that vehicle repairers must be
25

licensed in accordance with Section 5-301 of the Illinois
26

Vehicle Code;

HB4719
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LRB104 17900 BAB 31336 b
1

(r) Failing to pay the replacement vehicle use or
2

occupation tax, title, and transfer fees required by
3

Section 154.9 of this Code;
4

(r-5) Knowingly taking advantage of the insured's
5

physical infirmity, ignorance, illiteracy, or inability to
6

understand the language of the policy or any associated
7

agreements in order to obtain a favorable settlement of a
8

claim.
9

(r-10) Willfully misrepresenting the status or outcome
10

of an investigation or failing to take any meaningful
11

investigatory acts before issuing a denial or offer of a
12

compromise settlement.

13

(s) Engaging in any other acts which are in substance
14

equivalent to any of the foregoing.
15

Committing any of the acts specified in this Section is a
16
violation of the Consumer Fraud and Deceptive Business
17
Practices Act.

18
(Source: P.A. 102-69, eff. 7-1-22
.)

19

Section 10.
The Consumer Fraud and Deceptive Business
20
Practices Act is amended by adding Section 2MMMM as follows:

21

(815 ILCS 505/2MMMM new)
22

Sec. 2MMMM.
Improper claims practices under the Illinois
23
Insurance Code.
A person who commits an improper claims
24
practice specified in Sections 154.5 and 154.6 of the Illinois

HB4719
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LRB104 17900 BAB 31336 b
1
Insurance Code commits an unlawful practice within the meaning
2
of this Act.

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