Illinois Code § 5

§ 5.

Definitions. In this Act, unless the context otherwise requires, the following words and phrases shall have the following meanings: "Collateral" means any or all property pledged or otherwise used to secure payment, repayment, or performance under a credit or lease agreement, whether personal property, real property, fixtures, inventory, receivables, rights, privileges, or otherwise. "Collateral protection insurance" means: Insurance coverage that: (1) is purchased unilaterally by a creditor subsequent to the date of a credit agreement; (2) provides monetary protection against loss of or damage to the collateral or against liability arising out of the ownership or use of the collateral; and (3) is purchased according to the terms of a credit agreement as a result of a debtor's failure to provide evidence of insurance or failure to maintain adequate insurance covering the collateral, with the costs of the collateral protection insurance, including interest and any other charges imposed by the creditor in connection with the placement of the collateral protection insurance, payable by the debtor. Collateral protection insurance includes insurance coverage that is purchased to protect only the interest of the creditor and insurance coverage that is purchased to protect both the interest of the creditor and some or all of the interest of the debtor. The term of a collateral protection insurance policy may, but need not, extend to the full term of the credit transaction. Collateral protection insurance does not include insurance coverage that is: (1) purchased by the creditor for which the debtor is not charged; (2) purchased at the inception of a credit transaction to which the debtor is a party or agrees, whether or not the costs are included in any payment plan under the credit transaction; (3) purchased by the creditor following foreclosure, repossession, or a similar event wherein the creditor gains possession or control over the collateral; (4) maintained by the creditor for the protection of any or all collateral which may come into the possession or control of the creditor through foreclosure, repossession, or a similar event; (5) credit insurance, mortgage protection insurance, insurance issued to cover the life or health of the debtor, or any other insurance maintained to cover the inability or failure of the debtor to make payment under the credit agreement; (6) title insurance; or (7) flood insurance required to be placed by creditors by 42 U.S.C. 4012(a), as amended, pursuant to the National Flood Insurance Reform Act of 1994. "Credit agreement" means the written document or documents that set forth the terms of the credit transaction. "Credit transaction" means any transaction the terms of which require the payment or repayment of money, goods, services, property, rights, or privileges, which is to be made on one or more future dates, where such obligation is secured by collateral. "Creditor" means any person, corporation, partnership, association, or other venture, which is a lender of money or the vendor or lessor of goods, services, property, rights, or privileges, for which repayment is arranged through a credit transaction, and includes any successor to the rights, title, interest, or liens of such lender, vendor, or lessor. "Debtor" means a borrower of money or a purchaser or lessee of goods, services, property, rights, or privileges, for which payment or repayment is arranged through a credit agreement. Debtor does not include any person who is not the primary obligor under a credit transaction and who is not jointly liable or jointly and severally liable with the debtor for the obligation. (Source: P.A. 89-623, eff. 8-9-96; 90-35, eff. 6-27-97.)