98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
HB2355

 

Introduced , by Rep. Frank J. Mautino

 

SYNOPSIS AS INTRODUCED:
 
215 ILCS 5/500-10
215 ILCS 5/500-100
215 ILCS 5/500-108 new

    Amends the Illinois Insurance Code. Sets forth a definition of "travel insurance". Makes a change in the provision concerning limited lines producer licenses. Provides that notwithstanding any other provision of law, a travel retailer may offer and disseminate travel insurance on behalf of and under a limited lines producer business entity license only if certain conditions are met. Provides that any travel retailer offering or disseminating travel insurance shall make available to prospective purchasers brochures or other written materials that contain certain information and explanations. Prohibits a travel retailer's employee or authorized representative who is not licensed as an insurance producer from certain actions. Provides that a travel retailer whose insurance-related activities, and those of its employees and authorized representatives, are limited to offering and disseminating travel insurance on behalf of and under the direction of a limited lines producer meeting certain conditions is authorized to do so and receive related compensation, upon registration by the limited lines producer. Provides that travel insurance may be provided under an individual policy or under a group or master policy. Provides that as the insurer designee, the limited lines producer is responsible for the acts of the travel retailer and shall use reasonable means to ensure compliance by the travel retailer with the provision concerning travel insurance limited line license for limited lines travel insurance producers.


LRB098 09200 RPM 39339 b

 

 

A BILL FOR

 

HB2355LRB098 09200 RPM 39339 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Insurance Code is amended by
5changing Sections 500-10 and 500-100 and by adding Section
6500-108 as follows:
 
7    (215 ILCS 5/500-10)
8    (Section scheduled to be repealed on January 1, 2017)
9    Sec. 500-10. Definitions. In addition to the definitions in
10Section 2 of the Code, the following definitions apply to this
11Article:
12    "Business entity" means a corporation, association,
13partnership, limited liability company, limited liability
14partnership, or other legal entity.
15    "Car rental limited line licensee" means a person
16authorized under the provisions of Section 500-105 to sell
17certain coverages relating to the rental of vehicles.
18    "Home state" means the District of Columbia and any state
19or territory of the United States in which an insurance
20producer maintains his or her principal place of residence or
21principal place of business and is licensed to act as an
22insurance producer.
23    "Insurance" means any of the lines of authority in Section

 

 

HB2355- 2 -LRB098 09200 RPM 39339 b

1500-35, any health care plan under the Health Maintenance
2Organization Act, or any limited health care plan under the
3Limited Health Service Organization Act.
4    "Insurance producer" means a person required to be licensed
5under the laws of this State to sell, solicit, or negotiate
6insurance.
7    "Insurer" means a company as defined in subsection (e) of
8Section 2 of this Code, a health maintenance organization as
9defined in the Health Maintenance Organization Act, or a
10limited health service organization as defined in the Limited
11Health Service Organization Act.
12    "License" means a document issued by the Director
13authorizing an individual to act as an insurance producer for
14the lines of authority specified in the document or authorizing
15a business entity to act as an insurance producer. The license
16itself does not create any authority, actual, apparent, or
17inherent, in the holder to represent or commit an insurance
18carrier.
19    "Limited lines insurance" means those lines of insurance
20defined in Section 500-100 or any other line of insurance that
21the Director may deem it necessary to recognize for the
22purposes of complying with subsection (e) of Section 500-40.
23    "Limited lines producer" means a person authorized by the
24Director to sell, solicit, or negotiate limited lines
25insurance.
26    "Negotiate" means the act of conferring directly with or

 

 

HB2355- 3 -LRB098 09200 RPM 39339 b

1offering advice directly to a purchaser or prospective
2purchaser of a particular contract of insurance concerning any
3of the substantive benefits, terms, or conditions of the
4contract, provided that the person engaged in that act either
5sells insurance or obtains insurance from insurers for
6purchasers.
7    "Person" means an individual or a business entity.
8    "Rental agreement" means a written agreement setting forth
9the terms and conditions governing the use of a vehicle
10provided by a rental company for rental or lease.
11    "Rental company" means a person, or a franchisee of the
12person, in the business of providing primarily private
13passenger vehicles to the public under a rental agreement for a
14period not to exceed 30 days.
15    "Rental period" means the term of the rental agreement.
16    "Renter" means a person obtaining the use of a vehicle from
17a rental company under the terms of a rental agreement for a
18period not to exceed 30 days.
19    "Self-service storage facility limited line licensee"
20means a person authorized under the provisions of Section
21500-107 to sell certain coverages relating to the rental of
22self-service storage facilities.
23    "Sell" means to exchange a contract of insurance by any
24means, for money or its equivalent, on behalf of an insurance
25company.
26    "Solicit" means attempting to sell insurance or asking or

 

 

HB2355- 4 -LRB098 09200 RPM 39339 b

1urging a person to apply for a particular kind of insurance
2from a particular company.
3    "Terminate" means the cancellation of the relationship
4between an insurance producer and the insurer or the
5termination of a producer's authority to transact insurance.
6    "Travel insurance" means insurance coverage for personal
7risks incident to planned travel, including, but not limited to
8(1) interruption or cancellation of a trip or event, (2) loss
9of baggage or personal effects, (3) damages to accommodations
10or rental vehicles, or (4) sickness, accident, disability, or
11death occurring during travel. "Travel insurance" does not
12include major medical plans that provide comprehensive medical
13protection for travelers with trips lasting 6 months or longer,
14including those working overseas as an ex-patriot or as
15military personnel on deployment.
16    "Uniform Business Entity Application" means the current
17version of the National Association of Insurance
18Commissioners' Uniform Business Entity Application for
19nonresident business entities.
20    "Uniform Application" means the current version of the
21National Association of Insurance Commissioners' Uniform
22Application for nonresident producer licensing.
23    "Vehicle" or "rental vehicle" means a motor vehicle of (1)
24the private passenger type, including passenger vans, mini
25vans, and sport utility vehicles or (2) the cargo type,
26including cargo vans, pickup trucks, and trucks with a gross

 

 

HB2355- 5 -LRB098 09200 RPM 39339 b

1vehicle weight of less than 26,000 pounds the operation of
2which does not require the operator to possess a commercial
3driver's license.
4    "Webinar" means an online educational presentation during
5which a live and participating instructor and participating
6viewers, whose attendance is periodically verified throughout
7the presentation, actively engage in discussion and in the
8submission and answering of questions.
9(Source: P.A. 97-113, eff. 7-14-11.)
 
10    (215 ILCS 5/500-100)
11    (Section scheduled to be repealed on January 1, 2017)
12    Sec. 500-100. Limited lines producer license.
13    (a) An individual who is at least 18 years of age and whom
14the Director considers to be competent, trustworthy, and of
15good business reputation may obtain a limited lines producer
16license for one or more of the following classes:
17        (1) travel insurance as defined in Section 500-10 of
18    this Article on baggage or limited travel health, accident,
19    or trip cancellation insurance sold in connection with
20    transportation provided by a common carrier;
21        (2) industrial life insurance, as defined in Section
22    228 of this Code;
23        (3) industrial accident and health insurance, as
24    defined in Section 368 of this Code;
25        (4) insurance issued by a company organized under the

 

 

HB2355- 6 -LRB098 09200 RPM 39339 b

1    Farm Mutual Insurance Company Act of 1986;
2        (5) legal expense insurance;
3        (6) enrollment of recipients of public aid or medicare
4    in a health maintenance organization;
5        (7) a limited health care plan issued by an
6    organization having a certificate of authority under the
7    Limited Health Service Organization Act.
8    (b) The application for a limited lines producer license
9must be submitted on a form prescribed by the Director by a
10designee of the insurance company, health maintenance
11organization, or limited health service organization
12appointing the limited insurance representative. The insurance
13company, health maintenance organization, or limited health
14service organization must pay the fee required by Section
15500-135.
16    (c) A limited lines producer may represent more than one
17insurance company, health maintenance organization, or limited
18health service organization.
19    (d) An applicant who has met the requirements of this
20Section shall be issued a perpetual limited lines producer
21license.
22    (e) A limited lines producer license shall remain in effect
23as long as the appointing insurance company pays the respective
24fee required by Section 500-135 prior to January 1 of each
25year, unless the license is revoked or suspended pursuant to
26Section 500-70. Failure of the insurance company to pay the

 

 

HB2355- 7 -LRB098 09200 RPM 39339 b

1license fee or to submit the required documents shall cause
2immediate termination of the limited line insurance producer
3license with respect to which the failure occurs.
4    (f) A limited lines producer license may be terminated by
5the insurance company or the licensee.
6    (g) A person whom the Director considers to be competent,
7trustworthy, and of good business reputation may be issued a
8car rental limited line license. A car rental limited line
9license for a rental company shall remain in effect as long as
10the car rental limited line licensee pays the respective fee
11required by Section 500-135 prior to the next fee date unless
12the car rental license is revoked or suspended pursuant to
13Section 500-70. Failure of the car rental limited line licensee
14to pay the license fee or to submit the required documents
15shall cause immediate suspension of the car rental limited line
16license. A car rental limited line license for rental companies
17may be voluntarily terminated by the car rental limited line
18licensee. The license fee shall not be refunded upon
19termination of the car rental limited line license by the car
20rental limited line licensee.
21    (h) A limited lines producer issued a license pursuant to
22this Section is not subject to the requirements of Section
23500-30.
24    (i) A limited lines producer license must contain the name,
25address and personal identification number of the licensee, the
26date the license was issued, general conditions relative to the

 

 

HB2355- 8 -LRB098 09200 RPM 39339 b

1license's expiration or termination, and any other information
2the Director considers proper. A limited line producer license,
3if applicable, must also contain the name and address of the
4appointing insurance company.
5(Source: P.A. 92-386, eff. 1-1-02.)
 
6    (215 ILCS 5/500-108 new)
7    Sec. 500-108. Travel insurance limited line license for
8limited lines travel insurance producers.
9    (a) As used in this Section:
10        "Limited lines travel insurance producer" means:
11            (1) a licensed managing general underwriter;
12            (2) a licensed managing general agent or third
13        party administrator; or
14            (3) a licensed insurance producer or limited line
15        producer designated by an insurer as the travel
16        insurance supervising entity as set forth in
17        subsection (g) of this Section.
18        "Offer and disseminate" means providing general
19    information, including a description of the coverage and
20    price, as well as processing the application, collecting
21    premiums, and performing other non-licensable activities
22    permitted by the State.
23        "Travel retailer" means a business entity that makes,
24    arranges, or offers travel services and may offer and
25    disseminate travel insurance as a service to its customers

 

 

HB2355- 9 -LRB098 09200 RPM 39339 b

1    on behalf of and under the direction of a limited lines
2    travel insurance producer.
3    (b) Notwithstanding any other provision of law, a travel
4retailer may offer and disseminate travel insurance on behalf
5of and under the direction of a limited lines producer business
6entity license only if all of the following conditions are met:
7        (1) The limited lines producer or travel retailer
8    provides to purchasers of travel insurance the following:
9            (A) a description of the material terms or the
10        actual material terms of the insurance coverage;
11            (B) a description of the process for filing a
12        claim;
13            (C) a description of the review or cancellation
14        process for the travel insurance policy; and
15            (D) the identity and contact information of the
16        insurer and limited lines producer.
17        (2) At the time of licensure, the limited lines
18    producer establishes and maintains a register on a form
19    prescribed by the Director of each travel retailer that
20    offers travel insurance on the limited lines producer's
21    behalf. The register shall be maintained and updated
22    annually by the limited lines producer and shall include
23    the name, address, and contact information of the travel
24    retailer and an officer or person who directs or controls
25    the travel retailer's operations and the travel retailer's
26    federal tax identification number. The limited lines

 

 

HB2355- 10 -LRB098 09200 RPM 39339 b

1    producer shall submit the register to the Department of
2    Insurance upon reasonable request. The limited lines
3    producer shall also certify that the travel retailer
4    registered complies with Section 1033 of Title 18 of the
5    United States Code.
6        (3) The limited lines producer designates one of its
7    employees as a licensed individual producer (designated
8    responsible producer or DRP) responsible for the limited
9    lines producer's compliance with the travel insurance
10    laws, rules, and regulations of this State.
11        (4) The DRP, president, secretary, treasurer, and any
12    other officer or person who directs or controls the limited
13    lines producer's insurance operations comply with the
14    fingerprinting requirements applicable to insurance
15    producers in the resident state of the limited lines
16    producer.
17        (5) The limited lines producer has paid all applicable
18    insurance producer licensing fees as set forth in
19    applicable State law.
20        (6) The limited lines producer requires each employee
21    and authorized representative of the travel retailer whose
22    duties include offering and disseminating travel insurance
23    to receive a program of instruction or training, which may
24    be subject to review by the Director. The training material
25    shall, at a minimum, contain instructions on the types of
26    insurance offered, ethical sales practices, and required

 

 

HB2355- 11 -LRB098 09200 RPM 39339 b

1    disclosures to prospective customers.
2    (c) Any travel retailer offering or disseminating travel
3insurance shall make available to prospective purchasers
4brochures or other written materials that:
5        (1) provide the identity and contact information of the
6    insurer and the limited lines producer;
7        (2) explain that the purchase of travel insurance is
8    not required in order to purchase any other product or
9    service from the travel retailer; and
10        (3) explain that an unlicensed travel retailer is
11    permitted to provide general information about the
12    insurance offered by the travel retailer, including a
13    description of the coverage and price, but is not qualified
14    or authorized to answer technical questions about the terms
15    and conditions of the insurance offered by the travel
16    retailer or to evaluate the adequacy of the customer's
17    existing insurance coverage.
18    (d) A travel retailer's employee or authorized
19representative who is not licensed as an insurance producer may
20not:
21        (1) evaluate or interpret the technical terms,
22    benefits, and conditions of the offered travel insurance
23    coverage;
24        (2) evaluate or provide advice concerning a
25    prospective purchaser's existing insurance coverage; or
26        (3) hold himself, herself, or itself out as a licensed

 

 

HB2355- 12 -LRB098 09200 RPM 39339 b

1    insurer, licensed producer, or insurance expert.
2    (e) A travel retailer whose insurance-related activities,
3and those of its employees and authorized representatives, are
4limited to offering and disseminating travel insurance on
5behalf of and under the direction of a limited lines producer
6meeting the conditions stated in this Section, is authorized to
7do so and receive related compensation, upon registration by
8the limited lines producer as described in item (2) of
9subsection (b) of this Section.
10    (f) Travel insurance may be provided under an individual
11policy or under a group or master policy.
12    (g) As the insurer designee, the limited lines producer is
13responsible for the acts of the travel retailer and shall use
14reasonable means to ensure compliance by the travel retailer
15with this Section.