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Stofer v. Motor Vehicle Casualty Co.

OPINION FILED OCTOBER 5, 1977.

ROBERT R. STOFER, APPELLEE,

v.

MOTOR VEHICLE CASUALTY CO. ET AL., APPELLANTS. — JOSEPH N. FOX, APPELLEE,

v.

THE HARTFORD FIRE INSURANCE CO. ET AL., APPELLANTS.



Appeal from the Circuit Court of Cook County, the Hon. Abraham W. Brussell, Judge, presiding.

MR. JUSTICE CLARK DELIVERED THE OPINION OF THE COURT:

Rehearing denied November 23, 1977.

This is a consolidated, direct, interlocutory appeal pursuant to our Rules 302(b) and 308 (58 Ill.2d Rules 302(b), 308) from decisions of the circuit court of Cook County holding sections 397 and 401 of the Insurance Code of 1937 (Ill. Rev. Stat. 1975, ch. 73, pars. 1009, 1013) invalid on the grounds that the power thereby granted the Director of Insurance to prescribe uniform insurance contracts (including contractual limitations on the time within which suits may be brought against the insurer by the insured) violated the separation of governmental branches and powers mandated by section 1 of article II of our constitution (Ill. Const. 1970, art. II, sec. 1). We reverse, because we conclude that the powers thus exercised by the Director of Insurance are of the type which the legislature could (and did) properly lodge in an executive officer.

Section 397 of the Insurance Code of 1937 (Ill. Rev. Stat. 1975, ch. 73, par. 1009) provides:

"The Director of Insurance shall promulgate such rules and regulations as may be necessary to effect uniformity in all basic policies of fire and lightning insurance issued in this State, to the end that there be concurrency of contract where two or more companies insure the same risk."

Section 401 (Ill. Rev. Stat. 1975, ch. 73, par. 1013) further provides:

"The Director * * * shall have the power

(a) to make reasonable rules and regulations as may be necessary for making effective such laws."

Pursuant to that authority, the Director had promulgated Rule 23.01, which prescribed "the Standard Policy for fire and lightning insurance of the State of Illinois" and prohibited the making, issuance, and delivery of insurance contracts and policies which did not conform to the standard policy.

The standard policy includes the following clause:

"No suit or action on this policy for the recovery of any claim shall be sustainable in any court of law or equity unless all of the requirements of this policy shall have been complied with, and unless commenced within twelve months next after inception of the loss."

The plaintiffs in these two actions, Robert Stofer and Joseph Fox, and the defendant insurance companies entered into temporary contracts of fire insurance ("binders") which incorporated the above-quoted standard clause.

Stofer allegedly suffered a loss on October 29, 1972. On December 18, 1972, Stofer submitted a written claim to his insurer, accompanied by a sworn statement of "proof of loss." On May 22, 1973, the insurer rejected the claim, and on November 5, 1973, Stofer filed suit against his insurer in the circuit court of Cook County. As an affirmative defense, the insurance ...


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