Topic:
Insured’s Independent Counsel Act
(Mulroe, D-Chicago) applies if an insurer has a duty to defend an insured under a policy of insurance and a significant and actual conflict of interest arises that imposes a duty on the insurer to provide independent counsel to the insured. It requires the insurer to provide independent counsel to the insured unless the insured waives the right to independent counsel in writing. Defines the phrase “significant and actual conflict of interest” to exclude these circumstances: (1) claims or facts in a civil action for which the insurer denies coverage; (2) the mere issuance of a reservation of rights letter by the insurer; (3) a claim of damages in excess of the policy limits; (4) a claim of punitive damages; or (5) any other conflict that is not significant and actual. Scheduled for hearing next Tuesday in Senate Judiciary Committee.