NAII Urges Illinois Supreme Court to Change Ruling

Stating that thousands of policy amendments sent through the mail during the past decade could be ruled invalid if an Illinois appellate court decision is not overturned, the National Association of Independent Insurers (NAII) urged the Illinois Supreme Court to reverse the lower court’s ruling that changes the proof of mailing requirement for policy amendments.

According to the NAII, in the case of Guillen v. Potomac, the insurer added a lead liability exclusion to its policy via mail. The appellate court ruled that Potomac did not comply with proof of mailing requirements, so proper notice was not given to the insured. Thus the exclusion was never incorporated into the policy. The court held that the proof of mailing required for notice of policy amendment is the same as that required for notices of non-renewal or cancellations.

“The lower court misapplied Illinois law in this case and has caused uncertainty regarding the effectiveness of coverage. This confusion fosters more litigation and does not serve the interests of policyholders or Illinois insurance companies,” said Laura Kotelman, counsel for NAII.

NAII’s amicus brief regarding the case maintains that the law does not require the same level of proof of notification for policy amendments as it does for non-renewals and cancellations. The statute pertaining to changes in coverage simply requires that a company maintain proof of mailing or proof of receipt with no further specification as to the form of proof of mailing required.

“If the Illinois legislature had wanted the same proof of mailing requirement, it could and would have stated that in the law and given the notification a uniform standard throughout the statute. We are urging the Supreme Court to clarify the inconsistency between the appellate court’s holding and the plain language of the statute and overturn the decision,” Kotelman said.

Topics Illinois