Surplus Line Law
(215 ILCS 5/445)
Sec. 445. Surplus line.
(1) Surplus
line defined; surplus line insurer requirements.
“Surplus line insurance” means insurance on an
Illinois risk of the kinds specified in Classes 2
and 3 of
Section 4 of this Code procured from an
unauthorized insurer after the insurance producer
representing the insured or the surplus line
producer is unable, after diligent effort, to
procure said insurance from authorized insurers.
“Authorized
insurer” means an insurer that holds a certificate
of authority issued by the Director but, for the
purposes of this Section, does not include a
domestic surplus line insurer as defined in
Section 445a or any residual market mechanism.
“Residual
market mechanism” means an association,
organization, or other entity described in
Article XXXIII of this Code or Section 7-501 of
the
Illinois Vehicle Code or any similar
association, organization, or other entity.
“Unauthorized
insurer” means an insurer that does not hold a valid
certificate of authority issued by the Director but,
for the purposes of this Section, shall also include
a domestic surplus line insurer as defined in
Section 445a.
Insurance
producers may procure surplus line insurance only if
licensed as a surplus line producer under this
Section and may procure that insurance only from an
unauthorized insurer:
(a) that
based upon information available to the surplus line
producer has a policyholders surplus of not less
than $15,000,000 determined in accordance with
accounting rules that are applicable to authorized
insurers; and
(b) that has
standards of solvency and management that are
adequate for the protection of policyholders; and
(c) where an
unauthorized insurer does not meet the standards set
forth in (a) and (b) above, a surplus line producer
may, if necessary, procure insurance from that
insurer only if prior written warning of such fact
or condition is given to the insured by the
insurance producer or surplus line producer.
Insurance
producers shall not procure from an unauthorized
insurer an insurance policy:
(i) that is
designed to satisfy the proof of financial
responsibility and insurance requirements in any
Illinois law where the law requires that the proof
of insurance is issued by an authorized insurer or
residual market mechanism;
(ii) that
covers the risk of accidental injury to employees
arising out of and in the course of employment
according to the provisions of the
Workers' Compensation Act; or
(iii) that
insures any Illinois personal lines risk, as defined
in
subsection (a), (b), or (c) of Section 143.13 of
this Code, that is eligible for residual market
mechanism coverage, unless the insured or
prospective insured requests limits of liability
greater than the limits provided by the residual
market mechanism. In the course of making a diligent
effort to procure insurance from authorized
insurers, an insurance producer shall not be
required to submit a risk to a residual market
mechanism when the risk is not eligible for coverage
or exceeds the limits available in the residual
market mechanism.
Where there is
an insurance policy issued by an authorized insurer
or residual market mechanism insuring a risk
described in item (i), (ii), or (iii) above, nothing
in this paragraph shall be construed to prohibit a
surplus line producer from procuring from an
unauthorized insurer a policy insuring the risk on
an excess or umbrella basis where the excess or
umbrella policy is written over one or more
underlying policies.
(2) Surplus
line producer; license.
Any licensed producer who is
a resident of this State, or any nonresident who
qualifies under
Section 500-40, may be licensed as a surplus
line producer upon:
(a)
completing a prelicensing course of study. The
course provided for by this Section shall be
conducted under rules and regulations prescribed by
the Director. The Director may administer the course
or may make arrangements, including contracting with
an outside educational service, for administering
the course and collecting the non-refundable
application fee provided for in this subsection. Any
charges assessed by the Director or the educational
service for administering the course shall be paid
directly by the individual applicants. Each
applicant required to take the course shall enclose
with the application a non-refundable $20
application fee payable to the Director plus a
separate course administration fee. An applicant who
fails to appear for the course as scheduled, or
appears but fails to complete the course, shall not
be entitled to any refund, and shall be required to
submit a new request to attend the course together
with all the requisite fees before being rescheduled
for another course at a later date; and
(b) payment
of an annual license fee of $400; and
(c)
procurement of the surety bond required in
subsection (4) of this Section.
A surplus line
producer so licensed shall keep a separate account
of the business transacted thereunder which shall be
open at all times to the inspection of the Director
or his representative.
The
prelicensing course of study requirement in (a)
above shall not apply to insurance producers who
were licensed under the Illinois surplus line law on
or before January 1, 2002.
(3) Taxes
and reports.
(a) Surplus
line tax and penalty for late payment.
A surplus line
producer shall file with the Director on or before
February 1 and August 1 of each year a report in the
form prescribed by the Director on all surplus line
insurance procured from unauthorized insurers during
the preceding 6 month period ending December 31 or
June 30 respectively, and on the filing of such
report shall pay to the Director for the use and
benefit of the State a sum equal to 3.5% of the
gross premiums less returned premiums upon all
surplus line insurance procured or cancelled during
the preceding 6 months.
Any surplus
line producer who fails to pay the full amount due
under this subsection is liable, in addition to the
amount due, for such penalty and interest charges as
are provided for under
Section 412 of this Code. The Director, through
the Attorney General, may institute an action in the
name of the People of the State of Illinois, in any
court of competent jurisdiction, for the recovery of
the amount of such taxes and penalties due, and
prosecute the same to final judgment, and take such
steps as are necessary to collect the same.
(b) Fire
Marshal Tax.
Each surplus
line producer shall file with the Director on or
before March 31 of each year a report in the form
prescribed by the Director on all fire insurance
procured from unauthorized insurers subject to tax
under
Section 12 of the Fire Investigation Act and
shall pay to the Director the fire marshal tax
required thereunder.
(c) Taxes
and fees charged to insured.
The taxes
imposed under this subsection and the countersigning
fees charged by the Surplus Line Association of
Illinois may be charged to and collected from
surplus line insureds.
(4) Bond.
Each surplus line producer, as a condition to
receiving a surplus line producer's license, shall
execute and deliver to the Director a surety bond to
the People of the State in the penal sum of $20,000,
with a surety which is authorized to transact
business in this State, conditioned that the surplus
line producer will pay to the Director the tax,
interest and penalties levied under
subsection (3) of this Section.
(5)
Submission of documents to Surplus Line Association
of Illinois.
A surplus line producer shall submit
every insurance contract issued under his or her
license to the Surplus Line Association of Illinois
for recording and countersignature. The submission
and countersignature may be effected through
electronic means. The submission shall set forth:
(a) the name
of the insured;
(b) the
description and location of the insured property or
risk;
(c) the
amount insured;
(d) the
gross premiums charged or returned;
(e) the name
of the unauthorized insurer from whom coverage has
been procured;
(f) the
kind or kinds of insurance procured; and
(g) amount
of premium subject to tax required by
Section 12 of the Fire Investigation Act.
Proposals,
endorsements, and other documents which are
incidental to the insurance but which do not affect
the premium charged are exempted from filing and
countersignature.
The submission
of insuring contracts to the Surplus Line
Association of Illinois constitutes a certification
by the surplus line producer or by the insurance
producer who presented the risk to the surplus line
producer for placement as a surplus line risk that
after diligent effort the required insurance could
not be procured from authorized insurers and that
such procurement was otherwise in accordance with
the surplus line law.
(6)
Countersignature required.
It shall be unlawful for
an insurance producer to deliver any unauthorized
insurer contract unless such insurance contract is
countersigned by the Surplus Line Association of
Illinois.
(7)
Inspection of records.
A surplus line producer shall
maintain separate records of the business transacted
under his or her license, including complete copies
of surplus line insurance contracts maintained on
paper or by electronic means, which records shall be
open at all times for inspection by the Director and
by the Surplus Line Association of Illinois.
(8)
Violations and penalties.
The Director may suspend
or revoke or refuse to renew a surplus line producer
license for any violation of this Code. In addition
to or in lieu of suspension or revocation, the
Director may subject a surplus line producer to a
civil penalty of up to $2,000 for each cause for
suspension or revocation. Such penalty is
enforceable under subsection (5) of
Section 403A of this Code.
(9) Director
may declare insurer ineligible.
If the Director
determines that the further assumption of risks
might be hazardous to the policyholders of an
unauthorized insurer, the Director may order the
Surplus Line Association of Illinois not to
countersign insurance contracts evidencing insurance
in such insurer and order surplus line producers to
cease procuring insurance from such insurer.
(10) Service
of process upon Director.
Insurance contracts
delivered under this Section from unauthorized
insurers, other than domestic surplus line insurers
as defined in Section 445a, shall contain a
provision designating the Director and his
successors in office the true and lawful attorney of
the insurer upon whom may be served all lawful
process in any action, suit or proceeding arising
out of such insurance. Service of process made upon
the Director to be valid hereunder must state the
name of the insured, the name of the unauthorized
insurer and identify the contract of insurance. The
Director at his option is authorized to forward a
copy of the process to the Surplus Line Association
of Illinois for delivery to the unauthorized insurer
or the Director may deliver the process to the
unauthorized insurer by other means which he
considers to be reasonably prompt and certain.
(10.5)
Insurance contracts delivered under this Section
from unauthorized insurers, other than domestic
surplus line insurers as defined in
Section 445a, shall have stamped or imprinted on
the first page thereof in not less than 12-pt. bold
face type the following legend: “Notice to
Policyholder: This contract is issued, pursuant to
Section 445 of the Illinois Insurance Code, by a
company not authorized and licensed to transact
business in Illinois and as such is not covered by
the Illinois Insurance Guaranty Fund.” Insurance
contracts delivered under this Section from domestic
surplus line insurers as defined in
Section 445a shall have stamped or imprinted on
the first page thereof in not less than 12-pt. bold
face type the following legend: “Notice to
Policyholder: This contract is issued by a domestic
surplus line insurer, as defined in Section 445a of
the Illinois Insurance Code, pursuant to Section
445, and as such is not covered by the Illinois
Insurance Guaranty Fund.”
(11)
The
Illinois Surplus Line law does not apply to
insurance of property and operations of railroads or
aircraft engaged in interstate or foreign commerce,
insurance of vessels, crafts or hulls, cargoes,
marine builder's risks, marine protection and
indemnity, or other risks including strikes and war
risks insured under ocean or wet marine forms of
policies.
(12)
Surplus
line insurance procured under this Section,
including insurance procured from a domestic surplus
line insurer, is not subject to the provisions of
the Illinois Insurance Code other than Sections
123,
123.1,
401,
401.1,
402,
403,
403A,
408,
412,
445,
445.1,
445.2,
445.3,
445.4, and all of the provisions of
Article XXXI to the extent that the provisions
of
Article XXXI are not inconsistent with the terms
of this Act.
(215 ILCS
5/445.1)
Sec.
445.1. Surplus Line Association of Illinois.
There
is hereby created a non-profit association to be
known as the
Surplus Line Association of Illinois. All
surplus line producers shall be and must remain
individual members of the Association as a condition
of their holding a license as a surplus line
producer in this State. The Association must perform
its functions under the plan of operation
established and approved under
Section 445.3 and must exercise its powers
through a board of directors established under
Section 445.2 of this Code. The Association
shall be supervised by the Director and is subject
to the applicable provisions of the Illinois
Insurance Code. The Association shall be authorized
and have the duty to:
(1) receive,
record and countersign all surplus line insurance
contracts which surplus line producers are required
to file with the Association under
subsection (5) of Section 445;
(2) prepare
monthly reports for the Director on surplus line
insurance procured by its members during the
preceding month in such form and providing such
information as the Director may prescribe;
(3) prepare
and deliver to each licensee and to the Director the
reports of surplus line business prescribed in
subsection (3) of Section 445;
(4) assess
its members for costs of operations in accordance
with a schedule adopted by the Board of Directors of
the Association and approved by the Director;
(5) employ
and retain such persons as are necessary to carry
out the duties of the Association;
(6) borrow
money as necessary to effect the purposes of the
Association;
(7) enter
contracts as necessary to effect the purposes of the
Association;
(8) perform
such other acts as will facilitate and encourage
compliance by its members with the surplus line law
of this State and rules promulgated thereunder; and
(9) provide
such other services to its members as are incidental
or related to the purposes of the Association.
Nothing in this Act shall be construed as giving the
Association any discretionary authority to enforce
this Act or to withhold countersignature of
insurance contracts which meet the requirements of
subsection (5) of Section 445.
(215 ILCS
5/445.2)
Sec.
445.2. Board of Directors.
The Association shall
function through a Board of Directors elected by the
Association members, and officers who shall be
elected by the Board of Directors.
The
Board of Directors of the Association shall consist
of not less than 5 nor more than 9 persons serving
terms as established in the plan of operation. The
plan of operation shall provide for the election of
a Board of Directors by the members of the
Association from its membership. The plan of
operation shall fix the manner of voting and may
weigh each member's vote to reflect the annual
surplus line insurance premium written by the
member. Members employed by the same or affiliated
employers may consolidate their premiums written and
delegate an individual officer or partner to
represent the member in the exercise of Association
affairs, including service on the Association Board
of Directors. The Director shall appoint an interim
Board of Directors for the sole purpose of
conducting an election of Directors. If no Board of
Directors is elected within 90 days after the
effective date of this amendatory Act of 1984, the
Director shall appoint the initial members of the
Board of Directors.
The
Board of Directors shall elect such officers as may
be provided in the plan of operation.
(215 ILCS
5/445.3)
Sec. 445.3.
Plan of Operation.
(1) The
Association shall submit to the Director a plan of
operation and any amendments thereto to provide
operating procedures for the administration of the
Association. The plan of operation and any
amendments thereto shall become effective upon
approval in writing by the Director.
(2) If the
Association fails to submit a suitable plan of
operation within 180 days following the effective
date of this amendatory Act of 1984, or if at any
time thereafter the Association fails to submit
required amendments to the plan of operation, the
Director shall, after notice and hearing pursuant to
Sections
401,
402 and
403 of this Code, adopt and promulgate such
rules as are necessary or advisable to effectuate
the provisions of this Act. Such rules shall
continue in force until modified by the Director or
superseded by a plan of operation submitted by the
Association and approved by the Director.
(3) All
Association members must comply with the plan of
operation.
(215 ILCS
5/445.4)
Sec.
445.4. Examination.
The Director shall, at such
times as he deems necessary, make or cause to be
made an examination of the Association. The
reasonable cost of any such examination shall be
paid by the Association upon presentation to it by
the Director of a detailed account of such cost.
During the course of such examination, the
directors, officers, members, agents and employees
of the Association may be examined under oath
regarding the operation of the Association and shall
make available all books, records, accounts,
documents and agreements pertaining thereto. The
Director shall furnish a copy of the examination
report to the Association. Within 20 days after
receipt of the report, the Association may request a
hearing on the report or any facts or
recommendations therein. If the Director finds the
Association or any of its members to be in violation
of this Act, he may issue an order requiring
discontinuance of such violation.
(215 ILCS
5/445.5)
Sec.
445.5. Immunity.
There shall be no liability on the
part of and no causes of action of any nature shall
arise against the Association, its directors,
officers, agents or employees, or the Director of
Insurance or his representatives for any action
taken or omitted by them in the performance of their
powers and duties under this Act.
(215 ILCS
5/445a)
Sec. 445a.
Domestic surplus line insurer.
(a) A
domestic insurer possessing policyholder surplus of
at least $15,000,000 may pursuant to a resolution by
its board of directors, and with the written
approval of the Director, be designated as a
"domestic surplus line insurer".
(b) A
domestic surplus line insurer may only insure in
this State an Illinois risk procured from a surplus
line producer pursuant to
Section 445 of this Code.
(c) A
domestic surplus line insurer must agree not to
issue a policy designed to satisfy the financial
responsibility requirements of the
Illinois Vehicle Code, the
Workers' Compensation Act, or the
Workers' Occupational Diseases Act. A domestic
surplus line insurer is not subject to the
provisions of Articles
XXXIII,
XXXIII 1/2,
XXXIV,
XXXVIIIA,
Section 468, or Section 478.1 of this Code.
Appendix 1: Classes of Insurance
(215 ILCS 5/4)
Sec. 4.
Classes of insurance. Insurance and insurance
business shall be classified as follows:
Class 1. Life,
Accident and Health.
(a) Life.
Insurance on the lives of persons and every
insurance appertaining thereto or connected
therewith and granting, purchasing or disposing of
annuities. Policies of life or endowment insurance
or annuity contracts or contracts supplemental
thereto which contain provisions for additional
benefits in case of death by accidental means and
provisions operating to safeguard such policies or
contracts against lapse, to give a special surrender
value, or special benefit, or an annuity, in the
event, that the insured or annuitant shall become
totally and permanently disabled as defined by the
policy or contract, or which contain benefits
providing acceleration of life or endowment or
annuity benefits in advance of the time they would
otherwise be payable, as an indemnity for long term
care which is certified or ordered by a physician,
including but not limited to, professional nursing
care, medical care expenses, custodial nursing care,
non-nursing custodial care provided in a nursing
home or at a residence of the insured, or which
contain benefits providing acceleration of life or
endowment or annuity benefits in advance of the time
they would otherwise be payable, at any time during
the insured's lifetime, as an indemnity for a
terminal illness shall be deemed to be policies of
life or endowment insurance or annuity contracts
within the intent of this clause.
Also to be
deemed as policies of life or endowment insurance or
annuity contracts within the intent of this clause
shall be those policies or riders that provide for
the payment of up to 75% of the face amount of
benefits in advance of the time they would otherwise
be payable upon a diagnosis by a physician licensed
to practice medicine in all of its branches that the
insured has incurred a covered condition listed in
the policy or rider.
"Covered
condition", as used in this clause, means: heart
attack, stroke, coronary artery surgery, life
threatening cancer, renal failure, alzheimer's
disease, paraplegia, major organ transplantation,
total and permanent disability, and any other
medical condition that the Department may approve
for any particular filing.
The Director
may issue rules that specify prohibited policy
provisions, not otherwise specifically prohibited by
law, which in the opinion of the Director are
unjust, unfair, or unfairly discriminatory to the
policyholder, any person insured under the policy,
or beneficiary.
(b) Accident
and health. Insurance against bodily injury,
disablement or death by accident and against
disablement resulting from sickness or old age and
every insurance appertaining thereto, including
stop-loss insurance. Stop-loss insurance is
insurance against the risk of economic loss issued
to a single employer self-funded employee disability
benefit plan or an employee welfare benefit plan as
described in 29 U.S.C. 100 et seq.
(c) Legal
Expense Insurance. Insurance which involves the
assumption of a contractual obligation to reimburse
the beneficiary against or pay on behalf of the
beneficiary, all or a portion of his fees, costs, or
expenses related to or arising out of services
performed by or under the supervision of an attorney
licensed to practice in the jurisdiction wherein the
services are performed, regardless of whether the
payment is made by the beneficiaries individually or
by a third person for them, but does not include the
provision of or reimbursement for legal services
incidental to other insurance coverages. The
insurance laws of this State, including this Act do
not apply to:
(i)
Retainer contracts made by attorneys at law with
individual clients with fees based on estimates of
the nature and amount of services to be provided to
the specific client, and similar contracts made with
a group of clients involved in the same or closely
related legal matters;
(ii) Plans
owned or operated by attorneys who are the providers
of legal services to the plan;
(iii) Plans
providing legal service benefits to groups where
such plans are owned or operated by authority of a
state, county, local or other bar association;
(iv) Any
lawyer referral service authorized or operated by a
state, county, local or other bar association;
(v) The
furnishing of legal assistance by labor unions and
other employee organizations to their members in
matters relating to employment or occupation;
(vi) The
furnishing of legal assistance to members or
dependents, by churches, consumer organizations,
cooperatives, educational institutions, credit
unions, or organizations of employees, where such
organizations contract directly with lawyers or law
firms for the provision of legal services, and the
administration and marketing of such legal services
is wholly conducted by the organization or its
subsidiary;
(vii) Legal
services provided by an employee welfare benefit
plan defined by the Employee Retirement Income
Security Act of 1974;
(viii) Any
collectively bargained plan for legal services
between a labor union and an employer negotiated
pursuant to Section 302 of the Labor Management
Relations Act as now or hereafter amended, under
which plan legal services will be provided for
employees of the employer whether or not payments
for such services are funded to or through an
insurance company.
Class 2.
Casualty, Fidelity and Surety.
(a) Accident
and health. Insurance against bodily injury,
disablement or death by accident and against
disablement resulting from sickness or old age and
every insurance appertaining thereto, including
stop-loss insurance. Stop-loss insurance is
insurance against the risk of economic loss issued
to a single employer self-funded employee disability
benefit plan or an employee welfare benefit plan as
described in 29 U.S.C. 1001 et seq.
(b) Vehicle.
Insurance against any loss or liability resulting
from or incident to the ownership, maintenance or
use of any vehicle (motor or otherwise), draft
animal or aircraft. Any policy insuring against any
loss or liability on account of the bodily injury or
death of any person may contain a provision for
payment of disability benefits to injured persons
and death benefits to dependents, beneficiaries or
personal representatives of persons who are killed,
including the named insured, irrespective of legal
liability of the insured, if the injury or death for
which benefits are provided is caused by accident
and sustained while in or upon or while entering
into or alighting from or through being struck by a
vehicle (motor or otherwise), draft animal or
aircraft, and such provision shall not be deemed to
be accident insurance.
(c)
Liability. Insurance against the liability of the
insured for the death, injury or disability of an
employee or other person, and insurance against the
liability of the insured for damage to or
destruction of another person's property.
(d) Workers'
compensation. Insurance of the obligations accepted
by or imposed upon employers under laws for workers'
compensation.
(e) Burglary
and forgery. Insurance against loss or damage by
burglary, theft, larceny, robbery, forgery, fraud or
otherwise; including all householders' personal
property floater risks.
(f) Glass.
Insurance against loss or damage to glass including
lettering, ornamentation and fittings from any
cause.
(g) Fidelity
and surety. Become surety or guarantor for any
person, copartnership or corporation in any position
or place of trust or as custodian of money or
property, public or private; or, becoming a surety
or guarantor for the performance of any person,
copartnership or corporation of any lawful
obligation, undertaking, agreement or contract of
any kind, except contracts or policies of insurance;
and underwriting blanket bonds. Such obligations
shall be known and treated as suretyship obligations
and such business shall be known as surety business.
(h)
Miscellaneous. Insurance against loss or damage to
property and any liability of the insured caused by
accidents to boilers, pipes, pressure containers,
machinery and apparatus of any kind and any
apparatus connected thereto, or used for creating,
transmitting or applying power, light, heat, steam
or refrigeration, making inspection of and issuing
certificates of inspection upon elevators, boilers,
machinery and apparatus of any kind and all
mechanical apparatus and appliances appertaining
thereto; insurance against loss or damage by water
entering through leaks or openings in buildings, or
from the breakage or leakage of a sprinkler, pumps,
water pipes, plumbing and all tanks, apparatus,
conduits and containers designed to bring water into
buildings or for its storage or utilization therein,
or caused by the falling of a tank, tank platform or
supports, or against loss or damage from any cause
(other than causes specifically enumerated under
Class 3 of this Section) to such sprinkler, pumps,
water pipes, plumbing, tanks, apparatus, conduits or
containers; insurance against loss or damage which
may result from the failure of debtors to pay their
obligations to the insured; and insurance of the
payment of money for personal services under
contracts of hiring.
(i) Other
casualty risks. Insurance against any other casualty
risk not otherwise specified under Classes 1 or 3,
which may lawfully be the subject of insurance and
may properly be classified under Class 2.
(j)
Contingent losses. Contingent, consequential and
indirect coverages wherein the proximate cause of
the loss is attributable to any one of the causes
enumerated under Class 2. Such coverages shall, for
the purpose of classification, be included in the
specific grouping of the kinds of insurance wherein
such cause is specified.
(k)
Livestock and domestic animals. Insurance against
mortality, accident and health of livestock and
domestic animals.
(l) Legal
expense insurance. Insurance against risk resulting
from the cost of legal services as defined under
Class 1(c).
Class 3. Fire
and Marine, etc.
(a) Fire.
Insurance against loss or damage by fire, smoke and
smudge, lightning or other electrical disturbances.
(b)
Elements. Insurance against loss or damage by
earthquake, windstorms, cyclone, tornado, tempests,
hail, frost, snow, ice, sleet, flood, rain, drought
or other weather or climatic conditions including
excess or deficiency of moisture, rising of the
waters of the ocean or its tributaries.
(c) War,
riot and explosion. Insurance against loss or damage
by bombardment, invasion, insurrection, riot,
strikes, civil war or commotion, military or usurped
power, or explosion (other than explosion of steam
boilers and the breaking of fly wheels on premises
owned, controlled, managed, or maintained by the
insured.)
(d) Marine
and transportation. Insurance against loss or damage
to vessels, craft, aircraft, vehicles of every kind,
(excluding vehicles operating under their own power
or while in storage not incidental to
transportation) as well as all goods, freights,
cargoes, merchandise, effects, disbursements,
profits, moneys, bullion, precious stones,
securities, chooses in action, evidences of debt,
valuable papers, bottomry and respondentia interests
and all other kinds of property and interests
therein, in respect to, appertaining to or in
connection with any or all risks or perils of
navigation, transit, or transportation, including
war risks, on or under any seas or other waters, on
land or in the air, or while being assembled,
packed, crated, baled, compressed or similarly
prepared for shipment or while awaiting the same or
during any delays, storage, transshipment, or
reshipment incident thereto, including marine
builder's risks and all personal property floater
risks; and for loss or damage to persons or property
in connection with or appertaining to marine, inland
marine, transit or transportation insurance,
including liability for loss of or damage to either
arising out of or in connection with the
construction, repair, operation, maintenance, or use
of the subject matter of such insurance, (but not
including life insurance or surety bonds); but,
except as herein specified, shall not mean
insurances against loss by reason of bodily injury
to the person; and insurance against loss or damage
to precious stones, jewels, jewelry, gold, silver
and other precious metals whether used in business
or trade or otherwise and whether the same be in
course of transportation or otherwise, which shall
include jewelers' block insurance; and insurance
against loss or damage to bridges, tunnels and other
instrumentalities of transportation and
communication (excluding buildings, their furniture
and furnishings, fixed contents and supplies held in
storage) unless fire, tornado, sprinkler leakage,
hail, explosion, earthquake, riot and civil
commotion are the only hazards to be covered; and to
piers, wharves, docks and slips, excluding the risks
of fire, tornado, sprinkler leakage, hail,
explosion, earthquake, riot and civil commotion; and
to other aids to navigation and transportation,
including dry docks and marine railways, against all
risk.
(e) Vehicle.
Insurance against loss or liability resulting from
or incident to the ownership, maintenance or use of
any vehicle (motor or otherwise), draft animal or
aircraft, excluding the liability of the insured for
the death, injury or disability of another person.
(f)
Property damage, sprinkler leakage and crop.
Insurance against the liability of the insured for
loss or damage to another person's property or
property interests from any cause enumerated in this
class; insurance against loss or damage by water
entering through leaks or openings in buildings, or
from the breakage or leakage of a sprinkler, pumps,
water pipes, plumbing and all tanks, apparatus,
conduits and containers designed to bring water into
buildings or for its storage or utilization therein,
or caused by the falling of a tank, tank platform or
supports or against loss or damage from any cause to
such sprinklers, pumps, water pipes, plumbing,
tanks, apparatus, conduits or containers; insurance
against loss or damage from insects, diseases or
other causes to trees, crops or other products of
the soil.
(g) Other
fire and marine risks. Insurance against any other
property risk not otherwise specified under Classes
1 or 2, which may lawfully be the subject of
insurance and may properly be classified under Class
3.
(h)
Contingent losses. Contingent, consequential and
indirect coverages wherein the proximate cause of
the loss is attributable to any of the causes
enumerated under Class 3. Such coverages shall, for
the purpose of classification, be included in the
specific grouping of the kinds of insurance wherein
such cause is specified.
(i) Legal
expense insurance. Insurance against risk resulting
from the cost of legal services as defined under
Class 1(c).
Appendix 2: Fees, Charges and Taxes
ARTICLE XXV
FEES, CHARGES
AND TAXES
(215 ILCS
5/408)
Sec. 408. Fees
and charges.
(1) The
Director shall charge, collect and give proper
acquittances for the payment of the following fees
and charges:
(a) For
filing all documents submitted for the incorporation
or organization or certification of a domestic
company, except for a fraternal benefit society,
$2,000.
(b) For
filing all documents submitted for the incorporation
or organization of a fraternal benefit society,
$500.
(c) For
filing amendments to articles of incorporation and
amendments to declaration of organization, except
for a fraternal benefit society, a mutual benefit
association, a burial society or a farm mutual,
$200.
(d) For
filing amendments to articles of incorporation of a
fraternal benefit society, a mutual benefit
association or a burial society, $100.
(e) For
filing amendments to articles of incorporation of a
farm mutual, $50.
(f) For
filing bylaws or amendments thereto, $50.
(g) For
filing agreement of merger or consolidation:
(i) for a
domestic company, except for a fraternal benefit
society, a mutual benefit association, a burial
society, or a farm mutual, $2,000.
(ii) for a
foreign or alien company, except for a fraternal
benefit society, $600.
(iii) for a
fraternal benefit society, a mutual benefit
association, a burial society, or a farm mutual,
$200.
(h) For
filing agreements of reinsurance by a domestic
company, $200.
(i) For
filing all documents submitted by a foreign or alien
company to be admitted to transact business or
accredited as a reinsurer in this State, except for
a fraternal benefit society, $5,000.
(j) For
filing all documents submitted by a foreign or alien
fraternal benefit society to be admitted to transact
business in this State, $500.
(k) For
filing declaration of withdrawal of a foreign or
alien company, $50.
(l) For
filing annual statement, except a fraternal benefit
society, a mutual benefit association, a burial
society, or a farm mutual, $200.
(m) For
filing annual statement by a fraternal benefit
society, $100.
(n) For
filing annual statement by a farm mutual, a mutual
benefit association, or a burial society, $50.
(o) For
issuing a certificate of authority or renewal
thereof except to a fraternal benefit society, $200.
(p) For
issuing a certificate of authority or renewal
thereof to a fraternal benefit society, $100.
(q) For
issuing an amended certificate of authority, $50.
(r) For each
certified copy of certificate of authority, $20.
(s) For each
certificate of deposit, or valuation, or compliance
or surety certificate, $20.
(t) For
copies of papers or records per page, $1.
(u) For each
certification to copies of papers or records, $10.
(v) For
multiple copies of documents or certificates listed
in subparagraphs (r), (s), and (u) of paragraph (1)
of this Section, $10 for the first copy of a
certificate of any type and $5 for each additional
copy of the same certificate requested at the same
time, unless, pursuant to paragraph (2) of this
Section, the Director finds these additional fees
excessive.
(w) For
issuing a permit to sell shares or increase paid-up
capital:
(i) in
connection with a public stock offering, $300;
(ii) in any
other case, $100.
(x) For
issuing any other certificate required or
permissible under the law, $50.
(y) For
filing a plan of exchange of the stock of a domestic
stock insurance company, a plan of demutualization
of a domestic mutual company, or a plan of
reorganization under Article XII, $2,000.
(z) For
filing a statement of acquisition of a domestic
company as defined in Section 131.4 of this Code,
$2,000.
(aa) For
filing an agreement to purchase the business of an
organization authorized under the Dental Service
Plan Act or the Voluntary Health Services Plans Act
or of a health maintenance organization or a limited
health service organization, $2,000.
(bb) For
filing a statement of acquisition of a foreign or
alien insurance company as defined in Section
131.12a of this Code, $1,000.
(cc) For
filing a registration statement as required in
Sections 131.13 and 131.14, the notification as
required by Sections 131.16, 131.20a, or 141.4, or
an agreement or transaction required by Sections
124.2(2), 141, 141a, or 141.1, $200.
(dd) For
filing an application for licensing of:
(i) a
religious or charitable risk pooling trust or a
workers' compensation pool, $1,000;
(ii) a
workers' compensation service company, $500;
(iii) a
self-insured automobile fleet, $200; or
(iv) a
renewal of or amendment of any license issued
pursuant to (i), (ii), or (iii) above, $100.
(ee) For
filing articles of incorporation for a syndicate to
engage in the business of insurance through the
Illinois Insurance Exchange, $2,000.
(ff) For
filing amended articles of incorporation for a
syndicate engaged in the business of insurance
through the Illinois Insurance Exchange, $100.
(gg) For
filing articles of incorporation for a limited
syndicate to join with other subscribers or limited
syndicates to do business through the Illinois
Insurance Exchange, $1,000.
(hh) For
filing amended articles of incorporation for a
limited syndicate to do business through the
Illinois Insurance Exchange, $100.
(ii) For a
permit to solicit subscriptions to a syndicate or
limited syndicate, $100.
(jj) For the
filing of each form as required in Section 143 of
this Code, $50 per form. The fee for advisory and
rating organizations shall be $200 per form.
(i) For the
purposes of the form filing fee, filings made on
insert page basis will be considered one form at the
time of its original submission. Changes made to a
form subsequent to its approval shall be considered
a new filing.
(ii) Only
one fee shall be charged for a form, regardless of
the number of other forms or policies with which it
will be used.
(iii) Fees
charged for a policy filed as it will be issued
regardless of the number of forms comprising that
policy shall not exceed $1,000 or $2,000 for
advisory or rating organizations.
(iv) The
Director may by rule exempt forms from such fees.
(kk) For
filing an application for licensing of a reinsurance
intermediary, $500.
(ll) For
filing an application for renewal of a license of a
reinsurance intermediary, $200.
(2) When
printed copies or numerous copies of the same paper
or records are furnished or certified, the Director
may reduce such fees for copies if he finds them
excessive. He may, when he considers it in the
public interest, furnish without charge to state
insurance departments and persons other than
companies, copies or certified copies of reports of
examinations and of other papers and records.
(3) The
expenses incurred in any performance examination
authorized by law shall be paid by the company or
person being examined. The charge shall be
reasonably related to the cost of the examination
including but not limited to compensation of
examiners, electronic data processing costs,
supervision and preparation of an examination report
and lodging and travel expenses. All lodging and
travel expenses shall be in accord with the
applicable travel regulations as published by the
Department of Central Management Services and
approved by the Governor's Travel Control Board,
except that out-of-state lodging and travel expenses
related to examinations authorized under Section 132
shall be in accordance with travel rates prescribed
under paragraph 301-7.2 of the Federal Travel
Regulations, 41 C.F.R. 301-7.2, for reimbursement of
subsistence expenses incurred during official
travel. All lodging and travel expenses may be
reimbursed directly upon authorization of the
Director. With the exception of the direct
reimbursements authorized by the Director, all
performance examination charges collected by the
Department shall be paid to the Insurance Producers
Administration Fund, however, the electronic data
processing costs incurred by the Department in the
performance of any examination shall be billed
directly to the company being examined for payment
to the Statistical Services Revolving Fund.
(4) At the
time of any service of process on the Director as
attorney for such service, the Director shall charge
and collect the sum of $20, which may be recovered
as taxable costs by the party to the suit or action
causing such service to be made if he prevails in
such suit or action.
(5) (a)
The costs incurred by the Department of Insurance in
conducting any hearing authorized by law shall be
assessed against the parties to the hearing in such
proportion as the Director of Insurance may
determine upon consideration of all relevant
circumstances including: (1) the nature of the
hearing; (2) whether the hearing was instigated by,
or for the benefit of a particular party or parties;
(3) whether there is a successful party on the
merits of the proceeding; and (4) the relative
levels of participation by the parties.
(b) For
purposes of this subsection (5) costs incurred shall
mean the hearing officer fees, court reporter fees,
and travel expenses of Department of Insurance
officers and employees; provided however, that costs
incurred shall not include hearing officer fees or
court reporter fees unless the Department has
retained the services of independent contractors or
outside experts to perform such functions.
(c) The
Director shall make the assessment of costs incurred
as part of the final order or decision arising out
of the proceeding; provided, however, that such
order or decision shall include findings and
conclusions in support of the assessment of costs.
This subsection (5) shall not be construed as
permitting the payment of travel expenses unless
calculated in accordance with the applicable travel
regulations of the Department of Central Management
Services, as approved by the Governor's Travel
Control Board. The Director as part of such order or
decision shall require all assessments for hearing
officer fees and court reporter fees, if any, to be
paid directly to the hearing officer or court
reporter by the party(s) assessed for such costs.
The assessments for travel expenses of Department
officers and employees shall be reimbursable to the
Director of Insurance for deposit to the fund out of
which those expenses had been paid.
(d) The
provisions of this subsection (5) shall apply in the
case of any hearing conducted by the Director of
Insurance not otherwise specifically provided for by
law.
(6) The
Director shall charge and collect an annual
financial regulation fee from every domestic company
for examination and analysis of its financial
condition and to fund the internal costs and
expenses of the Interstate Insurance Receivership
Commission as may be allocated to the State of
Illinois and companies doing an insurance business
in this State pursuant to Article X of the
Interstate Insurance Receivership Compact. The fee
shall be the greater fixed amount based upon the
combination of nationwide direct premium income and
nationwide reinsurance assumed premium income or
upon admitted assets calculated under this
subsection as follows:
(a)
Combination of nationwide direct premium income and
nationwide reinsurance assumed premium.
(i) $150,
if the premium is less than $500,000 and there is no
reinsurance assumed premium;
(ii) $750,
if the premium is $500,000 or more, but less than
$5,000,000 and there is no reinsurance assumed
premium; or if the premium is less than $5,000,000
and the reinsurance assumed premium is less than
$10,000,000;
(iii) $3,750,
if the premium is less than $5,000,000 and the
reinsurance assumed premium is $10,000,000 or more;
(iv) $7,500,
if the premium is $5,000,000 or more, but less than
$10,000,000;
(v) $18,000,
if the premium is $10,000,000 or more, but less than
$25,000,000;
(vi) $22,500,
if the premium is $25,000,000 or more, but less than
$50,000,000;
(vii) $30,000,
if the premium is $50,000,000 or more, but less than
$100,000,000;
(viii)
$37,500, if the premium is $100,000,000 or more.
(b) Admitted
assets.
(i) $150,
if admitted assets are less than $1,000,000;
(ii) $750,
if admitted assets are $1,000,000 or more, but less
than $5,000,000;
(iii) $3,750,
if admitted assets are $5,000,000 or more, but less
than $25,000,000;
(iv) $7,500,
if admitted assets are $25,000,000 or more, but less
than $50,000,000;
(v) $18,000,
if admitted assets are $50,000,000 or more, but less
than $100,000,000;
(vi) $22,500,
if admitted assets are $100,000,000 or more, but
less than $500,000,000;
(vii) $30,000,
if admitted assets are $500,000,000 or more, but
less than $1,000,000,000;
(viii)
$37,500, if admitted assets are $1,000,000,000 or
more.
(c) The sum
of financial regulation fees charged to the domestic
companies of the same affiliated group shall not
exceed $250,000 in the aggregate in any single year
and shall be billed by the Director to the member
company designated by the group.
(7) The
Director shall charge and collect an annual
financial regulation fee from every foreign or alien
company, except fraternal benefit societies, for the
examination and analysis of its financial condition
and to fund the internal costs and expenses of the
Interstate Insurance Receivership Commission as may
be allocated to the State of Illinois and companies
doing an insurance business in this State pursuant
to Article X of the Interstate Insurance
Receivership Compact. The fee shall be a fixed
amount based upon Illinois direct premium income and
nationwide reinsurance assumed premium income in
accordance with the following schedule:
(a) $150, if
the premium is less than $500,000 and there is no
reinsurance assumed premium;
(b) $750, if
the premium is $500,000 or more, but less than
$5,000,000 and there is no reinsurance assumed
premium; or if the premium is less than $5,000,000
and the reinsurance assumed premium is less than
$10,000,000;
(c) $3,750,
if the premium is less than $5,000,000 and the
reinsurance assumed premium is $10,000,000 or more;
(d) $7,500,
if the premium is $5,000,000 or more, but less than
$10,000,000;
(e) $18,000,
if the premium is $10,000,000 or more, but less than
$25,000,000;
(f)
$22,500, if the premium is $25,000,000 or more, but
less than $50,000,000;
(g) $30,000,
if the premium is $50,000,000 or more, but less than
$100,000,000;
(h) $37,500,
if the premium is $100,000,000 or more.
The sum of
financial regulation fees under this subsection (7)
charged to the foreign or alien companies within the
same affiliated group shall not exceed $250,000 in
the aggregate in any single year and shall be billed
by the Director to the member company designated by
the group.
(8)
Beginning January 1, 1992, the financial regulation
fees imposed under subsections (6) and (7) of this
Section shall be paid by each company or domestic
affiliated group annually. After January 1, 1994,
the fee shall be billed by Department invoice based
upon the company's premium income or admitted assets
as shown in its annual statement for the preceding
calendar year. The invoice is due upon receipt and
must be paid no later than June 30 of each calendar
year. All financial regulation fees collected by the
Department shall be paid to the Insurance Financial
Regulation Fund. The Department may not collect
financial examiner per diem charges from companies
subject to subsections (6) and (7) of this Section
undergoing financial examination after June 30,
1992.
(9) In
addition to the financial regulation fee required by
this Section, a company undergoing any financial
examination authorized by law shall pay the
following costs and expenses incurred by the
Department: electronic data processing costs, the
expenses authorized under Section 131.21 and
subsection (d) of Section 132.4 of this Code, and
lodging and travel expenses.
Electronic
data processing costs incurred by the Department in
the performance of any examination shall be billed
directly to the company undergoing examination for
payment to the Statistical Services Revolving Fund.
Except for direct reimbursements authorized by the
Director or direct payments made under Section
131.21 or subsection (d) of Section 132.4 of this
Code, all financial regulation fees and all
financial examination charges collected by the
Department shall be paid to the Insurance Financial
Regulation Fund.
All lodging
and travel expenses shall be in accordance with
applicable travel regulations published by the
Department of Central Management Services and
approved by the Governor's Travel Control Board,
except that out-of-state lodging and travel expenses
related to examinations authorized under Sections
132.1 through 132.7 shall be in accordance with
travel rates prescribed under paragraph 301-7.2 of
the Federal Travel Regulations, 41 C.F.R. 301-7.2,
for reimbursement of subsistence expenses incurred
during official travel. All lodging and travel
expenses may be reimbursed directly upon the
authorization of the Director.
In the case of
an organization or person not subject to the
financial regulation fee, the expenses incurred in
any financial examination authorized by law shall be
paid by the organization or person being examined.
The charge shall be reasonably related to the cost
of the examination including, but not limited to,
compensation of examiners and other costs described
in this subsection.
(10) Any
company, person, or entity failing to make any
payment of $150 or more as required under this
Section shall be subject to the penalty and interest
provisions provided for in subsections (4) and (7)
of Section 412.
(11) Unless
otherwise specified, all of the fees collected under
this Section shall be paid into the Insurance
Financial Regulation Fund.
(12) For
purposes of this Section:
(a)
"Domestic company" means a company as defined in
Section 2 of this Code which is incorporated or
organized under the laws of this State, and in
addition includes a not-for-profit corporation
authorized under the Dental Service Plan Act or the
Voluntary Health Services Plans Act, a health
maintenance organization, and a limited health
service organization.
(b) "Foreign
company" means a company as defined in Section 2 of
this Code which is incorporated or organized under
the laws of any state of the United States other
than this State and in addition includes a health
maintenance organization and a limited health
service organization which is incorporated or
organized under the laws of any state of the United
States other than this State.
(c) "Alien
company" means a company as defined in Section 2 of
this Code which is incorporated or organized under
the laws of any country other than the United
States.
(d)
"Fraternal benefit society" means a corporation,
society, order, lodge or voluntary association as
defined in Section 282.1 of this Code.
(e) "Mutual
benefit association" means a company, association or
corporation authorized by the Director to do
business in this State under the provisions of
Article XVIII of this Code.
(f) "Burial
society" means a person, firm, corporation, society
or association of individuals authorized by the
Director to do business in this State under the
provisions of Article XIX of this Code.
(g) "Farm
mutual" means a district, county and township mutual
insurance company authorized by the Director to do
business in this State under the provisions of the
Farm Mutual Insurance Company Act of 1986.
(215 ILCS
5/408.1)
Sec. 408.1.
Fee for valuation of life insurance policies. Upon
the effective date of this amendatory Act of 1998,
all actions to collect life insurance policy
valuation fees or to transfer such fees to the
General Revenue Fund from any protest account
established under the State Officers and Employees
Money Disposition Act shall cease and any such
protested life insurance policy valuation fee
payments shall be returned to the taxpayer who
initiated the protest.
(215 ILCS
5/408.2)
Sec. 408.2.
Statistical Services. Any public record, or any data
obtained by the Department of Insurance, which is
subject to public inspection or copying and which is
maintained on a computer processible medium, may be
furnished in a computer processed or computer
processible medium upon the written request of any
applicant and the payment of a reasonable fee
established by the Director sufficient to cover the
total cost of the Department for processing,
maintaining and generating such computer processible
records or data, except to the extent of any
salaries or compensation of Department officers or
employees.
The Director
of Insurance is specifically authorized to contract
with members of the public at large, enter waiver
agreements, or otherwise enter written agreements
for the purpose of assuring public access to the
Department's computer processible records or data,
or for the purpose of restricting, controlling or
limiting such access where necessary to protect the
confidentiality of individuals, companies or other
entities identified by such documents.
All fees
collected by the Director under this Section 408.2
shall be deposited in the Statistical Services
Revolving Fund and credited to the account of the
Department of Insurance. Any surplus funds remaining
in such account at the close of any fiscal year
shall be delivered to the State Treasurer for
deposit in the Insurance Financial Regulation Fund.
(215 ILCS
5/408.3)
Sec. 408.3.
Insurance Financial Regulation Fund; uses. The
monies deposited into the Insurance Financial
Regulation Fund shall be used only for (i) payment
of the expenses of the Department, including related
administrative expenses, incurred in analyzing,
investigating and examining the financial condition
or control of insurance companies and other entities
licensed or seeking to be licensed by the
Department, including the collection, analysis and
distribution of information on insurance premiums,
other income, costs and expenses, and (ii) to pay
internal costs and expenses of the Interstate
Insurance Receivership Commission allocated to this
State and authorized and admitted companies doing an
insurance business in this State under Article X of
the Interstate Receivership Compact. All
distributions and payments from the Insurance
Financial Regulation Fund shall be subject to
appropriation as otherwise provided by law for
payment of such expenses.
Sums
appropriated under clause (ii) of the preceding
paragraph shall be deemed to satisfy, pro tanto, the
obligations of insurers doing business in this State
under Article X of the Interstate Insurance
Receivership Compact.
Nothing in
this Code shall prohibit the General Assembly from
appropriating funds from the General Revenue Fund to
the Department for the purpose of administering this
Code.
No fees
collected pursuant to Section 408 of this Code shall
be used for the regulation of pension funds or
activities by the Department in the performance of
its duties under Article 22 of the Illinois Pension
Code.
If at the end
of a fiscal year the balance in the Insurance
Financial Regulation Fund which remains unexpended
or unobligated exceeds the amount of funds that the
Director may certify is needed for the purposes
enumerated in this Section, then the General
Assembly may appropriate that excess amount for
purposes other than those enumerated in this
Section.
(215 ILCS
5/408.4)
Sec. 408.4.
Receipt and use grants.
(a) The
Department is authorized to accept, receive, and
use, for and in behalf of the State, any grant of
money given to further the purposes of the insurance
laws of this State by the federal government as may
be offered unconditionally or under conditions,
agreements, covenants, or terms that, in the
judgment of the Department, are proper and
consistent with the provisions of subsection (b).
All moneys so received shall be deposited into the
Insurance Producer Administration Fund.
(b) The
moneys deposited into the Insurance Producer
Administration Fund under this Section shall be
accounted for separately and shall be expended,
pursuant to appropriation, only in accordance with
the conditions, agreements, covenants, or terms, if
any, under which they were accepted and must be used
to disseminate and provide insurance related
information or assistance to senior citizens.
(215 ILCS
5/409)
Sec. 409.
Annual privilege tax payable by companies.
(1) As of
January 1, 1999 for all health maintenance
organization premiums written; as of July 1, 1998
for all premiums written as accident and health
business, voluntary health service plan business,
dental service plan business, or limited health
service organization business; and as of January 1,
1998 for all other types of insurance premiums
written, every company doing any form of insurance
business in this State, including, but not limited
to, every risk retention group, and excluding all
fraternal benefit societies, all farm mutual
companies, all religious charitable risk pooling
trusts, and excluding all statutory residual market
and special purpose entities in which companies are
statutorily required to participate, whether
incorporated or otherwise, shall pay, for the
privilege of doing business in this State, to the
Director for the State treasury a State tax equal to
0.5% of the net taxable premium written, together
with any amounts due under Section 444 of this Code,
except that the tax to be paid on any premium
derived from any accident and health insurance or on
any insurance business written by any company
operating as a health maintenance organization,
voluntary health service plan, dental service plan,
or limited health service organization shall be
equal to 0.4% of such net taxable premium written,
together with any amounts due under Section 444.
Upon the failure of any company to pay any such tax
due, the Director may, by order, revoke or suspend
the company's certificate of authority after giving
20 days written notice to the company, or commence
proceedings for the suspension of business in this
State under the procedures set forth by Section
401.1 of this Code. The gross taxable premium
written shall be the gross amount of premiums
received on direct business during the calendar year
on contracts covering risks in this State, except
premiums on annuities, premiums on which State
premium taxes are prohibited by federal law,
premiums paid by the State for health care coverage
for Medicaid eligible insureds as described in
Section 5-2 of the Illinois Public Aid Code,
premiums paid for health care services included as
an element of tuition charges at any university or
college owned and operated by the State of Illinois,
premiums on group insurance contracts under the
State Employees Group Insurance Act of 1971, and
except premiums for deferred compensation plans for
employees of the State, units of local government,
or school districts. The net taxable premium shall
be the gross taxable premium written reduced only by
the following:
(a) the
amount of premiums returned thereon which shall be
limited to premiums returned during the same
preceding calendar year and shall not include the
return of cash surrender values or death benefits on
life policies including annuities;
(b)
dividends on such direct business that have been
paid in cash, applied in reduction of premiums or
left to accumulate to the credit of policyholders or
annuitants. In the case of life insurance, no
deduction shall be made for the payment of deferred
dividends paid in cash to policyholders on maturing
policies; dividends left to accumulate to the credit
of policyholders or annuitants shall be included as
gross taxable premium written when such dividend
accumulations are applied to purchase paid-up
insurance or to shorten the endowment or premium
paying period.
(2) The
annual privilege tax payment due from a company
under subsection (4) of this Section may be reduced
by: (a) the excess amount, if any, by which the
aggregate income taxes paid by the company, on a
cash basis, for the preceding calendar year under
subsections (a) through (d) of Section 201 of the
Illinois Income Tax Act exceed 1.5% of the company's
net taxable premium written for that prior calendar
year, as determined under subsection (1) of this
Section; and (b) the amount of any fire department
taxes paid by the company during the preceding
calendar year under Section 11-10-1 of the Illinois
Municipal Code. Any deductible amount or offset
allowed under items (a) and (b) of this subsection
for any calendar year will not be allowed as a
deduction or offset against the company's privilege
tax liability for any other taxing period or
calendar year.
(3) If a
company survives or was formed by a merger,
consolidation, reorganization, or reincorporation,
the premiums received and amounts returned or paid
by all companies party to the merger, consolidation,
reorganization, or reincorporation shall, for
purposes of determining the amount of the tax
imposed by this Section, be regarded as received,
returned, or paid by the surviving or new company.
(4) (a)
All companies subject to the provisions of this
Section shall make an annual return for the
preceding calendar year on or before March 15
setting forth such information on such forms as the
Director may reasonably require. Payments of
quarterly installments of the taxpayer's total
estimated tax for the current calendar year shall be
due on or before April 15, June 15, September 15,
and December 15 of such year, except that all
companies transacting insurance in this State whose
annual tax for the immediately preceding calendar
year was less than $5,000 shall make only an annual
return. Failure of a company to make the annual
payment, or to make the quarterly payments, if
required, of at least 25% of either (i) the total
tax paid during the previous calendar year or (ii)
80% of the actual tax for the current calendar year
shall subject it to the penalty provisions set forth
in Section 412 of this Code.
(b)
Notwithstanding the foregoing provisions, no annual
return shall be required or made on March 15, 1998,
under this subsection. For the calendar year 1998:
(i) each
health maintenance organization shall have no
estimated tax installments;
(ii) all
companies subject to the tax as of July 1, 1998 as
set forth in subsection (1) shall have estimated tax
installments due on September 15 and December 15 of
1998 which installments shall each amount to no less
than one-half of 80% of the actual tax on its net
taxable premium written during the period July 1,
1998, through December 31, 1998; and
(iii) all
other companies shall have estimated tax
installments due on June 15, September 15, and
December 15 of 1998 which installments shall each
amount to no less than one-third of 80% of the
actual tax on its net taxable premium written during
the calendar year 1998.
In the year
1999 and thereafter all companies shall make annual
and quarterly installments of their estimated tax as
provided by paragraph (a) of this subsection.
(5) In
addition to the authority specifically granted under
Article XXV of this Code, the Director shall have
such authority to adopt rules and establish forms as
may be reasonably necessary for purposes of
determining the allocation of Illinois corporate
income taxes paid under subsections (a) through (d)
of Section 201 of the Illinois Income Tax Act
amongst members of a business group that files an
Illinois corporate income tax return on a unitary
basis, for purposes of regulating the amendment of
tax returns, for purposes of defining terms, and for
purposes of enforcing the provisions of Article XXV
of this Code. The Director shall also have authority
to defer, waive, or abate the tax imposed by this
Section if in his opinion the company's solvency and
ability to meet its insured obligations would be
immediately threatened by payment of the tax due.
(215 ILCS
5/410)
Sec. 410.
Reports and statements for purpose of auditing
retaliatory and privilege tax returns.
(1) For the
purpose of enabling the Director to audit the
retaliatory and privilege tax calculation of a
company liable for such tax under the provisions of
Sections 409, 444 and 444.1, every such company, in
addition to all other statements and reports
required by law, shall file a report in writing with
the Director not later than March 1 of each year, in
the form prescribed by the Director, signed and
sworn to by its president, vice president,
secretary, treasurer or manager.
(2) In every
such return the reporting of premiums for tax
purposes shall be on a written basis or on a paid
for basis, consistent with the basis required by the
annual statement of the insurer filed with the
Director pursuant to Section 136.
(3) The
Director may require at any time verified
supplemental statements with reference to any matter
pertinent to the proper calculation of the tax.
(215 ILCS
5/412)
Sec. 412.
Refunds; penalties; collection.
(1) (a)
Whenever it appears to the satisfaction of the
Director that because of some mistake of fact, error
in calculation, or erroneous interpretation of a
statute of this or any other state, any authorized
company has paid to him, pursuant to any provision
of law, taxes, fees, or other charges in excess of
the amount legally chargeable against it, during the
6 year period immediately preceding the discovery of
such overpayment, he shall have power to refund to
such company the amount of the excess or excesses by
applying the amount or amounts thereof toward the
payment of taxes, fees, or other charges already
due, or which may thereafter become due from that
company until such excess or excesses have been
fully refunded, or upon a written request from the
authorized company, the Director shall provide a
cash refund within 120 days after receipt of the
written request if all necessary information has
been filed with the Department in order for it to
perform an audit of the annual return for the year
in which the overpayment occurred or within 120 days
after the date the Department receives all the
necessary information to perform such audit. The
Director shall not provide a cash refund if there
are insufficient funds in the Insurance Premium Tax
Refund Fund to provide a cash refund, if the amount
of the overpayment is less than $100, or if the
amount of the overpayment can be fully offset
against the taxpayer's estimated liability for the
year following the year of the cash refund request.
Any cash refund shall be paid from the Insurance
Premium Tax Refund Fund, a special fund hereby
created in the State treasury.
(b)
Beginning January 1, 2000 and thereafter, the
Department shall deposit a percentage of the amounts
collected under Sections 409, 444, and 444.1 of this
Code into the Insurance Premium Tax Refund Fund. The
percentage deposited into the Insurance Premium Tax
Refund Fund shall be the annual percentage. The
annual percentage shall be calculated as a fraction,
the numerator of which shall be the amount of cash
refunds approved by the Director for payment and
paid during the preceding calendar year as a result
of overpayment of tax liability under Sections 409,
444, and 444.1 of this Code and the denominator of
which shall be the amounts collected pursuant to
Sections 409, 444, and 444.1 of this Code during the
preceding calendar year. However, if there were no
cash refunds paid in a preceding calendar year, the
Department shall deposit 5% of the amount collected
in that preceding calendar year pursuant to Sections
409, 444, and 444.1 of this Code into the Insurance
Premium Tax Refund Fund instead of an amount
calculated by using the annual percentage.
(c)
Beginning July 1, 1999, moneys in the Insurance
Premium Tax Refund Fund shall be expended
exclusively for the purpose of paying cash refunds
resulting from overpayment of tax liability under
Sections 409, 444, and 444.1 of this Code as
determined by the Director pursuant to subsection
1(a) of this Section. Cash refunds made in
accordance with this Section may be made from the
Insurance Premium Tax Refund Fund only to the extent
that amounts have been deposited and retained in the
Insurance Premium Tax Refund Fund.
(d) This
Section shall constitute an irrevocable and
continuing appropriation from the Insurance Premium
Tax Refund Fund for the purpose of paying cash
refunds pursuant to the provisions of this Section.
(2) When any
insurance company or any surplus line producer fails
to file any tax return required under Sections
408.1, 409, 444, 444.1 and 445 of this Code or
Section 12 of the Fire Investigation Act on the date
prescribed, including any extensions, there shall be
added as a penalty $400 or 10% of the amount of such
tax, whichever is greater, for each month or part of
a month of failure to file, the entire penalty not
to exceed $2,000 or 50% of the tax due, whichever is
greater.
(3) (a)
When any insurance company or any surplus line
producer fails to pay the full amount due under the
provisions of this Section, Sections 408.1, 409,
444, 444.1 or 445 of this Code, or Section 12 of the
Fire Investigation Act, there shall be added to the
amount due as a penalty an amount equal to 10% of
the deficiency.
(b) If such
failure to pay is determined by the Director to be
wilful, after a hearing under Sections 402 and 403,
there shall be added to the tax as a penalty an
amount equal to the greater of 50% of the deficiency
or 10% of the amount due and unpaid for each month
or part of a month that the deficiency remains
unpaid commencing with the date that the amount
becomes due. Such amount shall be in lieu of any
determined under paragraph (a).
(4) Any
insurance company or any surplus line producer which
fails to pay the full amount due under this Section
or Sections 408.1, 409, 444, 444.1 or 445 of this
Code, or Section 12 of the Fire Investigation Act is
liable, in addition to the tax and any penalties,
for interest on such deficiency at the rate of 12%
per annum, or at such higher adjusted rates as are
or may be established under subsection (b) of
Section 6621 of the Internal Revenue Code, from the
date that payment of any such tax was due,
determined without regard to any extensions, to the
date of payment of such amount.
(5) The
Director, through the Attorney General, may
institute an action in the name of the People of the
State of Illinois, in any court of competent
jurisdiction, for the recovery of the amount of such
taxes, fees, and penalties due, and prosecute the
same to final judgment, and take such steps as are
necessary to collect the same.
(6) In the
event that the certificate of authority of a foreign
or alien company is revoked for any cause or the
company withdraws from this State prior to the
renewal date of the certificate of authority as
provided in Section 114, the company may recover the
amount of any such tax paid in advance. Except as
provided in this subsection, no revocation or
withdrawal excuses payment of or constitutes grounds
for the recovery of any taxes or penalties imposed
by this Code.
(7) When an
insurance company or domestic affiliated group fails
to pay the full amount of any fee of $200 or more
due under Section 408 of this Code, there shall be
added to the amount due as a penalty the greater of
$100 or an amount equal to 10% of the deficiency for
each month or part of a month that the deficiency
remains unpaid.
(215 ILCS
5/413)
Sec. 413.
Privilege Tax Payable on Admission of Foreign or
Alien Company.
(1) Every
foreign or alien company applying for a certificate
of authority to transact business in this State
shall pay to the Director a tax for the privilege of
transacting business in this State in accordance
with Section 409.
(2) If
during all or any part of the 3 year period next
preceding the date of application for a certificate
of authority the company had a certificate of
authority to transact business in this State, or if
it survives or was formed by a merger,
consolidation, reorganization or reincorporation,
and one or more of the parties thereto was a foreign
or alien company authorized to transact business in
this State during all or any part of such 3 year
period, then the tax shall be determined in
accordance with Section 409 on the basis of the last
entire calendar year during which the company or any
one of the foreign or alien companies parties to the
merger, consolidation, reorganization or
reincorporation was authorized to transact business
in this State, or if none was authorized during any
entire calendar year, then on the basis of the last
partial calendar year during which any of such
companies were authorized to transact business in
this State.
(215 ILCS
5/414a)
Sec. 414a.
Notwithstanding the provisions of this or any other
Act, the tax authorized by Section 414 of this Act
shall not be imposed after January 1, 1979; provided
that this Section shall not prohibit the collection
after January 1, 1979 of any taxes levied under
Section 414 prior to January 1, 1979, on property
subject to assessment and taxation under Section 414
of this Act prior to January 1, 1979. For the
purpose of replacing the revenue lost by taxing
districts, as defined in Section 1-150 of the
Property Tax Code, as a result of the abolition of
ad valorem taxes on personal property after January
1, 1979, there shall be imposed the taxes described
in Section 201(c) and (d) of the Illinois Income Tax
Act, Section 2a.1 of the Messages Tax Act, Section
2a.1 of the Gas Revenue Tax Act, Section 2a.1 of the
Public Utilities Revenue Act, and Section 1 of the
Water Company Invested Capital Tax Act. Such
replacement taxes owed within one year of the
effective date of the taxes established by this
amendatory Act of 1979 shall replace the personal
property tax levies of 1979. The replacement taxes
owed in each succeeding year shall replace the
personal property tax that could have been levied in
each succeeding year.
(215 ILCS
5/415)
Sec. 415. No
taxes to be imposed by political subdivisions. The
fees, charges and taxes provided for by this Article
shall be in lieu of all license fees or privilege or
occupation taxes or other fees levied or assessed by
any municipality, county or other political
subdivision of this State, and no municipality,
county or other political subdivision of this State
shall impose any license fee or privilege or
occupation tax or fee upon any domestic, foreign or
alien company, or upon any of its agents, for the
privilege of doing an insurance business therein,
except the tax authorized by Division 10 of Article
11 of the Illinois Municipal Code, as heretofore and
hereafter amended. This Section shall not be
construed to prohibit the levy and collection of:
(a) State,
county or municipal taxes upon the real and personal
property of such a company, including the tax
imposed by Section 414 of this Code, and
(b) taxes
for the purpose of maintaining the Office of the
State Fire Marshal and paying the expenses incident
thereto.
(215 ILCS
5/416)
(Text of
Section from P.A. 93-721)
Sec. 416.
Illinois Workers' Compensation Commission Operations
Fund Surcharge.
(a) As of
the effective date of this amendatory Act of the
93rd General Assembly, every company licensed or
authorized by the Illinois Department of Insurance
and insuring employers' liabilities arising under
the Workers' Compensation Act or the Workers'
Occupational Diseases Act shall remit to the
Director a surcharge based upon the annual direct
written premium, as reported under Section 136 of
this Act, of the company in the manner provided in
this Section. Such proceeds shall be deposited into
the Illinois Workers' Compensation Commission
Operations Fund as established in the Workers'
Compensation Act. If a company survives or was
formed by a merger, consolidation, reorganization,
or reincorporation, the direct written premiums of
all companies party to the merger, consolidation,
reorganization, or reincorporation shall, for
purposes of determining the amount of the fee
imposed by this Section, be regarded as those of the
surviving or new company.
(b) (1)
Except as provided in subsection (b)(2) of this
Section, beginning on July 1, 2004 and each year
thereafter, the Director shall charge an annual
Illinois Workers' Compensation Commission Operations
Fund Surcharge from every company subject to
subsection (a) of this Section equal to 1.5% of its
direct written premium for insuring employers'
liabilities arising under the Workers' Compensation
Act or Workers' Occupational Diseases Act as
reported in each company's annual statement filed
for the previous year as required by Section 136.
The Illinois Workers' Compensation Commission
Operations Fund Surcharge shall be collected by
companies subject to subsection (a) of this Section
as a separately stated surcharge on insured
employers at the rate of 1.5% of direct written
premium. All sums collected by the Department of
Insurance under the provisions of this Section shall
be paid promptly after the receipt of the same,
accompanied by a detailed statement thereof, into
the Illinois Workers' Compensation Commission
Operations Fund in the State treasury.
(b) (2)
Prior to July 1, 2004, the Director shall charge and
collect the surcharge set forth in subparagraph
(b)(1) of this Section on or before September 1,
2003, December 1, 2003, March 1, 2004 and June 1,
2004. For purposes of this subsection (b)(2), the
company shall remit the amounts to the Director
based on estimated direct premium for each quarter
beginning on July 1, 2003, together with a sworn
statement attesting to the reasonableness of the
estimate, and the estimated amount of direct premium
written forming the bases of the remittance.
(c) In
addition to the authority specifically granted under
Article XXV of this Code, the Director shall have
such authority to adopt rules or establish forms as
may be reasonably necessary for purposes of
enforcing this Section. The Director shall also have
authority to defer, waive, or abate the surcharge or
any penalties imposed by this Section if in the
Director's opinion the company's solvency and
ability to meet its insured obligations would be
immediately threatened by payment of the surcharge
due.
(d) When a
company fails to pay the full amount of any annual
Illinois Workers' Compensation Commission Operations
Fund Surcharge of $100 or more due under this
Section, there shall be added to the amount due as a
penalty the greater of $1,000 or an amount equal to
5% of the deficiency for each month or part of a
month that the deficiency remains unpaid.
(e) The
Department of Insurance may enforce the collection
of any delinquent payment, penalty, or portion
thereof by legal action or in any other manner by
which the collection of debts due the State of
Illinois may be enforced under the laws of this
State.
(f) Whenever
it appears to the satisfaction of the Director that
a company has paid pursuant to this Act an Illinois
Workers' Compensation Commission Operations Fund
Surcharge in an amount in excess of the amount
legally collectable from the company, the Director
shall issue a credit memorandum for an amount equal
to the amount of such overpayment. A credit
memorandum may be applied for the 2-year period from
the date of issuance, against the payment of any
amount due during that period under the surcharge
imposed by this Section or, subject to reasonable
rule of the Department of Insurance including
requirement of notification, may be assigned to any
other company subject to regulation under this Act.
Any application of credit memoranda after the period
provided for in this Section is void.
(g)
Annually, the Governor may direct a transfer of up
to 2% of all moneys collected under this Section to
the Insurance Financial Regulation Fund.
(Text of
Section from P.A. 93-840)
Sec. 416.
Industrial Commission Operations Fund Surcharge.
(a) As of
the effective date of this amendatory Act of 2004,
every company licensed or authorized by the Illinois
Department of Insurance and insuring employers'
liabilities arising under the Workers' Compensation
Act or the Workers' Occupational Diseases Act shall
remit to the Director a surcharge based upon the
annual direct written premium, as reported under
Section 136 of this Act, of the company in the
manner provided in this Section. Such proceeds shall
be deposited into the Industrial Commission
Operations Fund as established in the Workers'
Compensation Act. If a company survives or was
formed by a merger, consolidation, reorganization,
or reincorporation, the direct written premiums of
all companies party to the merger, consolidation,
reorganization, or reincorporation shall, for
purposes of determining the amount of the fee
imposed by this Section, be regarded as those of the
surviving or new company.
(b) (1)
Except as provided in subsection (b)(2) of this
Section, beginning on the effective date of this
amendatory Act of 2004 and on July 1 of each year
thereafter, the Director shall charge an annual
Industrial Commission Operations Fund Surcharge from
every company subject to subsection (a) of this
Section equal to 1.01% of its direct written premium
for insuring employers' liabilities arising under
the Workers' Compensation Act or Workers'
Occupational Diseases Act as reported in each
company's annual statement filed for the previous
year as required by Section 136. The Industrial
Commission Operations Fund Surcharge shall be
collected by companies subject to subsection (a) of
this Section as a separately stated surcharge on
insured employers at the rate of 1.01% of direct
written premium. The Industrial Commission
Operations Fund Surcharge shall not be collected by
companies subject to subsection (a) of this Section
from any employer that self-insures its liabilities
arising under the Workers' Compensation Act or
Workers' Occupational Diseases Act, provided that
the employer has paid the Industrial Commission
Operations Fund Fee pursuant to Section 4d of the
Workers' Compensation Act. All sums collected by the
Department of Insurance under the provisions of this
Section shall be paid promptly after the receipt of
the same, accompanied by a detailed statement
thereof, into the Industrial Commission Operations
Fund in the State treasury.
(b) (2)
The surcharge due pursuant to this amendatory Act of
2004 shall be collected instead of the surcharge due
on July 1, 2004 under Public Act 93-32. Payment of
the surcharge due under this amendatory Act of 2004
shall discharge the employer's obligations due on
July 1, 2004.
(c) In
addition to the authority specifically granted under
Article XXV of this Code, the Director shall have
such authority to adopt rules or establish forms as
may be reasonably necessary for purposes of
enforcing this Section. The Director shall also have
authority to defer, waive, or abate the surcharge or
any penalties imposed by this Section if in the
Director's opinion the company's solvency and
ability to meet its insured obligations would be
immediately threatened by payment of the surcharge
due.
(d) When a
company fails to pay the full amount of any annual
Industrial Commission Operations Fund Surcharge of
$100 or more due under this Section, there shall be
added to the amount due as a penalty the greater of
$1,000 or an amount equal to 5% of the deficiency
for each month or part of a month that the
deficiency remains unpaid.
(e) The
Department of Insurance may enforce the collection
of any delinquent payment, penalty, or portion
thereof by legal action or in any other manner by
which the collection of debts due the State of
Illinois may be enforced under the laws of this
State.
(f) Whenever
it appears to the satisfaction of the Director that
a company has paid pursuant to this Act an
Industrial Commission Operations Fund Surcharge in
an amount in excess of the amount legally
collectable from the company, the Director shall
issue a credit memorandum for an amount equal to the
amount of such overpayment. A credit memorandum may
be applied for the 2-year period from the date of
issuance, against the payment of any amount due
during that period under the surcharge imposed by
this Section or, subject to reasonable rule of the
Department of Insurance including requirement of
notification, may be assigned to any other company
subject to regulation under this Act. Any
application of credit memoranda after the period
provided for in this Section is void.
(g)
Annually, the Governor may direct a transfer of up
to 2% of all moneys collected under this Section to
the Insurance Financial Regulation Fund.
Appendix 3: Fire Marshal Tax
(425 ILCS
25/12)
Sec. 12. Every
fire insurance company, whether upon the stock or
mutual plan, and every other personal or business
entity doing any form of fire insurance business in
the State of Illinois, shall pay to the Department
of Insurance in the month of March, such amount as
may be assessed by the Department of Insurance,
which may not exceed 1% of the gross fire, sprinkler
leakage, riot, civil commotion, explosion and motor
vehicle fire risk premium receipts of such company
or other entity from such business done in the State
of Illinois during the preceding year, and shall
make an annual report or statement under oath to the
Department specifying the amount of such premiums
received during the preceding year. The Department
of Insurance shall pay the money so received into
the Fire Prevention Fund, to be used as specified in
Section 13.1 of this Act.
(425 ILCS
25/13)
Sec. 13. Every
company, firm, co-partnership, association or
aggregation of individuals, or body of persons
insuring each other, or their agents,
representatives, or attorneys in fact, who shall
refuse or neglect to comply with the requirements of
Section 12 of this Act, is liable, in addition to
the amount due, for such penalty and interest
charges as are provided for under Section 412 of the
"Illinois Insurance Code". The Director through the
Attorney General, may institute an action in the
name of the People of the State of Illinois, in any
court of competent jurisdiction for the recovery of
the amount of such taxes and penalties due, and
prosecute the same to final judgment, and take such
steps as are necessary to collect the same. If such
violation is by a company, association,
co-partnership or aggregation of individuals
licensed to do business in the State of Illinois,
such license may be revoked by the Department of
Insurance.
(425 ILCS
25/13.1)
Sec. 13.1.
(a) There
shall be a special fund in the State Treasury known
as the Fire Prevention Fund.
(b) The
following moneys shall be deposited into the Fund:
(1) Moneys
received by the Department of Insurance under
Section 12 of this Act.
(2) All fees
and reimbursements received by the Office of the
State Fire Marshal.
(3) All
receipts from boiler and pressure vessel
certification, as provided in Section 13 of the
Boiler and Pressure Vessel Safety Act.
(4) Such
other moneys as may be provided by law.
(c) The
moneys in the Fire Prevention Fund shall be used,
subject to appropriation, for the following
purposes:
(1) Of the
moneys deposited into the fund under Section 12 of
this Act, 12.5% shall be available for the
maintenance of the Illinois Fire Service Institute
and the expenses, facilities, and structures
incident thereto, and for making transfers into the
General Obligation Bond Retirement and Interest Fund
for debt service requirements on bonds issued by the
State of Illinois after January 1, 1986 for the
purpose of constructing a training facility for use
by the Institute.
(2) Of the
moneys deposited into the Fund under Section 12 of
this Act, 10% shall be available for the maintenance
of the Chicago Fire Department Training Program and
the expenses, facilities and structures incident
thereto, in addition to any moneys payable from the
Fund to the City of Chicago pursuant to the Illinois
Fire Protection Training Act.
(3) For
making payments to local governmental agencies and
individuals pursuant to Section 10 of the Illinois
Fire Protection Training Act.
(4) For the
maintenance and operation of the Office of the State
Fire Marshal, and the expenses incident thereto.
(5) For any
other purpose authorized by law.
(d) Any
portion of the Fire Prevention Fund remaining
unexpended at the end of any fiscal year which is
not needed for the maintenance and expenses of the
Office of the State Fire Marshal or the maintenance
and expenses of the Illinois Fire Service Institute,
shall remain in the Fire Prevention Fund for the
exclusive and restricted uses provided in subsection
(c) of this Section.
(e) The
Office of the State Fire Marshal shall keep on file
an itemized statement of all expenses incurred which
are payable from the Fund, other than expenses
incurred by the Illinois Fire Service Institute, and
shall approve all vouchers issued therefor before
they are submitted to the State Comptroller for
payment. Such vouchers shall be allowed and paid in
the same manner as other claims against the State.
Appendix 4: Violations
(215 ILCS 5/403A)
Sec. 403A.
Violations; Notice of Apparent Liability; Limitation
of Forfeiture Liability.
(1) Any
company or person, agent or broker, officer or
director and any other person subject to this Code
and as may be defined in Section 2 of this Code, who
willfully or repeatedly fails to observe or who
otherwise violates any of the provisions of this
Code or any rule or regulation promulgated by the
Director under authority of this Code or any final
order of the Director entered under the authority of
this Code shall by civil penalty forfeit to the
State of Illinois a sum not to exceed $2,000. Each
day during which a violation occurs constitutes a
separate offense. The civil penalty provided for in
this Section shall apply only to those Sections of
this Code or administrative regulations thereunder
that do not otherwise provide for a monetary civil
penalty.
(2) No
forfeiture liability under paragraph (1) of this
Section may attach unless a written notice of
apparent liability has been issued by the Director
and received by the respondent, or the Director
sends written notice of apparent liability by
registered or certified mail, return receipt
requested, to the last known address of the
respondent. Any respondent so notified must be
granted an opportunity to request a hearing within
10 days from receipt of notice, or to show in
writing, why he should not be held liable. A notice
issued under this Section must set forth the date,
facts and nature of the act or omission with which
the respondent is charged and must specifically
identify the particular provision of the Code, rule,
regulation or order of which a violation is charged.
(3) No
forfeiture liability under paragraph (1) of this
Section may attach for any violation occurring more
than 2 years prior to the date of issuance of the
notice of apparent liability and in no event may the
total civil penalty forfeiture imposed for the acts
or omissions set forth in any one notice of apparent
liability exceed $500,000.
(4) The
civil penalty forfeitures provided for in this
Section are payable to the General Revenue Fund of
the State of Illinois, and may be recovered in a
civil suit in the name of the State of Illinois
brought in the Circuit Court in Sangamon County, or
in the Circuit Court of the county where the
respondent is domiciled or has its principal
operating office.
(5) In any
case where the Director issues a notice of apparent
liability looking toward the imposition of a civil
penalty forfeiture under this Section, that fact may
not be used in any other proceeding before the
Director to the prejudice of the respondent to whom
the notice was issued, unless (a) the civil penalty
forfeiture has been paid, or (b) a court has ordered
payment of the civil penalty forfeiture and that
order has become final.
Appendix 5: Service of
Process
(215 ILCS
5/123)
Sec. 123.
Service of process upon an unauthorized foreign or
alien company.
(1) The
purpose of this Section is to subject unauthorized
foreign and alien companies to the jurisdiction of
courts of this State in actions by or on behalf of
insureds, reinsureds, or beneficiaries under
insurance or reinsurance contracts. The Legislature
declares that it is a subject of concern that many
residents of this State or corporations authorized
to do business in this State hold policies of
insurance or reinsurance issued by companies not
authorized to do business in this State, thus
presenting to such residents or corporations
authorized to do business in this State the often
insuperable obstacle of resorting to distant forums
for the purpose of asserting legal rights under such
policies. In furtherance of such State interest, the
Legislature herein provides a method of substituted
service of process upon such companies and declares
that in so doing it exercises its power to protect
its residents and corporations authorized to do
business in this State and to define, for the
purpose of this statute, what constitutes doing
business in this State, and also exercises powers
and privileges available to the State by virtue of
Public Law 15, 79th Congress of the United States,
Chapter 20, 1st. Sess., S. 340, as amended, which
declares that the business of insurance and every
person engaged therein shall be subject to the laws
of the several states.
(2) Any of
the following acts in this State, effected by mail
or otherwise, by an unauthorized foreign or alien
company: (a) the issuance or delivery of contracts
of insurance or reinsurance to residents of this
State or to corporations authorized to do business
therein, (b) the solicitation of applications for
such contracts, (c) the collection of premiums,
membership fees, assessments or other considerations
for such contracts, or (d) any other transaction of
business, is equivalent to and shall constitute an
appointment by such company, of the Director and his
or her successor or successors in office, to be its
true and lawful attorney upon whom may be served all
lawful process in any action or proceeding against
it, arising out of such policy or contract of
insurance or reinsurance, and the acts shall be a
signification of its agreement that any such process
against it which is so served shall be of the same
legal force and validity as if served upon the
company.
(3) Service
of such process shall be made by delivering and
leaving with the Director a copy thereof and the
payment to the Director of the fee prescribed by
this Code. The Director shall keep a record of all
process so served upon him or her. Such process
shall be sufficient service upon such foreign or
alien company provided notice of such service and a
copy of the process are, within 10 days thereafter,
sent by certified or registered mail by the
plaintiff's attorney of record to the defendant at
the last known principal place of business of the
defendant, and the defendant's receipt and the
plaintiff's attorney's affidavit of compliance
herewith are filed with the Clerk of the Court in
which such action is pending on or before the return
date of the process or within such further time as
the court may allow.
(4) Service
of process in any such action against any such
company shall in addition to the mode hereinabove
described be valid and legal if served upon any
person within this State who, in this State on
behalf of such company, is
(a)
soliciting insurance or reinsurance, or
(b) making,
issuing, or delivering any policies or contracts of
insurance or reinsurance, or
(c)
collecting or receiving any premium, membership fee,
assessment or other consideration for insurance or
reinsurance, or
(d) in any
manner aiding or assisting in doing any of the
things enumerated in clauses (a), (b), or (c) of
this subsection; and a copy of such process is
within 10 days thereafter sent by certified or
registered mail by the plaintiff's attorney of
record to the defendant at the last known principal
place of business of the defendant and the
defendant's receipt and the plaintiff's attorney's
affidavit of compliance herewith are filed with the
clerk of the court in which such action is pending
on or before the return date of the process or
within such further time as the court may allow.
(5) Before
any unauthorized foreign or alien company shall file
or cause to be filed any pleading in any action or
proceeding, including any arbitration, instituted
against it, such unauthorized company shall either
(1) deposit with the clerk of the court in which
such action or proceeding is pending or with the
clerk of the court in the jurisdiction in which the
arbitration is pending cash or securities or file
with such clerk a bond with good and sufficient
sureties, to be approved by the court, in an amount
to be fixed by the court sufficient to secure the
payment of any final judgment which may be rendered
in such action, proceeding, or arbitration; or (2)
where the unauthorized company continues to transact
the business of insurance by issuing new contracts
of insurance or reinsurance, procure a certificate
of authority to transact the business of insurance
in this State.
The court in
any action or proceeding, in which service is made
in the manner provided in subsections (3) or (4)
may, in its discretion, order such postponement as
may be necessary to afford the defendant reasonable
opportunity to comply with the provisions of this
subsection and to defend such action.
Nothing in
this Section is to be construed to prevent an
unauthorized foreign or alien company from filing a
motion to quash process or to set aside service
thereof made in the manner provided in subsections
(3) or (4) on the ground either (a) that such
unauthorized company has not done any of the acts
enumerated in subsection (2) or (b) that the person
on whom service was made pursuant to subsection (4)
was not doing any of the acts therein enumerated.
(6) In any
action against an unauthorized foreign or alien
company upon a contract of insurance or reinsurance
issued or delivered in this State to a resident
thereof or to a corporation authorized to do
business therein, if the company has failed for 30
days after demand prior to the commencement of the
action to make payment in accordance with the terms
of the contract, and it appears to the court that
such refusal was vexatious and without reasonable
cause, the court may allow to the plaintiff a
reasonable attorney fee and include such fee in any
judgment that may be rendered in such action. Such
fee shall not exceed 12-1/2 per cent of the amount
which the court or jury finds the plaintiff is
entitled to recover against the insurer, but in no
event shall such fee be less than $25. Failure of a
company to defend any such action shall be deemed
prima facie evidence that its failure to make
payment was vexatious and without reasonable cause.
(7) No
plaintiff shall be entitled to a judgment by default
under this Section until the expiration of 30 days
from the date of the filing of the affidavit of
compliance.
(8) The
provisions of this Section shall not apply to any
action or proceeding against any unauthorized
foreign or alien company arising out of any contract
of direct insurance
(a) effected
in accordance with Section 445, or
(b) covering
ocean marine, aircraft, railway insurance risks, or
(c) against
legal liability arising out of the ownership,
operation or maintenance of any property having a
permanent situs outside this State, or
(d) against
loss of or damage to any property having a permanent
situs outside this State, where such contract of
insurance contains a provision designating the
Director and his or her successor or successors in
office or a bona fide resident of Illinois to be the
true and lawful attorney of such non-admitted
insurer upon whom may be served all lawful process
in any action or proceeding arising out of any such
contract of insurance or where the insurer enters a
general appearance in any such action or proceeding.
(9) Nothing
in this Section contained shall limit or affect the
right to serve any process, notice or demand
required or permitted by law to be served upon any
company in any other manner now or hereafter
permitted by law.
(215 ILCS
5/123.1)
Sec. 123.1.
Service of process upon unauthorized insurers for
false advertising.
(1) (a)
The purpose of this Act is to subject to the
jurisdiction of the Director of Insurance of this
State and to the jurisdiction of the courts of this
State insurers not authorized to transact business
in this State which place in or send into this State
any false advertising designed to induce residents
of this State to purchase insurance from insurers
not authorized to transact business in this State.
The Legislature declares it is in the interest of
the citizens of this State who purchase insurance
from insurers which solicit insurance business in
this State in the manner set forth in the preceding
sentence that such insurers be subject to the
provisions of this Act. In furtherance of such state
interest, the Legislature herein provides a method
of substituted service of process upon such insurers
and declares that in so doing, it exercises its
power to protect its residents and also exercises
powers and privileges available to the State by
virtue of Public Law 15, 79th Congress of the United
States, Chapter 20, 1st Session, S. 340, which
declares that the business of insurance and every
person engaged therein shall be subject to the laws
of the several states; the authority provided herein
to be in addition to any existing powers of this
State.
(b) The
provisions of this Section shall be liberally
construed.
(2) No
unauthorized foreign or alien insurer of the kind
described in subsection (1) shall make, issue,
circulate or cause to be made, issued or circulated,
to residents of this State any estimate,
illustration, circular, pamphlet, or letter, or
cause to be made in any newspaper, magazine or other
publication or over any radio or television station,
any announcement or statement to such residents
misrepresenting its financial condition or the terms
of any contracts issued or to be issued or the
benefits or advantages promised thereby, or the
dividends or share of the surplus to be received
thereon in violation of Article XXVI, and whenever
the Director shall have reason to believe that any
such insurer is engaging in such unlawful
advertising, it shall be his duty to give notice of
such fact by certified or registered mail to such
insurer and to the insurance supervisory official of
the domiciliary state of such insurer. For the
purpose of this Section the domiciliary state of an
alien insurer shall be deemed to be the state of
entry or the state of the principal office in the
United States.
(3) If after
thirty days following the giving of the notice
mentioned in subsection (2) such insurer has failed
to cease making, issuing, or circulating such false
misrepresentations or causing the same to be made,
issued or circulated in this State, and if the
Director has reason to believe that a proceeding by
him in respect to such matters would be to the
interest of the public, and that such insurer is
issuing or delivering contracts of insurance to
residents of this State or collecting premiums on
such contracts or doing any of the acts enumerated
in subsection (4), he shall take action against such
insurer under Article XXVI.
(4) (a)
Any of the following acts in this State, effected by
mail or otherwise, by any such unauthorized foreign
or alien insurer:
(i) the
issuance or delivery of contracts or insurance to
residents of this State; or
(ii) the
solicitation of applications for such contracts; or
(iii) the
collection of premiums, membership fees, assessments
or other considerations for such contracts; or
(iv) any
other transaction of insurance business; is
equivalent to and shall constitute an appointment by
such insurer of the Director and his successor or
successors in office, to be its true and lawful
attorney, upon whom may be served all statements of
charges, notices and lawful process in any
proceeding instituted in respect to the
misrepresentations set forth in subsection (2)
hereof under the provisions of Article XXVI, or in
any action, suit or proceeding for the recovery of
any penalty therein provided, and any such act shall
be signification of its agreement that such service
of statement of charges, notices or process is of
the same legal force and validity as personal
service of such statement of charges, notices or
process in this State, upon such insurer.
(b) Service
of a statement of charges and notices under Article
XXVI shall be made by any deputy or employee of the
Department of Insurance delivering to and leaving
with the Director or some person in apparent charge
of his office, two copies thereof. Service of
process issued by any court in any action, suit or
proceeding to collect any penalty under Article XXVI
provided, shall be made by delivering and leaving
with the Director, or some person in apparent charge
of his office, two copies thereof. The Director
shall forthwith cause to be mailed by certified or
registered mail one of the copies of such statement
of charges, notices or process to the defendant at
its last known principal place of business, and
shall keep a record of all statements of charges,
notices and process so served. Such service of
statement of charges, notices or process shall be
sufficient provided they shall have been so mailed
and the defendant's receipt or receipt issued by the
post office with which the letter is certified or
registered, showing the name of the sender of the
letter and the name and address of the person to
whom the letter is addressed, and the affidavit of
the person mailing such letter showing a compliance
herewith are filed with the Director in the case of
any statement of charges or notices, or with the
clerk of the court in which such action is pending
in the case of any process, on or before the date
the defendant is required to appear or within such
further time as may be allowed.
(c) Service
of statement of charges, notices and process in any
such proceeding, action or suit shall in addition to
the manner provided in paragraph (b) of this
subsection be valid if served upon any person within
this State who on behalf of such insurer is
(i)
soliciting insurance; or
(ii) making,
issuing or delivering any policies or contracts of
insurance; or
(iii)
collecting or receiving in this State any premium,
membership fee, assessment or other consideration
for insurance; or
(iv) in any
manner aiding or assisting in doing any of the
things enumerated in clauses (i), (ii) or (iii) of
this paragraph; and a copy of such statement of
charges, notices or process is sent within ten days
thereafter by certified or registered mail by or on
behalf of the Director to the defendant at the last
known principal place of business of the defendant,
and the defendant's receipt, or the receipt issued
by the post office with which the letter is
certified or registered, showing the name of the
sender of the letter, the name and address of the
person to whom the letter is addressed, and the
affidavit of the person mailing the same showing a
compliance herewith, are filed with the Director in
the case of any statement of charges or notices, or
with the clerk of the court in which such action is
pending in the case of any process, on or before the
date the defendant is required to appear or within
such further time as the court may allow.
(d) No cease
or desist order or judgment by default under this
section shall be entered until the expiration of
thirty days from the date of the filing of the
affidavit of compliance.
(e) Service
of process and notice under the provisions of this
section shall be in addition to all other methods of
service provided by law, and nothing in this section
shall limit or prohibit the right to serve any
statement of charges, notices or process upon any
insurer in any other manner now or hereafter
permitted by law.
(5) When
used in this Act, "residents" shall mean and include
person, partnership or corporation, domestic, alien
or foreign.
Appendix 6: Director of
Insurance - Hearings and Review
(215 ILCS 5/401)
Sec. 401.
General powers of the director. The Director is
charged with the rights, powers and duties
appertaining to the enforcement and execution of all
the insurance laws of this State. He shall have the
power
(a) to make
reasonable rules and regulations as may be necessary
for making effective such laws;
(b) to
conduct such investigations as may be necessary to
determine whether any person has violated any
provision of such insurance laws;
(c) to
conduct such examinations, investigations and
hearings in addition to those specifically provided
for, as may be necessary and proper for the
efficient administration of the insurance laws of
this State; and
(d) to
institute such actions or other lawful proceedings
as he may deem necessary for the enforcement of the
Illinois Insurance Code or of any Order or action
made or taken by him under this Code. The Attorney
General, upon request of the Director, may proceed
in the courts of this State to enforce an Order or
decision in any court proceeding or in any
administrative proceeding before the Director.
Whenever the
Director is authorized or required by law to
consider some aspect of criminal history record
information for the purpose of carrying out his
statutory powers and responsibilities, then, upon
request and payment of fees in conformance with the
requirements of Section 2605-400 of the Department
of State Police Law (20 ILCS 2605/2605-400), the
Department of State Police is authorized to furnish,
pursuant to positive identification, such
information contained in State files as is necessary
to meet the requirements of such authorization or
statutes.
(215 ILCS
5/401.1)
Sec. 401.1.
(1) This
Section applies to all companies and persons subject
to examination by the Director, or purporting to do
insurance business in this State, or in the process
of organization with intent to do such business
therein, or for whom a Certificate of Authority is
required for the transaction of business, or whose
Certificate of Authority is revoked or suspended.
(2) Whenever
it appears to the Director that any person or
company subject to this Code is conducting its
business and affairs in such a manner as to threaten
to render it insolvent, or that it is in a hazardous
condition, or is conducting its business and affairs
in a manner which is hazardous to its policyholders,
creditors or the public, or that it has committed or
engaged in, or is committing or engaging in, any
unlawful act, or any act, practice or transaction
which under any provision of this Code would
constitute ground rendering the person subject to
conservation, liquidation or rehabilitation
proceedings and that irreparable loss and injury to
the property and business of a person or company has
occurred or may occur unless the Director acts
immediately, the Director may, without notice, and
before hearing, issue and cause to be served upon
such person or company an order requiring such
person or company to forthwith cease and desist from
engaging further in the acts, practices or
transactions which are causing such conduct,
condition or ground to exist.
(3) At the
same time an order is served pursuant to paragraph
(2) of this Section, the Director must issue and
also serve upon the person or company a notice of
hearing to be held at a time and place fixed therein
which may not be less than 20 or more than 30 days
after the service thereof. The notice must contain a
statement of the conduct, condition or ground which
the Director deems violative of the provisions of
this Section.
(4) If,
after hearing as provided by paragraph (3) of this
Section, any of the statements as to conduct,
conditions or grounds in the notice are found to be
true, the Director may make such order or orders as
may be reasonably necessary to correct, eliminate or
remedy such conduct, conditions or grounds.
(5) Any
person or company subject to an order pursuant to
this Article is entitled to judicial review of the
order in accordance with the provisions of the
Administrative Review Law.
(6) If any
person or company violates or fails to comply with
any order of the Director or any part thereof which
as to such person has become final and is still in
effect, the Director may, after a hearing and notice
at which it is determined that a violation of such
order has been committed, further order that:
(a) Such
person shall forfeit and pay to the State of
Illinois a sum not to exceed $100 per day for each
and every day that such violation or failure to
comply shall continue, but in no event to exceed a
maximum amount of $5,000. Such liability shall be
enforced in an action brought in any court of
competent jurisdiction by the Director in the name
of the people of the State of Illinois; and
(b)
Proceedings be commenced to revoke or suspend any
license or Certificate of Authority held by such
person under this Code, in accordance with the
procedures provided therefor.
(7) The
powers vested in the Director by this Section are
additional to any and all other powers and remedies
vested in the Director by law, and nothing herein
shall be construed as requiring that the Director
shall employ the powers conferred herein instead of
or as a condition precedent to the exercise of any
other power or remedy vested in the Director.
(8) Any
order or notice of the Director hereunder may be
served on any person, in the same manner and with
the same effect as provided for in civil actions in
a Circuit Court of this State.
(215 ILCS
5/401.5)
Sec. 401.5.
Investigation of insurance law violations.
(a) If the
Director of Insurance has cause to believe that a
person has engaged in, or is engaging in, an act,
activity, or practice that constitutes a business
offense, misdemeanor, or felony violation of the
Illinois Insurance Code or related insurance laws,
he or she shall designate appropriate investigators
or agents to investigate the violations. For
purposes of carrying out investigations under this
Section, the Department of Insurance is deemed a
criminal justice agency under all federal and State
laws and regulations, and as such shall have access
to any information that concerns or relates to a
violation of the Illinois Insurance Code or related
insurance laws and that is available to criminal
justice agencies.
(b) The
Director of Insurance may transmit or receive
written or oral information relating to possible
violations of the insurance laws of this State
received by or from any other criminal justice
agencies, whether federal, State, or local, if, in
the opinion of the Director, the transmittal is
appropriate and may further the effective prevention
of criminal activities.
(c) The
Department of Insurance's papers, documents,
reports, or evidence relevant to the subject of an
investigation under this Section is not subject to
public inspection for so long as the Department
deems reasonably necessary to complete the
investigation, to protect the person investigated
from unwarranted injury, or to be in the public
interest. Further, the papers, documents, reports,
or evidence relevant to the subject of an
investigation under this Section is not subject to
subpoena until opened for public inspection by the
Department, unless the Department consents, or
until, after notice to the Department and a hearing,
the court determines the Department would not be
unnecessarily hindered by the subpoena. No officer,
agent, or employee of the Department is subject to
subpoena in civil actions by a court of this State
to testify concerning a matter of which they have
knowledge under a pending insurance fraud
investigation by the Department.
(d) No
insurer, or employees or agents of an insurer, are
subject to civil liability for libel or otherwise by
virtue of furnishing information required by the
insurance laws of this State or required by the
Department of Insurance as a result of its
investigation. No cause of action exists and no
liability may be imposed, either civil or criminal,
against the State, the Director, any officer, agent,
or employee of the Department of Insurance, or
individuals employed or retained by the Director,
for an act or omission by them in the performance of
a power or duty authorized by this Section, unless
the act or omission was performed in bad faith and
with intent to injure a particular person.
(e) The
powers vested in the Director by this Section are
additional to other powers and remedies vested in
the Director by law, and nothing in this Section
shall be construed as requiring that the Director
shall employ the powers conferred in this Section
instead of or as a condition precedent to the
exercise of any other power or remedy vested in the
Director. The Director may establish systems and
procedures for carrying out investigations under
this Section as are necessary to avoid the
impairment or compromise of his or her authority
under this Section or any other law relating to the
regulation of insurance.
(215 ILCS
5/402)
Sec. 402.
Examinations, investigations and hearings.
(1) All
examinations, investigations and hearings provided
for by this Code may be conducted either by the
Director personally, or by one or more of the
actuaries, technical advisors, deputies, supervisors
or examiners employed or retained by the Department
and designated by the Director for such purpose.
When necessary to supplement its examination
procedures, the Department may retain independent
actuaries deemed competent by the Director,
independent certified public accountants, or
qualified examiners of insurance companies deemed
competent by the Director, or any combination of the
foregoing, the cost of which shall be borne by the
company or person being examined. The Director may
compensate independent actuaries, certified public
accountants and qualified examiners retained for
supplementing examination procedures in amounts not
to exceed the reasonable and customary charges for
such services. The Director may also accept as a
part of the Department's examination of any company
or person (a) a report by an independent actuary
deemed competent by the Director or (b) a report of
an audit made by an independent certified public
accountant. Neither those persons so designated nor
any members of their immediate families shall be
officers of, connected with, or financially
interested in any company other than as
policyholders, nor shall they be financially
interested in any other corporation or person
affected by the examination, investigation or
hearing.
(2) All
hearings provided for in this Code shall, unless
otherwise specially provided, be held at such time
and place as shall be designated in a notice which
shall be given by the Director in writing to the
person or company whose interests are affected, at
least 10 days before the date designated therein.
The notice shall state the subject of inquiry and
the specific charges, if any. The hearings shall be
held in the City of Springfield, the City of
Chicago, or in the county where the principal
business address of the person or company affected
is located.
(215 ILCS
5/403)
Sec. 403.
Power to subpoena and examine witnesses.
(1) In the
conduct of any examination, investigation or hearing
provided for by this Code, the Director or other
officer designated by him or her to conduct the
same, shall have power to compel the attendance of
any person by subpoena, to administer oaths and to
examine any person under oath concerning the
business, conduct or affairs of any company or
person subject to the provisions of this Code, and
in connection therewith to require the production of
any books, records or papers relevant to the
inquiry.
(2) If a
person subpoenaed to attend such inquiry fails to
obey the command of the subpoena without reasonable
excuse, or if a person in attendance upon such
inquiry shall, without reasonable cause, refuse to
be sworn or to be examined or to answer a question
or to produce a book or paper when ordered to do so
by any officer conducting such inquiry, or if any
person fails to perform any act required hereunder
to be performed, he or she shall be required to pay
a penalty of not more than $2,000 to be recovered in
the name of the People of the State of Illinois by
the State's Attorney of the county in which the
violation occurs, and the penalty so recovered shall
be paid into the county treasury.
(3) When any
person neglects or refuses without reasonable cause
to obey a subpoena issued by the Director, or
refuses without reasonable cause to testify, to be
sworn or to produce any book or paper described in
the subpoena, the Director may file a petition
against such person in the circuit court of the
county in which the testimony is desired to be or
has been taken or has been attempted to be taken,
briefly setting forth the fact of such refusal or
neglect and attaching a copy of the subpoena and the
return of service thereon and applying for an order
requiring such person to attend, testify or produce
the books or papers before the Director or his or
her actuary, supervisor, deputy or examiner, at such
time or place as may be specified in such order. Any
circuit court of this State, upon the filing of such
petition, either before or after notice to such
person, may, in the judicial discretion of such
court, order the attendance of such person, the
production of books and papers and the giving of
testimony before the Director or any of his or her
actuaries, supervisors, deputies or examiners. If
such person shall fail or refuse to obey the order
of the court and it shall appear to the court that
the failure or refusal of such person to obey its
order is wilful, and without lawful excuse, the
court shall punish such person by fine or
imprisonment in the county jail, or both, as the
nature of the case may require, as is now, or as may
hereafter be lawful for the court to do in cases of
contempt of court.
(4) The fees
of witnesses for attendance and travel shall be the
same as the fees of witnesses before the circuit
courts of this State. When a witness is subpoenaed
by or testifies at the instance of the Director or
other officer designated by him or her, such fees
shall be paid in the same manner as other expenses
of the Department. When a witness is subpoenaed or
testifies at the instance of any other party to any
such proceeding, the cost of the subpoena or
subpoenas duces tecum and the fee of the witness
shall be borne by the party at whose instance a
witness is summoned. In such case, the Department in
its discretion, may require a deposit to cover the
cost of such service and witness fees.
(215 ILCS
5/403A)
Sec. 403A.
Violations; Notice of Apparent Liability; Limitation
of Forfeiture Liability.
(1) Any
company or person, agent or broker, officer or
director and any other person subject to this Code
and as may be defined in Section 2 of this Code, who
willfully or repeatedly fails to observe or who
otherwise violates any of the provisions of this
Code or any rule or regulation promulgated by the
Director under authority of this Code or any final
order of the Director entered under the authority of
this Code shall by civil penalty forfeit to the
State of Illinois a sum not to exceed $2,000. Each
day during which a violation occurs constitutes a
separate offense. The civil penalty provided for in
this Section shall apply only to those Sections of
this Code or administrative regulations thereunder
that do not otherwise provide for a monetary civil
penalty.
(2) No
forfeiture liability under paragraph (1) of this
Section may attach unless a written notice of
apparent liability has been issued by the Director
and received by the respondent, or the Director
sends written notice of apparent liability by
registered or certified mail, return receipt
requested, to the last known address of the
respondent. Any respondent so notified must be
granted an opportunity to request a hearing within
10 days from receipt of notice, or to show in
writing, why he should not be held liable. A notice
issued under this Section must set forth the date,
facts and nature of the act or omission with which
the respondent is charged and must specifically
identify the particular provision of the Code, rule,
regulation or order of which a violation is charged.
(3) No
forfeiture liability under paragraph (1) of this
Section may attach for any violation occurring more
than 2 years prior to the date of issuance of the
notice of apparent liability and in no event may the
total civil penalty forfeiture imposed for the acts
or omissions set forth in any one notice of apparent
liability exceed $500,000.
(4) The
civil penalty forfeitures provided for in this
Section are payable to the General Revenue Fund of
the State of Illinois, and may be recovered in a
civil suit in the name of the State of Illinois
brought in the Circuit Court in Sangamon County, or
in the Circuit Court of the county where the
respondent is domiciled or has its principal
operating office.
(5) In any
case where the Director issues a notice of apparent
liability looking toward the imposition of a civil
penalty forfeiture under this Section, that fact may
not be used in any other proceeding before the
Director to the prejudice of the respondent to whom
the notice was issued, unless (a) the civil penalty
forfeiture has been paid, or (b) a court has ordered
payment of the civil penalty forfeiture and that
order has become final.
Appendix 7: Article XXXI -
Insurance Producers
ARTICLE XXXI.
INSURANCE PRODUCERS, LIMITED
INSURANCE
REPRESENTATIVES AND REGISTERED FIRMS
(215 ILCS
5/500-5)
Sec. 500-5.
Scope of Article. This Article applies to all
persons and insurance companies as defined in this
Code. This Article does not apply to surplus lines
producers licensed pursuant to Section 445 except as
provided in Section 500-40 and subsection (b) of
Section 500-90 of this Article.
(215 ILCS
5/500-10)
Sec. 500-10.
Definitions. In addition to the definitions in
Section 2 of the Code, the following definitions
apply to this Article:
"Business
entity" means a corporation, association,
partnership, limited liability company, limited
liability partnership, or other legal entity.
"Car rental
limited line licensee" means a person authorized
under the provisions of Section 500-105 to sell
certain coverages relating to the rental of
vehicles.
"Home state"
means the District of Columbia and any state or
territory of the United States in which an insurance
producer maintains his or her principal place of
residence or principal place of business and is
licensed to act as an insurance producer.
"Insurance"
means any of the lines of authority in Section
500-35, any health care plan under the Health
Maintenance Organization Act, or any limited health
care plan under the Limited Health Service
Organization Act.
"Insurance
producer" means a person required to be licensed
under the laws of this State to sell, solicit, or
negotiate insurance.
"Insurer"
means a company as defined in subsection (e) of
Section 2 of this Code, a health maintenance
organization as defined in the Health Maintenance
Organization Act, or a limited health service
organization as defined in the Limited Health
Service Organization Act.
"License"
means a document issued by the Director authorizing
an individual to act as an insurance producer for
the lines of authority specified in the document or
authorizing a business entity to act as an insurance
producer. The license itself does not create any
authority, actual, apparent, or inherent, in the
holder to represent or commit an insurance carrier.
"Limited lines
insurance" means those lines of insurance defined in
Section 500-100 or any other line of insurance that
the Director may deem it necessary to recognize for
the purposes of complying with subsection (e) of
Section 500-40.
"Limited lines
producer" means a person authorized by the Director
to sell, solicit, or negotiate limited lines
insurance.
"Negotiate"
means the act of conferring directly with or
offering advice directly to a purchaser or
prospective purchaser of a particular contract of
insurance concerning any of the substantive
benefits, terms, or conditions of the contract,
provided that the person engaged in that act either
sells insurance or obtains insurance from insurers
for purchasers.
"Person" means
an individual or a business entity.
"Rental
agreement" means a written agreement setting forth
the terms and conditions governing the use of a
vehicle provided by a rental company for rental or
lease.
"Rental
company" means a person, or a franchisee of the
person, in the business of providing primarily
private passenger vehicles to the public under a
rental agreement for a period not to exceed 30 days.
"Rental
period" means the term of the rental agreement.
"Renter" means
a person obtaining the use of a vehicle from a
rental company under the terms of a rental agreement
for a period not to exceed 30 days.
"Self-service
storage facility limited line licensee" means a
person authorized under the provisions of Section
500-107 to sell certain coverages relating to the
rental of self-service storage facilities.
"Sell" means
to exchange a contract of insurance by any means,
for money or its equivalent, on behalf of an
insurance company.
"Solicit"
means attempting to sell insurance or asking or
urging a person to apply for a particular kind of
insurance from a particular company.
"Terminate"
means the cancellation of the relationship between
an insurance producer and the insurer or the
termination of a producer's authority to transact
insurance.
"Uniform
Business Entity Application" means the current
version of the National Association of Insurance
Commissioners' Uniform Business Entity Application
for nonresident business entities.
"Uniform
Application" means the current version of the
National Association of Insurance Commissioners'
Uniform Application for nonresident producer
licensing.
"Vehicle" or
"rental vehicle" means a motor vehicle of (1) the
private passenger type, including passenger vans,
mini vans, and sport utility vehicles or (2) the
cargo type, including cargo vans, pickup trucks, and
trucks with a gross vehicle weight of less than
26,000 pounds the operation of which does not
require the operator to possess a commercial
driver's license.
(215 ILCS
5/500-15)
Sec. 500-15.
License required.
(a) A person
may not sell, solicit, or negotiate insurance in
this State for any class or classes of insurance
unless the person is licensed for that line of
authority in accordance with this Article.
(b) A person
may not, for a fee, engage in the business of
offering any advice, counsel, opinion, or service
with respect to the benefits, advantages, or
disadvantages under any policy of insurance that
could be issued in Illinois, unless that person is:
(1) engaged
or employed as an attorney licensed to practice law
and performing duties incidental to that position;
(2) a
licensed insurance producer, limited insurance
representative, or temporary insurance producer
offering advice concerning a class of insurance as
to which he or she is licensed to transact business;
(3) a trust
officer of a bank performing duties incidental to
his or her position;
(4) an
actuary or a certified public accountant engaged or
employed in a consulting capacity, performing duties
incidental to that position; or
(5) a
licensed public adjuster acting within the scope of
his or her license.
(c) In
addition to any other penalty set forth in this
Article, an individual who knowingly violates
subsection (a) is guilty of a Class A misdemeanor.
(d) In
addition to any other penalty set forth in this
Article, any individual violating subsection (a) or
(b) and misappropriating or converting any moneys
collected in conjunction with the violation is
guilty of a Class 4 felony.
(215 ILCS
5/500-20)
Sec. 500-20.
Exceptions to licensing.
(a) Nothing
in this Article shall be construed to require an
insurer to obtain an insurance producer license. In
this Section, the term "insurer" does not include an
insurer's officers, directors, employees,
subsidiaries, or affiliates.
(b) A
license as an insurance producer shall not be
required of the following:
(1) an
officer, director, or employee of an insurer or of
an insurance producer, provided that the officer,
director, or employee does not receive any
commission on policies written or sold to insure
risks residing, located, or to be performed in this
State and:
(A) the
officer's, director's, or employee's activities are
executive, administrative, managerial, clerical, or
a combination of these, and are only indirectly
related to the sale, solicitation, or negotiation of
insurance;
(B) the
officer's, director's, or employee's function
relates to underwriting, loss control, inspection,
or the processing, adjusting, investigating, or
settling of a claim on a contract of insurance; or
(C) the
officer, director, or employee is acting in the
capacity of a special agent or agency supervisor
assisting insurance producers if the person's
activities are limited to providing technical advice
and assistance to licensed insurance producers and
do not include the sale, solicitation, or
negotiation of insurance;
(2) a person
who secures and furnishes information for the
purpose of group life insurance, group property and
casualty insurance, group annuities, or group or
blanket accident and health insurance or for the
purpose of enrolling individuals under plans,
issuing certificates under plans or otherwise
assisting in administering plans or who performs
administrative services related to mass marketed
property and casualty insurance, if no commission is
paid to the person for the service;
(3) an
employer or association or its officers, directors,
employees, or the trustees of an employee trust
plan, to the extent that the employers, officers,
employees, directors, or trustees are engaged in the
administration or operation of a program of employee
benefits for the employer's or association's own
employees or the employees of its subsidiaries or
affiliates, which program involves the use of
insurance issued by an insurer, as long as the
employers, associations, officers, directors,
employees, or trustees are not in any manner
compensated, directly or indirectly, by the company
issuing the contracts;
(4)
employees of insurers or organizations employed by
insurers who are engaging in the inspection, rating,
or classification of risks or in the supervision of
the training of insurance producers and who are not
individually engaged in the sale, solicitation, or
negotiation of insurance;
(5) a person
whose activities in this State are limited to
advertising without the intent to solicit insurance
in this State through communications in printed
publications or forms of electronic mass media whose
distribution is not limited to residents of this
State, provided that the person does not sell,
solicit, or negotiate insurance that would insure
risks residing, located, or to be performed in this
State;
(6) a person
who is not a resident of this State who sells,
solicits, or negotiates a contract of insurance for
commercial property and casualty risks to an insured
with risks located in more than one state insured
under that contract, provided that the person is
otherwise licensed as an insurance producer to sell,
solicit, or negotiate that insurance in the state
where the insured maintains its principal place of
business and the contract of insurance insures risks
located in that state; or
(7) a
salaried, full-time employee who counsels or advises
his or her employer relative to the insurance
interests of the employer or of the subsidiaries or
business affiliates of the employer provided that
the employee does not sell or solicit insurance or
receive a commission.
(215 ILCS
5/500-25)
Sec. 500-25.
Application for examination.
(a) A
resident individual applying for an insurance
producer license must pass a written examination
unless exempt pursuant to Section 500-45. Both part
one and part 2 of the examination must be passed
within 90 days of each other. The examination shall
test the knowledge of the individual concerning the
lines of authority for which application is made,
the duties and responsibilities of an insurance
producer, and the insurance laws and rules of this
State. Examinations required by this Section must be
developed and conducted under rules prescribed by
the Director.
(b) The
Director may make arrangements, including
contracting with an outside testing service, for
administering examinations and collecting the
nonrefundable fee set forth in Section 500-135.
(c) An
individual applying for an examination must remit a
nonrefundable fee as prescribed by the Director as
set forth in Section 500-135, plus a separate
remittance payable to the designated testing service
for the total fees the testing service charges for
each of the various services being requested by the
applicant.
(d) An
individual who fails to appear for the examination
as scheduled or fails to pass the examination, must
reapply for an examination and remit all required
fees and forms before being rescheduled for another
examination.
(215 ILCS
5/500-30)
Sec. 500-30.
Application for license.
(a) An
individual applying for a resident insurance
producer license must make application on a form
specified by the Director and declare under penalty
of refusal, suspension, or revocation of the license
that the statements made in the application are
true, correct, and complete to the best of the
individual's knowledge and belief. Before approving
the application, the Director must find that the
individual:
(1) is at
least 18 years of age;
(2) has not
committed any act that is a ground for denial,
suspension, or revocation set forth in Section
500-70;
(3) has
completed, if required by the Director, a
pre-licensing course of study for the lines of
authority for which the individual has applied (an
individual who successfully completes the Fire and
Casualty pre-licensing courses also meets the
requirements for Personal Lines-Property and
Casualty);
(4) has paid
the fees set forth in Section 500-135; and
(5) has
successfully passed the examinations for the lines
of authority for which the person has applied.
(b) A
pre-licensing course of study for each class of
insurance for which an insurance producer license is
requested must be established in accordance with
rules prescribed by the Director and must consist of
the following minimum hours:
Class of
Insurance
Number of
Hours
Life (Class 1
(a))
15.0
Accident and
Health (Class 1(b) or
2(a)) 15.0
Fire (Class
3)
15.0
Casualty
(Class
2)
15.0
Personal
Lines-Property
Casualty
15.0
Motor Vehicle
(Class 2(b) or
3(e)) 7.5
(c) A
business entity acting as an insurance producer must
obtain an insurance producer license. Application
must be made using the Uniform Business Entity
Application. Before approving the application, the
Director must find that:
(1) the
business entity has paid the fees set forth in
Section 500-135; and
(2) the
business entity has designated a licensed producer
responsible for the business entity's compliance
with the insurance laws and rules of this State.
(d) The
Director may require any documents reasonably
necessary to verify the information contained in an
application.
(215 ILCS
5/500-35)
Sec. 500-35.
License.
(a) Unless
denied a license pursuant to Section 500-70, persons
who have met the requirements of Sections 500-25 and
500-30 shall be issued a 2-year insurance producer
license. An insurance producer may receive
qualification for a license in one or more of the
following lines of authority:
(1) Life:
insurance coverage on human lives including benefits
of endowment and annuities, and may include benefits
in the event of death or dismemberment by accident
and benefits for disability income.
(2) Variable
life and variable annuity products: insurance
coverage provided under variable life insurance
contracts and variable annuities.
(3) Accident
and health or sickness: insurance coverage for
sickness, bodily injury, or accidental death and may
include benefits for disability income.
(4)
Property: insurance coverage for the direct or
consequential loss or damage to property of every
kind.
(5)
Casualty: insurance coverage against legal
liability, including that for death, injury, or
disability or damage to real or personal property.
(6) Personal
lines: property and casualty insurance coverage sold
to individuals and families for primarily
noncommercial purposes.
(7) Any
other line of insurance permitted under State laws
or rules.
(b) An
insurance producer license shall remain in effect
unless revoked or suspended as long as the fee set
forth in Section 500-135 is paid and education
requirements for resident individual producers are
met by the due date.
(1) Before
each license renewal, an insurance producer must
satisfactorily complete at least 30 hours of course
study in accordance with rules prescribed by the
Director. The Director may not approve a course of
study unless the course provides for classroom,
seminar, or self-study instruction methods. A course
given in a combination instruction method of
classroom or seminar and self-study shall be deemed
to be a self-study course unless the classroom or
seminar certified hours meets or exceeds two-thirds
of total hours certified for the course. The
self-study material used in the combination course
must be directly related to and complement the
classroom portion of the course in order to be
considered for credit. An instruction method other
than classroom or seminar shall be considered as
self-study methodology. Self-study credit hours
require the successful completion of an examination
covering the self-study material. The examination
may not be self-evaluated. However, if the
self-study material is completed through the use of
an approved computerized interactive format whereby
the computer validates the successful completion of
the self-study material, no additional examination
is required. The self-study credit hours contained
in a certified course shall be considered classroom
hours when at least two-thirds of the hours are
given as classroom or seminar instruction.
(2) An
insurance producer license automatically terminates
when an insurance producer fails to successfully
meet the requirements of item (1) of subsection (b)
of this Section. The producer must complete the
course in advance of the renewal date to allow the
education provider time to report the credit to the
Department.
(c) A
provider of a pre-licensing or continuing education
course required by Section 500-30 and this Section
must pay a registration fee and a course
certification fee for each course being certified as
provided by Section 500-135.
(d) An
individual insurance producer who allows his or her
license to lapse may, within 12 months after the due
date of the renewal fee, be issued a license without
the necessity of passing a written examination.
However, a penalty in the amount of double the
unpaid renewal fee shall be required after the due
date.
(e) A
licensed insurance producer who is unable to comply
with license renewal procedures due to military
service may request a waiver of those procedures.
(f) The
license must contain the licensee's name, address,
and personal identification number, the date of
issuance, the lines of authority, the expiration
date, and any other information the Director deems
necessary.
(g)
Licensees must inform the Director by any means
acceptable to the Director of a change of address
within 30 days after the change.
(h) In order
to assist in the performance of the Director's
duties, the Director may contract with a
non-governmental entity including the National
Association of Insurance Commissioners (NAIC), or
any affiliates or subsidiaries that the NAIC
oversees, to perform any ministerial functions,
including collection of fees, related to producer
licensing that the Director and the non-governmental
entity may deem appropriate.
(215 ILCS
5/500-40)
Sec. 500-40.
Nonresident licensing.
(a) Unless
denied a license pursuant to Section 500-70, a
nonresident person shall receive a nonresident
producer license if:
(1) the
person is currently licensed as a resident and in
good standing in his or her home state;
(2) the
person has submitted the proper request for a
license and has paid the fees required by Section
500-135;
(3) the
person has submitted or transmitted to the Director
the application for a license that the person
submitted to his or her home state or, instead of
that application, a completed Uniform Application;
and
(4) the
person's home state awards nonresident producer
licenses to residents of this State on the same
basis.
(b) The
Director may verify the producer's licensing status
through the Producer Database maintained by the
National Association of Insurance Commissioners or
its affiliates or subsidiaries or by obtaining
certification from the public official having
supervision of insurance in the applicant's state of
residence that the applicant has passed the written
examination for the class of insurance applied for.
(c) A
nonresident producer who moves from one state to
another state or a resident producer who moves from
this State to another state must file a change of
address and provide certification from the new
resident state within 30 days after the change of
legal residence. No fee or license application is
required.
(d)
Notwithstanding any other provision of this Article,
a person licensed as a surplus lines producer in his
or her home state shall receive a nonresident
surplus lines producer license pursuant to
subsection (a) of this Section. Except as provided
in subsection (a), nothing in this Section
supersedes any provision of Section 445 of this
Code.
(e)
Notwithstanding any other provision of this Article,
a person licensed as a limited lines producer in his
or her home state shall receive a nonresident
limited lines producer license, pursuant to
subsection (a) of this Section, granting the same
scope of authority as granted under the license
issued by the producer's home state. For the
purposes of this subsection, limited line insurance
is any authority granted by the home state that
restricts the authority of the license to less than
the total authority prescribed in the associated
major lines pursuant to items (1) through (5) of
subsection (a) of Section 500-35.
(215 ILCS
5/500-45)
Sec. 500-45.
Exemption from examination.
(a) An
individual who applies for an insurance producer
license in this State who was previously licensed
for the same lines of authority in another state
shall not be required to complete any pre-licensing
education or examination. This exemption is only
available if the person is currently licensed in
that state or if the application is received within
90 days after the cancellation of the applicant's
previous license and if the prior state issues a
certification that, at the time of cancellation, the
applicant was in good standing in that state or the
state's Producer Database records, maintained by the
National Association of Insurance Commissioners, its
affiliates, or subsidiaries indicate that the
producer is or was licensed in good standing for the
line of authority requested.
(b) A person
licensed as an insurance producer in another state
who moves to this State must make application within
90 days after establishing legal residence to become
a resident licensee pursuant to Section 500-30. A
pre-licensing education or examination is not
required of that person to obtain any line of
authority previously held in the prior state except
when the Director determines otherwise by rule.
(215 ILCS
5/500-50)
Sec. 500-50.
Insurance producers; examination statistics.
(a) The use
of examinations for the purpose of determining
qualifications of persons to be licensed as
insurance producers has a direct and far-reaching
effect on persons seeking those licenses, on
insurance companies, and on the public. It is in the
public interest and it will further the public
welfare to insure that examinations for licensing do
not have the effect of unlawfully discriminating
against applicants for licensing as insurance
producers on the basis of race, color, national
origin, or sex.
(b) As used
in this Section, the following words have the
meanings given in this subsection.
Examination.
"Examination" means the examination in each line of
insurance administered pursuant to Section 500-30.
Examinee.
"Examinee" means a person who takes an examination.
Part. "Part"
means a portion of an examination for which a score
is calculated.
Operational
item. "Operational item" means a test question
considered in determining an examinee's score.
Test form.
"Test form" means the test booklet or instrument
used for a part of an examination.
Pretest item.
"Pretest item" means a prospective test question
that is included in a test form in order to assess
its performance, but is not considered in
determining an examinee's score.
Minority group
or examinees. "Minority group" or "minority
examinees" means African American, American Indian,
Asian, and Hispanic examinees.
Correct-answer
rate. "Correct-answer rate" for an item means the
number of examinees who provided the correct answer
on an item divided by the number of examinees who
answered the item.
Correlation.
"Correlation" means a statistical measure of the
relationship between performance on an item and
performance on a part of the examination.
(c) The
Director shall ask each examinee to self-report on a
voluntary basis on the answer sheet, application
form, or by other appropriate means, the following
information:
(1) race or
ethnicity (African American; white; American Indian;
Asian; Hispanic; or other);
(2)
education (8th grade or less; less than 12th grade;
high school diploma or G.E.D.; some college, but no
4-year degree; or 4-year degree or more); and
(3) gender
(male or female).
The Director
must advise all examinees that they are not required
to provide this information, that they will not be
penalized for not doing so, and that the Director
will use the information provided exclusively for
research and statistical purposes and to improve the
quality and fairness of the examinations.
(d) No later
than May 1 of each year, the Director must prepare,
publicly announce, and publish an Examination Report
of summary statistical information relating to each
examination administered during the preceding
calendar year. Each Examination Report shall show
with respect to each examination:
(1) For all
examinees combined and separately by race or
ethnicity, by educational level, by gender, by
educational level within race or ethnicity, by
education level within gender, and by race or
ethnicity within gender:
(A) number of
examinees;
(B)
percentage and number of examinees who passed each
part;
(C)
percentage and number of examinees who passed all
parts;
(D) mean
scaled scores on each part; and
(E) standard
deviation of scaled scores on each part.
(2) For male
examinees, female examinees, African American
examinees, white examinees, American Indian
examinees, Asian examinees, and Hispanic examinees,
respectively, with a high school diploma or G.E.D.,
the distribution of scaled scores on each part.
No later than
May 1 of each year, the Director must prepare and
make available on request an Item Report of summary
statistical information relating to each operational
item on each test form administered during the
preceding calendar year. The Item Report shall show,
for each operational item, for all examinees
combined and separately for African American
examinees, white examinees, American Indian
examinees, Asian examinees, Hispanic examinees, and
other examinees, the correct-answer rates and
correlations.
The Director
is not required to report separate statistical
information for any group or subgroup comprising
fewer than 50 examinees.
(e) The
Director must obtain a regular analysis of the data
collected under this Section, and any other relevant
information, for purposes of the development of new
test forms. The analysis shall continue the
implementation of the item selection methodology as
recommended in the Final Report of the Illinois
Insurance Producer's Licensing Examination Advisory
Committee dated November 19, 1991, and filed with
the Department unless some other methodology is
determined by the Director to be as effective in
minimizing differences between white and minority
examinee pass-fail rates.
(f) The
Director has the discretion to set cutoff scores for
the examinations, provided that scaled scores on
test forms administered after July 1, 1993, shall be
made comparable to scaled scores on test forms
administered in 1991 by use of professionally
acceptable methods so as to minimize changes in
passing rates related to the presence or absence of
or changes in equating or scaling equations or
methods or content outlines. Each calendar year, the
scaled cutoff score for each part of each
examination shall fluctuate by no more than the
standard error of measurement from the scaled cutoff
score employed during the preceding year.
(g) No later
than May 1, 2003 and no later than May 1 of every
fourth year thereafter, the Director must release to
the public and make generally available one
representative test form and set of answer keys for
each part of each examination.
(h) The
Director must maintain, for a period of 3 years
after they are prepared or used, all registration
forms, test forms, answer sheets, operational items
and pretest items, item analyses, and other
statistical analyses relating to the examinations.
All personal identifying information regarding
examinees and the content of test items must be
maintained confidentially as necessary for purposes
of protecting the personal privacy of examinees and
the maintenance of test security.
(i) In
administering the examinations, the Director must
make such accommodations for disabled examinees as
are reasonably warranted by the particular
disability involved, including the provision of
additional time if necessary to complete an
examination or special assistance in taking an
examination.
(215 ILCS
5/500-55)
Sec. 500-55.
Assumed names. An insurance producer doing business
under any name other than the producer's legal name
must notify the Director before using the assumed
name.
(215 ILCS
5/500-60)
Sec. 500-60.
Temporary licensing.
(a) The
Director may issue a temporary insurance producer
license for a period not to exceed 180 days and, at
the discretion of the Director, may renew the
temporary producer license for an additional 180
days without requiring an examination if the
Director deems that the temporary license is
necessary for the servicing of an insurance business
in the following cases:
(1) to the
surviving spouse or court-appointed personal
representative of a licensed insurance producer who
dies or becomes mentally or physically disabled to
allow adequate time for the sale of the insurance
business owned by the producer or for the recovery
or return of the producer to the business or to
provide for the training and licensing of new
personnel to operate the producer's business;
(2) to a
member or employee of a business entity licensed as
an insurance producer, upon the death or disability
of an individual designated in the business entity
application or the license; or
(3) to the
designee of a licensed insurance producer entering
active service in the armed forces of the United
States of America.
(b) The
Director may by order limit the authority of any
temporary licensee in any way deemed necessary to
protect insureds and the public. The Director may
require the temporary licensee to have a suitable
sponsor who is a licensed producer or insurer and
who assumes responsibility for all acts of the
temporary licensee and may impose other similar
requirements designed to protect insureds and the
public. The Director may by order revoke a temporary
license if the interest of insureds or the public
are endangered. A temporary license may not continue
after the owner or the personal representative
disposes of the business.
(c) Before
any temporary insurance producer license is issued,
there must be filed with the Director a written
application by the person desiring the license in
the form, with the supplements, and containing the
information that the Director requires. License
fees, as provided for in Section 500-135, must be
paid upon the issuance of the original temporary
insurance producer license, but not for any renewal
thereof.
(215 ILCS
5/500-65)
Sec. 500-65.
Temporary insurance producer license for an
applicant.
(a) The
Director may grant a temporary insurance producer
license to an applicant for an insurance producer
license, without requiring an examination, for a
period of 90 days, when the applicant otherwise
meets the requirements of this Article. During that
90-day period, the applicant must be enrolled in a
training course or training program conducted by or
on behalf of the appointing insurance company and be
in the process of fulfilling the pre-licensing
requirements of Sections 500-25 and 500-30.
(b) An
individual applicant may not hold more than one
temporary insurance producer license during his or
her lifetime.
(c) The
Director may refuse to grant temporary insurance
producer licenses to applicants from an insurance
company when during a 6-month period more than 50%
of that company's temporary insurance producer
license holders have failed to obtain insurance
producer licenses prior to the expiration of their
temporary insurance producer licenses.
(d) Before
the Director approves any temporary insurance
producer license, the insurance company requesting
the license must file with the Director an
application and the fee required by Section 500-135.
The application must be made on the form and in the
manner the Director requires.
(215 ILCS
5/500-70)
Sec. 500-70.
License denial, nonrenewal, or revocation.
(a) The
Director may place on probation, suspend, revoke, or
refuse to issue or renew an insurance producer's
license or may levy a civil penalty in accordance
with this Section or take any combination of
actions, for any one or more of the following
causes:
(1)
providing incorrect, misleading, incomplete, or
materially untrue information in the license
application;
(2)
violating any insurance laws, or violating any rule,
subpoena, or order of the Director or of another
state's insurance commissioner;
(3)
obtaining or attempting to obtain a license through
misrepresentation or fraud;
(4)
improperly withholding, misappropriating or
converting any moneys or properties received in the
course of doing insurance business;
(5)
intentionally misrepresenting the terms of an actual
or proposed insurance contract or application for
insurance;
(6) having
been convicted of a felony;
(7) having
admitted or been found to have committed any
insurance unfair trade practice or fraud;
(8) using
fraudulent, coercive, or dishonest practices, or
demonstrating incompetence, untrustworthiness or
financial irresponsibility in the conduct of
business in this State or elsewhere;
(9) having
an insurance producer license, or its equivalent,
denied, suspended, or revoked in any other state,
province, district or territory;
(10) forging a
name to an application for insurance or to a
document related to an insurance transaction;
(11)
improperly using notes or any other reference
material to complete an examination for an insurance
license;
(12) knowingly
accepting insurance business from an individual who
is not licensed;
(13) failing
to comply with an administrative or court order
imposing a child support obligation;
(14) failing
to pay state income tax or penalty or interest or
comply with any administrative or court order
directing payment of state income tax or failed to
file a return or to pay any final assessment of any
tax due to the Department of Revenue; or
(15) failing
to make satisfactory repayment to the Illinois
Student Assistance Commission for a delinquent or
defaulted student loan.
(b) If the
action by the Director is to nonrenew, suspend, or
revoke a license or to deny an application for a
license, the Director shall notify the applicant or
licensee and advise, in writing, the applicant or
licensee of the reason for the suspension,
revocation, denial or nonrenewal of the applicant's
or licensee's license. The applicant or licensee may
make written demand upon the Director within 30 days
after the date of mailing for a hearing before the
Director to determine the reasonableness of the
Director's action. The hearing must be held within
not fewer than 20 days nor more than 30 days after
the mailing of the notice of hearing and shall be
held pursuant to 50 Ill. Adm. Code 2402.
(c) The
license of a business entity may be suspended,
revoked, or refused if the Director finds, after
hearing, that an individual licensee's violation was
known or should have been known by one or more of
the partners, officers, or managers acting on behalf
of the partnership, corporation, limited liability
company, or limited liability partnership and the
violation was neither reported to the Director nor
corrective action taken.
(d) In
addition to or instead of any applicable denial,
suspension, or revocation of a license, a person
may, after hearing, be subject to a civil penalty of
up to $10,000 for each cause for denial, suspension,
or revocation, however, the civil penalty may total
no more than $100,000.
(e) The
Director has the authority to enforce the provisions
of and impose any penalty or remedy authorized by
this Article against any person who is under
investigation for or charged with a violation of
this Code or rules even if the person's license or
registration has been surrendered or has lapsed by
operation of law.
(f) Upon the
suspension, denial, or revocation of a license, the
licensee or other person having possession or
custody of the license shall promptly deliver it to
the Director in person or by mail. The Director
shall publish all suspensions, denials, or
revocations after the suspensions, denials, or
revocations become final in a manner designed to
notify interested insurance companies and other
persons.
(g) A person
whose license is revoked or whose application is
denied pursuant to this Section is ineligible to
apply for any license for 3 years after the
revocation or denial. A person whose license as an
insurance producer has been revoked, suspended, or
denied may not be employed, contracted, or engaged
in any insurance related capacity during the time
the revocation, suspension, or denial is in effect.
(215 ILCS
5/500-75)
Sec. 500-75.
Disclosure. A policy the solicitation of which
involves an insurance producer, limited insurance
representative, or temporary insurance producer must
identify the name of the producer, representative,
or firm. An individual life or accident and health
application and a master policy application for life
or accident and health group coverages must bear the
name and signature of the licensee who solicited and
wrote the application.
(215 ILCS
5/500-77)
Sec. 500-77.
Policyholder information and exclusive ownership of
expirations.
(a) As used
in this Section, "expirations" means all information
relative to an insurance policy including, but not
limited to, the name and address of the insured, the
location and description of the property insured,
the value of the insurance policy, the inception
date, the renewal date, and the expiration date of
the insurance policy, the premiums, the limits and a
description of the terms and coverage of the
insurance policy, and any other personal and
privileged information, as defined by Section 1003
of this Code, compiled by a registered firm or
furnished by the insured to the insurer or any
agent, contractor, or representative of the insurer.
For purposes
of this Section only, a registered firm also
includes a sole proprietorship that transacts the
business of insurance as an insurance agency.
(b) All
"expirations" as defined in subsection (a) of this
Section shall be mutually and exclusively owned by
the insured and the registered firm. The limitations
on the use of expirations as provided in subsections
(c) and (d) of this Section shall be for mutual
benefit of the insured and the registered firm.
(c) Except
as otherwise provided in this Section, for purposes
of soliciting, selling, or negotiating the renewal
or sale of insurance coverage, insurance products,
or insurance services or for any other marketing
purpose, a registered firm shall own and have the
exclusive use of expirations, records, and other
written or electronically stored information
directly related to an insurance application
submitted by, or an insurance policy written
through, the registered firm. No insurance company,
managing general agent, surplus lines insurance
broker, wholesale broker, group self-insurance fund,
third-party administrator, or any other entity,
other than a financial institution as defined in
Section 1402 of this Code, shall use such
expirations, records, or other written or
electronically stored information to solicit, sell,
or negotiate the renewal or sale of insurance
coverage, insurance products, or insurance services
to the insured or for any other marketing purposes,
either directly or by providing such information to
others, without, separate from the general agency
contract, the written consent of the registered
firm. However, such expirations, records, or other
written or electronically stored information may be
used for any purpose necessary for placing such
business through the insurance producer including
reviewing an application and issuing or renewing a
policy and for loss control services.
(d) With
respect to a registered firm, this Section shall not
apply:
(1) when the
insured requests either orally or in writing that
another registered firm obtain quotes for insurance
from another insurance company or when the insured
requests in writing individually or through another
registered firm, that the insurance company renew
the policy;
(2) to
policies in the Illinois Fair Plan, the Illinois
Automobile Insurance Plan, or the Illinois Assigned
Risk Plan for coverage under the Workers'
Compensation Act and the Workers' Occupational
Diseases Act;
(3) when the
insurance producer is employed by or has agreed to
act exclusively or primarily for one company or
group of affiliated insurance companies or to a
producer who submits to the company or group of
affiliated companies that are organized to transact
business in this State as a reciprocal company, as
defined in Article IV of this Code, every request or
application for insurance for the classes and lines
underwritten by the company or group of affiliated
companies;
(4) to
policies providing life and accident and health
insurance;
(5) when the
registered firm is in default for nonpayment of
premiums under the contract with the insurer or is
guilty of conversion of the insured's or insurer's
premiums or its license is revoked by or surrendered
to the Department;
(6) to any
insurance company's obligations under Sections
143.17 and 143.17a of this Code; or
(7) to any
insurer that, separate from a producer or registered
firm, creates, develops, compiles, and assembles its
own, identifiable expirations as defined in
subsection (a).
For purposes
of this Section, an insurance producer shall be
deemed to have agreed to act primarily for one
company or a group of affiliated insurance companies
if the producer (i) receives 75% or more of his or
her insurance related commissions from one company
or a group of affiliated companies or (ii) places
75% or more of his or her policies with one company
or a group of affiliated companies.
Nothing in
this Section prohibits an insurance company, with
respect to any items herein, from conveying to the
insured or the registered firm any additional
benefits or ownership rights including, but not
limited to, the ownership of expirations on any
policy issued or the imposition of further
restrictions on the insurance company's use of the
insured's personal information.
(e) Nothing
in this Section prevents a financial institution, as
defined in Section 1402 of this Code, from obtaining
from the insured, the insurer, or the registered
firm the expiration dates of an insurance policy
placed on collateral or otherwise used as security
in connection with a loan made or serviced by the
financial institution when the financial institution
requires the expiration dates for evidence of
insurance.
(f) For
purposes of this Section, "financial institution"
does not include an insurance company, registered
firm, managing general agent, surplus lines broker,
wholesale broker, group self-funded insurance fund,
or third-party administrator.
(g) The
Director may adopt rules in accordance with Section
401 of this Code for the enforcement of this
Section.
(h) This
Section applies to the expirations relative to all
policies of insurance bound, applied for, sold,
renewed, or otherwise taking effect on or after the
effective date of this amendatory Act of the 92nd
General Assembly.
(215 ILCS
5/500-80)
Sec. 500-80.
Commissions.
(a) An
insurer or insurance producer may not pay a
commission, service fee, brokerage, or other
valuable consideration to a person for selling,
soliciting, or negotiating insurance in this State
if that person is required to be licensed under this
Article and is not so licensed at the time of
selling, soliciting, or negotiating the insurance.
(b) A person
may not accept a commission, service fee, brokerage,
or other valuable consideration for selling,
soliciting, or negotiating insurance in this State
if that person is required to be licensed under this
Article and is not so licensed.
(c) Renewal
or other deferred commissions may be paid to a
person for selling, soliciting, or negotiating
insurance in this State if the person was required
to be licensed under this Article at the time of the
sale, solicitation, or negotiation and was so
licensed at that time.
(d) An
insurer or insurance producer may pay or assign
commissions, service fees, brokerages, or other
valuable consideration to an insurance agency or to
persons who do not sell, solicit, or negotiate
insurance in this State, unless the payment would
violate Section 151 of this Code.
(e) When an
insurance producer or business entity charges any
fee or compensation separate from commissions
deductible from, or directly attributable to,
premiums on insurance policies or contracts, it must
comply with all of the following:
(1) It must
provide written disclosure to the consumer or
contracting party that clearly specifies the amount
or extent of the compensation or fee prior to the
delivery of the corresponding policy. A copy of the
written disclosure must be maintained by the
producer or business entity that collects the
compensation or fee for a period of 7 years.
(2) If the
combined compensation or fee exceeds 10% of a
directly attributable premium amount of a
corresponding contract or policy, the disclosure
must also include the signature of the consumer or
contracting party acknowledging the compensation or
fee.
(3) If an
insurance policy or contract is cancelled for any
reason within 90 days following the inception date,
the producer or business entity shall refund to the
consumer a prorated portion of the fee or
compensation within 30 days after the producer or
business entity receives proper documentation that
the corresponding insurance policy or contract has
been cancelled. At no time shall a producer or
business entity charge the consumer a fee or
compensation for cancellation of any insurance
policy or contract.
(4) If the
policy file contains documentation that the producer
performed a service corresponding to the applicable
coverage or policy and the written disclosure stated
that the fees were fully earned, then those fees
shall be fully earned at inception of the
disclosure's execution.
(215 ILCS
5/500-85)
Sec. 500-85.
Notification of termination; immunity;
confidentiality.
(a) An
insurer or authorized representative of an insurer
that terminates the appointment, employment,
contract, or other insurance business relationship
with a producer must notify the Director within 30
days following the effective date of the
termination, using a format prescribed by the
Director, if the reason for termination is one of
the reasons set forth in Section 500-70 or the
insurer has knowledge the producer was found by a
court, government body, or self-regulatory
organization authorized by law to have engaged in
any of the activities in Section 500-70. Upon
written request by the Director, the insurer must
provide additional information, documents, records,
or other data pertaining to the termination or
activity of the producer.
(b) The
insurer or the authorized representative of the
insurer must promptly notify the Director in a
format acceptable to the Director if, upon further
review or investigation, the insurer discovers
additional information that would have been
reportable to the Director in accordance with
subsection (a) had the insurer then known of its
existence.
(c) Within
15 days after making the notification required by
subsections (a) and (b), the insurer must mail a
copy of the notification to the producer at his or
her last known address. If the producer is
terminated for cause for any of the reasons listed
in Section 500-70, the insurer must provide a copy
of the notification to the producer at his or her
last known address by certified mail, return receipt
requested, postage prepaid or by overnight delivery
using a nationally recognized carrier.
Within 30 days
after the producer has received the original or
additional notification, the producer may file
written comments concerning the substance of the
notification with the Director. The producer must,
by the same means, simultaneously send a copy of the
comments to the reporting insurer, and the comments
shall become a part of the Director's file and
accompany every copy of a report distributed or
disclosed for any reason about the producer as
permitted under this Code.
(d) There
shall be no liability on the part of, nor shall a
cause of action of any nature arise against, an
insurer, the authorized representative of the
insurer, a producer, the Director, or an
organization of which the Director is a member for
any information, documents, records, or statements
provided pursuant to this Section.
(e) An
insurer, the authorized representative of the
insurer, or a producer that fails to report as
required under the provisions of this Section or
that is found to have reported with malicious intent
by a court of competent jurisdiction may, after
notice and hearing, have its license or certificate
of authority suspended or revoked and may be
subjected to a civil penalty.
(215 ILCS
5/500-90)
Sec. 500-90.
Reciprocity.
(a) The
Director shall waive any requirements for a
nonresident license applicant with a valid license
from his or her home state, except the requirements
imposed by Section 500-40 of this Article, if the
applicant's home state awards nonresident licenses
to residents of this State on the same basis.
(b) A
nonresident producer's satisfaction of his or her
home state's continuing education requirements for
licensed insurance producers shall constitute
satisfaction of this State's continuing education
requirements if the non-resident producer's home
state recognizes the satisfaction of its continuing
education requirements imposed upon producers from
this State on the same basis.
(215 ILCS
5/500-95)
Sec. 500-95.
Reporting of actions. An individual who, while
licensed as an insurance producer, is convicted of a
felony, must report the conviction to the Director
within 30 days after the entry date of the judgment.
Within that 30-day period, the individual must also
provide the Director with a copy of the judgment,
the probation or commitment order, and any other
relevant documents.
(215 ILCS
5/500-100)
Sec. 500-100.
Limited lines producer license.
(a) An
individual who is at least 18 years of age and whom
the Director considers to be competent, trustworthy,
and of good business reputation may obtain a limited
lines producer license for one or more of the
following classes:
(1)
insurance on baggage or limited travel health,
accident, or trip cancellation insurance sold in
connection with transportation provided by a common
carrier;
(2)
industrial life insurance, as defined in Section 228
of this Code;
(3)
industrial accident and health insurance, as defined
in Section 368 of this Code;
(4)
insurance issued by a company organized under the
Farm Mutual Insurance Company Act of 1986;
(5) legal
expense insurance;
(6)
enrollment of recipients of public aid or medicare
in a health maintenance organization;
(7) a
limited health care plan issued by an organization
having a certificate of authority under the Limited
Health Service Organization Act.
(b) The
application for a limited lines producer license
must be submitted on a form prescribed by the
Director by a designee of the insurance company,
health maintenance organization, or limited health
service organization appointing the limited
insurance representative. The insurance company,
health maintenance organization, or limited health
service organization must pay the fee required by
Section 500-135.
(c) A
limited lines producer may represent more than one
insurance company, health maintenance organization,
or limited health service organization.
(d) An
applicant who has met the requirements of this
Section shall be issued a perpetual limited lines
producer license.
(e) A
limited lines producer license shall remain in
effect as long as the appointing insurance company
pays the respective fee required by Section 500-135
prior to January 1 of each year, unless the license
is revoked or suspended pursuant to Section 500-70.
Failure of the insurance company to pay the license
fee or to submit the required documents shall cause
immediate termination of the limited line insurance
producer license with respect to which the failure
occurs.
(f) A
limited lines producer license may be terminated by
the insurance company or the licensee.
(g) A person
whom the Director considers to be competent,
trustworthy, and of good business reputation may be
issued a car rental limited line license. A car
rental limited line license for a rental company
shall remain in effect as long as the car rental
limited line licensee pays the respective fee
required by Section 500-135 prior to the next fee
date unless the car rental license is revoked or
suspended pursuant to Section 500-70. Failure of the
car rental limited line licensee to pay the license
fee or to submit the required documents shall cause
immediate suspension of the car rental limited line
license. A car rental limited line license for
rental companies may be voluntarily terminated by
the car rental limited line licensee. The license
fee shall not be refunded upon termination of the
car rental limited line license by the car rental
limited line licensee.
(h) A
limited lines producer issued a license pursuant to
this Section is not subject to the requirements of
Section 500-30.
(i) A
limited lines producer license must contain the
name, address and personal identification number of
the licensee, the date the license was issued,
general conditions relative to the license's
expiration or termination, and any other information
the Director considers proper. A limited line
producer license, if applicable, must also contain
the name and address of the appointing insurance
company.
(215 ILCS
5/500-105)
Sec. 500-105.
Car rental limited line license for rental
companies.
(a) A rental
company must obtain a producer license or obtain a
car rental limited line license before offering or
selling insurance in connection with and incidental
to the rental of vehicles. The sale of the insurance
may occur at the rental office or by preselection of
coverage in a master, corporate, group rental, or
individual agreement. The following general
categories of coverage may be offered or sold:
(1) personal
accident insurance covering the risks of travel
including, but not limited to, accident and health
insurance that provides coverage, as applicable, to
renters and other rental vehicle occupants for
accidental death or dismemberment and reimbursement
for medical expenses resulting from an accident that
occurs during the rental period;
(2)
liability insurance, including uninsured and
underinsured motorist coverage, that provides
coverage, as applicable, to renters and other
authorized drivers of rental vehicles for liability
arising from the operation of the rental vehicle;
(3) personal
effects insurance that provides coverage, as
applicable, to renters and other vehicle occupants
for the loss of, or damage to, personal effects that
occurs during the rental period;
(4) roadside
assistance and emergency sickness protection
programs; and
(5) any
other travel or auto-related coverage that a rental
company offers in connection with and incidental to
the rental of vehicles.
(b)
Insurance may not be offered by a car rental limited
line producer pursuant to this Section unless:
(1) the
rental company has applied for and obtained a car
rental limited line license;
(2) the
rental period of the rental agreement does not
exceed 30 consecutive days;
(3) at every
rental location where rental agreements are
executed, brochures or other written materials are
readily available to the prospective renter that:
(A) summarize
clearly and correctly, the material terms of
coverage offered to renters, including the identity
of the insurer;
(B) disclose
that the coverage offered by the rental company may
provide a duplication of coverage already provided
by a renter's personal automobile insurance policy,
homeowner's insurance policy, personal liability
insurance policy, or other source of coverage;
(C) state
that the purchase by the renter of the kinds of
coverage specified in this Section is not required
in order to rent a vehicle; and
(D) describe
the process for filing a claim in the event the
renter elects to purchase coverage and in the event
of a claim; and
(4) evidence
of coverage in the rental agreement is disclosed to
every renter who elects to purchase such coverage.
(c) Car
rental company franchisees must apply for a car
rental limited line license independent of the
franchisor if insurance provided pursuant to this
Section is offered by the franchisee.
(d) A car
rental limited line license issued under this
Section shall also authorize any employee of the car
rental limited line licensee to act individually on
behalf and under the supervision of the car rental
limited line licensee with respect to the kinds of
coverage specified in this Section.
(e) A rental
company licensed pursuant to this Section must
conduct a training program in which employees being
trained shall receive basic instruction about the
kinds of coverage specified in this Section and
offered for purchase by prospective renters of
rental vehicles.
(f)
Notwithstanding any other provision of this Section
or any rule adopted by the Director, a car rental
limited line producer pursuant to this Section is
not required to treat moneys collected from renters
purchasing insurance when renting vehicles as funds
received in a fiduciary capacity, provided that the
charges for coverage shall be itemized and be
ancillary to a rental transaction.
(g) The sale
of insurance not in conjunction with a rental
transaction shall not be permitted.
(h) A car
rental limited line producer under this Section may
not advertise, represent, or otherwise hold itself
or any of its employees out as licensed insurers,
insurance producers, insurance agents, or insurance
brokers.
(i) Direct
commissions may not be paid to rental car company
employees by the insurer or the customer purchasing
insurance products. The rental car company may
include insurance products in an overall employee
performance compensation incentive program.
(j) An
application for a car rental limited line license
must be made on a form specified by the Director.
(215 ILCS
5/500-107)
Sec. 500-107.
Self-service storage facility limited line license
for self-storage facilities.
(a) Except
as permitted by subsection (j) of this Section, a
self-service storage facility must obtain a producer
license or obtain a self-service storage facility
limited line license before offering or selling
insurance in connection with and incidental to the
rental of storage space provided by a self-service
storage facility. The sale of insurance may occur at
the rental office or by preselection of coverage in
a master, corporate, group rental, or individual
agreement. The following general categories of
coverage may be offered or sold:
(1)
insurance that provides hazard insurance coverage to
renters for the loss of, or damage to, tangible
personal property in storage or in transit during
the rental period; or
(2) any
other coverage the Director may approve as
meaningful and appropriate in connection with the
rental of storage space.
(b)
Insurance may not be offered by a self-service
storage limited line producer pursuant to this
Section unless:
(1) the
self-service storage facility has applied for and
obtained a self-service storage facility limited
line license;
(2) at every
rental location where rental agreements are
executed, brochures or other written materials are
readily available to the prospective renter that:
(A) summarize
clearly and correctly the material terms of coverage
offered to renters, including the identity of the
insurer;
(B) disclose
that the coverage offered by the self-service
storage facility may provide a duplication of
coverage already provided by the renter's personal
homeowner's insurance policy, automobile insurance
policy, personal liability insurance policy, or
other source of coverage;
(C) state
that the purchase by the renter of the kinds of
coverage specified in this Section is not required
in order to rent storage space; and
(D) describe
the process for filing a claim in the event the
consumer elects to purchase coverage and in the
event of a claim; and
(3) evidence
of coverage is provided to each renter who elects to
purchase the coverage.
(c) A
self-service storage facility limited line license
issued under this Section shall also authorize any
employee of the self-service storage facility
limited line licensee to act individually on behalf
and under the supervision of the self-service
storage facility limited line licensee with respect
to the kinds of coverage specified in this Section.
(d) A
self-service storage facility licensed pursuant to
this Section must conduct a training program in
which employees being trained shall receive basic
instruction about the kinds of coverage specified in
this Section and offered for purchase by prospective
renters of storage space.
(e)
Notwithstanding any other provision of this Section
or any rule adopted by the Director, a self-service
storage facility limited line producer pursuant to
this Section is not required to treat moneys
collected from renters purchasing insurance when
renting storage space as funds received in a
fiduciary capacity, provided that the charges for
coverage shall be itemized and ancillary to a rental
transaction.
(f) The sale
of insurance not in conjunction with a rental
transaction shall not be permitted.
(g) A
self-service storage facility limited line producer
under this Section may not advertise, represent, or
otherwise hold itself or any of its employees out as
licensed insurers, insurance producers, insurance
agents, or insurance brokers.
(h) Direct
commissions may not be paid to self-service storage
facility employees by the insurer or the customer
purchasing insurance products. The self-service
storage facility may include insurance products in
an overall employee performance compensation
incentive program.
(i) An
application for a self-service storage facility
limited line license must be made on a form
specified by the Director.
(j) Nothing
contained in this Section shall prohibit an
unlicensed person from enrolling, issuing, or
otherwise distributing certificates of insurance
under a group master policy lawfully issued in this
or another state when:
(1) the
enrollment or distribution is by an employee of the
group master policyholder;
(2) no
commission is paid for such enrollment or
distribution;
(3) the
distribution is incidental and ancillary to the
primary rental business of the group master
policyholder; and
(4) the
group master policy is sold to the group master
policyholder by a licensed producer.
(k) Nothing
in this Section applies to or affects common
carriers regulated by the Illinois Commerce
Commission.
(215 ILCS
5/500-110)
Sec. 500-110.
Regulatory examinations.
(a) The
Director may examine any applicant for or holder of
an insurance producer license, limited line producer
license or temporary insurance producer license or
any business entity.
(b) All
persons being examined, as well as their officers,
directors, insurance producers, limited lines
producers, and temporary insurance producers must
provide to the Director convenient and free access,
at all reasonable hours at their offices, to all
books, records, documents, and other papers relating
to the persons' insurance business affairs. The
officers, directors, insurance producers, limited
lines producers, temporary insurance producers, and
employees must facilitate and aid the Director in
the examinations as much as it is in their power to
do so.
(c) The
Director may designate an examiner or examiners to
conduct any examination under this Section. The
Director or his or her designee may administer oaths
and examine under oath any individual relative to
the business of the person being examined.
(d) The
examiners designated by the Director under this
Section may make reports to the Director. A report
alleging substantive violations of this Article or
any rules prescribed by the Director must be in
writing and be based upon facts ascertained from the
books, records, documents, papers, and other
evidence obtained by the examiners or from sworn or
affirmed testimony of or written affidavits from the
person's officers, directors, insurance producers,
limited lines producer, temporary insurance
producers, or employees or other individuals, as
given to the examiners. The report of an examination
must be verified by the examiners.
(e) If a
report is made, the Director must either deliver a
duplicate of the report to the person being examined
or send the duplicate by certified or registered
mail to the person's address of record. The Director
shall afford the person an opportunity to demand a
hearing with reference to the facts and other
evidence contained in the report. The person may
request a hearing within 14 calendar days after he
or she receives the duplicate of the examination
report by giving the Director written notice of that
request, together with a written statement of the
person's objections to the report. The Director
must, if requested to do so, conduct a hearing in
accordance with Sections 402 and 403 of this Code.
The Director must issue a written order based upon
the examination report and upon the hearing, if a
hearing is held, within 90 days after the report is
filed, or within 90 days after the hearing if a
hearing is held. If the report is refused or
otherwise undeliverable, or a hearing is not
requested in a timely fashion, the right to a
hearing is waived. After the hearing or the
expiration of the time period in which a person may
request a hearing, if the examination reveals that
the person is operating in violation of any law,
rule, or prior order, the Director in the written
order may require the person to take any action the
Director considers necessary or appropriate in
accordance with the report or examination hearing.
The order is subject to review under the
Administrative Review Law.
(f) The
Director may adopt reasonable rules to further the
purposes of this Section.
(g) A person
who violates or aids and abets any violation of a
written order issued under this Section shall be
guilty of a business offense and his or her license
may be revoked or suspended pursuant to Section
500-70 of this Article and he or she may be
subjected to a civil penalty of not more than
$20,000.
(215 ILCS
5/500-115)
Sec. 500-115.
Financial responsibilities.
(a) Any
money that an insurance producer, limited line
producer, temporary insurance producer, business
entity, or surplus line producer receives for
soliciting, negotiating, effecting, procuring,
renewing, continuing, or binding policies of
insurance shall be held in a fiduciary capacity and
shall not be misappropriated, converted, or
improperly withheld. An insurance company that
delivers to any insurance producer in this State a
policy or contract for insurance pursuant to the
application or request of an insurance producer,
authorizes the producer to collect or receive on its
behalf payment of any premium that is due on the
policy or contract for insurance at the time of its
issuance or delivery and any premium that becomes
due on the policy or contract not more than 90 days
thereafter.
(b) An
insurer that issues a policy of insurance shall be
deemed to have received payment of the premium if
the insured paid any insurance producer requesting
the coverage. The insurer shall be responsible to
the insured for any return premium.
(c) In the
case of open accounts receivable with the balance
payable to an insurance producer within a specified
period of 90 days or less, where the balance is not
fully paid within that period, a late charge not
exceeding 1.5% per month may be added by the
insurance producer to the unpaid balance to induce
payment of the premium.
(d) If an
insurance producer or surplus line producer
knowingly misappropriates or converts to his or her
own use or illegally withholds fiduciary moneys in
the amount of $150 or less, he or she is guilty of a
Class A misdemeanor for a first offense and a Class
4 felony for subsequent conversions,
misappropriations, and withholdings of that nature.
If an insurance producer or surplus line producer
knowingly misappropriates or converts to his or her
own use or illegally withholds premiums in excess of
$150, he or she is guilty of a Class 3 felony.
(215 ILCS
5/500-120)
Sec. 500-120.
Conflicts of interest; inactive status.
(a) A
person, partnership, association, or corporation
licensed by the Department who, due to employment
with any unit of government that would cause a
conflict of interest with the holding of that
license, notifies the Director in writing on forms
prescribed by the Department and, subject to rules
of the Department, makes payment of applicable
licensing renewal fees, may elect to place the
license on an inactive status.
(b) A
licensee whose license is on inactive status may
have the license restored by making application to
the Department on such form as may be prescribed by
the Department. The application must be accompanied
with a fee of $100 plus the current applicable
license fee.
(c) A
license may be placed on inactive status for a
2-year period, and upon request, the inactive status
may be extended for a successive 2-year period not
to exceed a cumulative 4-year inactive period. After
a license has been on inactive status for 4 years or
more, the licensee must meet all of the standards
required of a new applicant before the license may
be restored to active status.
(d) If
requests for inactive status are not renewed as set
forth in subsection (c), the license will be taken
off the inactive status and the license will lapse
immediately.
(215 ILCS
5/500-125)
Sec. 500-125.
Controlled business.
(a) An
insurance producer license may not be granted or
extended to any person if the Director has
reasonable cause to believe:
(1) that
during either of the 2 calendar years immediately
preceding the extension date of the license the
aggregate amount of premiums on insurance
represented by controlled business exceeded the
aggregate amount of premiums on all other insurance
business of the licensee; or
(2) that
during the 12-month period immediately following the
issuance or extension of the license, if so issued
or extended, the aggregate amount of premiums on
controlled business would exceed the aggregate
amount of premiums on all other insurance business
of the applicant or licensee.
(b)
Controlled business means insurance procured or to
be procured by or through the person upon:
(1) his own
life, person, property or risks, or those of his
spouse; or
(2) the
life, person, property, or risks of his employer or
his own business.
(215 ILCS
5/500-130)
Sec. 500-130.
Bond required of insurance producers.
(a) An
insurance producer who places insurance either
directly or indirectly with an insurer with which
the insurance producer does not have an agent
contact must maintain in force while licensed a bond
in favor of the people of the State of Illinois
executed by an authorized surety company and payable
to any party injured under the terms of the bond.
The bond shall be continuous in form and in the
amount of $2,500 or 5% of the premiums brokered in
the previous calendar year, whichever is greater,
but not to exceed $50,000 total aggregate liability.
The bond shall be conditioned upon full accounting
and due payment to the person or company entitled
thereto, of funds coming into the insurance
producer's possession as an incident to insurance
transactions under the license or surplus line
insurance transactions under the license as a
surplus line producer.
(b)
Authorized insurance producers of a business entity
may meet the requirements of this Section with a
bond in the name of the business entity, continuous
in form, and in the amounts set forth in subsection
(a) of this Section. Insurance producers may meet
the requirements of this Section with a bond in the
name of an association. An individual producer
remains responsible for assuring that a producer
bond is in effect and is for the correct amount. The
association must have been in existence for 5 years,
have common membership, and been formed for a
purpose other than obtaining a bond.
(c) The
surety may cancel the bond and be released from
further liability thereunder upon 30 days' written
notice in advance to the principal. The cancellation
does not affect any liability incurred or accrued
under the bond before the termination of the 30-day
period.
(d) The
producer's license may be revoked if the producer
acts without a bond that is required under this
Section.
(e) If a
party injured under the terms of the bond requests
the producer to provide the name of the surety and
the bond number, the producer must provide the
information within 3 working days after receiving
the request.
(f) An
association may meet the requirements of this
Section for all of its members with a bond in the
name of the association that is continuous in form
and in the amounts set forth in subsection (a) of
this Section.
(215 ILCS
5/500-135)
(Text of
Section from P.A. 93-32)
Sec. 500-135.
Fees.
(a) The fees
required by this Article are as follows:
(1) a fee of
$180 for a person who is a resident of Illinois, and
$250 for a person who is not a resident of Illinois,
payable once every 2 years for an insurance producer
license;
(2) a fee of
$50 for the issuance of a temporary insurance
producer license;
(3) a fee of
$150 payable once every 2 years for a business
entity;
(4) an
annual $50 fee for a limited line producer license
issued under items (1) through (7) of subsection (a)
of Section 500-100;
(5) a $50
application fee for the processing of a request to
take the written examination for an insurance
producer license;
(6) an
annual registration fee of $1,000 for registration
of an education provider;
(7) a
certification fee of $50 for each certified
pre-licensing or continuing education course and an
annual fee of $20 for renewing the certification of
each such course;
(8) a fee of
$180 for a person who is a resident of Illinois, and
$250 for a person who is not a resident of Illinois,
payable once every 2 years for a car rental limited
line license;
(9) a fee of
$200 payable once every 2 years for a limited lines
license other than the licenses issued under items
(1) through (7) of subsection (a) of Section 500-100
or a car rental limited line license.
(b) Except
as otherwise provided, all fees paid to and
collected by the Director under this Section shall
be paid promptly after receipt thereof, together
with a detailed statement of such fees, into a
special fund in the State Treasury to be known as
the Insurance Producer Administration Fund. The
moneys deposited into the Insurance Producer
Administration Fund may be used only for payment of
the expenses of the Department in the execution,
administration, and enforcement of the insurance
laws of this State, and shall be appropriated as
otherwise provided by law for the payment of those
expenses with first priority being any expenses
incident to or associated with the administration
and enforcement of this Article.
(Text of
Section from P.A. 93-288)
Sec. 500-135.
Fees.
(a) The fees
required by this Article are as follows:
(1) a fee of
$150 payable once every 2 years for an insurance
producer license;
(2) a fee of
$25 for the issuance of a temporary insurance
producer license;
(3) a fee of
$50 payable once every 2 years for a business
entity;
(4) an
annual $25 fee for a limited line producer license
issued under items (1) through (7) of subsection (a)
of Section 500-100;
(5) a $25
application fee for the processing of a request to
take the written examination for an insurance
producer license;
(6) an
annual registration fee of $500 for registration of
an education provider;
(7) a
certification fee of $25 for each certified
pre-licensing or continuing education course and an
annual fee of $10 for renewing the certification of
each such course;
(8) a fee of
$50 payable once every 2 years for a car rental
limited line license;
(9) a fee of
$150 payable once every 2 years for a limited lines
license other than the licenses issued under items
(1) through (7) of subsection (a) of Section
500-100, a car rental limited line license, or a
self-service storage facility limited line license;
(10) a fee of
$50 payable once every 2 years for a self-service
storage facility limited line license.
(b) Except
as otherwise provided, all fees paid to and
collected by the Director under this Section shall
be paid promptly after receipt thereof, together
with a detailed statement of such fees, into a
special fund in the State Treasury to be known as
the Insurance Producer Administration Fund. The
moneys deposited into the Insurance Producer
Administration Fund may be used only for payment of
the expenses of the Department in the execution,
administration, and enforcement of the insurance
laws of this State, and shall be appropriated as
otherwise provided by law for the payment of those
expenses with first priority being any expenses
incident to or associated with the administration
and enforcement of this Article.
(215 ILCS
5/500-140)
Sec. 500-140.
Injunctive relief. A person required to be licensed
under this Article but failing to obtain a valid and
current license under this Article constitutes a
public nuisance. The Director may report the failure
to obtain a license to the Attorney General, whose
duty it is to apply forthwith by complaint on
relation of the Director in the name of the people
of the State of Illinois, for injunctive relief in
the circuit court of the county where the failure to
obtain a license occurred to enjoin that person from
failing to obtain a license. Upon the filing of a
verified petition in the court, the court, if
satisfied by affidavit or otherwise that the person
is required to have a license and does not have a
valid and current license, may enter a temporary
restraining order without notice or bond, enjoining
the defendant from acting in any capacity that
requires such license. A copy of the verified
complaint shall be served upon the defendant, and
the proceedings shall thereafter be conducted as in
other civil cases. If it is established that the
defendant has been, or is engaged in any unlawful
practice, the court may enter an order or judgment
perpetually enjoining the defendant from further
engaging in such practice. In all proceedings
brought under this Section, the court, in its
discretion, may apportion the costs among the
parties, including the cost of filing the complaint,
service of process, witness fees and expenses, court
reporter charges, and reasonable attorney fees. In
case of the violation of any injunctive order
entered under the provisions of this Section, the
court may summarily try and punish the offender for
contempt of court. The injunctive relief available
under this Section is in addition to and not in lieu
of all other penalties and remedies provided in this
Code.
(215 ILCS
5/500-145)
Sec. 500-145.
Rules. The Director may, in accordance with Section
401 of this Code, promulgate reasonable rules as are
necessary or proper to carry out the purposes of
this Article.
(215 ILCS
5/500-150)
Sec. 500-150.
Severability. The provisions of this Article are
severable under Section 1.31 of the Statute on
Statutes.
(215 ILCS
5/507.2)
Sec. 507.2.
Policyholder information and exclusive ownership of
expirations.
(a) As used
in this Section, "expirations" means all information
relative to an insurance policy including, but not
limited to, the name and address of the insured, the
location and description of the property insured,
the value of the insurance policy, the inception
date, the renewal date, and the expiration date of
the insurance policy, the premiums, the limits and a
description of the terms and coverage of the
insurance policy, and any other personal and
privileged information, as defined by Section 1003
of this Code, compiled by a registered firm or
furnished by the insured to the insurer or any
agent, contractor, or representative of the insurer.
For purposes
of this Section only, a registered firm also
includes a sole proprietorship that transacts the
business of insurance as an insurance agency.
(b) All
"expirations" as defined in subsection (a) of this
Section shall be mutually and exclusively owned by
the insured and the registered firm. The limitations
on the use of expirations as provided in subsections
(c) and (d) of this Section shall be for mutual
benefit of the insured and the registered firm.
(c) Except
as otherwise provided in this Section, for purposes
of soliciting, selling, or negotiating the renewal
or sale of insurance coverage, insurance products,
or insurance services or for any other marketing
purpose, a registered firm shall own and have the
exclusive use of expirations, records, and other
written or electronically stored information
directly related to an insurance application
submitted by, or an insurance policy written
through, the registered firm. No insurance company,
managing general agent, surplus lines insurance
broker, wholesale broker, group self-insurance fund,
third-party administrator, or any other entity,
other than a financial institution as defined in
Section 1402 of this Code, shall use such
expirations, records, or other written or
electronically stored information to solicit, sell,
or negotiate the renewal or sale of insurance
coverage, insurance products, or insurance services
to the insured or for any other marketing purposes,
either directly or by providing such information to
others, without, separate from the general agency
contract, the written consent of the registered
firm. However, such expirations, records, or other
written or electronically stored information may be
used for any purpose necessary for placing such
business through the insurance producer including
reviewing an application and issuing or renewing a
policy and for loss control services.
(d) With
respect to a registered firm, this Section shall not
apply:
(1) when the
insured requests either orally or in writing that
another registered firm obtain quotes for insurance
from another insurance company or when the insured
requests in writing individually or through another
registered firm, that the insurance company renew
the policy;
(2) to
policies in the Illinois Fair Plan, the Illinois
Automobile Insurance Plan, or the Illinois Assigned
Risk Plan for coverage under the Workers'
Compensation Act and the Workers' Occupational
Diseases Act;
(3) when the
insurance producer is employed by or has agreed to
act exclusively or primarily for one company or
group of affiliated insurance companies or to a
producer who submits to the company or group of
affiliated companies that are organized to transact
business in this State as a reciprocal company, as
defined in Article IV of this Code, every request or
application for insurance for the classes and lines
underwritten by the company or group of affiliated
companies;
(4) to
policies providing life and accident and health
insurance;
(5) when the
registered firm is in default for nonpayment of
premiums under the contract with the insurer or is
guilty of conversion of the insured's or insurer's
premiums or its license is revoked by or surrendered
to the Department;
(6) to any
insurance company's obligations under Sections
143.17 and 143.17a of this Code; or
(7) to any
insurer that, separate from a producer or registered
firm, creates, develops, compiles, and assembles its
own, identifiable expirations as defined in
subsection (a).
For purposes
of this Section, an insurance producer shall be
deemed to have agreed to act primarily for one
company or a group of affiliated insurance companies
if the producer (i) receives 75% or more of his or
her insurance related commissions from one company
or a group of affiliated companies or (ii) places
75% or more of his or her policies with one company
or a group of affiliated companies.
Nothing in
this Section prohibits an insurance company, with
respect to any items herein, from conveying to the
insured or the registered firm any additional
benefits or ownership rights including, but not
limited to, the ownership of expirations on any
policy issued or the imposition of further
restrictions on the insurance company's use of the
insured's personal information.
(e) Nothing
in this Section prevents a financial institution, as
defined in Section 1402 of this Code, from obtaining
from the insured, the insurer, or the registered
firm the expiration dates of an insurance policy
placed on collateral or otherwise used as security
in connection with a loan made or serviced by the
financial institution when the financial institution
requires the expiration dates for evidence of
insurance.
(f) For
purposes of this Section, "financial institution"
does not include an insurance company, registered
firm, managing general agent, surplus lines broker,
wholesale broker, group self-funded insurance fund,
or third-party administrator.
(g) The
Director may adopt rules in accordance with Section
401 of this Code for the enforcement of this
Section.
(h) This
Section applies to the expirations relative to all
policies of insurance bound, applied for, sold,
renewed, or otherwise taking effect on or after the
effective date of this amendatory Act of the 92nd
General Assembly.
Appendix 8: Unauthorized
Transactions
(215 ILCS
5/121-2)
Sec. 121-2.
Transacting business without certificate of
authority prohibited - Exempt transactions. It is
unlawful for any insurer to transact insurance
business in this State, (as described in Section
121-3,) without a certificate of authority from the
Director. This Section does not however, apply to
any transaction described in Sections 121-2.01
through 121-2.10.
(215 ILCS
5/121-2.01)
Sec. 121-2.01.
The lawful transaction of business under Section
445.
(215 ILCS
5/121-2.02)
Sec. 121-2.02.
The lawful transaction of reinsurance by insurers.
(215 ILCS
5/121-2.03)
Sec. 121-2.03.
Transactions in this State involving a policy
lawfully solicited, written, and delivered outside
of this State covering only subjects of insurance
not resident, located, or expressly to be performed
in this State at the time of issuance, and which
transactions are subsequent to the issuance of such
policy.
(215 ILCS
5/121-2.04)
Sec. 121-2.04.
Attorneys acting in the ordinary relation of
attorney and client in the adjustment of claims or
losses.
(215 ILCS
5/121-2.05)
Sec. 121-2.05.
Group insurance policies issued and delivered in
other State - Transactions in this State. With the
exception of insurance transactions authorized under
Sections 230.2 or 367.3 of this Code, transactions
in this State involving group legal, group life and
group accident and health or blanket accident and
health insurance or group annuities where the master
policy of such groups was lawfully issued and
delivered in, and under the laws of, a State in
which the insurer was authorized to do an insurance
business, to a group properly established pursuant
to law or regulation, and where the policyholder is
domiciled or otherwise has a bona fide situs.
(215 ILCS
5/121-2.06)
Sec. 121-2.06.
Transactions in this State involving any policy of
insurance or annuity contract issued before the
effective date of this amendatory Act of 1971.
(215 ILCS
5/121-2.07)
Sec. 121-2.07.
Transactions in this State relative to a policy
issued or to be issued outside this State involving
insurance on vessels, craft or hulls, cargos, marine
builder's risk, marine protection and indemnity or
other risk, including strikes and war risks commonly
insured under ocean or wet marine forms of policy.
(215 ILCS
5/121-2.08)
Sec. 121-2.08.
Transactions in this State involving contracts of
insurance issued to one or more industrial insureds.
For purposes of this Section "industrial insured" is
an insured:
(a) which
procures the insurance of any risk or risks other
than life and annuity contracts by use of the
services of a full time employee acting as an
insurance manager or buyer or the services of a
regularly and continuously retained qualified
insurance consultant;
(b) whose
aggregate annual premiums for insurance on all
risks, except for life and accident and health
insurance, total at least $100,000; and
(c) which
either (i) has at least 25 full time employees, (ii)
has gross assets in excess of $3,000,000, or (iii)
has annual gross revenues in excess of $5,000,000.
(215 ILCS
5/121-2.09)
Sec. 121-2.09.
Transactions in this State involving bankers'
blanket bonds or directors' and officers' liability
insurance issued by a captive insurance company,
formed exclusively for the purpose of providing
directors' and officers' liability and bankers'
blanket bond insurance to a bank or bank holding
company, as such terms are defined in Section 2 of
"The Illinois Bank Holding Company Act of 1957", as
amended, if the aggregate annual premiums for each
bank or bank holding company for insurance on all of
its property and liability risks total at least
$25,000, and such insurance is procured by a
full-time employee acting as an insurance manager or
buyer or through the services of a regularly and
continuously retained qualified insurance
consultant.
(215 ILCS
5/121-2.10)
Sec. 121-2.10.
Exempt charitable gift annuities. The insurance laws
of this State, including this Code, do not apply to
any charitable gift annuity, as defined in Section
501(m)(5) of the Internal Revenue Code, issued by an
organization that is described in Section 170(c) of
the Internal Revenue Code, if either (i) an insurer
authorized to transact business in this State is
directly obligated to the annuitant or (ii) the
organization has been in active operation for not
less than 20 years before the date the annuity is
issued and has an unrestricted fund balance of not
less than $2,000,000 on the date the annuity is
issued. For purposes of this Section, "Internal
Revenue Code" refers to the Internal Revenue Code of
1986, as amended, and corresponding provisions of
subsequent federal tax laws.
(215 ILCS
5/121-3)
Sec. 121-3.
Transaction of insurance business defined. Any of
the following acts in this State, effected by mail
or otherwise by or on behalf of an unauthorized
insurer, constitutes the transaction of an insurance
business in this State.
(a) The
making of or proposing to make, as an insurer, an
insurance contract.
(b) The
making of or proposing to make, as guarantor or
surety, any contract of guaranty or suretyship as a
vocation and not merely incidental to any other
legitimate business or activity of the guarantor or
surety.
(c) The
taking or receiving of any application for
insurance.
(d) The
receiving or collection of any premium, commission,
membership fees, assessments, dues or other
consideration for any insurance or any part thereof.
(e) The
issuance or delivery of contracts of insurance to
residents of this State or to persons authorized to
do business in this State.
(f)
Directly or indirectly acting as an agent for or
otherwise representing or aiding on behalf of
another any person or insurer in the solicitation,
negotiation, procurement or effectuation of
insurance or renewals thereof or in the
dissemination of information as to coverage or
rates, or forwarding of applications, or delivery of
policies or contracts, or inspection of risks, a
fixing of rates or investigation or adjustment of
claims or losses or in the transaction of matters
subsequent to effectuation of the contract and
arising out of that contract, or in any other manner
representing or assisting a person or insurer in the
transaction of insurance with respect to subjects of
insurance resident, located or to be performed in
this State. This paragraph does not prohibit
full-time salaried employees of a corporate insured
from acting in the capacity of an insurance manager
or buyer in placing insurance in behalf of that
employer.
(g) The
transaction of any kind of insurance business
specifically recognized as transacting an insurance
business within the meaning of this Act.
(h) The
transacting or proposing to transact any insurance
business in substance equivalent to any of the
foregoing in a manner designed to evade this Act.
The venue of
an act committed by mail is at the point where the
matter transmitted by mail is delivered and takes
effect. Unless otherwise indicated, the term
"insurer" as used in this Article includes all
corporations, associations, partnerships and
individuals, engaged as principals in the business
of insurance and also includes interinsurance
exchanges and mutual benefit societies.
(215 ILCS
5/121-4)
Sec. 121-4.
Validity of contracts - court actions. The failure
of an insurer transacting insurance business in this
State to obtain a certificate of authority does not
impair the validity of any act or contract of that
insurer nor does it prevent that insurer from
defending any action in any court of this State.
However, no insurer transacting insurance business
in this State without a certificate of authority may
maintain an action in any court of this State to
enforce any right, claim or demand arising out of
the transaction of that business until the insurer
has obtained a certificate of authority.
If any such
unauthorized insurer fails to pay any claim or loss
within the provisions of such an insurance contract,
any person who assisted or in any manner aided
directly or indirectly in the procurement of the
insurance contract shall be liable to the insured
for the full amount of the claim or loss as provided
in that insurance contract.
Appendix 9: Definition of
Personal Lines
(215 ILCS
5/143.13)
Sec. 143.13.
Definition of terms used in Sections 143.11 through
143.24.
(a) "Policy of
automobile insurance" means a policy delivered or issued
for delivery in this State, insuring a natural person as
named insured or one or more related individuals
resident of the same household and under which the
insured vehicles therein designated are motor vehicles
of the private passenger, station wagon, or any other
4-wheeled motor vehicle with a load capacity of 1500
pounds or less which is not used in the occupation,
profession or business of the insured or not used as a
public or livery conveyance for passengers nor rented to
others. Policy of automobile insurance shall also mean a
named non-owner's automobile policy.
Policy of
automobile insurance does not apply to policies of
automobile insurance issued under the Illinois
Automobile Insurance Plan, to any policy covering
garages, automobile sales agencies, repair shops,
service stations or public parking place operation
hazards. "Policy of automobile insurance" does not
include a policy, binder, or application for which the
applicant gives or has given for the initial premium a
check or credit card charge that is subsequently
dishonored for payment, unless the check or credit card
charge was dishonored through no fault of the payor.
(b) "Policy of
fire and extended coverage insurance" means a policy
delivered or issued for delivery in this State, that
includes but is not limited to, the perils of fire and
extended coverage, and covers real property used
principally for residential purposes up to and including
a 4 family dwelling or any household or personal
property that is usual or incidental to the occupancy to
any premises used for residential purposes.
(c) "All other
policies of personal lines" means any other policy of
insurance issued to a natural person for personal or
family protection.
(d) "Renewal" or
"to renew" means (1) any change to an entire line of
business in accordance with subsection b-5 of Section
143.17 and (2) the issuance and delivery by an insurer
of a policy superseding at the end of the policy period
a policy previously issued and delivered by the same
insurer or the issuance and delivery of a certificate or
notice extending the term of a policy beyond its policy
period or term; however, any successive policies issued
by the same insurer to the same insured, for the same or
similar coverage, shall be considered a renewal policy.
Any policy with a
policy period or term of less than 6 months or any
policy with no fixed expiration date shall be considered
as if written for successive policy periods or terms of
6 months for the purpose of "renewal" or "to renew" as
defined in this paragraph (d) and for the purpose of any
non-renewal notice required by Section 143.17 of this
Code.
(e) "Nonpayment
of premium" means failure of the named insured to
discharge, when due, any of his obligations in
connection with the payment of premiums or any
installment of such premium that is payable directly to
the insurer or to its agent. Premium shall mean the
premium that is due for an individual policy which shall
not include any membership dues or other consideration
required to be a member of any organization in order to
be eligible for such policy. The term "nonpayment of
premium" does not include a check, credit card charge,
or money order that an applicant gives or has given to
any person for the initial premium payment for a policy,
binder, or application and that is subsequently
dishonored for payment, and any policy, binder, or
application in connection therewith is void and of no
effect and not subject to the cancellation provisions of
this Code.
(f) "A policy
delivered or issued for delivery in this State" shall
include but not be limited to all binders of insurance,
whether written or oral, and all applications bound for
future delivery by a duly licensed resident agent. A
written binder of insurance issued for a term of 60 days
or less, which contains on its face a specific inception
and expiration date and which a copy has been furnished
to the insured, shall not be subject to the non-renewal
requirements of Section 143.17 of this Code.
(g)
"Cancellation" or "cancelled" means the termination of a
policy by an insurer prior to the expiration date of the
policy. A policy of automobile or fire and extended
coverage insurance which expires by its own terms on the
policy expiration date unless advance premiums are
received by the insurer for succeeding policy periods
shall not be considered "cancelled" or a "cancellation"
effected by the insurer in the event such premiums are
not paid on or before the policy expiration date.
(h) "Commercial
excess and umbrella liability policy" means a policy
written over one or more underlying policies for an
insured:
(1) that has at
least 25 full-time employees at the time the commercial
excess and umbrella liability policy is written and
procures the insurance of any risk or risks, other than
life, accident and health, and annuity contracts, as
described in clauses (a) and (b) of Class 1 of Section 4
and clause (a) of Class 2 of Section 4, by use of the
services of a full-time employee acting as an insurance
manager or buyer; or
(2) whose
aggregate annual premiums for all property and casualty
insurance on all risks is at least $50,000.
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