Proper Notice to Governmental Agency for Effective Cancellation of Insurance Policy
National Liability and Fire Insurance Company (“National”) issued a general liability policy to Pro Med for coverage of its vehicles. However, Pro Med obtained a premium financing loan to fund the premium. Pro Med failed to make payments to the premium financing company; therefore, the company sent notice to National cancelling the policy. Subsequently, one of Pro Med’s vehicles was involved in an accident.
Acuity, insurer for the injured party, claims that the Insurance Code requires notice to the Secretary of State when a premium finance company cancels insurance for medical transport vehicles. National argues that the Code does not apply because it only applies when the policy is cancelled by the insurer issuing the policy. In this case, the premium finance company cancelled the policy.
The court concluded that the cancellation of an insurance policy by a premium finance company does not take effect if the insurer fails to give notice to the Secretary of State. Therefore, because a medical transport vehicle was involved in the case and the premium finance company cancelled the policy, notice must be given to the Secretary of State. The cancellation did not take effect for the medical transport vehicle.
Am. Home Assur. Co. v. Taylor, 931 N.E.2d 304, 402 (Ill. App. 3d 549).
