(215 ILCS 5/533) (from Ch. 73, par. 1065.83)
Sec. 533. Scope. This Article applies to all of the kinds of insurance
written on a direct basis which are included in Class 2 and
Class 3 of Section 4 of this Code, except that
it shall not apply to:
(a) accident and health insurance written under clause (a) of Class 2, or
(b) mortgage guaranty or other financial guaranty written as
suretyship obligations or insurance under clause (g), clause (h)
or clause (i) of Class 2 or otherwise, or
(c) fidelity or surety bonds, or any other bonding obligations other
than employee fidelity bonds, or
(d) marine insurance other than inland marine insurance, written under
clause (d) of Class 3, or
(e) insurance of warranties or service contracts, including insurance that
provides for the
repair, replacement, or service of goods or property or indemnification for
repair, replacement, or service for the operational or structural failure of
the goods or property due to a defect in materials, workmanship, or normal wear
and tear or provides reimbursement for the liability incurred by the issuer of
agreements or service contracts that provide these benefits, or
(f) any claim servicing agreement or insurance policy which contains a
retrospective rating or other premium adjustment agreement under which
premiums are substantially equal to the losses and loss expenses covered
under the policy or any policy providing retroactive insurance of known loss, or
(g) any insurance which is provided, guaranteed or reinsured pursuant to
the Federal Crop Insurance Program or the National Flood Insurance Program,
including flood insurance written by National Flood Insurance Program
Write Your Own Companies.
(Source: P.A. 103-113, eff. 6-30-23.)
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(215 ILCS 5/534) (from Ch. 73, par. 1065.84)
Sec. 534. Definitions. For the purposes of this Article, unless the
context requires otherwise, the words and phrases defined in Sections 534.1
through 534.9 have the meanings set forth in those Sections.
(Source: P.A. 103-113, eff. 6-30-23.)
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(215 ILCS 5/534.1) (from Ch. 73, par. 1065.84-1)
Sec. 534.1.
"Fund" means the Illinois Insurance Guaranty Fund created by this
Article.
(Source: P.A. 77-305.)
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(215 ILCS 5/534.2) (from Ch. 73, par. 1065.84-2)
Sec. 534.2.
"Director" means the Director of Insurance of the State of Illinois.
(Source: P.A. 77-305.)
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(215 ILCS 5/534.3) (from Ch. 73, par. 1065.84-3)
Sec. 534.3. Covered claim; unearned premium defined.
(a) "Covered claim" means an unpaid claim for a loss
arising out of and within the
coverage of an insurance policy to which this Article applies and which
is in force at the time of the occurrence giving rise to the unpaid
claim, including claims presented during any extended discovery period
which was purchased from the company before the entry of a liquidation
order or which is purchased or obtained from the liquidator after the entry
of a liquidation order, made by a person insured under such policy or by a
person
suffering injury or damage for which a person insured under such policy
is legally liable, and for unearned premium, if:
(i) The company issuing, assuming, or being allocated | ||
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(ii) The claimant or insured is a resident of this | ||
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(b) "Covered claim" does not include:
(i) any amount in excess of the applicable limits of | ||
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(ii) any claim for punitive or exemplary damages or | ||
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(iii) any first party claim by an insured who is an | ||
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(iv) any first party or third party claim by or | ||
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(v) any claim for any amount due any reinsurer, | ||
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(c) "Unearned Premium" means the premium for the unexpired period of a
policy which has been terminated prior to the expiration of the period for
which premium has been paid and does not mean premium which is returnable
to the insured for any other reason.
(Source: P.A. 101-60, eff. 7-12-19; 102-558, eff. 8-20-21.)
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(215 ILCS 5/534.4) (from Ch. 73, par. 1065.84-4)
Sec. 534.4.
"Insolvent company" means a company
organized as a stock company, mutual company, reciprocal or Lloyds (a)
which holds a certificate of authority to transact insurance
in this State either at the time the policy was issued or when
the insured event occurred, or any company which has assumed or has been allocated
such policy obligation through merger, division, insurance business transfer, consolidation, or
reinsurance, whether or not such assuming company held a
certificate of authority to transact insurance in this State
at the time such policy was issued or when the insured event occurred; and (b)
against which a final Order of Liquidation with a finding of
insolvency to which there is no further right of appeal has been entered by
a court of competent jurisdiction in the company's State of domicile after the
effective date of this Article.
(Source: P.A. 103-75, eff. 6-9-23.)
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(215 ILCS 5/534.5) (from Ch. 73, par. 1065.84-5)
Sec. 534.5.
Member company.
"Member Company" means any insurance
company organized as a
stock company, mutual company, reciprocal or Lloyds, which holds a certificate
of authority to transact
any kind of insurance in this State to
which this Article applies, and which is either:
(a) a domestic insurance company formed before or after the
effective date of this Article; or
(b) a foreign or alien insurance company.
An insurance company shall cease to be a member company effective on the
day following the termination or expiration of its license to transact the
kinds of insurance to which this Article applies; provided, however, that the
insurance company shall remain liable as a member company for any and all
obligations, including obligations for assessments levied before the
termination or expiration of the insurance company's license and assessments
levied after the termination or expiration, based on any insolvency as to which
the determination of insolvency by a court of competent jurisdiction occurs
before the termination or expiration of the insurance company's license.
(Source: P.A. 89-97, eff. 7-7-95.)
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(215 ILCS 5/534.6) (from Ch. 73, par. 1065.84-6)
Sec. 534.6.
"Net direct written premiums" means direct gross premiums
written in this State on insurance policies to which this Article applies, less return
premiums thereon and dividends paid or credited to policyholders on such
direct business. "Net direct written premiums" does not include premiums on
contracts of reinsurance or other contracts between insurers or reinsurers.
(Source: P.A. 85-576.)
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(215 ILCS 5/534.7) (from Ch. 73, par. 1065.84-7)
Sec. 534.7.
Affiliate.
An "affiliate" of a specified person means a
person who directly, or indirectly
through one or more intermediaries, controls, is controlled by, or is under
common control with the specified person on
December 31 of the year next
preceding the date the insolvent company became an
insolvent company.
(Source: P.A. 89-97, eff. 7-7-95.)
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(215 ILCS 5/534.8) (from Ch. 73, par. 1065.84-8)
Sec. 534.8.
"Control" means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
person, whether through the ownership of voting securities, the holding of
proxies, by contract other than a commercial contract for goods or
nonmanagement services, or otherwise, unless the power is solely the result
of an official position with or corporate office held by the person.
Control shall be presumed to exist if any person, directly or indirectly,
owns, controls, holds with the power to vote, or holds proxies
representing, 10% or more of the voting securities or voting power of any
other person. This presumption may be rebutted by a showing that control
does not exist in fact.
(Source: P.A. 85-576.)
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(215 ILCS 5/534.9) Sec. 534.9. Cybersecurity insurance. "Cybersecurity insurance" means a type of insurance under Class 2 of Section 4 of this Code that involves first-party and third-party coverage, in a policy or endorsement, written on a direct, admitted basis to cover losses and loss mitigation arising out of or relating to data privacy breaches, unauthorized information network security intrusions, computer viruses, ransomware, cyber extortion, identity theft, and similar exposures.
(Source: P.A. 103-113, eff. 6-30-23.) |
(215 ILCS 5/535) (from Ch. 73, par. 1065.85)
Sec. 535.
Creation of the Fund.
There is created a nonprofit
unincorporated legal entity to be known as the Illinois Insurance
Guaranty Fund. All member companies as defined in Section 534.5 shall be and
remain members of the Fund as a condition of their authority to transact
business in this State. The Fund shall perform its functions under a
plan of operation established and approved under Section 539 and shall
exercise its powers through a board of directors established under
Section 536. For purposes of administration and assessment, the Fund
shall be divided into 2 separate accounts: (a) the automobile insurance
account; and (b) the account for all other insurance to which this
Article applies, including Workers' Compensation.
(Source: P.A. 85-576.)
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(215 ILCS 5/536) (from Ch. 73, par. 1065.86)
Sec. 536. Board of Directors. (a) The board of directors of the Fund shall consist of not less than 5
nor more than 10 persons, with one public member appointed by the Director, serving terms as established in the plan of
operation. The public member shall be a resident of this State, and he or she shall either (1) be a licensed and certified public accountant under the laws of this State or (2) have earned, and maintain in good standing, the Chartered Property and Casualty Underwriter (CPCU) designation from the American Institute for Chartered Property Casualty Underwriters. The plan of operation shall provide that the board of directors
be elected on the basis of one vote for each member company of the Fund. If
more than one company of a group of wholly owned or controlled companies is a
member company of the Fund only one vote will be allowed for the entire
group. The members of the board of directors shall be elected by member companies
subject to the approval of the Director. Vacancies on the board of
directors shall be filled for the remaining period of the term by the board
of directors, subject to the approval of the
Director.
(b) In approving elections to the board of directors, the Director shall consider
among other things whether all member companies are fairly represented.
(c) Members of the board of directors shall receive no compensation, but may be
reimbursed from the assets of the Fund for expenses incurred by them as
members of the board of directors.
(Source: P.A. 98-202, eff. 1-1-14.)
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(215 ILCS 5/537) (from Ch. 73, par. 1065.87)
Sec. 537.
Duties
and obligations of the Fund.
The Fund shall have the duties and obligations enumerated in Sections
537.1 through 537.9.
(Source: P.A. 82-210.)
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(215 ILCS 5/537.1) (from Ch. 73, par. 1065.87-1)
Sec. 537.1.
The Fund may provide for an equal annual fee of all member
companies on a non-pro rata basis to provide for contingent expenses of the
Fund. This fee may not exceed $500 per member company for any one calendar year.
(Source: P.A. 85-576.)
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(215 ILCS 5/537.2) (from Ch. 73, par. 1065.87-2)
Sec. 537.2. Obligation of Fund. The Fund shall be obligated to the
extent of the covered
claims existing prior to the entry of an Order of Liquidation against
an insolvent company and arising within
30 days after the entry of such
Order, or before the policy expiration date if less than 30 days after
the entry of such Order, or before the insured replaces the policy or on
request effects cancellation, if he does so within 30 days after the entry
of such Order. If the entry of an Order of Liquidation occurs on or after
October 1, 1975 and before October 1, 1977, such obligations shall not:
(i) exceed $100,000, or (ii)
include any obligation to refund the first $100 of any unearned premium
claim; and if the entry of an Order of Liquidation occurs on or after October
1, 1977 and before January 1, 1988, such obligations shall
not: (i) exceed
$150,000, except that this limitation shall not apply to any workers compensation
claims, or (ii)
include any obligation to refund the first
$100 of any unearned premium claim; and if the entry of an Order of
Liquidation occurs on or after January 1, 1988 and before January 1, 2011, such obligations shall not:
(i) exceed $300,000, except that this limitation shall not apply to any
workers compensation claims, or (ii) include any obligation to refund the
first $100 of any unearned premium claim or to refund any unearned premium
over $10,000 under any one policy. If the entry of an Order of Liquidation occurs on or after January 1, 2011, then such obligations shall not: (i) exceed $500,000, except that this limitation shall not apply to any workers compensation claims or (ii) include any obligation to refund the first $100 of any unearned premium claim or refund any unearned premium over $10,000 under any one policy. If the entry of an Order of Liquidation occurs on or after January 1, 2023, then such obligations shall not: (i) exceed $500,000, except that this limitation shall not apply to any workers compensation claims, or (ii) exceed without any deduction $50,000 for any unearned premium claim or refund under any one policy. In no event shall the Fund be
obligated to a policyholder or claimant in an amount in excess
of the face amount of the policy from which the claim arises, including, but not limited to, any applicable specific or aggregate limits. For purposes of this Article, obligations arising under an insurance policy written to indemnify a permissibly self-insured employer under subsection (a) of Section 4 of the Workers' Compensation Act for its liability to pay workers' compensation benefits in excess of a specific or aggregate retention shall be subject to the applicable per-claim limits set forth in this Section. In no event shall the Fund be obligated to pay an amount in excess of $500,000 in the aggregate for all first-party and third-party claims under a policy or endorsement providing cybersecurity insurance as defined in Section 534.9 and arising out of or related to a single insured event, regardless of the number of claims made or number of claimants.
In no event
shall the Fund be liable for any interest on
any
judgment entered against the insured or the insolvent company, or for any
other
interest claim against the insured or the insolvent company, regardless of
whether the insolvent company would have been obligated to pay such interest
under the terms of its policy. The Fund shall be liable for interest at the
statutory rate on money judgments entered against the Fund until the judgment
is satisfied.
Any obligation of the Fund to defend an insured shall cease upon the
Fund's payment or tender of an amount equal to the lesser of the Fund's
covered claim obligation limit or the applicable policy limit.
(Source: P.A. 103-113, eff. 6-30-23.)
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(215 ILCS 5/537.3) (from Ch. 73, par. 1065.87-3)
Sec. 537.3.
Access to insolvent company records.
The liquidator of an insolvent company shall
permit access by the Fund or its authorized
representatives, and by any similar organization in another state or its
authorized representatives, to such of the
insolvent company's records which are necessary for the
Fund or such similar organization in carrying
out its functions under this Article or similar laws in other states
with regard to covered claims. In
addition, the liquidator shall provide the Fund or its representative, or
such similar organization, with
copies of such records upon the request
and at the expense of
the Fund or such similar organization.
(Source: P.A. 85-576.)
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(215 ILCS 5/537.4) (from Ch. 73, par. 1065.87-4)
Sec. 537.4. Fund assumes obligations of insolvent companies. The Fund
shall be deemed the insolvent company to the extent
of the Fund's obligation for covered claims and to such extent
shall have all
rights, duties, and obligations of the insolvent company, subject to the
limitations provided in this Article, as if the company had not become
insolvent, with the
exception that the liquidator shall retain the sole right
to recover any reinsurance proceeds.
The Fund's rights under this Section include, but are not limited to, the
right to pursue and retain salvage and subrogation recoveries on paid covered
claim obligations to the extent paid by the Fund. The extent of the Fund's subrogation rights and any other rights of reimbursement with respect to its covered claims payments shall not be limited as if the Fund were the insolvent company, but shall be determined independently by taking into account the Fund's rights under Section 546 of this Article.
(Source: P.A. 99-387, eff. 8-17-15.)
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(215 ILCS 5/537.6) (from Ch. 73, par. 1065.87-6)
Sec. 537.6. Allocation of claims; assessments. The Fund shall allocate
covered claims paid and expenses
incurred between the accounts established by Section 535 separately, and
assess member companies separately for each
account amounts necessary to pay the obligations of the Fund under
Section 537.2 subsequent to the entry of an Order of Liquidation against
an insolvent company, the expenses of handling
covered claims subsequent to such Order of Liquidation and other expenses
authorized by this
Article. The assessments of each member company shall be in the proportion that
the net direct written premiums of the member company for the calendar
year immediately preceding the year in which the assessment is levied on
the kinds of insurance in the account bears to the net direct written
premiums of all member companies for such preceding calendar year on the
kinds of insurance in the account. Each member company shall be notified
of the assessment not later than 30 days before it is due. Before January 1,
2002, no member
company may be assessed in any year on any account an amount greater
than 1% of that member company's net direct written premiums
on the kinds of insurance in the account for the calendar
year preceding the assessment. Beginning January 1, 2002, the amount a
member company may be assessed in any year on any account shall be a maximum of
2% of that member company's net direct written premium on the kinds of
insurance in the account for the calendar year preceding the assessment. This
2% maximum shall apply regardless of the date of any insolvency that gives rise
to the need for the assessment. If the
maximum assessment, together with the other assets of the Fund in any
account, does not provide, in any one year, in any account, an amount
sufficient to make all necessary payments from that account, the funds
available shall be paid in the manner determined by the Fund and
approved by the Director and the unpaid portion shall be paid as
soon thereafter as funds become available. If requested by a member
company, the Director may exempt or defer the assessment of any member
company, if the assessment would cause the member company's financial
impairment.
In addition to the other assessment authority provided in this Section, the board of directors shall also have the assessment authority to pay off a loan as provided in Section 538.3. If a loan is projected to be outstanding for 3 years or more, then the board of directors shall have the authority to increase the assessment to 3% of the net direct written premiums for the previous year until the loan has been paid in full. (Source: P.A. 101-60, eff. 7-12-19.)
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(215 ILCS 5/537.7) (from Ch. 73, par. 1065.87-7)
Sec. 537.7. Investigation of claims; disposition.
(a) The Fund shall investigate claims brought against the
Fund and adjust, compromise, settle, and pay covered claims to the extent of
the Fund's
obligation and deny all other claims.
(b) The Fund shall not be bound by a settlement, release, compromise,
waiver, or final judgment executed or entered within 12 months prior to an
order of liquidation and shall have the right to assert all defenses available
to the Fund including, but not limited to, defenses applicable to determining
and enforcing its statutory rights and obligations to any claim. The Fund
shall be bound by a settlement, release, compromise, waiver, or final judgment
executed or entered more than 12 months prior to an order of liquidation,
but only
if the
claim is a covered claim and the settlement, release, compromise, waiver, or final judgment was not a result of
fraud, collusion, default, or failure to defend. In addition, with respect to
covered
claims arising from a judgment under a decision, verdict, or finding based on
the default of the insolvent insurer or its failure to defend, upon application
by the Fund, either on its own behalf or on behalf of an insured, the court
shall set aside the judgment, order, decision, verdict,
or finding, and the Fund shall be permitted to defend against the claim on the
merits. The same criteria determining whether the Fund will be bound, as specified in this subsection (b), shall apply to any settlement, release, compromise, waiver, or final judgment entered into by a high net worth insured before the date on which claims by or against that insured became non-exempt for reasons specified in paragraph (iv) of subsection (b) of Section 534.3.
(c) The Fund shall have the right to appoint or
approve and to direct legal counsel
retained under liability insurance policies for the defense
of covered claims as well as the right to appoint or approve and to direct legal counsel and other service providers under any other insurance policies subject to this Article, regardless of any limitations in the policy.
(Source: P.A. 103-113, eff. 6-30-23.)
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(215 ILCS 5/537.9) (from Ch. 73, par. 1065.87-9)
Sec. 537.9.
The Fund shall handle claims through its employees or
through one or more companies or other persons employed as servicing facilities.
(Source: P.A. 85-576.)
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(215 ILCS 5/538) (from Ch. 73, par. 1065.88)
Sec. 538. Powers
of the Fund. The Fund shall have the powers enumerated in the Sections following this Section and preceding Section 539.
(Source: P.A. 102-396, eff. 8-16-21.)
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(215 ILCS 5/538.1) (from Ch. 73, par. 1065.88-1)
Sec. 538.1.
The Fund may appear in, defend and appeal any action on a claim brought
against it on a covered claim.
(Source: P.A. 77-305.)
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(215 ILCS 5/538.2) (from Ch. 73, par. 1065.88-2)
Sec. 538.2.
The Fund may employ or retain such persons as are necessary to handle
claims, provide policy benefits and services, and perform other duties of the Fund.
(Source: P.A. 103-113, eff. 6-30-23.)
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(215 ILCS 5/538.3) (from Ch. 73, par. 1065.88-3)
Sec. 538.3.
The Fund may borrow an amount of money necessary to effect the purposes
of this Article in accord with the plan of operation. The board of directors shall have the authority to pledge all or an appropriate portion of future assessments as necessary to secure a loan that may be needed to pay covered claims. Until all loans secured by assessments are fully satisfied, the board of directors shall assess the maximum allowable under Section 537.6.
(Source: P.A. 101-60, eff. 7-12-19.)
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(215 ILCS 5/538.4) (from Ch. 73, par. 1065.88-4)
Sec. 538.4. Legal actions by Fund. The Fund may sue or be sued, including, but not limited to, taking any legal actions necessary
or proper for recovery of: (i) any unpaid assessments under Section 537.1 or 537.6; (ii) any amounts due to the Fund for salvage and subrogation under Section 537.4 or from insurers described in subsection (a) of Section 546; or (iii) any amounts due from an insured pursuant to subsections (a) and (d) of Section 545.
The Fund's power to sue includes, but is not limited to, the
power and right to
intervene as a party before any court that has jurisdiction over an insolvent
insurer when the Fund is a creditor or potential creditor of the insolvent
insurer.
(Source: P.A. 101-60, eff. 7-12-19.)
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(215 ILCS 5/538.5) (from Ch. 73, par. 1065.88-5)
Sec. 538.5.
The Fund may negotiate and become a party to such contracts as are
necessary to carry out the purposes of this Article.
(Source: P.A. 82-210.)
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(215 ILCS 5/538.7) (from Ch. 73, par. 1065.88-7)
Sec. 538.7.
(a) The Fund may perform such other acts as are necessary or proper to
effectuate the purposes of this Article.
(b) The Fund may contract with the Office of Special Deputy Receiver or any other person or organizations authorized by law to carry out the duties of the Director in her or his capacity as a receiver under Article XIII of this Code. The power of the Fund to contract with these persons or entities includes, but is not limited to, providing consulting services and claims administration services that assist with these persons or entities in the performance of their respective statutory and legal functions provided by law. The Fund may only exercise the authority to contract pursuant to this subsection upon the board of director's written determination that the provisioning of such services will advance the purposes set forth in Section 532. Any contract the Fund may enter into to provide services pursuant to this subsection shall be subordinate and subject to the Fund's statutory obligations to timely pay covered claims and avoid financial loss to claimants or policyholders described in this Article. This subsection (b) is inoperative 5 years after the effective date of this amendatory Act of the 102nd General Assembly. (Source: P.A. 102-396, eff. 8-16-21.)
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(215 ILCS 5/538.8) (from Ch. 73, par. 1065.88-8)
Sec. 538.8.
(a) If, at any time, the board of directors finds
that the assets of the Fund in any account exceed the liabilities and
expected costs and expenses of that account, the Fund may refund that amount of assets
of the account which exceed such liabilities, expenses and costs to the
member companies in such a manner as is determined by the board of
directors.
(b) If, at any time, the Fund receives monies as reimbursement from
the estate of an insolvent company, the Fund shall distribute those monies
in accordance with the procedures established in the plan of operation.
(Source: P.A. 85-576.)
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(215 ILCS 5/538.9) Sec. 538.9. Action regarding insolvent company records. (a) In this Section, "claims information" includes files, records, and electronic data. (b) The Fund may bring an action against any third-party administrator, agent, attorney, or other representative of the insolvent insurer to obtain custody and control of all claims information related to an insolvent company that are appropriate or necessary for the Fund or a similar association in other states to carry out its duties under this Article. In such an action, the Fund shall have the absolute right through emergency equitable relief to obtain custody and control of such claims information in possession of such third-party administrator, agent, attorney or other representative of the insolvent insurer, regardless of where that claims information may be physically located. In bringing an action under this Section, the Fund shall not be subject to any defense, lien (possessory or otherwise), or other legal or equitable ground whatsoever for refusal to surrender such claims information that might be asserted against the liquidator of the insolvent insurers. To the extent that litigation is required for the Fund to obtain custody and control of the claims information requested and it results in the relinquishment of claims information to the Fund after refusal to provide that information in response to a written demand, the court shall award the Fund its costs, expenses, and reasonable attorney's fees incurred in bringing the action. This Section shall have the same effect on the rights and remedies that the custodian of such claims information may have against the insolvent insurers, so long as these rights and remedies do not conflict with the rights of the Fund to custody and control of the claims information under this Article.
(Source: P.A. 101-60, eff. 7-12-19.) |
(215 ILCS 5/539) (from Ch. 73, par. 1065.89)
Sec. 539.
Plan of operation.
(a) The Fund shall submit to the Director
a plan of operation and any
amendments thereto necessary or suitable to assure the fair, reasonable,
and equitable administration of the Fund. The plan of operation and any
amendments thereto shall become effective upon approval in writing by the
Director.
(b) If the Fund fails to submit a suitable plan of operation within 90
days following the effective date of this Article or if at any time
thereafter the Fund fails to submit suitable 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 reasonable
rules as are necessary or advisable to effectuate the provisions of this
Article. Such rules shall continue in force until modified by the Director
or superseded by a plan of operation submitted by the Fund and approved
by the Director.
(c) All member companies must comply with the plan of operation.
(Source: P.A. 82-210.)
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(215 ILCS 5/540) (from Ch. 73, par. 1065.90)
Sec. 540.
The plan of operation shall do the following as enumerated in Sections
540.1 through 540.9.
(Source: P.A. 77-305 .)
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(215 ILCS 5/540.1) (from Ch. 73, par. 1065.90-1)
Sec. 540.1.
The plan of operation shall establish the procedures whereby all the
powers and duties of the Fund under Sections 537.1 through 537.9 will be
performed.
(Source: P.A. 82-210 .)
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(215 ILCS 5/540.2) (from Ch. 73, par. 1065.90-2)
Sec. 540.2.
The plan of operation shall establish procedures for handling
assets of the Fund.
(Source: P.A. 77-305.)
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(215 ILCS 5/540.3) (from Ch. 73, par. 1065.90-3)
Sec. 540.3.
The plan of operation shall establish the amount and method of
reimbursing members of the board of directors under subsection (c) of Section 536.
(Source: P.A. 82-210.)
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(215 ILCS 5/540.5) (from Ch. 73, par. 1065.90-5)
Sec. 540.5.
(a) A covered claim, for other than unearned premium, is a claim
which appears on the books and records of the insolvent company as of the
date of the Order of Liquidation or a claim for which notice is given
in writing to the liquidator of the insolvent company's domiciliary state
or to an ancillary receiver in this State, if any, or to the Fund or its
agents prior to the earlier of the last date fixed for the timely
filing of proofs of claim
in the domiciliary liquidation proceedings or 18 months after the entry
of the order of liquidation. The liquidator or ancillary
receiver in this State, if any, shall periodically submit a list of claims
to the Fund or similar organization in another state.
(b) The Fund shall establish procedures by which
unearned premium claims are to be determined and paid as covered claims.
(Source: P.A. 85-576.)
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(215 ILCS 5/540.6) (from Ch. 73, par. 1065.90-6)
Sec. 540.6.
The plan of operation shall provide that any member company aggrieved by
any final action or decision of the Fund may appeal to the Director within
30 days after the action or decision.
(Source: P.A. 77-305.)
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(215 ILCS 5/540.7) (from Ch. 73, par. 1065.90-7)
Sec. 540.7.
The plan of operation shall establish the procedures whereby selections
for the board of directors will be submitted to the Director.
(Source: P.A. 77-305.)
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(215 ILCS 5/540.8) (from Ch. 73, par. 1065.90-8)
Sec. 540.8.
The plan of operation shall establish the procedures for
disposition of monies reimbursed from the estate of the insolvent company.
(Source: P.A. 85-576.)
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(215 ILCS 5/540.9) (from Ch. 73, par. 1065.90-9)
Sec. 540.9.
The plan of operation may contain additional provisions necessary or
proper for the execution of the powers, duties and obligations of the Fund.
(Source: P.A. 77-305 .)
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(215 ILCS 5/541) (from Ch. 73, par. 1065.91)
Sec. 541.
The plan of operation may provide that any or all powers and duties
of the Fund, except those under Sections 537.6 and 538.3 may be
delegated to a corporation, association, or other organization which
performs or will perform functions similar to those of this Fund, or its
equivalent, in 2 or more states.
A delegation under this Section shall take effect only with
the approval of both the board of directors and the Director, and may be
made only to a corporation, association, or organization which extends
protection not substantially less favorable and effective than that
provided by this Article.
(Source: P.A. 80-827.)
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(215 ILCS 5/543) (from Ch. 73, par. 1065.93)
Sec. 543.
Duties
and obligations of the Director.
The Director shall have the duties and obligations enumerated in
Sections 543.1 through 543.3.
(Source: P.A. 77-305.)
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(215 ILCS 5/543.1) (from Ch. 73, par. 1065.93-1)
Sec. 543.1.
The Director shall serve a copy of the complaint seeking an
Order of Liquidation with a finding of insolvency against a domestic member
company on the Fund at the same time that such complaint is filed with the circuit court
or shall forward to the Fund notice of the filing of such a complaint
against a foreign or alien member company promptly upon receipt thereof.
The Director also shall serve on the Fund a copy of an Order of
Liquidation with a finding of insolvency against a domestic member company
immediately after it is entered by the circuit court or shall forward to
the Fund a copy of such order against a foreign or alien member company
promptly upon receipt thereof.
(Source: P.A. 85-576.)
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(215 ILCS 5/543.2) (from Ch. 73, par. 1065.93-2)
Sec. 543.2.
The Director shall, upon request of the board of directors, provide the
Fund with a statement of the net direct written premiums of each member
company for the preceding calendar year for which annual statements have
been filed with the Director.
(Source: P.A. 77-305.)
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(215 ILCS 5/543.3) (from Ch. 73, par. 1065.93-3)
Sec. 543.3.
The liquidator of an insolvent company shall notify the
policyholders of the insolvent company who are residents
of this State of the entry of an Order of Liquidation against the company
and of their rights under this
Article. Such notification shall be mailed to the last known
address of such policyholders,
where available, but if sufficient information for notification by mail is
not available, notice by publication in a newspaper of general circulation
shall be sufficient. If the insolvent company is domiciled in another
state and the liquidator fails to give notice which satisfies the purposes
of this Section, such notice shall be given by the Director as ancillary
receiver or if the insolvent company is domiciled in another state and there
is no ancillary receiver in this State, the Fund shall give such notice
provided the necessary information is made available to the Fund by the liquidator.
The form of the notice given by the Director as either liquidator or ancillary
receiver shall be submitted to the Fund for its approval prior to mailing
or publication.
(Source: P.A. 85-576.)
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(215 ILCS 5/544) (from Ch. 73, par. 1065.94)
Sec. 544.
Powers of the Director.
The Director shall either (a) suspend or revoke, after notice
and hearing pursuant to Sections 401, 402 and 403 of this Code, the
certificate of authority to do business in this State of any member company
which fails to pay an assessment when due or fails to comply with the plan
of operation, or (b) levy a fine on any member
company which fails to pay an assessment when due. Such fine shall not
exceed 5% per month of the unpaid assessment, except that no fine shall be
less than $200 per month.
(Source: P.A. 93-32, eff. 7-1-03.)
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(215 ILCS 5/545) (from Ch. 73, par. 1065.95)
Sec. 545. Effect of paid claims.
(a) Every insured or claimant seeking the
protection of this Article shall cooperate with the Fund to the same
extent as such person would have been required to cooperate with the
insolvent company. The Fund shall have all the rights, duties and
obligations under the policy to the extent of the covered claim payment,
provided the Fund shall have no cause of action against the
insured of the insolvent company for any sums it has paid out except
such causes of action as the insolvent company would have had if such
sums had been paid by the insolvent company and except as provided in
subsection (d) of this Section. Any person recovering under this Article and any insured whose liabilities are satisfied under this Article shall be deemed to have assigned the person's or insured's rights under the policy to the Fund to the extent of his or her recovery or satisfaction obtained from the Fund's payments.
(b) The Fund and any similar organization in another state shall be
recognized as claimants in the liquidation of an insolvent company for any
amounts paid by them on covered claims obligations as determined under this
Article or similar laws in other states and shall receive dividends at the
priority set forth in paragraph (d) of subsection (1) of Section
205 of this
Code; provided that if, at the time that the liquidator issues a cut-off notice to the Fund in anticipation of closing the estate, a reserve has been established by the Fund, or any similar organization in another state, for the amount of their future administrative expenses and loss development associated with unpaid reported pending claims, these reserves will be deemed to have been paid as of the date of the notice and payment shall be made accordingly.
The liquidator of an insolvent company shall be bound by
determinations of covered claim eligibility under the Act and by settlements
of claims made by
the Fund or a similar organization in
another state on the receipt of certification of such payments, to the extent
those
determinations or settlements satisfy obligations of the Fund, but the receiver
shall not be bound in any way by those determinations or settlements to the
extent that there remains a claim in the estate for amounts in excess of the
payments by the Fund.
In submitting their claim for covered claim payments the Fund and any
similar organization in another state shall not be subject to the
requirements of Sections 208 and 209 of this Code and shall not be affected
by the failure of the person receiving a covered claim payment to file a proof
of claim.
(c) The expenses of the Fund and of any similar
organization in any other state, other than expenses incurred in the
performance of
duties under Section 547 or similar duties under the
statute governing a similar organization in another state, shall
be accorded priority over all claims
against the estate, except as provided for in paragraph (a) of subsection (1) of
Section 205 of this Code. The liquidator shall make prompt reimbursement
to the Fund and any similar organization for such expense payments.
(d) The Fund has the right to recover from the following persons the amount
of any covered claims (as determined without regard to the exemption in paragraph (iv) of subsection (b) of Section 534.3) and allocated claims expenses which the Fund paid or
incurred on behalf of such person in satisfaction, in whole or in part, of
liability obligations of such person to any other person:
(i) any insured whose net worth on December 31 of the | ||
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(ii) any insured who is an affiliate of the insolvent | ||
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The Fund may also, at its sole discretion and without assumption of any ongoing duty to do so, pay any workers compensation claims or any other third-party claims or any cybersecurity insurance obligations covered by a policy of an insolvent company on behalf of a high net worth insured as defined in paragraph (iv) of subsection (b) of Section 534.3. In that case, the Fund shall recover from the high net worth insured under this Section for all amounts paid on its behalf, all allocated claim adjusted expenses related to such claims, the Fund's attorney's fees, and all court costs in any action necessary to collect the full amount to the Fund's reimbursement under this Section. (Source: P.A. 103-113, eff. 6-30-23.)
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(215 ILCS 5/546) (from Ch. 73, par. 1065.96)
Sec. 546. Other insurance.
(a) An insured or claimant shall be required first to exhaust all
coverage provided by any other insurance policy, regardless of whether or not
such other insurance policy was written by a member company, if the claim under
such other policy arises from the same facts, injury, or loss that gave rise to
the covered claim against the Fund. The Fund's obligation under Section 537.2
shall be reduced by the amount recovered or recoverable, whichever is greater,
under such other insurance policy. Where such other insurance policy provides
uninsured
or underinsured motorist coverage, the amount recoverable shall be deemed to be
the full applicable limits of such coverage. To the extent that the Fund's
obligation under Section 537.2 is reduced by application of this Section, the
liability of the person insured by the insolvent insurer's policy for the claim
shall be reduced in the same amount. If the Fund pays a covered claim without the exhaustion of all other coverage that could have been exhausted under this Section, the Fund shall have an independent right of recovery against each insurer whose coverage was not exhausted in the amount the Fund would not have had to pay if that insurer's coverage had been exhausted first.
(b) Any insured or claimant having a claim which may be recovered under more
than one insurance guaranty fund or its equivalent shall seek recovery
first from the Fund of the place of residence of the insured except that
if it is a first party claim for damage to property with a permanent
location, he shall first seek recovery from the Fund of the location of
the property; if it is a workers' compensation claim, he shall first
seek recovery from the Fund of the residence of the claimant. Any
recovery under this Article shall be reduced by the amount of the
recovery from any other insurance guaranty fund or its equivalent.
(Source: P.A. 99-387, eff. 8-17-15.)
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(215 ILCS 5/547) (from Ch. 73, par. 1065.97)
Sec. 547. Prevention of insolvencies. To aid in the detection and prevention of company insolvencies:
(a) The board of directors may, upon majority vote, | ||
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(b) The board of directors may prepare a report on | ||
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(c) The Director may disclose to the Fund the | ||
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(Source: P.A. 102-929, eff. 5-27-22.)
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(215 ILCS 5/548) (from Ch. 73, par. 1065.98)
Sec. 548. Examination of the Fund. The Fund shall be subject to examination and regulation by the Director.
The board of directors shall, not later than April 30 of each year, submit
a financial report for the preceding calendar year in a form approved by
the Director.
(Source: P.A. 99-388, eff. 1-1-16 .)
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(215 ILCS 5/549) (from Ch. 73, par. 1065.99)
Sec. 549.
Tax
exemption.
The Fund shall be exempt from payment of all fees and all taxes levied
by this State or any of its subdivisions.
(Source: P.A. 77-305.)
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(215 ILCS 5/550) (from Ch. 73, par. 1065.100)
Sec. 550.
Immunity.
There shall be no liability on the part of and no cause of action of any
nature shall arise against any member company, the Fund or their agents or
employees, the board of directors, or the Director or his representatives
for any action taken or omitted by them in the performance of their powers
and duties under this Article.
(Source: P.A. 77-305.)
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(215 ILCS 5/551) (from Ch. 73, par. 1065.101)
Sec. 551.
Stay of proceedings.
All proceedings arising out of a claim under a policy of insurance written by
an insolvent company shall be stayed for 120 days from the date of the entry of
the Order of Liquidation to permit proper defense by the Fund of all such
pending causes of action.
(Source: P.A. 92-77, eff. 7-12-01.)
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(215 ILCS 5/552) (from Ch. 73, par. 1065.102)
Sec. 552.
All provisions of this Article shall be interpreted in
accordance with and pursuant to those Sections of Article XIII of this Code
which may be applicable.
(Source: P.A. 85-576.)
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(215 ILCS 5/553) (from Ch. 73, par. 1065.103)
Sec. 553.
Severability.
If any provision of this Article or the application thereof to any
claimant, company or circumstance is held invalid, such invalidity does not
affect other provisions or applications of this Article which can be given
effect without the invalid application or provision, and to this end the
provisions of this Article are declared to be severable.
(Source: P.A. 77-305.)
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(215 ILCS 5/Art. XXXVIII heading) ARTICLE XXXVIII.
(Repealed by P.A. 88-379)
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(215 ILCS 5/801) (from Ch. 73, par. 1065.401)
Sec. 801.
(Repealed).
(Source: Repealed by P.A. 88-379.)
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(215 ILCS 5/802) (from Ch. 73, par. 1065.402)
Sec. 802.
(Repealed).
(Source: Repealed by P.A. 88-379.)
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(215 ILCS 5/803) (from Ch. 73, par. 1065.403)
Sec. 803.
(Repealed).
(Source: Repealed by P.A. 88-379.)
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(215 ILCS 5/803a) (from Ch. 73, par. 1065.403a)
Sec. 803a.
(Repealed).
(Source: Repealed by P.A. 88-379.)
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(215 ILCS 5/804) (from Ch. 73, par. 1065.404)
Sec. 804.
(Repealed).
(Source: Repealed by P.A. 88-379.)
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(215 ILCS 5/805) (from Ch. 73, par. 1065.405)
Sec. 805.
(Repealed).
(Source: Repealed by P.A. 88-379.)
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(215 ILCS 5/806) (from Ch. 73, par. 1065.406)
Sec. 806.
(Repealed).
(Source: Repealed by P.A. 88-379.)
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(215 ILCS 5/806A) (from Ch. 73, par. 1065.406A)
Sec. 806A.
(Repealed).
(Source: Repealed by P.A. 88-379.)
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(215 ILCS 5/807) (from Ch. 73, par. 1065.407)
Sec. 807.
(Repealed).
(Source: Repealed by P.A. 88-379.)
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(215 ILCS 5/808) (from Ch. 73, par. 1065.408)
Sec. 808.
(Repealed).
(Source: Repealed by P.A. 88-379.)
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(215 ILCS 5/809) (from Ch. 73, par. 1065.409)
Sec. 809.
(Repealed).
(Source: Repealed by P.A. 88-379.)
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(215 ILCS 5/810) (from Ch. 73, par. 1065.410)
Sec. 810.
(Repealed).
(Source: Repealed by P.A. 88-379.)
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(215 ILCS 5/811) (from Ch. 73, par. 1065.411)
Sec. 811.
(Repealed).
(Source: Repealed by P.A. 88-379.)
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(215 ILCS 5/812) (from Ch. 73, par. 1065.412)
Sec. 812.
(Repealed).
(Source: Repealed by P.A. 88-379.)
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(215 ILCS 5/813) (from Ch. 73, par. 1065.413)
Sec. 813.
(Repealed).
(Source: Repealed by P.A. 88-379.)
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(215 ILCS 5/Art. XXXVIIIA heading) Article XXXVIIIA
MINE SUBSIDENCE INSURANCE
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(215 ILCS 5/801.1)
Sec. 801.1.
Purpose.
The purpose of this Article is to require insurers to
make mine subsidence insurance coverage available for residences, living units
and commercial buildings located in Illinois; to establish the Illinois Mine
Subsidence Insurance Fund; to divide the Fund into separate residential and
commercial sub-funds; and to make the Fund the reinsurer for the mine
subsidence insurance made available under this Article.
(Source: P.A. 88-379.)
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(215 ILCS 5/802.1)
Sec. 802.1.
Definitions.
As used in this Article:
(a) "Commercial Building" means any building, other than a residence,
permanently affixed to realty located in Illinois, including basements,
footings, foundations, septic systems and underground pipes directly servicing
the building, but does not include sidewalks, driveways, parking lots, living
units, land, trees, plants, crops or agricultural field drainage tile.
(b) "Commercial Coverage" means mine subsidence insurance for a commercial
building.
(c) "Insurer" or "Insurers" means insurance companies and reciprocals
licensed and authorized to write Class 3 policies of insurance, as defined in
this Code, within Illinois.
(d) "Living Unit" shall mean that physical portion designated for separate
ownership or occupancy for residential purposes, of a building or group of
buildings, permanently affixed to realty located in Illinois, having elements
which are owned or used in common, including a condominium unit, a cooperative
unit or any other similar unit.
(e) "Living Unit Coverage" means mine subsidence insurance for a living unit
covering the losses described in Section 805.1(d).
(f) "Mine Subsidence" means lateral or vertical ground movement caused by a
failure initiated at the mine level, of man-made underground mines, including,
but not limited to coal mines, clay mines, limestone mines, and fluorspar mines
that directly damages residences or commercial buildings. "Mine Subsidence"
does not include lateral or vertical ground movement caused by earthquake,
landslide, volcanic eruption, soil conditions, soil erosion, soil freezing and
thawing, improperly compacted soil, construction defects, roots of trees and
shrubs or collapse of storm and sewer drains and rapid transit tunnels.
(g) "Mine Subsidence Insurance Fund" or "Fund" means the fund established by
this Article.
(h) "Policy" or "policies" means any contract or contracts of insurance
providing the coverage of the Standard Fire Policy and Extended Coverage
Endorsement on any residence, living unit or commercial building. It does not
include those
insurance contracts that are referred to as marine or inland marine policies.
(i) "Premium" or "premiums" means the gross amount charged to policyholders
for the mine subsidence insurance made available under this Article.
(j) "Rates" or "rate schedules" means the rates by which premiums shall be
computed for the mine subsidence insurance made available under this Article.
(k) "Residence" means a building used principally for residential purposes
up
to and including a four family dwelling, permanently affixed to realty located
in Illinois, including appurtenant structures, driveways, sidewalks, basements,
footings, foundations, septic systems and underground pipes directly servicing
the dwelling or building, but does not include living units, land, trees,
plants, crops or agricultural field drainage tile.
(l) "Residential Coverage" means mine subsidence insurance for a
residence.
(m) "Intergovernmental cooperative" means an intergovernmental
cooperative organized pursuant to Article VII, Section 10 of the Illinois
Constitution and Section 6 of the Intergovernmental Cooperation Act.
(Source: P.A. 90-499, eff. 8-19-97.)
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(215 ILCS 5/803.1)
Sec. 803.1. Establishment of Fund.
(a) There is established a fund to be known as the "Illinois Mine Subsidence
Insurance Fund". The Fund shall operate pursuant to this Article. The Fund is
authorized to transact business, provide services, enter into contracts and sue
or be sued in its own name.
(b) The Fund shall provide reinsurance for mine subsidence losses to all
insurers writing mine subsidence insurance pursuant to this Article.
(c) The monies in the Fund shall be derived from premiums for mine
subsidence
insurance collected on behalf of the Fund pursuant to this Article, from
investment income and from receipt of Federal or State funds. No insurer shall
have any liability to the Fund or to any creditor of the Fund, except as may be
set forth in this Article, in the Articles of Governance which may be adopted
by the Fund, in a reinsurance agreement executed pursuant to Section 810.1,
in
the Plan of Operation established by the Fund, or in the rules and procedures
adopted by the Fund as authorized by the reinsurance agreement.
(d) The Fund shall establish its rates, rating schedules, deductibles and
retentions, minimum premiums,
classifications, and the maximum amount of reinsurance available per residence, commercial building, and living unit
for mine subsidence insurance which the Fund shall file
with the Director. The Director shall have 30 days from the
date of
receipt to approve or disapprove a rate filing. If no action is taken by the
Director within 30 days, the rate is deemed to be approved. The
Director
may, in writing, extend the period for an additional 30 days if
the
Director
determines that additional time is needed.
(e) The Fund shall establish its rates, rating schedules, deductibles and
retentions, minimum premiums,
classifications, and the maximum amount of reinsurance available per residence, commercial building, and living unit in such a manner as to satisfy all reasonably foreseeable
claims and expenses the Fund is likely to incur. The Fund shall give due
consideration to loss experience and relevant trends, premium and other income
and reasonable reserves established for contingencies in establishing the mine
subsidence rates.
(f) The Fund shall compile and publish an annual operating report.
(g) The Fund shall develop at least 2 consumer information publications to
aid the public in understanding mine subsidence and mine subsidence insurance
and shall establish a schedule for the distribution of the publications
pursuant
to the reinsurance agreement. Topics that shall be addressed shall include but
are not limited to:
(1) Descriptive information about mine subsidence, | ||
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(2) Information that will be useful to a policyholder | ||
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(h) The Fund shall be empowered to conduct research programs in an effort to
improve the administration of the mine subsidence insurance program and help
reduce and mitigate mine subsidence losses consistent with the public
interest.
(i) The Fund may enter into reinsurance agreements with any
intergovernmental cooperative that provides joint self-insurance for mine
subsidence losses of its members. These reinsurance agreements shall be
substantially similar to reinsurance agreements described in Section 810.1.
(Source: P.A. 95-92, eff. 1-1-08; 95-334, eff. 1-1-08.)
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(215 ILCS 5/804.1)
Sec. 804.1.
Management of the Fund.
(a) The Fund shall be managed by an 11 member Board of Directors, 6 of whom
shall be insurance industry directors, 4 of whom shall be public
directors, and one of whom shall be an Illinois licensed
insurance producer. The industry
directors shall be elected annually in the manner provided in Articles of
Governance adopted by the Fund. The public directors shall be appointed by the
Director, and shall not be employees of or otherwise affiliated with the
insurance industry. The Illinois licensed insurance producer shall be
appointed by the Director.
(b) The members of the Governing Committee of the Illinois Mine Subsidence
Insurance Fund established by Article XXXVIII who are members of the Governing
Committee as of December 31, 1993 shall become the members of the Board of
Directors of the Fund established by this Article on the effective date of this
Act, and shall continue to hold office until the next annual meeting of the
Fund.
(c) No later than the date of the next annual meeting of the Fund following
the effective date of this Act, the Director shall appoint 4 public directors,
one for a one-year term, one for a two-year term and 2 for three-year
terms.
No later than the date of the next annual meeting of the Fund following the
effective date of this amendatory Act of 1994, the Director shall appoint the
Illinois licensed insurance producer for a 2-year term. Thereafter, all public
directors and the licensed insurance producer shall be appointed for 3 year terms.
(d) As soon as practical after the effective date of this Act, the Fund
shall adopt Articles of Governance, which shall be submitted to the Director
for his review and approval.
(Source: P.A. 88-379; 88-667, eff. 9-16-94; 89-206, eff. 7-21-95.)
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(215 ILCS 5/805.1)
Sec. 805.1. Mine Subsidence Coverage.
(a) Beginning January 1, 1994, every policy issued or renewed insuring a
residence on a direct basis shall include, at a separately stated premium,
residential coverage unless waived in writing by the insured. Beginning
January 1, 1994, every policy issued or renewed insuring a commercial building
on a direct basis shall include at a separately stated premium, commercial
coverage unless waived in writing by the insured. Beginning January 1, 1994,
every policy issued or renewed insuring a living unit on a direct basis shall
include, at a separately stated premium, living unit coverage unless waived in
writing by the insured.
(b) If the insured has previously waived mine subsidence coverage in
writing,
the insurer or agent need not offer mine subsidence coverage in any renewal or
supplementary policy in connection with a policy previously issued to such
insured by the same insurer, unless the insured subsequently makes a written
request for mine subsidence coverage.
(c) The premium charged for residential, commercial or living unit coverage
shall be the
premium level set by the Fund. The loss covered shall be the loss in excess of
the deductible or retention established by the Fund and contained in a
mine subsidence endorsement to the policy. For all policies issued or renewed on or after January 1, 2008, the reinsured loss per residence, per commercial building, and per living unit shall be the amounts established by the Fund and approved by the Director.
For all policies issued or renewed on or after January 1, 1996, the amount of
reinsurance available from the Fund shall not be less than $200,000 per
residence, $200,000 per commercial building, or $15,000 per living unit. The
Fund may, from time to time, adjust the amount of reinsurance available as long
as the minimum set by this Section is met.
(d) The residential coverage provided pursuant to this Article may also
cover
the additional living expenses reasonably and necessarily incurred by the owner
of a residence who has been temporarily displaced as the direct result of
damage to the residence caused by mine subsidence if the underlying policy also
covers this type of loss, provided however, that the loss covered under living
unit coverage shall be limited to losses to improvements
and betterments, and reimbursement of additional living expenses and
assessments made against the insured on account of mine subsidence loss.
(e) The total amount of the loss reimbursable to an insurer shall be limited
to the amount of
insurance reinsured by the Fund in force at the time when the damage first
becomes reasonably observable. All damage caused by a single mine subsidence
event or several subsidence events which are continuous shall constitute one
occurrence. As set forth in subsections (a) and (c) of this Section, a policy issued or renewed must provide coverage, unless waived in writing by the insured, and the insurer must continue to charge the premium level set for that coverage by the Fund. If mine subsidence coverage is in force when the mine subsidence damage first becomes reasonably observable, then the insurer shall notify the insured making the mine subsidence claim that continuation of that coverage thereafter may not be necessary and is optional, but that continued coverage on the damaged residence or commercial building shall terminate only upon written waiver by the insured. The notification shall be made within 60 days after the insurer receives written confirmation from the Fund that the cause of loss is active mine subsidence. The notification shall be in the form of a separate mailing to the insured from the insurer via the United States Postal Service and shall include notification to the insured that mine subsidence premiums paid for coverage on a damaged residence or commercial building subsequent to the established date of loss shall be refunded to the insured within 60 days after the insured provides a signed waiver of mine subsidence coverage to the insurer. The notification shall be accompanied by a waiver of coverage form for the insured to sign and return to the insurer.
(f) No insurer shall be required to offer mine subsidence coverage in
excess of the reinsured limits.
(Source: P.A. 98-1007, eff. 1-1-15 .)
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(215 ILCS 5/806.1)
Sec. 806.1.
Division of Fund Into Separate Residential and
Commercial Sub-funds.
(a) Effective January 1, 1994, the Fund shall establish 2
separate
sub-funds, a Residential Fund to provide reinsurance for mine subsidence losses
arising from residential and living unit coverage and a Commercial Fund to
provide reinsurance for mine subsidence losses arising from commercial
coverage. The assets and liabilities of the Fund shall be allocated to the two
sub-funds in such manner as determined by the Board of Directors, with the
approval of the Director. The two sub-funds shall continue to be managed by
the Board of Directors. Beginning January 1, 1994, all premiums received by
the Fund for residential coverage or living unit coverage shall be credited to
the Residential Fund, all losses and expenses for residential coverage or
living unit coverage shall be charged to the Residential Fund. All premiums
received by the Fund for commercial coverage shall be credited to the
Commercial Fund, and all losses and expenses for commercial coverage shall be
charged to the Commercial Fund. The Fund's overhead expenses shall be
allocated between the Residential Fund and the Commercial Fund on the basis of
annual written premium credited to each sub-fund. The assets and liabilities
of
the Residential and Commercial Funds shall be accounted for
separately. The assets of the Residential Fund shall not be used to reimburse
insurers for losses
for Commercial Coverage and the assets of the Commercial Fund shall not be used
to reimburse insurers for losses for residential coverage or living unit
coverage.
(b) No insurer shall be required to pay any claim for any loss reinsured
under
this Article except to the extent that the amount available in the Residential
Fund or the Commercial Fund, as the case may be, is sufficient to reimburse the
insurer for such payment.
(Source: P.A. 88-379; 89-206, eff. 7-21-95.)
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(215 ILCS 5/807.1)
Sec. 807.1.
Exemption of Certain Counties by the
Director.
The Director shall exempt every policy insuring residences, living units or
commercial buildings located in any county of 1,000,000 or more inhabitants or
any county contiguous to any such county, and, upon request of the Fund,
may exempt every policy insuring residences, living units or commercial
buildings located in any other specified county of this
State, from the provisions of Section 805.1 of this Article.
(Source: P.A. 91-357, eff. 7-29-99.)
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(215 ILCS 5/808.1)
Sec. 808.1.
Right of Insurers to Refuse to Provide Mine
Subsidence Coverage.
An insurer may refuse to provide mine subsidence coverage on a residence or
commercial building evidencing unrepaired mine subsidence damage until such
damage has been repaired.
(Source: P.A. 88-379.)
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(215 ILCS 5/809.1)
Sec. 809.1.
Arbitration.
In the event of a dispute between a policyholder and an insurer as to whether
a residence or commercial building covered by mine subsidence insurance has
been damaged by mine subsidence, a policyholder shall have the right to submit
that dispute to arbitration in accordance with this Section. No policyholder
shall have the right under this Section to submit to arbitration any issue
regarding the amount of loss or damage caused to a residence or commercial
building by mine subsidence.
Arbitration may be initiated only after the insurer has made a decision that
the residence or commercial building covered by mine subsidence insurance was
not damaged by mine subsidence and so notified the policyholder in writing,
accompanied by a notice informing the policyholder of the policyholder's right
to arbitration and containing specific reference to this Section. Within 60
days after receipt by the policyholder of the notification, the policyholder
may initiate arbitration in accordance with the Commercial Arbitration Rules of
the American Arbitration Association, as then in effect. All costs of the
arbitration shall be borne by the losing party. Appeals from the decision of
the arbitrators shall be in accordance with the Uniform Arbitration Act as in
effect in Illinois.
(Source: P.A. 88-379.)
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(215 ILCS 5/810.1)
Sec. 810.1.
Reinsurance Agreements.
All insurers shall enter into a
reinsurance agreement with the Fund. The reinsurance agreement shall be filed
with and approved by the
Director. The agreement shall provide that each
insurer shall cede 100% of any subsidence insurance written up to the limits
contained in Section 805.1(c) to the Fund and, in
consideration of the ceding
commission retained by the insurer, agrees to distribute informational
publications provided by the Fund on a schedule set by the Fund, undertake
adjustment of losses, payment of taxes, and all other expenses of the insurer
necessary for sale of policies and administration of the mine subsidence
insurance coverage. The Fund shall agree to reimburse the insurer for all
amounts reasonably and properly paid policyholders from claims resulting from
mine subsidence and for expenses specified in the reinsurance agreement. In
addition, the reinsurance agreement may contain, and may authorize the Fund to
establish and promulgate deductibles. The reinsurance agreement may also
contain reasonable rules and procedures covering
insurer documentation of losses; insurer reporting of claims, reports of
litigation, premiums and loss payments; loss payment review by the Fund;
remitting of premiums to the Fund; underwriting; and cause and origin
investigations; and procedures for
resolving disputes between the insurers and the Fund.
(Source: P.A. 90-655, eff. 7-30-98; 91-357, eff. 7-29-99.)
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(215 ILCS 5/811.1)
Sec. 811.1.
Distribution of Premiums.
The Fund is authorized to establish the proportion of total mine subsidence
insurance premiums collected by each insurer which shall be retained by the
insurer as a ceding commission, subject to review of the Director. The
remainder of such premiums shall be remitted by the insurer to the Fund at
times to be determined by the Fund. The ceding commission shall be uniform in
all reinsurance agreements entered into pursuant to Section 810.1 of this
Article
and shall be based on reasonable administrative costs to the insurers,
including agents' commissions.
(Source: P.A. 88-379.)
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(215 ILCS 5/812.1)
Sec. 812.1.
Claim Payments.
The Residential or the Commercial Fund, as the case may be, shall reimburse
insurers for all amounts due within 90 days after receiving adequate
documentation, as set forth in the reinsurance agreement, the Plan of Operation
or in the operating rules and procedures adopted by the Fund, that the insurer
has properly paid the claim and is entitled to reimbursement by the Fund,
subject to the limitations imposed by Section 806.1.
(Source: P.A. 88-379.)
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(215 ILCS 5/813.1)
Sec. 813.1.
Reporting Requirements.
Every insurer must report, at times designated by the Fund, such information
as is reasonably required by the Fund to conduct its affairs, establish claim
reserves, and reimburse insurers for losses paid to insureds.
(Source: P.A. 88-379.)
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(215 ILCS 5/814.1)
Sec. 814.1.
Right of Recourse.
(a) The Fund shall have no right of recourse against the insurer, once the
Fund has reimbursed the insurer for any particular loss, unless the insurer has
failed to settle that loss in its customary manner, or in case of fraud by the
insurer.
(b) The Fund may seek recovery against the policyholder for unjust
enrichment
if, in the Fund's judgment, the policyholder was not entitled to the amounts
paid because of fraud, or a material violation of the policy conditions. The
insurer shall provide cooperation to the Fund.
(Source: P.A. 88-379.)
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(215 ILCS 5/815.1)
Sec. 815.1.
Subrogation.
(a) All insurers issuing mine subsidence policies shall retain the right of
subrogation.
(b) The Fund, on its own behalf, may exercise the right of subrogation.
(c) Every insurer shall include in its reports an itemized list of all
losses
in subrogation and shall remit to the Fund all monies, less expenses, recovered
as the result of subrogation actions.
(Source: P.A. 88-379.)
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(215 ILCS 5/817.1)
Sec. 817.1.
Powers of Director.
In addition to any powers conferred upon
him by this or any other law, the Director shall have the authority to
supervise the operations of the Fund and shall review the Fund's rates once
every three years. In addition the Director or any person designated by him
has the power:
(a) to examine the operation of the Fund through free | ||
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(b) to do all things necessary to enable the State of | ||
| ||
(c) to require such reports as the Director may deem | ||
| ||
(Source: P.A. 90-655, eff. 7-30-98.)
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(215 ILCS 5/Art. XXXVIII.5 heading) ARTICLE XXXVIII 1/2.
GROUP SELF-INSURANCE PROGRAMS
(Repealed by P.A. 89-97, eff. 7-7-95)
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(215 ILCS 5/850) (from Ch. 73, par. 1065.501)
Sec. 850.
(Repealed).
(Source: Repealed by P.A. 89-97, eff. 7-7-95.)
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(215 ILCS 5/Art. XXXIX heading) ARTICLE XXXIX.
GROUP LEGAL EXPENSE INSURANCE
|
(215 ILCS 5/900) (from Ch. 73, par. 1065.600)
Sec. 900.
Group legal expense defined.
Group legal expense insurance
means that form of legal expense insurance covering not less than 10 employees,
members, or employees of members, written under a master policy issued to
any governmental corporation, unit, agency or department thereof, or to
any corporation, copartnership, individual employer, or to any association
upon application of an executive officer or trustee of such association
having a constitution or bylaws and formed in good faith for purposes other
than that of obtaining insurance, where officers, members, employees, employees
of members or classes or departments thereof may be insured for their individual
benefit. In addition, a group legal expense policy may be written to insure
any group which may be insured under a group life insurance policy. The
term "employees" includes the officers, managers and employees or subsidiary
or affiliated corporations, and the individual proprietors, partners, and
employees of affiliated individuals and firms, when the business of such
subsidiary or affiliated corporations, firms or individuals is controlled
by a common employer through stock ownership, contract or otherwise.
(Source: P.A. 81-1361.)
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(215 ILCS 5/901) (from Ch. 73, par. 1065.601)
Sec. 901.
Group legal expense insurance authorized.) Any insurance company
authorized to write legal expense insurance in this State shall have the
power to issue group legal expense insurance policies. No policy,
certificate, endorsement, rider, or application which becomes or is designed
to become a part of any such policy of group legal expense insurance may
be issued or delivered in this State unless a copy of the form shall have
been filed with the Director of Insurance in accordance with Section 143
of this Code. Such policy, certificate, endorsement, rider, or application
must contain those provisions required by Sections 902 through 906
of the Code.
No such policy, certificate, endorsement, application or rider
shall contain any provision which would interfere with the freedom of choice
by the insured in the selection
of attorneys except that the insurer
may select and contract with attorneys to verify plan coverage and to provide
the insureds with legal services which consist of initial advice and consultation.
Nothing herein shall prevent an insured, after plan coverage has been verified,
from choosing to go directly to his or her own attorney of choice for initial
advice and consultation, subject to applicable policy limitations.
Every such policy, certificate, endorsement, application or rider shall
prominently display language advising the insured of such freedom of choice
by the insured in the selection of attorneys
and that no company issuing such policy, certificate, endorsement, application
or rider may require, suggest or recommend the use of any attorney
or firm of attorneys, provided, however, that dissemination by an insurer
of the names of attorneys who have agreed to accept legal expense insurance
benefits as payment for certain legal services shall not constitute a requirement,
suggestion or recommendation of the use of any attorney or firm of attorneys.
The foregoing shall not prohibit referral of insured by the insurer to
any lawyer referral service authorized or operated by a state, county, local
or other bar association.
Any insurance company issuing such policies shall in no way interfere with
the attorney-client relationship nor with the independent exercise of professional
judgment by any attorney.
(Source: P.A. 83-774.)
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(215 ILCS 5/902) (from Ch. 73, par. 1065.602)
Sec. 902. Entire contract specified. Each group legal expense insurance
policy shall provide that the policy, the application of the employer, or
executive officer or trustee of any association, and the individual applications,
if any, of the employees, members or employees of members insured shall
constitute the entire contract between the parties, and that all statements
made by the employer, or the executive officer or trustee, or by the individual
employees, members or employees of members shall, in the absence of fraud,
be deemed representations and not warranties, and that no such statement
shall be used in defense to a claim under the policy, unless it is contained
in a written application.
(Source: P.A. 99-642, eff. 7-28-16.)
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(215 ILCS 5/903) (from Ch. 73, par. 1065.603)
Sec. 903.
Certificates Required.) Each group legal expense insurance
policy shall provide that the insurer shall issue to the employer, or to
the executive officer or trustee of the association, for delivery to the
employee, member or employee of a member, who is insured under such policy,
an individual certificate setting forth a statement as to the insurance
protection to which he or she is entitled and to whom payable, if appropriate.
(Source: P.A. 81-1361.)
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(215 ILCS 5/904) (from Ch. 73, par. 1065.604)
Sec. 904.
New Members of Group.) Each group legal expense insurance policy
shall provide that to the group or class thereof originally insured
shall be added from time to time all new employees of the employer, members
of the association or employees of members eligible to and applying for
insurance in such group or class, but participation in the group plan shall
not be required as a condition of employment, nor shall any member not participating
in the plan be coerced or discriminated against.
(Source: P.A. 81-1361.)
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(215 ILCS 5/905) (from Ch. 73, par. 1065.605)
Sec. 905.
Conversion Rights.) Each group legal expense insurance policy
shall provide that any member of the group shall have the right to convert
his group policy to an individual standard policy of insurance in the same
company as offered by the insurer to the non-group insureds upon termination
of his connection with the group extending to him or her the same limits of coverage.
(Source: P.A. 81-1361.)
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(215 ILCS 5/906) (from Ch. 73, par. 1065.606)
Sec. 906.
Cancellation Restricted.
An insurer may not cancel the coverage
of an individual member of a group to which the insurer provides coverage
under a group legal expense insurance policy except for the nonpayment of
premium by such member, or the group policyholder if premium is paid or
collected by it for transmittal to the insurer or unless the insurance for
the entire group is cancelled. In the event of cancellation the insurer shall:
(1) If it has in its actual possession the names and addresses of individual
members insured under such group legal expense insurance policy, deliver
to the individual member written notice of cancellation stating when, not
less than 30 days thereafter, such cancellation shall be effective provided,
however, that if such cancellation is the result of nonpayment of premium
by such member or the group policyholder, a notice of 10 days shall be sufficient.
(2) In the event the insurer does not administer the group legal expense
insurance policy and is not in actual possession of the names and addresses
of individual members insured under such policy, the insurer shall deliver
to the employer or to the executive officer or trustee of the association for delivery
to the employee, member or employee of a member who is insured under such
policy individual notice of cancellation forms stating when, not less than
30 days thereafter, such cancellation shall be effective provided, however,
that if such cancellation is the result of nonpayment of premium a notice
of 10 days shall be sufficient. The insurer shall not be required to furnish
notice of cancellation under this Section to the group policyholder when
an individual member's insurance is terminated by reason of nonpayment of
premium unless it has specific knowledge of the individual's failure to pay premium.
Delivery shall be considered effective by the mailing of such notice if
subsection (1) above is applicable to the last address of the member as
shown on the records of the insurer, and under subsection (2) by the mailing
of such notice to the last address of the group policyholder as shown on
the records of the insurer.
(Source: P.A. 81-1361.)
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(215 ILCS 5/Art. XL heading) ARTICLE XL.
INSURANCE INFORMATION
AND PRIVACY PROTECTION
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(215 ILCS 5/1001) (from Ch. 73, par. 1065.701)
Sec. 1001.
Purpose.
The purpose of this Article is to establish standards
for the collection, use and disclosure of information gathered in connection
with insurance transactions by insurance institutions, agents or
insurance-support
organizations; to maintain a balance between the need for information by
those conducting the business of insurance and the public's need for fairness
in insurance information practices, including the need to minimize
intrusiveness;
to establish a regulatory mechanism to enable natural persons to ascertain
what information is being or has been collected about them in connection
with insurance transactions and to have access to such information for the
purpose of verifying or disputing its accuracy; to limit the disclosure
of information collected in connection with insurance transactions; and
to enable insurance applicants and policyholders to obtain the reasons for
any adverse underwriting decision. Further, this Article shall grant the
Director the authority to enforce Title V of the Gramm-Leach-Bliley Act (Public
Law 106-102, 106th Congress).
(Source: P.A. 92-556, eff. 6-24-02.)
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(215 ILCS 5/1002) (from Ch. 73, par. 1065.702)
Sec. 1002.
Scope.
(A) The obligations imposed by this Article shall
apply to those insurance institutions, agents or insurance-support organizations
which, on or after the effective date of this Article:
(1) in the case of life, health or disability insurance:
(a) collect, receive or maintain information in connection with insurance
transactions which pertains to natural persons who are residents of this State, or
(b) engage in insurance transactions with applicants, individuals or policyholders
who are residents of this State, and
(2) in the case of property or casualty insurance:
(a) collect, receive or maintain information in connection with insurance
transactions involving policies, contracts or certificates of insurance
delivered, issued for delivery or renewed in this State, or
(b) engage in insurance transactions involving policies, contracts or
certificates of insurance delivered, issued for delivery or renewed in this State.
(B) The rights granted by this Article shall extend to:
(1) in the case of life, health or disability insurance, the following
persons who are residents of this State:
(a) natural persons who are the subject of information collected, received
or maintained in connection with insurance transactions, and
(b) applicants, individuals or policyholders who engage in or seek to
engage in insurance transactions, and
(2) in the case of property or casualty insurance, the following persons:
(a) natural persons who are the subject of information collected, received
or maintained in connection with insurance transactions involving policies,
contracts or certificates of insurance delivered, issued for delivery or
renewed in this State, and
(b) applicants, individuals or policyholders who engage in or seek to
engage in insurance transactions involving policies, contracts or certificates
of insurance delivered, issued for delivery or renewed in this State.
(C) For purposes of this Section, a person shall be considered a resident
of this State if the person's last known mailing address, as shown in the
records of the insurance institution, agent or insurance-support organization,
is located in this State.
(D) Notwithstanding subsections (A) and (B) above, this Article shall not apply
to information collected from the public records of a governmental authority
and maintained by an insurance institution or its representatives for the
purpose of insuring the title to real property located in this State.
(Source: P.A. 81-1430.)
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(215 ILCS 5/1003) (from Ch. 73, par. 1065.703)
Sec. 1003.
Definitions.
As used in this Article:
(A) "Adverse underwriting decision" means:
(1) any of the following actions with respect to | ||
| ||
(a) a declination of insurance coverage,
(b) a termination of insurance coverage,
(c) failure of an agent to apply for insurance | ||
| ||
(d) in the case of a property or casualty | ||
| ||
(i) placement by an insurance institution or | ||
| ||
(ii) the charging of a higher rate on the | ||
| ||
(e) in the case of life, health or disability | ||
| ||
(2) Notwithstanding paragraph (1) above, the | ||
| ||
(a) the termination of an individual policy form | ||
| ||
(b) a declination of insurance coverage solely | ||
| ||
(c) the rescission of a policy.
(B) "Affiliate" or "affiliated" means a person that directly, or indirectly
through one or more intermediaries, controls, is controlled by or is under
common control with another person.
(C) "Agent" means an individual, firm, partnership, association or
corporation who is involved in the solicitation, negotiation or binding of
coverages for or on applications or policies of insurance, covering property or
risks located in this State. For the purposes of this Article, both "Insurance
Agent" and "Insurance Broker", as defined in Section 490, shall be considered
an agent.
(D) "Applicant" means any person who seeks to contract for insurance
coverage other than a person seeking group insurance that is not individually
underwritten.
(E) "Director" means the Director of Insurance.
(F) "Consumer report" means any written, oral or other communication of
information bearing on a natural person's credit worthiness, credit standing,
credit capacity, character, general reputation, personal characteristics
or mode of living which is used or expected to be used in connection with
an insurance transaction.
(G) "Consumer reporting agency" means any person who:
(1) regularly engages, in whole or in part, in the | ||
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(2) obtains information primarily from sources other | ||
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(3) furnishes consumer reports to other persons.
(H) "Control", including the terms "controlled by" or "under
common control with", means the possession, direct or indirect, of the power
to direct or cause the direction of the management and policies of a person,
whether through the ownership of voting securities, by contract other than
a commercial contract for goods or nonmanagement services, or otherwise,
unless the power is the result of an official position with or corporate
office held by the person.
(I) "Declination of insurance coverage" means a denial, in
whole or in part, by an insurance institution or agent of requested insurance
coverage.
(J) "Individual" means any natural person who:
(1) in the case of property or casualty insurance, is | ||
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(2) in the case of life, health or disability | ||
| ||
(3) is a past, present or proposed policyowner;
(4) is a past or present applicant;
(5) is a past or present claimant; or
(6) derived, derives or is proposed to derive | ||
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(K) "Institutional source" means any person or governmental entity that
provides information about an individual to an agent, insurance institution or
insurance-support organization, other than:
(1) an agent,
(2) the individual who is the subject of the | ||
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(3) a natural person acting in a personal capacity | ||
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(L) "Insurance institution" means any corporation, association, partnership,
reciprocal exchange, inter-insurer, Lloyd's insurer, fraternal benefit society
or other person engaged in the business of insurance, health maintenance
organizations as defined in Section 2 of the Health Maintenance Organization
Act,
voluntary health services plans as defined in Section 2 of the Voluntary Health
Services Plans Act, and dental service plans as defined in Section 4 of the
Dental Service Plan Act. "Insurance institution" shall not include agents or
insurance-support organizations.
(M) "Insurance-support organization" means:
(1) any person who regularly engages, in whole or in | ||
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(a) the furnishing of consumer reports or | ||
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(b) the collection of personal information from | ||
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(2) Notwithstanding paragraph (1) above, the | ||
| ||
(N) "Insurance transaction" means any transaction involving
insurance primarily for personal, family or household needs rather than
business or professional needs which entails:
(1) the determination of an individual's eligibility | ||
| ||
(2) the servicing of an insurance application, | ||
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(O) "Investigative consumer report" means a consumer report
or portion thereof in which information about a natural person's character,
general
reputation, personal characteristics or mode of living is obtained through personal
interviews with the person's neighbors, friends, associates, acquaintances
or others who may have knowledge concerning such items of information.
(P) "Medical-care institution" means any facility or institution
that is licensed to provide health care services to natural persons, including
but not limited to: hospitals, skilled nursing facilities, home-health
agencies, medical clinics, rehabilitation agencies and public-health
agencies and health-maintenance organizations.
(Q) "Medical professional" means any person licensed or certified
to provide health care services to natural persons, including but not limited
to, a physician, dentist, nurse, optometrist, chiropractor, naprapath,
pharmacist, physical or occupational therapist, psychiatric social worker,
speech therapist, clinical dietitian or clinical psychologist.
(R) "Medical-record information" means personal information which:
(1) relates to an individual's physical or mental | ||
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(2) is obtained from a medical professional or | ||
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(S) "Person" means any natural person, corporation, association,
partnership or other legal entity.
(T) "Personal information" means any individually identifiable
information gathered in connection with an insurance transaction from which
judgments can be made about an individual's character, habits, avocations,
finances, occupation, general reputation, credit, health or any other personal
characteristics. "Personal information" includes an individual's name and
address and "medical-record information" but does not include "privileged
information".
(U) "Policyholder" means any person who:
(1) in the case of individual property or casualty | ||
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(2) in the case of individual life, health or | ||
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(3) in the case of group insurance which is | ||
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(V) "Pretext interview" means an interview whereby a person,
in an attempt to obtain information about a natural person, performs one or
more of the following acts:
(1) pretends to be someone he or she is not,
(2) pretends to represent a person he or she is not | ||
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(3) misrepresents the true purpose of the interview, | ||
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(4) refuses to identify himself or herself upon | ||
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(W) "Privileged information" means any individually identifiable
information that: (1) relates to a claim for insurance benefits or
a civil or criminal proceeding involving an individual, and (2) is
collected in connection with or in reasonable anticipation
of a claim for insurance benefits or civil or criminal proceeding involving
an individual; provided,
however, information otherwise meeting the requirements of this subsection
shall nevertheless be considered "personal information" under this Article
if it is disclosed in violation of Section 1014 of this Article.
(X) "Residual market mechanism" means an association, organization
or other entity described in Article XXXIII
of this Act, or Section 7-501 of The
Illinois Vehicle Code.
(Y) "Termination of insurance coverage" or "termination of
an insurance policy" means either a cancellation or nonrenewal of an insurance
policy, in whole or in part, for any reason other than the failure to pay
a premium as required by the policy.
(Z) "Unauthorized insurer" means an insurance institution that has not
been granted a certificate of authority by the Director to transact the
business of insurance in this State.
(Source: P.A. 90-7, eff. 6-10-97; 90-177, eff. 7-23-97; 90-372,
eff. 7-1-98; 90-655, eff. 7-30-98.)
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(215 ILCS 5/1004) (from Ch. 73, par. 1065.704)
Sec. 1004.
Pretext Interviews.
No insurance institution, agent or insurance-support
organization shall use or authorize the use of pretext interviews to obtain
information in connection with an insurance transaction; provided, however,
a pretext interview may be undertaken to obtain information
from a person or institution
that does not have a generally or statutorily recognized privileged relationship
with the person about whom the information relates for the
purpose of investigating a claim where, based upon specific information
available for review by the Director, there is a reasonable basis for
suspecting criminal activity, fraud, material misrepresentation or material
nondisclosure in connection with the claim.
(Source: P.A. 82-108.)
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(215 ILCS 5/1005) (from Ch. 73, par. 1065.705)
Sec. 1005.
Notice of Insurance Information Practices.
(A) An insurance
institution or agent shall provide a notice of information practices
to all applicants or policyholders in connection with insurance transactions
as provided below:
(1) in the case of an application for insurance, a notice shall be provided
no later than:
(a) at the time of the delivery of the insurance policy or certificate
when personal information is collected only from the applicant or from
public records, or
(b) at the time the collection of personal information is initiated when
personal information is collected from a source other than
the applicant or public records;
(2) in the case of a policy renewal, a notice shall be provided no later
than the policy renewal date, except
that no notice shall be required in connection with a policy renewal if:
(a) personal information is collected only from the policyholder or
from public records, or
(b) a notice meeting the requirements of this Section has been given within
the previous 24 months; or
(3) in the case of a policy reinstatement or change in insurance benefits,
a notice shall be provided no later than the time a request for a policy
reinstatement or change in insurance benefits is received by the insurance
institution, except that no notice shall be required if personal information
is collected only from the policyholder or from public records.
(B) The notice required by subsection (A) shall be in writing
and shall state:
(1) whether personal information may be collected from persons other than
the individual or individuals proposed for coverage;
(2) the types of personal information that may be collected and the types
of sources and investigative techniques that may be used to collect such information;
(3) the types of disclosures identified in subsections
(B), (C), (D), (E), (F), (I),
(K), (L) and (N) of Section 1014 of this Article and the
circumstances under which such disclosures may be made without prior authorization;
provided, however,
only those circumstances need be described which occur with such frequency
as to indicate a general business practice;
(4) a description of the rights established under Sections 1009 and
1010 of this Article and the manner in which such rights may be exercised; and
(5) that information obtained from a report prepared by an
insurance-support organization may be retained by the insurance-support
organization and disclosed
to other persons.
(C) In lieu of the notice prescribed in subsection (B), the insurance
institution or agent may provide an abbreviated notice informing the applicant
or policyholder that:
(1) personal information may be collected from persons other than the
individual or individuals proposed for coverage,
(2) such information as well as other personal or privileged information
subsequently collected by the insurance institution or agent may in certain
circumstances be disclosed to third parties without authorization,
(3) a right of access and correction exists with respect to all personal
information collected, and
(4) the notice prescribed in subsection (B) will be furnished to the applicant
or policyholder upon request.
(D) The obligations imposed by this Section upon an insurance institution
or agent may be satisfied by another insurance institution or agent
authorized to act on its behalf.
(Source: P.A. 82-108.)
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(215 ILCS 5/1006) (from Ch. 73, par. 1065.706)
Sec. 1006.
Marketing and Research Surveys.
An insurance institution or
agent shall clearly specify those questions designed to obtain information
solely for marketing or research purposes
from an individual in connection with an insurance transaction.
(Source: P.A. 82-108.)
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(215 ILCS 5/1007) (from Ch. 73, par. 1065.707)
Sec. 1007.
Content of Disclosure Authorization Forms.
Notwithstanding
any other provision
of law of this State, no insurance institution, agent or insurance-support
organization may utilize as its disclosure authorization form
in connection with insurance transactions a
form or statement which authorizes the disclosure of personal or privileged
information about an individual to the insurance institution,
agent or insurance-support organization unless the form or statement:
(A) is written in plain language;
(B) is dated;
(C) specifies the types of persons authorized to disclose information
about the individual;
(D) specifies the nature of the information authorized to be disclosed;
(E) names the insurance institution or agent and identifies
by generic reference representatives of the insurance institution to whom
the individual is authorizing information to be disclosed;
(F) specifies the purposes for which the information is collected;
(G) specifies the length of time such authorization shall remain valid,
which shall be no longer than:
(1) in the case of authorizations signed for the purpose of collecting
information in connection with an application for an insurance policy, a
policy reinstatement or a request for change in policy benefits:
(a) 30 months from the date the authorization is signed if the application
or request involves life, health or disability insurance,
(b) one year from the date the authorization is signed if the application
or request involves property or casualty insurance;
(2) in the case of authorizations signed for the purpose of collecting
information in connection with a claim for benefits under an insurance policy,
(a) the term of coverage of the policy if the claim is for a health insurance benefit,
(b) the duration of the claim if the claim is not for a health insurance
benefit; and
(H) advises the individual or a person authorized to act on behalf of
the individual that the individual or the individual's authorized representative
is entitled to receive a copy of the authorization form.
(Source: P.A. 82-108.)
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(215 ILCS 5/1008) (from Ch. 73, par. 1065.708)
Sec. 1008.
Investigative Consumer Reports.
(A) No insurance institution,
agent or insurance-support organization may prepare or request an investigative
consumer report about an individual in connection with an insurance transaction
involving
an application for insurance, a policy renewal, a policy reinstatement or
a change in insurance benefits unless the insurance institution or agent
informs the individual:
(1) that he or she may request to be interviewed in connection with the
preparation of the investigative consumer report, and
(2) that upon a request pursuant to Section 1009, he or she is entitled to
receive a copy of the investigative consumer report.
(B) If an investigative consumer report is to be prepared by an insurance
institution or agent, the insurance institution or agent shall institute
reasonable procedures to conduct a personal interview requested by an individual.
(C) If an investigative consumer report is to be prepared by an insurance-support
organization, the insurance institution or agent desiring such report shall
inform the insurance-support organization whether a personal interview has
been requested by the individual. The insurance-support organization shall
institute reasonable procedures to conduct such interviews, if requested.
(Source: P.A. 82-108.)
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(215 ILCS 5/1009) (from Ch. 73, par. 1065.709)
Sec. 1009.
Access to Recorded Personal Information.
(A) If any individual, after proper identification, submits a written request
to an insurance institution, agent or insurance-support organization for
access to recorded personal information about the individual which is
reasonably described
by the individual and reasonably locatable and retrievable by the insurance
institution, agent or insurance-support organization, the insurance institution,
agent or insurance-support organization shall within 30 business days from
the date such request is received:
(1) inform the individual of the nature and substance of such recorded
personal information in writing, by telephone or by other oral communication,
whichever the insurance institution, agent or insurance-support organization prefers;
(2) permit the individual to see and copy, in person, such recorded personal
information pertaining to him or her or to obtain a copy of such recorded
personal information by mail, whichever the individual prefers, unless such
recorded personal information is in coded form, in which case an accurate
translation in plain language shall be provided in writing;
(3) disclose to the individual the identity, if recorded, of those persons
to whom the insurance institution, agent or insurance-support organization
has disclosed such personal information within 2 years prior to such
request, and if the identity is not recorded, the names of those insurance
institutions, agents, insurance-support organizations or other persons to
whom such information is normally disclosed; and
(4) provide the individual with a summary of the procedures by which he
or she may request correction, amendment or deletion of recorded personal information.
(B) Any personal information provided pursuant to subsection (A) above
shall identify the source of the information if such source is an institutional source.
(C) Medical-record information supplied by a medical-care institution
or medical professional and requested under subsection (A), together with
the identity of the medical professional or medical care institution which
provided such information, shall be supplied either directly to the individual
or to a medical professional designated by the individual and licensed to
provide medical care with respect to the condition to which the information
relates, whichever the insurance institution, agent or insurance-support
organization prefers. If it elects to disclose the information to a medical
professional designated by the individual, the insurance institution, agent
or insurance-support organization shall notify the individual, at the time
of the disclosure, that it has provided the information to the medical professional.
(D) Except for personal information provided under Section 1011, an insurance
institution, agent or insurance-support organization may charge a reasonable
fee to cover the costs incurred in providing a copy of recorded personal
information to individuals.
(E) The obligations imposed by this Section upon an insurance institution
or agent may be satisfied by another insurance institution or agent authorized
to act on its behalf. With respect to the copying and disclosure of recorded
personal information pursuant to a request under subsection (A), an insurance
institution, agent or insurance-support organization may make arrangements
with an insurance-support organization or a consumer reporting agency
to copy and disclose recorded personal
information on its behalf.
(F) The rights granted to individuals in this Section shall extend to
all natural persons to the extent information about them is collected and
maintained by an insurance institution, agent or insurance-support organization
in connection with an insurance transaction. The rights granted to all natural
persons by this subsection shall not extend to information about them that
relates to and is collected in connection with or in reasonable anticipation
of a claim or civil or criminal proceeding involving them.
(G) For purposes of this Section, the term "insurance-support organization"
does not include "consumer reporting agency".
(Source: P.A. 82-108.)
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(215 ILCS 5/1010) (from Ch. 73, par. 1065.710)
Sec. 1010.
Correction, Amendment or Deletion of Recorded Personal Information.
(A) Within 30 business days from the date of receipt of a written
request from an individual to correct, amend or delete any recorded
personal information
about the individual within its possession, an insurance institution, agent
or insurance-support organization shall either:
(1) correct, amend or delete the portion of the recorded personal information
in dispute; or
(2) notify the individual of:
(a) its refusal to make such correction, amendment or deletion,
(b) the reasons for the refusal, and
(c) the individual's right to file a statement as provided
in subsection (C).
(B) If the insurance institution, agent or insurance-support organization
corrects, amends or deletes recorded personal information in accordance
with paragraph (1) of subsection (A) above, the insurance institution, agent
or insurance-support organization shall so notify the individual in writing
and furnish the correction, amendment or fact of deletion to:
(1) any person specifically designated by the individual who may have,
within the preceding 2 years, received such recorded personal information;
(2) any insurance-support organization whose primary source of personal
information is insurance institutions, if the insurance-support organization
has systematically received such recorded personal information from the
insurance institution within the preceding 7 years; provided, however, that
the correction, amendment or fact of deletion need not be furnished
if the insurance-support organization no longer maintains recorded personal
information about the individual; and
(3) any insurance-support organization that furnished the personal information
that has been corrected, amended or deleted.
(C) Whenever an individual disagrees with an insurance institution's,
agent's or insurance-support organization's refusal to correct, amend or
delete recorded personal information, the individual shall be permitted
to file with the insurance institution, agent or insurance-support organization:
(1) a concise statement setting forth what the individual thinks is the
correct, relevant or fair information, and
(2) a concise statement of the reasons why the individual disagrees with
the insurance institution's, agent's or insurance-support organization's
refusal to correct, amend or delete recorded personal information.
(D) In the event an individual files either statement as described in
subsection (C) above, the insurance institution, agent or support organization shall:
(1) file the statement with the disputed personal information and provide
a means by which anyone reviewing the disputed personal information will
be made aware of the individual's statement and have access to it, and
(2) in any subsequent disclosure by the insurance institution, agent or
support organization of the recorded personal information that is the subject
of disagreement, clearly identify the matter or matters in dispute and
provide the individual's statement along with the recorded personal information
being disclosed; and
(3) furnish the statement to the persons and in the manner specified in
subsection (B) above.
(E) The rights granted to individuals in this Section shall extend to
all natural persons to the extent information about them is collected and
maintained by an insurance institution, agent or insurance-support organization
in connection with an insurance transaction. The rights granted to all
natural persons by this subsection shall not extend to information about
them that relates to and is collected in connection with or in reasonable
anticipation of a claim or civil or criminal proceeding involving them.
(F) For purposes of this Section, the term "insurance-support organization"
does not include "consumer reporting agency".
(Source: P.A. 82-108.)
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(215 ILCS 5/1011) (from Ch. 73, par. 1065.711)
Sec. 1011.
Reasons for Adverse Underwriting Decisions.
(A) In the event
of an adverse underwriting decision the insurance institution or agent responsible
for the decision shall:
(1) either provide the applicant, policyholder or individual proposed
for coverage with the specific reason or reasons for the adverse underwriting
decision in writing or advise such person that upon written request he or
she may receive the specific reason or reasons in writing, and
(2) provide the applicant, policyholder or individual proposed for coverage
with a summary of the rights established under subsection (B) and Sections
1009 and 1010 of this Article.
(B) Upon receipt of a written request within 90 business days from the
date of the mailing of notice or other communication of an adverse underwriting
decision to an applicant, policyholder or individual proposed for coverage,
the insurance institution or agent shall furnish to such person within 21
business days from the date of receipt of such written request:
(1) the specific reason or reasons for the adverse underwriting decision,
in writing, if such information was not initially furnished in writing pursuant
to paragraph (1) of subsection (A);
(2) the specific items of personal and privileged information that
support those reasons; provided, however:
(a) the insurance institution or agent shall not be required to furnish
specific items of privileged information if it has reasonable suspicion,
based upon specific information available for review by the Director, that
the applicant, policyholder
or individual proposed for coverage has engaged in criminal activity,
fraud, material misrepresentation
or material nondisclosure, and
(b) specific items of medical-record information supplied by a medical-care
institution or medical professional shall be disclosed either directly to
the individual about whom the information relates or to a medical professional
designated by the individual and licensed to provide medical care with respect
to the condition to which the information relates, whichever the insurance
institution or agent prefers; and
(3) the names and addresses of the institutional sources that supplied
the specific items of information pursuant to paragraph (2) of
subsection (B); provided, however, that the identity of any medical professional
or medical-care institution shall be disclosed either directly to the individual
or to the
designated medical professional, whichever the insurance institution or agent prefers.
(C) The obligations imposed by this Section upon an insurance institution
or agent may be satisfied by another insurance institution or agent authorized
to act on its behalf.
(D) When an adverse underwriting decision results solely from an oral
request or inquiry, the explanation of reasons and summary of rights required
by subsection (A) may be given orally.
(Source: P.A. 82-108.)
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(215 ILCS 5/1012) (from Ch. 73, par. 1065.712)
Sec. 1012.
Information Concerning Previous Adverse Underwriting Decisions.
No insurance institution, agent or insurance-support organization may seek
information in connection with an insurance transaction concerning:
(A) any previous adverse underwriting decision experienced by an individual, or
(B) any previous insurance coverage obtained by an individual through
a residual market mechanism,
unless such inquiry also requests the reasons for any previous adverse underwriting
decision or the reasons why insurance coverage was previously obtained through
a residual market mechanism.
(Source: P.A. 81-1430.)
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(215 ILCS 5/1013) (from Ch. 73, par. 1065.713)
Sec. 1013.
Previous Adverse Underwriting Decisions.
No insurance institution
or agent may base an adverse underwriting decision in whole or in part:
(A) on the fact of a previous adverse underwriting decision or on
the fact that an individual previously obtained insurance coverage through
a residual market mechanism; provided, however, an insurance institution
or agent may base an adverse underwriting decision on further information
obtained from an
insurance institution or agent responsible for a previous adverse underwriting decision;
(B) on personal information received from an insurance-support organization
whose primary source of information is insurance institutions; provided,
however, an insurance institution or agent may base an adverse underwriting
decision on further personal information obtained as the result of information
received from such insurance-support organization.
(Source: P.A. 82-108.)
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(215 ILCS 5/1014) (from Ch. 73, par. 1065.714)
Sec. 1014.
Disclosure Limitations and Conditions.
An insurance institution,
agent or insurance-support organization shall not disclose any personal
or privileged information about an individual collected or received in connection
with an insurance transaction unless the disclosure is:
(A) with the written authorization of the individual, provided:
(1) if such authorization is submitted by another insurance institution,
agent or insurance-support organization, the
authorization meets the requirements of Section 1007 of this Article, or
(2) if such authorization is submitted by a person other
than an insurance
institution, agent or insurance-support organization, the authorization is:
(a) dated,
(b) signed by the individual, and
(c) obtained one year or less prior to the date a disclosure is sought
pursuant to this subsection; or
(B) to a person other than an insurance institution, agent or insurance-support
organization, provided such disclosure is reasonably necessary:
(1) to enable such person to perform a business, professional or insurance
function for the disclosing insurance institution, agent or insurance-support
organization and such person agrees not to disclose the information further
without the individual's written authorization unless the further disclosure:
(a) would otherwise be permitted by this Section if made by an insurance
institution, agent, or insurance-support organization, or
(b) is reasonably necessary for such person to perform its function for
the disclosing insurance institution, agent, or insurance-support organization, or
(2) to enable such person to provide information to the disclosing insurance
institution, agent, or insurance-support organization for the purpose of:
(a) determining an individual's eligibility for an insurance benefit or payment, or
(b) detecting or preventing criminal activity, fraud, material misrepresentation
or material nondisclosure in connection with an insurance transaction; or
(C) to an insurance institution, agent, insurance-support organization
or self-insurer, provided the information disclosed is limited to that which
is reasonably necessary:
(1) to detect or prevent criminal activity, fraud, material misrepresentation
or material nondisclosure in connection with insurance transactions, or
(2) for either the disclosing or receiving insurance institution, agent
or insurance-support organization to perform its function in connection
with an insurance transaction involving the individual; or
(D) to a medical care institution or medical professional for the purpose of:
(1) verifying insurance coverage or benefits,
(2) informing an individual of a medical problem of which the individual
may not be aware, or
(3) conducting an operations or services audit,
provided only such information
is disclosed as is reasonably necessary to accomplish the foregoing purposes; or
(E) to an insurance regulatory authority; or
(F) to a law enforcement or other governmental authority:
(1) to protect the interests of the insurance institution, agent or insurance-support
organization in preventing or prosecuting the perpetration of
fraud upon it, or
(2) if the insurance institution, agent or insurance-support organization
reasonably believes that illegal activities have been conducted by the individual; or
(G) otherwise permitted or required by law; or
(H) in response to a facially valid administrative or judicial order,
including a search warrant or subpoena; or
(I) made for the purpose of conducting actuarial or
research studies provided:
(1) no individual may be identified in any actuarial or research
report,
(2) materials allowing the individual to be identified are returned or
destroyed as soon as they are no longer needed, and
(3) the actuarial or research organization agrees not to disclose the
information unless the disclosure would otherwise be permitted by this Section
if made by an insurance institution, agent or insurance-support organization; or
(J) to a party or a representative of a party to a proposed or consummated
sale, transfer, merger or consolidation of all or part of the business of
the insurance institution, agent or insurance support organization, provided:
(1) prior to the consummation of the sale, transfer, merger or consolidation
only such information is disclosed as is reasonably necessary to enable the
recipient to make business decisions about the purchase, transfer, merger
or consolidation, and
(2) the recipient agrees not to disclose the information unless the disclosure
would otherwise be permitted by this Section if made by an insurance institution,
agent or insurance-support organization; or
(K) to a person whose only use of such information will be in
connection with the marketing of a product or service, provided:
(1) no medical-record information, privileged information,
or personal information relating to an individual's character, personal
habits, mode of living or general reputation is disclosed, and no classification
derived from such information is disclosed,
(2) the individual has been given an opportunity to indicate
that he or she does not want personal information disclosed for marketing purposes and
has given no indication that he or she does not want the information disclosed, and
(3) the person receiving such information agrees not to use
it except in connection with the marketing of a product or service; or
(L) to an affiliate whose only use of the information will be in connection
with an audit of the insurance institution or agent or the marketing
of an insurance product or service, provided the affiliate agrees not to
disclose the information for any other purpose or to unaffiliated
persons; or
(M) by a consumer reporting agency, provided:
the disclosure is to a person other than an insurance institution or agent; or
(N) to a group policyholder for the purpose of reporting claims experience
or conducting an audit of the insurance institution's or agent's operations
or services, provided the information disclosed is reasonably necessary
for the group policyholder to conduct the review or audit; or
(O) to a professional peer review organization for the purpose of reviewing
the service or conduct of a medical-care institution or medical professional; or
(P) to a governmental authority for the purpose of determining the individual's
eligibility for health benefits for which the governmental authority may be liable; or
(Q) to a certificateholder or policyholder for the purpose of providing
information regarding the status of an insurance transaction; or
(R) to a lienholder, mortgagee, assignee, lessee, or other person shown
on the records of an insurance institution or agent as having a legal or
beneficial interest in a policy of insurance; provided that information
disclosed is limited to that which is reasonably necessary to permit such
person to protect its interest in such policy.
(Source: P.A. 82-108.)
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(215 ILCS 5/1015) (from Ch. 73, par. 1065.715)
Sec. 1015.
Powers of Director.
(A) The Director shall have power to examine and investigate into the affairs
of every insurance institution or agent doing business in this State to
determine whether the insurance institution or agent has been or is engaged
in any conduct in violation of this Article.
(B) The Director shall have the power to examine and investigate into
the affairs of every insurance-support organization acting on behalf of
an insurance institution or agent which either transacts business in this
State or transacts business outside this State that has an effect on a person
residing in this State, in order to determine whether such insurance-support
organization has been or is engaged in any conduct in violation of this Article.
(Source: P.A. 81-1430.)
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(215 ILCS 5/1016) (from Ch. 73, par. 1065.716)
Sec. 1016.
Hearings, Witnesses, Appearances, Production of Books and Service
of Process.
(A) Whenever the Director has reason to believe that an insurance institution,
agent or insurance-support organization has been or is engaged in conduct
in this State which violates this Article, or if the Director believes that
an insurance-support organization has been or is engaged in conduct outside
this State which has an effect on a person residing in this State and violates
this Article, the Director shall issue and serve upon such insurance institution,
agent or insurance-support organization a statement of charges and notice
of hearing to be held at a time and place fixed in the notice. Such hearing
shall be conducted pursuant to Sections 401, 402 and 403 of this Act, and any
applicable rules of the Department.
(B) At the time and place fixed for such hearing the insurance institution,
agent or insurance-support organization charged shall have an opportunity
to answer the charges against it and present evidence on its behalf. Upon
good cause shown, the Director shall permit any adversely affected person
to intervene, appear and be heard at such hearing by counsel or in person.
(Source: P.A. 81-1430.)
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(215 ILCS 5/1017) (from Ch. 73, par. 1065.717)
Sec. 1017.
Service of Process - Insurance-Support Organizations.
For
the purpose of this Article, an insurance-support organization transacting
business outside this State which has an effect on a person residing in
this State shall be
deemed to have appointed the Director to accept service of process on its
behalf, provided the Director causes a copy of such service to be mailed
forthwith by registered mail to the insurance-support organization at its
last known principal place of business. The return postcard receipt for
such mailing shall be sufficient proof that the same was properly mailed
by the Director.
(Source: P.A. 81-1430.)
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(215 ILCS 5/1018) (from Ch. 73, par. 1065.718)
Sec. 1018.
Cease and Desist Orders and Reports.
(A) If, after a hearing, the Director determines that the insurance institution,
agent or insurance-support organization charged has engaged in conduct or
practices in violation of this Article, he shall reduce his findings to
writing and shall issue and cause to be served upon such insurance institution,
agent or insurance-support organization a copy of such findings and an order
requiring such insurance institution, agent or insurance-support organization
to cease and desist from the conduct or practices constituting a violation
of this Article.
(B) If, after a hearing, the Director determines that the insurance institution,
agent or insurance-support organization charged has not engaged in conduct
or practices in violation of this Article, he shall prepare a written report
which sets forth findings of fact and conclusions of law. Such report shall
be served upon the insurance institution, agent or insurance-support organization
charged and upon the person or persons, if any, whose rights under this
Article were allegedly violated.
(Source: P.A. 81-1430.)
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(215 ILCS 5/1019) (from Ch. 73, par. 1065.719)
Sec. 1019.
Judicial Review.
(1) Any order or decision made, issued or
executed by the Director under this Article whereby any person or company
is aggrieved is subject to review by the Circuit Court of Sangamon County.
(2) The Administrative Review Law, as now or hereafter amended, and the
rules adopted pursuant thereto, applies to and governs all proceedings for
review of final administrative decisions of the Director provided for in
this Section. The term "administrative decision" is defined as in Section
3-101 of the Code of Civil Procedure.
(Source: P.A. 82-783.)
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(215 ILCS 5/1020) (from Ch. 73, par. 1065.720)
Sec. 1020.
Penalties.
(A) In any case where a hearing pursuant to Section
1016 results in the finding of a knowing violation of this Article, the
Director may, in addition to the issuance of a cease and desist order as
prescribed in Section 1018, order payment of a monetary penalty of not more
than $1,000 for each violation but not to exceed $20,000 in the aggregate
for multiple violations.
(B) Any person who violates a cease and desist order of the Director under
Section 1018 of this Article may, after notice and hearing and upon order
of the Director, be subject to one or more of the following penalties, at
the discretion of the Director:
(1) a monetary fine of not more than $20,000 for each | ||
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(2) a monetary fine of not more than $100,000 if the | ||
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(3) suspension or revocation of an insurance | ||
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(Source: P.A. 93-32, eff. 7-1-03.)
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(215 ILCS 5/1021) (from Ch. 73, par. 1065.721)
Sec. 1021.
Individual Remedies.
(A) If
any insurance institution, agent or insurance-support organization fails
to comply with Sections 1009, 1010 or 1011 of this Article with respect
to the rights granted under those Sections, any person whose rights are
violated may apply to the circuit court of this State, or any other court
of competent jurisdiction, for appropriate equitable relief.
(B) An insurance institution, agent or insurance-support organization
which discloses information in violation of Section 1014 of this Article
shall be liable for damages sustained by the individual about whom the information
relates; provided, however, that no individual shall be entitled to a monetary
award which exceeds the actual damages sustained by the individual as a
result of a violation of Section 1014 of this Article.
(C) In any action brought pursuant to this Section, the court may award
the cost of the action and reasonable attorney's fees to the prevailing party.
(D) An action under this Section must be brought within 2 years from the
date the alleged violation is or should have been discovered.
(E) Except as specifically provided in this Section, there shall be no
remedy or recovery available to individuals, in law or in equity, for occurrences
constituting a violation of any provision of this Article.
(Source: P.A. 82-108.)
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(215 ILCS 5/1022) (from Ch. 73, par. 1065.722)
Sec. 1022.
Immunity.
No cause of action in the nature of defamation,
invasion of privacy or negligence shall arise against any person for disclosing
personal or privileged information in accordance with this Article, nor
shall such a cause of action arise against any person for furnishing personal
or privileged information to an insurance institution, agent or insurance-support
organization; provided, however, this Section shall provide no immunity
for disclosing or furnishing false information with malice or willful intent
to injure any person.
(Source: P.A. 82-108.)
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(215 ILCS 5/1023) (from Ch. 73, par. 1065.723)
Sec. 1023.
Obtaining Information Under False Pretenses.
Any person
who knowingly and willfully obtains information about an individual from
an insurance institution, agent or insurance-support organization under
false pretenses shall be guilty of a Class 4 felony.
(Source: P.A. 81-1430.)
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(215 ILCS 5/1023.5)
Sec. 1023.5.
Federal privacy protections.
(A) In addition to the requirements of this Article, licensees shall comply
with the privacy protection provisions of Title V of the federal
Gramm-Leach-Bliley Act (Public Law 106-102, 106th Congress).
(B) The Director shall have authority to enforce the requirements of the
privacy protection provisions of Title V of the federal Gramm-Leach-Bliley Act,
employing powers granted to him under this Article and this Code.
(C) The Director shall make reasonable rules as may be necessary to make
effective the privacy provisions of Title V of the federal Gramm-Leach-Bliley
Act (Public Law 106-102, 106th Congress).
(D) For purposes of this Section, "licensee" means all insurers, insurance
producers, and other persons licensed or required to be licensed, authorized or
required to be authorized, registered or required to be registered, or
domiciled, pursuant to this Code or any other insurance law
of this State administered by the Department. "Licensee" also includes
unauthorized insurers who accept business placed through a licensed surplus
line
producer in this State, but only in regard to the surplus line placements
placed pursuant to Section 445 of this Code. However, this Section does not
apply to "service contract providers" as defined by the Service Contract Act.
(Source: P.A. 92-556, eff. 6-24-02.)
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(215 ILCS 5/1024) (from Ch. 73, par. 1065.724)
Sec. 1024.
This Article takes effect on July 1, 1981.
The rights granted
under Sections 1009, 1010 and 1014 of this Article shall take effect on July 1, 1981,
regardless of the date of the collection or receipt of the information which
is the subject of such Sections.
(Source: P.A. 81-1430.)
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(215 ILCS 5/Art. XLI heading) ARTICLE XLI.
RISK RETENTION ARRANGEMENTS FOR
BANKING ASSOCIATIONS
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(215 ILCS 5/1101) (from Ch. 73, par. 1065.801)
Sec. 1101.
Scope of Article.
This Article applies only to trusts
sponsored by domestic banking associations and organized under this
Article to provide casualty insurance authorized under Section 5 of the
Illinois Banking Act, as now or hereafter amended, for
association member banks.
(Source: P.A. 84-1431.)
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(215 ILCS 5/1102) (from Ch. 73, par. 1065.802)
Sec. 1102.
Definitions.
As used in this Article, the following terms
have the following meanings:
(1) "Banking association" means any Illinois corporation, whether
for-profit or not-for-profit, which functions as a professional or trade
association of dues-paying member commercial banks. For purposes of this
Article, "banking association" does not include any corporation which
directly or indirectly (a) accepts deposits which the depositor has a right
to withdraw on demand by check or negotiable order, or (b) engages in the
business of making loans, or both.
(2) "Trust sponsor" means a banking association which has created a risk
retention trust under this Article.
(3) "Pool retention fund" means a separate fund maintained for
payment of first dollar claims, up to a specific amount per claim
("specific retention") and up to an aggregate amount for a 12-month period
("aggregate retention").
(4) "Contingency reserve fund" means a separate fund maintained for
payment of claims in excess of the pool retention fund amount.
(5) "Coverage grant" means the document describing specific
coverages and terms of coverage which are provided by a risk retention trust
created under this Article.
(6) "Licensed service company" means an entity licensed under Section
464a of the Illinois Insurance Code to perform claims adjusting, loss
control and data processing.
(Source: P.A. 84-1431.)
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(215 ILCS 5/1103) (from Ch. 73, par. 1065.803)
Sec. 1103.
Name.
The corporate name of any trust organized under this
Article shall not be the same as or deceptively similar to the name of any
domestic insurance company or of any foreign or alien insurance company
authorized to transact business in this State.
(Source: P.A. 84-1431.)
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(215 ILCS 5/1104) (from Ch. 73, par. 1065.804)
Sec. 1104.
Principal Office and Place of Business.
The principal
office of any trust organized under this Article shall be located in this State.
(Source: P.A. 84-1431.)
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(215 ILCS 5/1105) (from Ch. 73, par. 1065.805)
Sec. 1105.
Risk Retention Trust.
(1) Any banking association which has
been in existence for a period of not less than 2 years may create a risk
retention trust for the pooling of risks in order to provide
casualty coverage authorized under Section 5 of the Illinois Banking Act,
as now or hereafter amended, for its member banks. Such trust
shall be administered by at least 3 trustees who are appointed by the trust
sponsor and who represent association member banks which have agreed in
writing to participate in the trust.
(2) The trustees shall appoint a qualified administrator who shall
administer the affairs of the risk retention trust.
(3) The trustees shall retain a licensed service company to perform
claims adjusting, loss control and data processing.
(4) The trust sponsor, the trustees and the trust administrator shall be
fiduciaries of the trust.
(5) Any trust created under this Article shall be consummated by a
written trust agreement and shall be subject to the laws of this State
governing the creation and operation of trusts, to the extent not
inconsistent with this Article.
(Source: P.A. 84-1431.)
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(215 ILCS 5/1106) (from Ch. 73, par. 1065.806)
Sec. 1106.
Trust - Participation.
(1) A banking association and its member banks
may participate in any trust created under this Article if it:
(a) Meets the underwriting standards for acceptance into the trust;
(b) Files a written application for coverage, agreeing to meet
all of the membership conditions of the trust;
(c) Is a member of the association sponsoring the trust;
(d) Agrees to meet the ongoing loss control provisions and risk pooling
arrangements set forth by the
trustees;
(e) Pays its premium contribution on a timely basis as required; and
(f) Pays its predetermined annual required contribution into the
contingency reserve fund.
(2) Any bank accepted for trust membership and participating in the
trust under this Article shall be liable for payment to the trust
of the amount of its annual premium contribution and its annual
predetermined contingency reserve fund contribution.
(Source: P.A. 84-1431.)
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(215 ILCS 5/1107) (from Ch. 73, par. 1065.807)
Sec. 1107.
Trust - Coverage Grants - Payment of Claims.
(1) No risk
retention trust created under this Article may issue coverage grants until
it has procured 100 bonafide applications for coverage with the first
premium contribution in cash for each kind of coverage which the trust
undertakes to write, and has a contingency reserve fund of at least
$2,500,000. Every trust subject to this Article must have, and at all times
maintain a pool retention fund at least equal to its unpaid liabilities and
an unimpaired minimum contingency reserve fund of $1,500,000.
The contingency reserve fund requirements shall be deemed satisfied if
the required contribution into such fund by any participating member bank
is obtained by a certificate of deposit redeemable by the trust in an
amount not greater than the amount insured by the Federal Deposit Insurance Corporation.
(2) Every coverage grant issued or delivered in this State by any trust
subject to this Article shall provide for the liability of trust
members to the extent that funds are needed to pay a member's share of the
depleted contingency reserve fund needed to maintain the reserves required
by this Section.
(3) The Director may after notice and hearing suspend or revoke the
license of any trust that
fails to maintain the minimum reserves required by this Section.
(4) All claims shall first be paid from the pool retention fund.
If that fund becomes depleted, any additional claims shall be paid from
the contingency reserve fund.
(5) On the basis of an annual independent certified audit,
the Director may require the risk retention trust to purchase insurance in amounts
required to provide additional protection to member banks in excess of the
contingency reserve fund.
(Source: P.A. 84-1431.)
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(215 ILCS 5/1108) (from Ch. 73, par. 1065.808)
Sec. 1108.
Trust; filing requirements; records.
(1) Any risk
retention trust
created under this Article shall file with the Director:
(a) A statement of intent to provide named coverages.
(b) The trust agreement between the trust sponsor and | ||
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(c) Signed risk pooling agreements from each trust | ||
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(d) By April 1 of each year a financial statement for | ||
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(e) The name of a bank or trust company with whom the | ||
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(f) Copies of coverage grants it will issue.
(2) The Director of Insurance shall charge, collect and give proper
acquittances for the payment of the following fees and charges:
(a) For filing trust instruments, amendments thereto | ||
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(b) For copies of papers or records per page, $2.
(c) For certificate to copy of paper, $10.
(d) For filing an application for the licensing of a | ||
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(3) The trust shall keep its books and records in accordance with the
provisions of Section 133 of this Code. The Director may examine such
books and records from time to time as provided in Sections 132
through 132.7 of this Code
and may charge the expense of such examination to the trust as provided in
subsection (3) of Section 408 of this Code.
(4) Trust funds established under this Section and all persons
interest therein or dealing therewith shall be subject to the provisions of
Sections 133, 144.1, 149, 401, 401.1, 402, 403, 403A, 412, and all of the
provisions of Articles VII, VIII, XII 1/2 and XIII of the Code, as amended.
Except as otherwise provided in this Section, trust funds established
under and which fully comply with this Section, shall not be subjected to
any other provision of the Code.
(5) The Director of Insurance may make reasonable rules and regulations
pertaining to the standards of coverage and administration of the trust
authorized by this Section. Such rules may include but need not be limited
to reasonable standards
for fiduciary duties of the trustees, standards for the investment of
funds, limitation of risks assumed, minimum size, capital, surplus,
reserves, and contingency reserves.
(Source: P.A. 93-32, eff. 7-1-03.)
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(215 ILCS 5/1109) (from Ch. 73, par. 1065.809)
Sec. 1109.
Illinois Insurance Guaranty Fund - Inapplicability.
The
provisions of Article XXXIV of this Code shall not apply to any risk
retention trust created under this Article.
(Source: P.A. 84-1431.)
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(215 ILCS 5/Art. XLII heading) ARTICLE XLII.
INSURANCE COST CONTAINMENT
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(215 ILCS 5/1200) (from Ch. 73, par. 1065.900)
Sec. 1200.
This Article shall be known and may be cited as the
"Illinois Insurance Cost Containment Act".
(Source: P.A. 84-1431.)
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(215 ILCS 5/1201) (from Ch. 73, par. 1065.901)
Sec. 1201.
Purpose of Article.
The purpose of this Article is to
promote the public welfare by studying the relationship of insurance
premium and related income as compared to insurance costs and expenses. The
General Assembly finds and declares that stabilizing the cost of insurance
is a vital concern to the people of this State.
It is the legislative intent, pursuant to this declared public concern, to
develop measures which will stabilize prices while continuing to provide
quality insurance products to all sectors of the citizenry. It is the
express intent of this Article to permit and encourage competition between
companies on a sound financial basis to the fullest extent possible and to
establish a mechanism to ensure the provision of adequate insurance at
reasonable rates to the citizens of this State.
The General Assembly finds that while the gathering of insurance
cost data has been attempted on a voluntary basis in the past, the lack
of a uniform system for the collection and analysis of data and the lack
of full participation by insurers has led to inadequate and unusable data.
In order to remedy this problem, the General Assembly find it necessary to
create a mandated uniform system in Illinois for the collection, analysis
and distribution of insurance cost data.
(Source: P.A. 84-1431.)
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(215 ILCS 5/1202) (from Ch. 73, par. 1065.902)
Sec. 1202. Duties. The Director shall:
(a) determine the relationship of insurance premiums | ||
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(b) study the insurance system in the State of | ||
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(c) respond to the requests by agencies of government | ||
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(d) make an interim report to the General Assembly no | ||
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(Source: P.A. 99-642, eff. 7-28-16; 100-23, eff. 7-6-17.)
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(215 ILCS 5/1203) (from Ch. 73, par. 1065.903)
Sec. 1203.
Powers and Additional Duties.
(a) The Director
may enter into any agreement with any corporation,
association or other entity he or she deems appropriate to undertake the process
described in this Article for the compilation and analysis of data
collected by the Department and may conduct or contract for studies on
insurance-related questions carried out in pursuance of the purposes of
this Article. The agreement may provide for the corporation, association or
entity to prepare and distribute or make available data to insurers,
government and the general public.
(b) The Director shall require, and the designated corporation,
association or entity shall prepare, semi-annual basic reports in the
aggregate on insurance cost trends in Illinois. The Director shall provide
these reports to the General Assembly, and upon request, to the public.
(c) Prior to the release or dissemination of these reports, the Director
or the designated corporation, association or entity, shall permit insurers
the opportunity to verify the accuracy of any information pertaining to the
insurer. The insurer may submit to the Director any corrections or errors
in the compilation of the data together with any supporting evidence and
documents the insurer may provide.
(Source: P.A. 84-1431.)
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(215 ILCS 5/1204) (from Ch. 73, par. 1065.904)
Sec. 1204. (A) The Director shall promulgate rules and regulations
which shall require each insurer licensed to write property or casualty
insurance in the State and each syndicate doing business on the Illinois
Insurance Exchange to record and report its loss and expense experience
and other data as may be necessary to assess the relationship of
insurance premiums and related income as compared to insurance costs and
expenses. The Director may designate one or more rate service
organizations or advisory organizations to gather and compile such
experience and data. The Director shall require each insurer licensed to
write property or casualty insurance in this State and each syndicate doing
business on the Illinois Insurance Exchange to submit a report, on
a form furnished by the Director, showing its direct writings in this
State and companywide.
(B) Such report required by subsection (A) of this Section may include,
but not be limited to, the following specific types of insurance written by
such insurer:
(1) Political subdivision liability insurance | ||
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(a) municipalities;
(b) school districts;
(c) other political subdivisions;
(2) Public official liability insurance;
(3) Dram shop liability insurance;
(4) Day care center liability insurance;
(5) Labor, fraternal or religious organizations | ||
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(6) Errors and omissions liability insurance;
(7) Officers and directors liability insurance | ||
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(a) non-profit entities;
(b) for-profit entities;
(8) Products liability insurance;
(9) Medical malpractice insurance;
(10) Attorney malpractice insurance;
(11) Architects and engineers malpractice insurance; | ||
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(12) Motor vehicle insurance reported separately for | ||
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(a) motor vehicle physical damage insurance;
(b) motor vehicle liability insurance.
(C) Such report may include, but need not be limited to the following data,
both
specific to this State and companywide, in the aggregate or by type of
insurance for the previous year on a calendar year basis:
(1) Direct premiums written;
(2) Direct premiums earned;
(3) Number of policies;
(4) Net investment income, using appropriate | ||
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(5) Losses paid;
(6) Losses incurred;
(7) Loss reserves:
(a) Losses unpaid on reported claims;
(b) Losses unpaid on incurred but not reported | ||
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(8) Number of claims:
(a) Paid claims;
(b) Arising claims;
(9) Loss adjustment expenses:
(a) Allocated loss adjustment expenses;
(b) Unallocated loss adjustment expenses;
(10) Net underwriting gain or loss;
(11) Net operation gain or loss, including net | ||
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(12) Any other information requested by the Director.
(C-3) Additional information by an advisory organization as defined in Section 463 of this Code. (1) An advisory organization as defined in Section | ||
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(a) paid and incurred losses for each of the past | ||
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(b) medical payments and medical charges, if | ||
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(c) the following indemnity payment information: | ||
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(d) injuries by frequency and severity; (e) by class of employee. (2) The report filed with the Secretary of Financial | ||
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(3) Reports required under this subsection (C-3) | ||
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(D) In addition to the information which may be requested under
subsection (C), the Director may also request on a companywide, aggregate
basis, Federal Income Tax recoverable, net realized capital gain or loss,
net unrealized capital gain or loss, and all other expenses not requested
in subsection (C) above.
(E) Violations - Suspensions - Revocations.
(1) Any company or person subject to this Article, | ||
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(2) No forfeiture liability under paragraph (1) of | ||
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(3) No forfeiture liability under paragraph (1) of | ||
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(4) All administrative hearings conducted pursuant to | ||
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(5) The civil penalty forfeitures provided for in | ||
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(6) In any case where the Director issues a notice of | ||
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(7) When any person or company has a license or | ||
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(8) When any person or company has a license or | ||
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(9) No suspension or revocation under this Section | ||
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(Source: P.A. 103-426, eff. 8-4-23.) |
(215 ILCS 5/1205) (from Ch. 73, par. 1065.905)
Sec. 1205.
Employees and Professional Consultants.
The Department may
employ and fix the compensation of such employees, and may enter into
contractual agreements with technical and professional consultants as it
deems necessary to expedite the purposes of this Article.
(Source: P.A. 84-1431.)
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(215 ILCS 5/1206) (from Ch. 73, par. 1065.906)
Sec. 1206. Expenses. The companies required to file reports under this
Article shall pay a reasonable fee established by the Director sufficient
to cover the total cost of the Department incident to or associated
with the administration and enforcement of this Article, including the
collection, analysis and distribution of the insurance cost data, the
conversion of hard copy reports to tape, and the compilation and
analysis of basic reports.
The Director may establish a schedule of fees for this purpose.
Expenses for additional reports shall be billed
to those requesting the reports. Any such fees collected under this Section
shall be paid to the Director of Insurance and deposited into the Technology Management
Revolving Fund and credited to the account of the
Department of Insurance.
(Source: P.A. 100-23, eff. 7-6-17.)
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(215 ILCS 5/Art. XLIII heading) ARTICLE XLIII.
Mortgage Insurance Consolidation
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(215 ILCS 5/1300) (from Ch. 73, par. 1065.1000)
Sec. 1300.
Title.
This Article may be cited as the Mortgage Insurance
Consolidation Law.
(Source: P.A. 86-378.)
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(215 ILCS 5/1301) (from Ch. 73, par. 1065.1001)
Sec. 1301.
Purpose.
The purpose of this Article is to protect the
interests of Illinois insureds by:
(1) establishing minimum standards and procedures for the effectuation
of mortgage insurance consolidations;
(2) establishing disclosure requirements specific to mortgage insurance
consolidations and requiring insurers to make such disclosures on a timely
basis;
(3) clarifying the applicability of the unfair rate discrimination
provisions of this Code to consolidations involved in loan transfers so as
to prevent premium increases for consumers resulting from mandatory premium
recalculation;
(4) requiring that group mortgage life insurance certificates
contain minimum standard provisions including conversion rights; and
(5) preventing the arbitrary termination of mortgage insurance coverage
in connection with consolidations.
(Source: P.A. 86-378.)
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(215 ILCS 5/1302) (from Ch. 73, par. 1065.1002)
Sec. 1302.
Scope.
(a) This Article applies:
(1) To all insurance companies authorized to transact the business of
insurance in this State of the kind or kinds of business described in Class
1(a) and (b) and Class 2(a) of Section 4 of this Code except for the kind
or kinds of business described in Article IX 1/2 of this Code.
(2) To all mortgage insurance coverage offered, issued, or issued
for delivery in this State, by mail or otherwise,
in connection with consolidations regardless of whether the financial
institution involved is located in or outside Illinois.
(3) To all consolidations whether the old coverage is provided under an
individual or group policy.
(b) Except as otherwise specifically provided, it is not intended that
this Article conflict with or supersede any other provisions of this Code,
or any rules promulgated by the Department of Insurance implementing any
such provisions.
(Source: P.A. 86-378.)
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(215 ILCS 5/1303) (from Ch. 73, par. 1065.1003)
Sec. 1303. Definitions. The following definitions shall apply to
this Article:
"Consolidation" means any transaction in which a financial institution
makes its premium collection services available to its mortgage debtors in
connection with a particular insurer's ("new insurer") offer of mortgage
insurance, which offer is made to debtors who, immediately prior to the
offer, had mortgage insurance with another insurer ("old insurer") and were
paying premiums for that insurance with their monthly mortgage payments.
"Financial institution" or "servicer" means any entity or organization
that services mortgage loans by collecting and accounting for monthly mortgage
insurance premiums as part of the debtor's monthly mortgage payment for one
or more insurers.
"Insured" means the individual loan customer or certificate holder.
"Loan transfer" means a transaction in which the servicing of a block of
mortgage loans is transferred from one servicer to another servicer.
This shall include, but not be limited to, mergers or acquisitions.
"Loan transfer consolidation" means a consolidation in which coverage is
limited to insureds whose mortgage loans have been sold or transferred in
the secondary market from one servicer to another.
"Group-to-group consolidation" means a consolidation in which coverages
under both the old plan and the new plan is provided under group policies.
"Mortgage insurance" means mortgage life insurance (term or ordinary),
mortgage disability insurance, mortgage accidental death insurance, or any
combination thereof, including both individual and group policies, and
any certificates issued thereunder, on credit transactions of more than 10
years duration and written in connection with a credit transaction that is
secured by a first mortgage or deed of trust and made to finance the
purchase of real property or the construction of a dwelling thereon or to
refinance a prior credit transaction made for such a purpose.
"New coverage" or "new plan" means the mortgage insurance coverage or
plan for which a financial institution collects premium beginning on the
effective date of a consolidation.
"New insurer" means any insurer who offers mortgage insurance coverage to
borrowers of the financial institution who can no longer remit monthly
premiums for the old insurer along with their monthly mortgage payment.
"Old coverage" or "old plan" means the mortgage insurance coverage or
plan for which a financial institution collects premiums immediately prior
to a consolidation.
"Old insurer" means any insurer for whom a financial institution will no
longer make its premium collection facilities available for all or some
of the insurer's policyholders or certificate holders.
(Source: P.A. 100-201, eff. 8-18-17.)
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(215 ILCS 5/1304) (from Ch. 73, par. 1065.1004)
Sec. 1304.
General requirements.
Except as provided in Section 1305, no
insurer shall participate in any consolidation unless, in addition to all
other requirements provided by law, it complies with the following:
(1) The new insurer must calculate premiums for the new coverage on the
basis of its own rates, the prospective insured's then attained age, if
applicable, and the amount of insurance offered.
(2) Notice of the new premium shall be mailed, together with the offer
of new coverage, to the prospective insured at least 30 days prior to the
effective date of the new coverage.
(3) The new coverage shall be put into effect only after the new insurer
receives an application which has been signed by the prospective insured.
(4) Whenever the existing coverage is provided under individual
policies, the new insurer shall comply with the requirements of Part 917 of
Title 50 of the Illinois Administrative Code, promulgated by the Department of Insurance.
(5) All riders which are a part of the existing insurance shall be
offered without proof of insurability to all policyholders (or certificate
holders) obtained by consolidation, including, but not limited to, waiver
of premium and accidental death insurance.
(6) Prospective insureds shall be given the option to name the
beneficiary of their choice by the new insurer, if the previous beneficiary
is other than a financial institution.
(7) Regulations including, but not limited to, those promulgated by the
Department of Insurance implementing Sections 143, 149, 151, 236, 237, 421,
424 and 507.1 of this Code concerning misrepresentations to any
policyholder for the purpose of inducing or tending to induce such
policyholder to lapse, forfeit or surrender his insurance, unfair or
deceptive practices, complaints, solicitation and replacement of life
insurance, compensation, and rebating shall be complied with.
(Source: P.A. 86-378.)
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(215 ILCS 5/1305) (from Ch. 73, par. 1065.1005)
Sec. 1305.
Loan transfer consolidations.
In a consolidation conducted
as a result of a loan transfer, the offer of new coverage may be based on
the same premium the insured was paying for his old coverage only if, in
addition to all other requirements provided by law, the following conditions
are met:
(1) Both the old and the new coverage must be provided under a group policy.
(2) An offer of new coverage must be made as soon as reasonably possible
after the loan transfer. If an offer of new coverage is not made within 30
days after the loan transfer, or at least 30 days prior to the proposed
effective date of the new coverage, the insurer shall notify the debtor,
in writing, that he has the right to an unconditional refund of all
premiums paid for the new coverage as long as he exercises that right, in
writing, within 30 days from the date of the notification.
(3) The new coverage offered to the prospective insured must be the same
as the old coverage, including all supplemental benefits provided under the
old plan. If the coverage offered is not the same, then all the
requirements of Section 1304 shall apply.
(4) In addition to the requirements of Section 1307, the certificate
shall contain the following notice, printed in bold type on page one of
the certificate:
IMPORTANT NOTICE
This certificate is issued to you in connection with a mortgage insurance
consolidation. It is the intention of the Company to provide you group
coverage which is equal to or better than the group coverage you had
before. To the extent the benefits provided or the provisions of your
prior certificate of insurance are more liberal than those under this
certificate, the provisions of your prior certificate will control.
Therefore, you should keep your old certificate along with this certificate
for comparison purposes.
(5) The information contained in the notice prescribed by paragraph (4)
shall also be disclosed in writing (separate from the certificate of
insurance) to each prospective insured at the time the offer of new
coverage is made.
(6) Only the group coverage written in connection with the loans which are
the subject of the loan transfer may be consolidated pursuant to this Section.
(7) Payment of the required premium shall constitute acceptance of the
new coverage if:
(A) such acceptance mechanism is clearly explained to the debtor; and
(B) All other disclosure requirements of this Article are met.
(8) Regulations including, but not limited to, those promulgated by the
Department of Insurance implementing Sections 143, 149, 151, 236, 237, 421,
424 and 507.1 of this Code concerning misrepresentations to any
policyholder for the purpose of inducing or tending to induce such
policyholder to lapse, forfeit or surrender his insurance, unfair or
deceptive practices, complaints, solicitation and replacement of life
insurance, compensation and rebating shall be complied
with.
(9) If an insurer charges debtor insureds the same premium for the new
coverage that they were paying for the old coverage, and, as a result,
debtor insureds of a financial institution are charged different premium
rates for the same coverage, such rate differences shall not constitute
unfair discrimination under Sections 236 and 364 of this Code provided all
the other applicable requirements of this Code are met.
(Source: P.A. 86-378.)
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(215 ILCS 5/1306) (from Ch. 73, par. 1065.1006)
Sec. 1306.
Out-of-state consolidations.
If Illinois residents whose
loans are serviced outside Illinois are involved in a group-to-group
consolidation by an out-of-state servicer, Section 1305 may be employed if
the Illinois residents are an incidental part of the consolidation.
Otherwise the provisions of this Article shall apply to any consolidation
insofar as it involves Illinois residents. For purposes of this provision
"incidental" shall mean that the Illinois residents comprise less than 25%
or 100 lives of the total lives involved in the consolidation, whichever
is less.
(Source: P.A. 86-378.)
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(215 ILCS 5/1307) (from Ch. 73, par. 1065.1007)
Sec. 1307.
Group certificates.
No insurer may participate in a
group-to-group consolidation or a loan transfer consolidation unless in
addition to all other requirements provided by law, it complies with
the following:
(1) A group certificate must be delivered to each debtor insured under
the new plan, which certificate shall include the following information:
(A) the name or names of the single or joint insureds;
(B) identification of the insured mortgage;
(C) the amount of insurance under the new plan;
(D) the premium for the new coverage;
(E) the effective date of the new coverage;
(F) the beneficiary for the new coverage.
(2) The new coverage offered to the prospective insured must be the same
coverage as the old coverage, including all supplemental benefits, or the
same type of coverage as the old coverage, whichever is otherwise required
by this Article.
(3) A group certificate evidencing the new coverage may not include a
contestability clause or, in the case of mortgage life insurance, a
provision excluding suicide.
(Source: P.A. 86-378.)
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(215 ILCS 5/1308) (from Ch. 73, par. 1065.1008)
Sec. 1308.
Conversion privilege.
Notwithstanding the provisions of
Section 231.1(H) of this Code, all group mortgage life insurance policies
and any certificates issued thereunder shall include a conversion privilege
permitting a debtor insured to convert, without evidence of insurability,
to an individual policy of decreasing term insurance within 30 days of the
date the debtor insured's group coverage is terminated for any reason other
than the nonpayment of premiums. The initial amount of coverage under the
individual policy shall be an amount equal to the amount of coverage
terminated under the group policy and shall decrease over a term that
corresponds with the scheduled term of the insured debtor's mortgage loan.
The premium for the individual policy shall be the same
premium the debtor insured was paying under the group policy.
(Source: P.A. 86-378.)
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(215 ILCS 5/1309) (from Ch. 73, par. 1065.1009)
Sec. 1309.
Required disclosures.
(a) In conjunction with the offer of new
coverage involving any consolidation, the new insurer shall disclose in
writing to each insured under the old plan or plans at least 30 days prior
to the effective date of the new coverage the following:
(1) Identification of the insured mortgage.
(2) The name of the insured or insureds.
(3) Name of the owner of the individual policy or master policy (if
group insurance) under both the new and old plans, if known.
(4) The premium for the new and old coverage.
(5) Amount of coverage for both the new and old plans. If the amount of
coverage for the old plan is not known, a statement that the amount may be
scheduled and it may be less than or greater than the amount of the loan
and the insured should check the policy schedule for an exact amount of
coverage.
(6) Effective dates of the old coverage if the contestable or suicide
period have not expired as of the effective date of the new coverage. If
the new insurer waives the contestable and suicide period, then the
effective date of the old coverage does not need to be disclosed.
(7) Name of the beneficiary under the old plan, if known.
(8) A statement as to whether the old plan was an individual or group
plan and a statement as to whether the new plan is an individual or a
group plan.
(9) A statement that neither the old plan or new plan is required.
(10) A statement that the prospective insured may have the right to
continue or convert his old coverage by paying premiums directly to the old
insurer, and what the prospective insured must do to keep the old coverage
in effect including, but not limited to, the name and address of the
company involved, the policy number or other information which reasonably
identifies the insured's plan of coverage, the amount of the premium and
where it is to be sent.
(11) A statement that the mortgage payment will be reduced by the amount
of the old plan premium if the new plan is not accepted.
(12) Name and home office address of the new and old insurer, as well as
the address and phone number for the customer services office for Illinois
insureds.
(13) The effective date of the new coverage.
(14) Whether premium rates under the new plan are guaranteed.
(15) Material differences, if any between the new plan and the old plan.
(b) Any insurer which fails to provide the written notice required by
subsection (a) at least 30 days prior to the effective date of the new
coverage shall notify the debtor, in writing, that he has the right to an
unconditional refund of all premiums paid for the new coverage as long as
he exercises that right, in writing, within 30 days from that notification.
(Source: P.A. 86-378.)
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(215 ILCS 5/1310) (from Ch. 73, par. 1065.1010)
Sec. 1310.
Compensation.
No sponsorship fees, or other special fees
designed to induce their participation, shall be paid to a financial
institution in connection with any mortgage consolidation, and any
compensation paid to either the financial institution or any of its
representatives shall be only in accordance with Section 151 and all other
applicable provisions of this Code.
(Source: P.A. 86-378.)
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(215 ILCS 5/1311) (from Ch. 73, par. 1065.1011)
Sec. 1311.
No group policy or group certificate of mortgage insurance
used in connection with a consolidation, nor any application, endorsement
or rider which becomes a part of any such group policy or certificate, may
be issued or delivered in this State until a copy of the form has been
filed with and approved by the Director.
(Source: P.A. 86-378.)
|
(215 ILCS 5/1312) (from Ch. 73, par. 1065.1012)
Sec. 1312.
The Director is authorized to adopt such rules governing
mortgage insurance consolidations as he deems necessary to implement or
enforce this Article.
(Source: P.A. 86-378.)
|
(215 ILCS 5/Art. XLIV heading) Article XLIV.
FINANCIAL INSTITUTIONS
INSURANCE SALES LAW
|
(215 ILCS 5/1400)
Sec. 1400.
Title.
This Article may be cited as the Financial Institutions
Insurance Sales Law.
(Source: P.A. 90-41, eff. 10-1-97.)
|
(215 ILCS 5/1401)
Sec. 1401.
Purpose.
The purpose of this Article is to increase the
availability of insurance products to the citizens of this State by expanding
those businesses authorized to sell insurance products to include financial
institutions, and to protect the interests of the citizens of this State by
regulating their authority to do so. This Article does not apply to activities
or services conducted in this State by or for a financial institution that do
not require
licensure as an insurance producer, temporary
insurance producer, limited insurance representative, or registered firm.
(Source: P.A. 90-41, eff. 10-1-97.)
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(215 ILCS 5/1402)
Sec. 1402.
Definitions.
For the purposes of this Article:
"Financial institution" means:
(1) a State bank, a national bank, or an out-of-state | ||
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(2) a foreign banking corporation, as that term is | ||
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(3) a corporate fiduciary, as that term is defined in | ||
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(4) a savings bank organized under the Savings Bank | ||
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(5) an association or federal association, as those | ||
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(6) an out-of-state savings and loan association | ||
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(7) a credit union as defined in the Illinois Credit | ||
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To the extent that any entity other than a financial institution conducts
insurance activities in this State on behalf of or on the premises of the
financial
institution, such entity shall be subject to this Article for the purposes of
those activities.
"Insurance" means all lines of insurance defined and regulated as insurance
under this Code, but for the purposes of this Article, "insurance" shall not
include the following lines of insurance, provided that this paragraph shall
not be deemed to preclude or otherwise limit regulation of the following lines
of insurance pursuant to and to the extent otherwise provided by any other
insurance law of this State:
(1) credit life, credit accident and health, credit | ||
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(2) extended service contracts and warranty | ||
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(3) insurance obtained by the debtor to provide | ||
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(4) insurance placed by a financial institution on | ||
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(5) title insurance regulated by the Title Insurance | ||
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(6) private mortgage insurance and financial | ||
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(Source: P.A. 90-41, eff. 10-1-97.)
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(215 ILCS 5/1403)
Sec. 1403. Licensure requirements for financial institutions.
(a) A financial institution transacting insurance business in this State
shall register with the Director pursuant to the Illinois Insurance Code and
shall be subject to the laws, rules, and penalties of the Illinois Insurance
Code.
(b) The solicitation and sale of insurance by a financial institution
shall be conducted only by individuals who have been issued and maintain an
insurance producer's license pursuant to the Illinois Insurance Code and shall
be subject to the laws, rules, and penalties of the Illinois Insurance Code.
(c) For the purposes of this Section, a "financial institution" means the
subsidiary of a financial institution when the financial institution is
transacting insurance business in this State only through the subsidiary. For
the purposes of Section 499.1 of the Illinois Insurance Code, a financial
institution shall be deemed to be a corporation.
(d) Nothing in Section 500-100 of this Code shall be construed to require a limited lines producer license or any other form or class of producer's license for financial institutions, or their employees, if the financial institution has purchased or sponsored a group credit life, credit accident and health, credit casualty, credit property, or other group credit insurance policy or program under which the financial institution enrolls or performs other administrative services, or both, to enable individuals to purchase insurance coverage under the group credit insurance policy sold by a licensed producer in compliance with Section 155.56. A financial institution that performs enrollment or other administrative services, or both, with respect to its group credit insurance policies or programs shall be deemed to be in compliance with paragraph (2) of subsection (b) of Section 500-20 of this Code. (Source: P.A. 100-349, eff. 8-25-17.)
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(215 ILCS 5/1404)
Sec. 1404.
Subsidiaries or divisions.
A financial institution shall not
qualify for registration as a registered firm under Section 499.1 of
this Code unless: (1) it establishes a separate subsidiary that
acts as the registered firm or (2) it is otherwise permitted by law to sell
insurance directly through the financial institution, and it establishes a
separate division within the financial institution to conduct the business of
the registered firm. The subsidiary or division acting as a registered firm
shall maintain records for insurance transactions that are
separate and distinct from the records of the financial institution.
(Source: P.A. 90-41, eff. 10-1-97.)
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(215 ILCS 5/1405)
Sec. 1405.
Extensions of credit.
A financial institution shall not delay
or impede the completion of a loan transaction or other transactions involving
the extension of credit for the purpose of influencing a customer's selection
of any insurance product.
(Source: P.A. 90-41, eff. 10-1-97.)
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(215 ILCS 5/1406)
Sec. 1406.
Insurance and financial institution products.
(a) No financial institution may offer banking products or services, or fix
or vary the consideration of the offer, on a condition or requirement that the
customer obtain insurance from the financial institution or any affiliate of
the financial institution.
(b) A financial institution that offers banking products or services in
conformity with the provisions of Section 106 of the Bank Holding Company Act
Amendments of 1970 (12 U.S.C. 1972) shall be deemed to be in compliance with
the provisions of subsection (a) of this Section.
(c) No financial institution shall require that a customer or prospective
customer of the financial institution purchase an insurance product from any
particular registered firm or insurance producer as a condition for the lending
of money or extension of credit, the establishment or maintenance of a
checking, savings, or other deposit account, or the establishment or
maintenance
of a trust account.
(Source: P.A. 90-41, eff. 10-1-97.)
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(215 ILCS 5/1407)
Sec. 1407.
Rebating and discounting.
(a) No financial institution may offer a rebate on
an insurance product in violation of Section 151 of this
Code.
(b) No financial institution may offer a discount on a loan or extension of
credit for the purpose of inducing the customer to purchase insurance required
in connection with the loan or extension of credit.
(Source: P.A. 90-41, eff. 10-1-97.)
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(215 ILCS 5/1408)
Sec. 1408.
Discrimination prohibited.
No financial institution may:
(1) require as a condition of providing any product or service or renewal of
any contract for providing a product or service to any customer, that the
customer acquire, finance, or negotiate any policy or contract of insurance
through a particular insurer, insurance producer, or registered firm;
(2) in connection with a loan or extension of credit that requires a borrower
to obtain insurance, reject an insurance policy solely because the policy has
been issued or underwritten by any person who is not associated with the
financial institution;
(3) impose any discriminatory requirement on any insurance producer who is
not associated with the financial institution that is not imposed on any
insurance producer who is associated with the financial institution; or
(4) if the financial institution is a registered firm, require any debtor,
insurer, or insurance producer to pay a separate charge in connection with the
handling of insurance
that is required under a contract, unless: (i) the financial institution is the
registered firm
providing the insurance, (ii) if the financial institution is not the
registered
firm providing the insurance, the charge would be uniformly applied if the
financial institution was the registered firm providing the insurance, or (iii)
the charge is otherwise permitted by this Code or other
applicable State or federal law.
(Source: P.A. 90-41, eff. 10-1-97.)
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(215 ILCS 5/1409)
Sec. 1409.
Disclosure.
A financial institution shall clearly and
conspicuously disclose in any written advertisement or promotional or
informational material regarding an insurance product that the insurance
offered, recommended, sponsored, or sold:
(1) is not a deposit;
(2) is not insured by the Federal Deposit Insurance Corporation, or in the
case of a credit union, by the National Credit Union Share Insurance Fund;
(3) is not guaranteed by the financial institution or an affiliated insured
depository institution; and
(4) where appropriate, involves investment risk, including potential loss of
principal.
(Source: P.A. 90-41, eff. 10-1-97.)
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(215 ILCS 5/1410)
Sec. 1410.
Misleading advertising.
No financial institution or registered
firm may employ any advertisement that would mislead or otherwise cause a
reasonable person to believe mistakenly that the State of Illinois or the
federal government is responsible for the insurance sales activities of the
financial institution or stands behind the financial institution's credit, or
that the financial institution, the State of Illinois, or the federal
government guarantees any returns on insurance products or is a source of
payment of any insurance obligation of or sold by the financial institution.
(Source: P.A. 90-41, eff. 10-1-97.)
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(215 ILCS 5/1411)
Sec. 1411.
Commissions and compensation.
No financial institution shall
pay, directly or indirectly, any commission, service fee, brokerage, or other
valuable consideration to any person for services as an insurance producer,
temporary insurance producer, or limited insurance representative, or for such
services by the person's members, officers, directors or employees, unless the
person, and any member, officer, director, or employee performing the service,
held a valid license regarding the class of insurance as to which the service
was rendered, or unless the person was a properly registered firm at the time
the service was performed. No person, other than a person properly licensed
or registered in accordance with Article XXXI of this Code at
the time the person performs services as an insurance producer, temporary
insurance producer, or limited insurance representative, shall accept any
commission, service fee, brokerage, or other valuable consideration for such
services. This Section shall not prevent payment or receipt of:
(1) renewal or other deferred commissions to or by any person entitled
thereto under this Section;
(2) fees to or by a financial institution or any other person for services
that do not require licensure as an insurance producer, temporary insurance
producer, limited insurance representative,
or registered firm; or
(3) consideration paid to a financial institution by a registered firm,
insurance producer, insurance company, or any other person pursuant to any
lease
agreement.
(Source: P.A. 90-41, eff. 10-1-97.)
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(215 ILCS 5/1412)
Sec. 1412.
Solicitations to loan applicants.
(a) A financial institution that
requires a customer to obtain insurance in connection with a loan or extension
of credit and that offers that insurance either directly or through an
affiliate shall clearly disclose to the customer in writing at the time of
written application or at closing if no written application is obtained
in a form substantially similar to the following:
"You may obtain insurance required in connection with | ||
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(b) This Section shall not apply when a financial institution is contacting
a customer in the course of direct or mass marketing to a group of persons in a
manner that bears no relation to the customer's loan application or credit
decision.
(Source: P.A. 90-41, eff. 10-1-97.)
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(215 ILCS 5/1413)
Sec. 1413.
Separate physical location and sales force when insurance is
solicited or sold in connection with a loan.
(a) An employee of a financial institution may not solicit or sell
insurance at the same desk where a loan transaction is conducted when the
insurance is solicited or sold in connection with the same loan.
(b) A loan officer of a financial institution
who is involved in the application, solicitation, or closing of a loan
transaction may not solicit or sell insurance in connection with the same loan,
but such loan officer may refer the loan customer to another insurance producer
who is not involved in the application, solicitation, or closing of the same
loan transaction.
(c) Subsections (a) and (b) of this Section shall not apply to a financial
institution, other than a credit union, or a branch location of a financial
institution, other than a credit union, that has less than
$100,000,000 in deposits.
(d) Subsections (a) and (b) of this Section shall not apply to a credit
union or a branch location of a credit union that has less than $30,000,000 in
deposits.
(Source: P.A. 90-41, eff. 10-1-97.)
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(215 ILCS 5/1414)
Sec. 1414.
Signage.
Signs concerning the availability of insurance
products offered by the financial institution or by any registered firm shall
be
clearly displayed in the same area where applications for loans or other
extensions of
credit are being taken or closed and shall include the disclosure set forth in
subsection (a) of Section 1412.
(Source: P.A. 90-41, eff. 10-1-97.)
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(215 ILCS 5/1415)
Sec. 1415.
Confidential customer information.
(a) A financial institution that is a registered firm may not release a
customer's insurance information to any person other than an officer, director,
employee, agent, or affiliate of the financial institution without the written
consent of the customer. For the purposes of this Section, "insurance
information" means information concerning the premiums, terms and conditions
of
insurance coverage, insurance claims, and the insurance history of a customer
contained in the financial institution's records.
(b) Subsection (a) of this Section shall not apply to:
(1) names, addresses, and telephone numbers derived | ||
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(2) the release of insurance information as otherwise | ||
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(c) A financial institution shall not require premium information when
requiring evidence of insurance in connection with a loan or extension of
credit and shall not use such premium information for the purpose of soliciting
insurance without the written consent of the customer.
(d) A financial institution may not use health information obtained from a
customer's insurance records for any purpose other than for its activities as a
registered firm pursuant to this Code.
(Source: P.A. 90-41, eff. 10-1-97.)
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(215 ILCS 5/1416)
Sec. 1416.
Prohibited defenses.
A violation of any provision of this Article shall not be used as a
defense by any person in any action by a financial institution to recover the
amount owing on any loan or extension of credit.
(Source: P.A. 90-41, eff. 10-1-97.)
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(215 ILCS 5/Art. XLV heading)
ARTICLE XLV. PUBLIC ADJUSTERS
(Source: P.A. 96-1332, eff. 1-1-11.) |
(215 ILCS 5/1501)
Sec. 1501. Short title. This Article may be cited as the Public Adjusters Law.
(Source: P.A. 96-1332, eff. 1-1-11.) |
(215 ILCS 5/1505)
Sec. 1505. Purpose and scope. This Article governs the qualifications and procedures for the licensing of public adjusters. It specifies the duties of and restrictions on public adjusters, which include limiting their licensure to assisting insureds in first party claims.
(Source: P.A. 96-1332, eff. 1-1-11.) |
(215 ILCS 5/1510) Sec. 1510. Definitions. In this Article: "Adjusting a claim for loss or damage covered by an insurance contract" means negotiating values, damages, or depreciation or applying the loss circumstances to insurance policy provisions. "Adjusting insurance claims" means representing an insured with an insurer for compensation and, while representing that insured, either negotiating values, damages, or depreciation or applying the loss circumstances to insurance policy provisions. "Business entity" means a corporation, association, partnership, limited liability company, limited liability partnership, or other legal entity. "Department" means the Department of Insurance. "Director" means the Director of Insurance. "Fingerprints" means an impression of the lines on the finger taken for the purpose of identification. The impression may be electronic or in ink converted to electronic format. "Home state" means the District of Columbia and any state or territory of the United States where the public adjuster's principal place of residence or principal place of business is located. If neither the state in which the public adjuster maintains the principal place of residence nor the state in which the public adjuster maintains the principal place of business has a substantially similar law governing public adjusters, the public adjuster may declare another state in which it becomes licensed and acts as a public adjuster to be the home state. "Individual" means a natural person. "Person" means an individual or a business entity. "Public adjuster" means any person who, for compensation or any other thing of value on behalf of the insured: (i) acts, aids, or represents the insured solely in | ||
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(ii) advertises for employment as a public adjuster | ||
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(iii) directly or indirectly solicits business, | ||
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"Uniform individual application" means the current version of the National Association of Directors (NAIC) Uniform Individual Application for resident and nonresident individuals. "Uniform business entity application" means the current version of the National Association of Insurance Commissioners (NAIC) Uniform Business Entity Application for resident and nonresident business entities.
"Webinar" means an online educational presentation during which a live and participating instructor and participating viewers, whose attendance is periodically verified throughout the presentation, actively engage in discussion and in the submission and answering of questions. (Source: P.A. 102-135, eff. 7-23-21; 103-216, eff. 1-1-24 .) |
(215 ILCS 5/1515) Sec. 1515. License required. (a) A person shall not act, advertise, solicit, or hold himself out as a public adjuster or to be in the business of adjusting insurance claims in this State, nor attempt to obtain a contract for public adjusting services, unless the person is licensed as a public adjuster in accordance with this Article. (b) A person licensed as a public adjuster shall not misrepresent to a claimant that he or she is an adjuster representing an insurer in any capacity, including acting as an employee of the insurer or acting as an independent adjuster unless so appointed by an insurer in writing to act on the insurer's behalf for that specific claim or purpose. A licensed public adjuster is prohibited from charging that specific claimant a fee when appointed by the insurer and the appointment is accepted by the public adjuster. (c) A business entity acting as a public adjuster is required to obtain a public adjuster license. Application shall be made using the Uniform Business Entity Application. Before approving the application, the Director shall find that: (1) the business entity has paid the required fees | ||
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(2) all officers, shareholders, and persons with | ||
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(d) Notwithstanding subsections (a) through (c) of this Section, a license as a public adjuster shall not be required of the following: (1) an attorney admitted to practice in this State, | ||
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(2) a person who negotiates or settles claims arising | ||
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(3) a person employed only for the purpose of | ||
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(4) a licensed health care provider, or employee of a | ||
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(5) a person who settles subrogation claims between | ||
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(e) All contracts entered into that are in violation of this Section are void and invalid.
(Source: P.A. 103-216, eff. 1-1-24 .) |
(215 ILCS 5/1520)
Sec. 1520. Application for license. (a) A person applying for a public adjuster license shall make application to the Director on the appropriate uniform application or other application prescribed by the Director. (b) The applicant shall declare under penalty of perjury and 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 applicant's knowledge and belief. (c) In order to make a determination of license eligibility, the Director is authorized to require all applicants for licensing, including renewal applicants, to undergo a fingerprint-based criminal history record check for the first year following the effective date of this amendatory Act of the 97th General Assembly. The fingerprints and the fee required to perform the criminal history record checks shall be submitted to the Illinois State Police and the Federal Bureau of Investigation (FBI) to conduct a State and national criminal history record check. The Illinois State Police and the Federal Bureau of Investigation shall furnish to the Department of Insurance all records of convictions, unless or until expunged, pursuant to the fingerprint-based criminal history records check. The Illinois State Police shall charge a fee for conducting such checks, which fee shall be deposited into the State Police Services Fund and shall not exceed the cost of the inquiry. The applicant shall be required to pay all fees associated with conducting the criminal history record check. (d) The Director may adopt rules to establish procedures necessary to carry out the requirements of subsection (c) of this Section. (e) The Director is authorized to submit electronic fingerprint records and necessary identifying information to the NAIC, its affiliates, or subsidiaries for permanent retention in a centralized repository. The purpose of such a centralized repository is to provide Directors with access to fingerprint records in order to perform criminal history record checks. (f) Until such time as the Director can obtain and receive national criminal history records, the applicant shall obtain a copy of his or her fingerprints and complete criminal history record from the FBI Criminal Justice Information Services Division and the Illinois State Police and provide such information to the Department of Insurance.
(Source: P.A. 102-538, eff. 8-20-21.) |
(215 ILCS 5/1525) Sec. 1525. Resident license. (a) Before issuing a public adjuster license to an applicant under this Section, the Director shall find that the applicant: (1) is eligible to designate this State as his or her | ||
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(2) is sufficiently rehabilitated in cases in which | ||
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(3) is trustworthy, reliable, competent, and of good | ||
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(4) is financially responsible to exercise the | ||
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(5) maintains an office in the home state of | ||
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(b) In addition to satisfying the requirements of subsection (a) of this Section, an individual shall: (1) be at least 18 years of age; (2) have successfully passed the public adjuster | ||
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(3) designate a licensed individual public adjuster | ||
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(4) designate only licensed individual public | ||
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(c) The Director may require any documents reasonably necessary to verify the information contained in the application.
(Source: P.A. 100-286, eff. 1-1-18 .) |
(215 ILCS 5/1530) Sec. 1530. Examination. (a) An individual applying for a public adjuster license under this Article must pass a written examination unless he or she is exempt pursuant to Section 1535 of this Article. The examination shall test the knowledge of the individual concerning the duties and responsibilities of a public adjuster and the insurance laws and regulations of this State. Examinations required by this Section shall be developed and conducted under rules and regulations 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. Each individual applying for an examination shall remit a nonrefundable fee as prescribed by the Director. An individual who fails to appear for the examination as scheduled or fails to pass the examination shall reapply for an examination and remit all required fees and forms before being rescheduled for another examination. An individual who fails to pass the examination on his or her first attempt must wait 7 days prior to rescheduling an examination. An individual who fails to pass the examination on his or her second or subsequent attempt must wait 30 days prior to rescheduling an examination.
(Source: P.A. 99-266, eff. 1-1-16 .) |
(215 ILCS 5/1535)
Sec. 1535. Exemptions from examination. (a) An individual who applies for a public adjuster license in this State who was previously licensed as a public adjuster in another state based on a public adjuster examination shall not be required to complete any examination. This exemption is only available if (i) the person is currently licensed in that state or if the application is received within 12 months of the cancellation of the applicant's previous license; and (ii) 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 or records maintained by the NAIC, its affiliates, or subsidiaries, indicate that the public adjuster is or was licensed in good standing. (b) A person licensed as a public adjuster in another state based on a public adjuster examination who moves to this State shall submit an application within 90 days of establishing legal residence to become a resident licensee pursuant to Section 1525 of this Article. No prelicensing examination shall be required of that person to obtain a public adjuster license. (c) An individual who applies for a public adjuster license in this State who was previously licensed as a public adjuster in this State shall not be required to complete any prelicensing examination. This exemption is only available if the application is received within 12 months of the cancellation of the applicant's previous license in this State and if, at the time of cancellation, the applicant was in good standing in this State.
(Source: P.A. 96-1332, eff. 1-1-11; 97-207, eff. 7-28-11.) |
(215 ILCS 5/1540)
Sec. 1540. Nonresident license reciprocity. (a) Unless denied licensure pursuant to Section 1555 of this Article, a nonresident person shall receive a nonresident public adjuster license if: (1) the person is currently licensed as a resident | ||
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(2) the person has submitted the proper request for | ||
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(3) the person has submitted or transmitted to the | ||
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(4) the person's home state awards nonresident public | ||
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(b) The Director may verify the public adjuster's licensing status through the producer database maintained by the NAIC, its affiliates, or subsidiaries. (c) As a condition to continuation of a public adjuster license issued under this Section, the licensee shall maintain a resident public adjuster license in his or her home state. The nonresident public adjuster license issued under this Section shall terminate and be surrendered immediately to the Director if the home state public adjuster license terminates for any reason, unless the public adjuster has been issued a license as a resident public adjuster in his or her new home state. Notification to the state or states where the nonresident license is issued must be made as soon as possible, yet no later than 30 days of change in new state resident license. The licensee shall include his or her new and old address on the notification. A new state resident license is required for nonresident licenses to remain valid. The new state resident license must have reciprocity with the licensing nonresident state or states for the nonresident license not to terminate.
(Source: P.A. 96-1332, eff. 1-1-11; 97-813, eff. 7-13-12.) |
(215 ILCS 5/1545)
Sec. 1545. License. (a) Unless denied licensure under this Article, persons who have met the requirements of this Article shall be issued a public adjuster license. (b) A public adjuster license shall remain in effect unless revoked, terminated, or suspended as long as the requirements for license renewal are met by the due date. (c) The licensee shall inform the Director by any means acceptable to the Director of a change of address, change of legal name, or change of information submitted on the application within 30 days of the change. (d) A licensed public adjuster shall be subject to Article XXVI of this Code. (e) A public adjuster who allows his or her license to lapse may, within 12 months from the due date of the renewal, be issued a new public adjuster license without necessity of passing a written examination. However, a penalty in the amount of double the unpaid renewal fee shall be required for the issue of the new public adjuster license. (f) A licensed public adjuster that is unable to comply with license renewal procedures due to military service or a long-term medical disability may request a waiver of the procedures in subsection (e) of this Section. The public adjuster may also request a waiver of any examination requirement, fine, or other sanction imposed for failure to comply with renewal procedures. (g) The license shall contain the licensee's name, city and state of business address, personal identification number, the date of issuance, the expiration date, and any other information the Director deems necessary. (h) In order to assist in the performance of the Director's duties, the Director may contract with non-governmental entities, including the NAIC or any affiliates or subsidiaries that the NAIC oversees, to perform any ministerial functions, including the collection of fees and data, related to licensing that the Director may deem appropriate.
(Source: P.A. 96-1332, eff. 1-1-11.) |
(215 ILCS 5/1550) Sec. 1550. Applicant convictions. (a) The Director and the Department shall not require applicants to report the following information and shall not collect or consider the following criminal history records in connection with a public adjuster license application: (1) Juvenile adjudications of delinquent minors as | ||
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(2) Law enforcement records, court records, and | ||
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(3) Records of arrest not followed by a formal charge | ||
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(4) Records of arrest where charges were dismissed | ||
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(5) Convictions overturned by a higher court. (6) Convictions or arrests that have been sealed or | ||
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(b) The Director, upon a finding that an applicant for a license under this Act was previously convicted of any felony or a misdemeanor involving dishonesty or fraud, shall consider any mitigating factors and evidence of rehabilitation contained in the applicant's record, including any of the following factors and evidence, to determine if a license may be denied because the prior conviction will impair the ability of the applicant to engage in the position for which a license is sought: (1) the bearing, if any, of the offense for which | ||
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(2) whether the conviction suggests a future | ||
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(3) if the applicant was previously licensed or | ||
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(4) whether 5 years since a felony conviction or 3 | ||
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(5) successful completion of sentence and, for | ||
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(6) evidence of the applicant's present fitness and | ||
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(7) evidence of rehabilitation or rehabilitative | ||
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(8) any other mitigating factors that contribute to | ||
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(c) If a nonresident licensee meets the standards set forth in items (1) through (4) of subsection (a) of Section 1540 and has received consent pursuant to 18 U.S.C. 1033(e)(2) from his or her home state, the Director shall grant the nonresident licensee a license. (d) If the Director refuses to issue a license to an applicant based on a conviction or convictions, in whole or in part, then the Director shall notify the applicant of the denial in writing with the following included in the notice of denial: (1) a statement about the decision to refuse to issue | ||
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(2) a list of convictions that the Director | ||
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(3) a list of the convictions that were the sole or | ||
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(4) a summary of the appeal process or the earliest | ||
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(Source: P.A. 103-216, eff. 1-1-24 .) |
(215 ILCS 5/1555) Sec. 1555. License denial, nonrenewal, or revocation. (a) The Director may place on probation, suspend, revoke, deny, or refuse to issue or renew a public adjuster's license or may levy a civil penalty or any combination of actions, for any one or more of the following causes: (1) providing incorrect, misleading, incomplete, or | ||
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(2) violating any insurance laws, or violating any | ||
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(3) obtaining or attempting to obtain a license | ||
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(4) improperly withholding, misappropriating, or | ||
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(5) intentionally misrepresenting the terms of an | ||
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(6) having been convicted of any felony or a | ||
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(7) having admitted or been found to have committed | ||
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(8) using fraudulent, coercive, or dishonest | ||
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(9) having an insurance license or public adjuster | ||
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(10) forging another's name to an application for | ||
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(11) cheating, including improperly using notes or | ||
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(12) knowingly accepting insurance business from or | ||
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(13) failing to comply with an administrative or | ||
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(14) failing to pay State income tax or comply with | ||
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(15) failing to comply with or having violated any of | ||
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(16) failing to maintain the records required by | ||
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(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 business entity and the violation was neither reported to the Director, nor corrective action taken. (d) In addition to or in lieu of any applicable denial, suspension or revocation of a license, a person may, after hearing, be subject to a civil penalty. 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 shall retain 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 Article even if the person's license or registration has been surrendered or has lapsed by operation of law. (f) Any individual whose public adjuster's license is revoked or whose application is denied pursuant to this Section shall be ineligible to apply for a public adjuster's license for 5 years. A suspension pursuant to this Section may be for any period of time up to 5 years.
(Source: P.A. 103-216, eff. 1-1-24 .) |
(215 ILCS 5/1560) Sec. 1560. Bond or letter of credit. (a) Prior to the issuance of a license as a public adjuster and for the duration of the license, the applicant shall secure evidence of financial responsibility in a format prescribed by the Director through a surety bond or irrevocable letter of credit, subject to all of the following requirements: (1) A surety bond executed and issued by an insurer | ||
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(A) shall be in the minimum amount of $50,000; (B) shall be in favor of this State and shall | ||
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(C) shall not be terminated unless at least 30 | ||
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(2) An irrevocable letter of credit issued by a | ||
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(A) shall be in the minimum amount of $50,000; (B) shall be to an account to the Director and | ||
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(C) shall not be terminated unless at least 30 | ||
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(b) The issuer of the evidence of financial responsibility shall notify the Director upon termination of the bond or letter of credit, unless otherwise directed by the Director. (c) The Director may ask for the evidence of financial responsibility at any time he or she deems relevant. (d) The authority to act as a public adjuster shall automatically terminate if the evidence of financial responsibility terminates or becomes impaired.
(Source: P.A. 103-216, eff. 1-1-24 .) |
(215 ILCS 5/1563)
Sec. 1563. Fees. The fees required by this Article
are as follows: (1) Public adjuster license fee of $250, payable once | ||
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(2) Business entity license fee of $250, payable once | ||
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(3) Application fee of $50 for processing each | ||
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(Source: P.A. 100-863, eff. 8-14-18.) |
(215 ILCS 5/1565)
Sec. 1565. Continuing education. (a) An individual who holds a public adjuster license and who is not exempt under subsection (b) of this Section shall satisfactorily complete a minimum of 24 hours of continuing education courses, including 3 hours of classroom or webinar ethics instruction, reported on a biennial basis in conjunction with the license renewal cycle. 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
the 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. The public adjuster must complete the course in advance of the renewal date to
allow the education provider time to report the credit to the
Department. (b) This Section shall not apply to: (1) licensees not licensed for one full year prior to | ||
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(2) licensees holding nonresident public adjuster | ||
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(c) Only continuing education courses approved by the Director shall be used to satisfy the continuing education requirement of subsection (a) of this Section.
(Source: P.A. 102-135, eff. 7-23-21.) |
(215 ILCS 5/1570) Sec. 1570. Public adjuster fees. (a) A public adjuster shall not pay a commission, service fee, or other valuable consideration to a person for investigating or settling claims in this State if that person is required to be licensed under this Article and is not so licensed. (b) A person shall not accept a commission, service fee, or other valuable consideration for investigating or settling claims in this State if that person is required to be licensed under this Article and is not so licensed. (c) A public adjuster may pay or assign commission, service fees, or other valuable consideration to persons who do not investigate or settle claims in this State, unless the payment would violate State law. (d) If the loss giving rise to the claim for which the public adjuster was retained arises from damage to property that is anything but a personal residence, a public adjuster may not charge, agree to, or accept any compensation, payment, commission, fee, or other valuable consideration in excess of 10% of the amount of the insurance settlement claim paid by the insurer on any claim resulting from a catastrophic event, unless approved in writing by the Director. Application for exception to the 10% limit must be made in writing. The request must contain specific reasons as to why the consideration should be in excess of 10% and proof that the policyholder would accept the consideration. The Director must act on any request within 5 business days after receipt of the request. For the purpose of this subsection (d), "catastrophic event" means an occurrence of widespread or severe damage or loss of property producing an overwhelming demand on State and local response resources and mechanisms and a severe long-term effect on general economic activity, and that severely affects State, local, and private sector capabilities to begin to sustain response activities resulting from any catastrophic cause, including, but not limited to, fire, including arson (provided the fire was not caused by the willful action of an owner or resident of the property), flood, earthquake, wind, storm, explosion, or extended periods of severe inclement weather as determined by declaration of a State of disaster by the Governor. This declaration may be made on a county-by-county basis and shall be in effect for 90 days, but may be renewed for 30-day intervals thereafter. (e) If the loss giving rise to the claim for which the public adjuster was retained arises from damage to a personal residence, a public adjuster may not charge, agree to, or accept any compensation, payment, commission, fee, or other valuable consideration in excess of 10% of the amount of the insurance settlement claim paid by the insurer on any claim. (Source: P.A. 103-216, eff. 1-1-24 .) |
(215 ILCS 5/1575) Sec. 1575. Contract between public adjuster and insured. (a) Public adjusters shall ensure that all contracts for their services are in writing and contain the following terms: (1) legible full name of the adjuster signing the | ||
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(2) permanent home state business address, email | ||
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(3) license number; (4) title of "Public Adjuster Contract"; (5) the insured's full name, street address, | ||
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(6) a description of the loss and its location; (7) description of services to be provided to the | ||
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(8) signatures of the public adjuster and the insured; (9) date and time the contract was signed by the | ||
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(10) attestation language stating that the public | ||
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(11) full salary, fee, commission, compensation, or | ||
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(b) The contract may specify that the public adjuster shall be named as a co-payee on an insurer's payment of a claim. (1) If the compensation is based on a share of the | ||
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(2) Initial expenses to be reimbursed to the public | ||
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(3) Compensation provisions in a public adjuster | ||
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(c) If the insurer, not later than 5 business days after the date on which the loss is reported to the insurer, either pays or commits in writing to pay to the insured the policy limit of the insurance policy, the public adjuster shall: (1) not receive a commission consisting of a | ||
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(2) inform the insured that loss recovery amount | ||
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(3) be entitled only to reasonable compensation from | ||
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(d) A public adjuster shall provide the insured a written disclosure concerning any direct or indirect financial interest that the public adjuster has with any other party who is involved in any aspect of the claim, other than the salary, fee, commission, or other consideration established in the written contract with the insured, including, but not limited to, any ownership of or any compensation expected to be received from, any construction firm, salvage firm, building appraisal firm, board-up company, or any other firm that provides estimates for work, or that performs any work, in conjunction with damages caused by the insured loss on which the public adjuster is engaged. The word "firm" shall include any corporation, partnership, association, joint-stock company, or person. (e) A public adjuster contract may not contain any contract term that: (1) allows the public adjuster's percentage fee to be | ||
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(2) requires the insured to authorize an insurance | ||
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(3) precludes a public adjuster or an insured from | ||
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(4) includes any hold harmless agreement that | ||
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(5) provides power of attorney by which the public | ||
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(f) The following provisions apply to a contract between a public adjuster and an insured: (1) Prior to the signing of the contract, the public | ||
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"Property insurance policies obligate the insured to | ||
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(A) "Company adjuster" means the insurance | ||
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(B) "Independent adjuster" means the insurance | ||
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(C) "Public adjuster" means the insurance | ||
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(2) The insured is not required to hire a public | ||
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(3) The public adjuster is not a representative or | ||
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(4) The salary, fee, commission, or other | ||
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(g) The contracts shall be executed in duplicate to provide an original contract to the public adjuster, and an original contract to the insured. The public adjuster's original contract shall be available at all times for inspection without notice by the Director. (h) The public adjuster shall provide the insurer or its authorized representative for receiving notice of loss or damage with an exact copy of the contract with the insured by email no later than 5 business days after execution of the contract, authorizing the public adjuster to represent the insured's interest. (i) The public adjuster shall give the insured written notice of the insured's rights as a consumer under the law of this State. (j) A public adjuster shall not provide services, other than emergency services, until a written contract with the insured has been executed, on a form filed with and approved by the Director, and an exact copy of the contract has been provided to the insurer in accordance with subsection (h). At the option of the insured, any such contract shall be voidable for 5 business days after the contract is received by the insurer. The insured may void the contract by notifying the public adjuster in writing by (i) registered or certified mail, return receipt requested, to the address shown on the contract, (ii) personally serving the notice on the public adjuster, or (iii) sending an email to the email address shown on the contract. (k) If the insured exercises the right to rescind the contract, anything of value given by the insured under the contract will be returned to the insured within 15 business days following the receipt by the public adjuster of the cancellation notice. (l) All contracts entered into that are in violation of this Section are void and invalid.
(Source: P.A. 103-216, eff. 1-1-24 .) |
(215 ILCS 5/1580)
Sec. 1580. Escrow or trust accounts.
A public adjuster who receives, accepts, or holds any funds on behalf of an insured towards the settlement of a claim for loss or damage shall deposit the funds in a non-interest bearing escrow or trust account in a financial institution that is insured by an agency of the federal government in the public adjuster's home state or where the loss occurred.
(Source: P.A. 96-1332, eff. 1-1-11.) |
(215 ILCS 5/1585) Sec. 1585. Record retention. (a) A public adjuster shall maintain a complete record of each transaction as a public adjuster. The records required by this Section shall include the following: (1) name of the insured; (2) date, location and amount of the loss; (3) a copy of the contract between the public | ||
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(4) name of the insurer, amount, expiration date and | ||
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(5) itemized statement of the insured's recoveries; (6) itemized statement of all compensation received | ||
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(7) a register of all monies received, deposited, | ||
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(8) name of public adjuster who executed the contract; (9) name of the attorney representing the insured, if | ||
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(10) evidence of financial responsibility in a format | ||
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(b) Records shall be maintained for at least 7 years after the termination of the transaction with an insured and shall be open to examination by the Director at all times. (c) Records submitted to the Director in accordance with this Section that contain information identified in writing as proprietary by the public adjuster shall be treated as confidential by the Director and shall not be subject to the Freedom of Information Act.
(Source: P.A. 103-216, eff. 1-1-24 .) |
(215 ILCS 5/1590) Sec. 1590. Standards of conduct of public adjuster. (a) A public adjuster is obligated, under his or her license, to serve with objectivity and complete loyalty for the interests of his client alone, and to render to the insured such information, counsel, and service, as within the knowledge, understanding, and opinion in good faith of the licensee, as will best serve the insured's insurance claim needs and interest. (b) A public adjuster may not propose or attempt to propose to any person that the public adjuster represent that person while a loss-producing occurrence is continuing, nor while the fire department or its representatives are engaged at the damaged premises, nor between the hours of 7:00 p.m. and 8:00 a.m. (c) A public adjuster shall not permit an unlicensed employee or representative of the public adjuster to conduct business for which a license is required under this Article. (d) A public adjuster shall not have a direct or indirect financial interest in any aspect of the claim, other than the salary, fee, commission, or other consideration established in the written contract with the insured, unless full written disclosure has been made to the insured as set forth in subsection (d) of Section 1575. (e) A public adjuster shall not acquire any interest in the salvage of property subject to the contract with the insured unless the public adjuster obtains written permission from the insured after settlement of the claim with the insurer as set forth in subsection (d) of Section 1575 of this Article. (f) The public adjuster shall abstain from referring or directing the insured to get needed repairs or services in connection with a loss from any person, unless disclosed to the insured: (1) with whom the public adjuster has a direct or | ||
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(2) from whom the public adjuster may receive direct | ||
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(g) The public adjuster shall disclose to an insured if he or she has any interest or will be compensated by any construction firm, salvage firm, building appraisal firm, board-up company, or any other firm that performs any work in conjunction with damages caused by the insured loss. The word "firm" shall include any corporation, partnership, association, joint-stock company or individual as set forth in Section 1575 of this Article. (h) Any compensation or anything of value in connection with an insured's specific loss that will be received by a public adjuster shall be disclosed by the public adjuster to the insured in writing including the source and amount of any such compensation. (i) In all cases where the loss giving rise to the claim for which the public adjuster was retained arise from damage to a personal residence, the insurance proceeds shall be delivered to the named insured or his or her designee. Where proceeds paid by an insurance company are paid jointly to the insured and the public adjuster, the insured shall release such portion of the proceeds that are due the public adjuster within 30 calendar days after the insured's receipt of the insurance company's check, money order, draft, or release of funds. If the proceeds are not so released to the public adjuster within 30 calendar days, the insured shall provide the public adjuster with a written explanation of the reason for the delay. (j) Public adjusters shall adhere to the following general ethical requirements: (1) a public adjuster shall not undertake the | ||
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(2) a public adjuster shall not knowingly make any | ||
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(3) no public adjuster, while so licensed by the | ||
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(4) the contract shall not be construed to prevent an | ||
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(5) a public adjuster shall not enter into a contract | ||
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(6) a public adjuster shall ensure that all contracts | ||
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(7) a public adjuster shall not advance money or any | ||
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(k) A public adjuster may not agree to any loss settlement without the insured's knowledge and consent and shall, upon the insured's request, provide the insured with a document setting forth the scope, amount, and value of the damages prior to request by the insured for authority to settle the loss. (l) A public adjuster shall not provide legal advice or representation to the insured or engage in the unauthorized practice of law. (m) A public adjuster shall not represent that he or she is a representative of an insurance company, a fire department, or the State of Illinois, that he or she is a fire investigator, that his or her services are required for the insured to submit a claim to the insured's insurance company, or that he or she may provide legal advice or representation to the insured. A public adjuster may represent that he or she has been licensed by the State of Illinois.
(Source: P.A. 103-216, eff. 1-1-24 .) |
(215 ILCS 5/1595)
Sec. 1595. Reporting of actions. (a) The public adjuster shall report to the Director any administrative action taken against the public adjuster in another jurisdiction or by another governmental agency in this State within 30 days of the final disposition of the matter. This report shall include a copy of the order, consent to order, or other relevant legal documents. (b) Within 30 days of the initial pretrial hearing date, the public adjuster shall report to the Director any criminal prosecution of the public adjuster taken in any jurisdiction. The report shall include a copy of the initial complaint filed, the order resulting from the hearing, and any other relevant legal documents.
(Source: P.A. 96-1332, eff. 1-1-11.) |
(215 ILCS 5/1600)
Sec. 1600. Examinations. (a) The Director shall have the power to examine any applicant or any person licensed or registered pursuant to this Article. (b) Every person being examined and its officers, directors, and members must provide to the Director convenient and free access, at all reasonable hours, to all books, records, documents, and other papers relating to its public adjusting affairs. The officers, directors, members, and employees must facilitate and aid in such examinations so far as it is in their power to do so. (c) Examiners may be designated by the Director. Such examiners shall make their reports to the Director pursuant to this Section. Any report alleging substantive violations shall be in writing and shall be based upon the facts ascertained from the books, records, documents, papers, and other evidence obtained by the examiners or ascertained from the testimony of the officers, directors, members, or other individuals examined under oath or ascertained by notarized affidavits received by the examiners. The reports shall be verified by the examiners.
(Source: P.A. 96-1332, eff. 1-1-11.) |
(215 ILCS 5/1605)
Sec. 1605. Injunctive relief. Any person who acts as or holds himself out to be a public adjuster without holding a valid and current license to do so is hereby declared to be inimical to the public welfare and to constitute a public nuisance. The Director may report such practice to the Attorney General of the State of Illinois 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, as plaintiff, for injunctive relief in the circuit court of the county where such practice occurred to enjoin the person from engaging in such practice; and upon the filing of a verified petition in such court, the court, if satisfied by affidavit or otherwise that the person has been engaged in such practice without a valid and current license to do so, may enter a temporary restraining order without notice or bond enjoining the defendant from such further practice. 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 such unlawful practice, then the court may enter an order or judgment perpetually enjoining the defendant from such further practice. In all proceedings hereunder, the court, in its discretion, may apportion the costs among the parties interested in the action, including the costs of filing the complaint, service of process, witness fees and expenses, court reporter charges, and reasonable attorney fees. In case of violation of any injunctive order entered under the provisions of this Section, the court may try and punish the offender for contempt of court. Such injunction proceedings shall be in addition to, and not in lieu of, all penalties and other remedies.
(Source: P.A. 96-1332, eff. 1-1-11.) |
(215 ILCS 5/1610)
Sec. 1610. Additional penalties.
In addition to any other penalty set forth in this Article, any person violating Section 1605 of this Code shall be guilty of a Class A misdemeanor and any person misappropriating or converting any monies collected as a public adjuster, whether licensed or not, shall be guilty of a Class 4 felony.
(Source: P.A. 96-1332, eff. 1-1-11.) |
(215 ILCS 5/1615)
Sec. 1615. Rules.
The Director shall promulgate reasonable rules as are necessary or proper to carry out the purposes of this Article.
(Source: P.A. 96-1332, eff. 1-1-11.) |
(215 ILCS 5/Art. XLVI heading) ARTICLE XLVI. TRAVEL INSURANCE
(Source: P.A. 102-212, eff. 10-28-21.) |
(215 ILCS 5/1620) Sec. 1620. Short title. This Article may be cited as the Travel Insurance Act.
(Source: P.A. 102-212, eff. 10-28-21 .) |
(215 ILCS 5/1625) Sec. 1625. Scope and purposes. (a) The purpose of this Article is to promote the public welfare by creating a comprehensive legal framework within which travel insurance may be sold in this State. (b) This Article applies to travel insurance that covers any resident of this State, and is sold, solicited, negotiated, or offered in this State, and policies and certificates that are delivered or issued for delivery in this State. This Article does not apply to cancellation fee waivers or travel assistance services except as expressly provided in this Article. (c) All other applicable provisions of this State's insurance laws shall continue to apply to travel insurance, except that the specific provisions of this Article shall supersede any general provisions of law that would otherwise be applicable to travel insurance.
(Source: P.A. 102-212, eff. 10-28-21 .) |
(215 ILCS 5/1630) Sec. 1630. Definitions. As used in this Article: "Aggregator site" means a website that provides access to information regarding insurance products from more than one insurer, including product and insurer information, for use in comparison shopping. "Blanket travel insurance" means a policy of travel insurance issued to any eligible group providing coverage for specific classes of persons defined in the policy with coverage provided to all members of the eligible group without a separate charge to individual members of the eligible group. "Cancellation fee waiver" means a contractual agreement between a supplier of travel services and its customer to waive some or all of the nonrefundable cancellation fee provisions of the supplier's underlying travel contract with or without regard to the reason for the cancellation or form of reimbursement. A "cancellation fee waiver" is not insurance. "Eligible group", solely for the purposes of travel insurance, means 2 or more persons who are engaged in a common enterprise, or have an economic, educational, or social affinity or relationship, including, but not limited to, any of the following: (1) any entity engaged in the business of | ||
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(2) any college, school, or other institution of | ||
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(3) any employer covering any group of employees, | ||
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(4) any sports team, camp, or sponsor of any | ||
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(5) any religious, charitable, recreational, | ||
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(6) any financial institution or financial | ||
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(7) any incorporated or unincorporated | ||
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(8) any trust or the trustees of a fund | ||
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(9) any entertainment production company covering | ||
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(10) any volunteer fire department, ambulance, | ||
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(11) preschools, day care institutions for | ||
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(12) any automobile or truck rental or leasing | ||
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(13) any other group where the Director has | ||
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"Fulfillment materials" means documentation sent to the purchaser of a travel protection plan confirming the purchase and providing the travel protection plan's coverage and assistance details. "Group travel insurance" means travel insurance issued to any eligible group. "Limited lines travel insurance producer" means one of the following: (1) a licensed managing general agent or | ||
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(2) a licensed insurance producer, including a | ||
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(3) a travel administrator. "Offering and disseminating" means the following: (1) Providing information to a prospective or | ||
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(2) Referring specific questions regarding coverage | ||
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(3) Disseminating and processing applications for | ||
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(4) Collecting premiums from a prospective or | ||
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(5) Receiving and recording information from a | ||
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"Primary policyholder" means an individual person who elects and purchases individual travel insurance. "Travel administrator" means a person who directly or indirectly underwrites, collects charges, collateral, or premiums from, or adjusts or settles claims on residents of this State in connection with travel insurance, except that a person shall not be considered a travel administrator if that person's only actions that would otherwise cause the person to be considered a travel administrator are among the following: (1) a person working for a travel administrator to | ||
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(2) an insurance producer selling insurance or | ||
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(3) a travel retailer offering and disseminating | ||
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(4) an individual adjusting or settling claims in | ||
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(5) a business entity that is affiliated with a | ||
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"Travel assistance services" means noninsurance services for which the consumer is not indemnified based on a fortuitous event, and where providing the service does not result in transfer or shifting of risk that would constitute the business of insurance. "Travel assistance services" include, but are not limited to: security advisories; destination information; vaccination and immunization information services; travel reservation services; entertainment; activity and event planning; translation assistance; emergency messaging; international legal and medical referrals; medical case monitoring; coordination of transportation arrangements; emergency cash transfer assistance; medical prescription replacement assistance; passport and travel document replacement assistance; lost luggage assistance; concierge services; and any other service that is furnished in connection with planned travel. "Travel assistance services" are not insurance and are not related to insurance. "Travel insurance" means insurance coverage for personal risks incident to planned travel, including, but not limited to: (1) the interruption or cancellation of a trip or | ||
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(2) the loss of baggage or personal effects; (3) damages to accommodations or rental vehicles; (4) sickness, accident, disability, or death | ||
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(5) emergency evacuation; (6) repatriation of remains; or (7) any other contractual obligations to indemnify | ||
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"Travel insurance" does not include major medical plans that provide comprehensive medical protection for travelers with trips lasting 6 months or longer, including those working overseas as expatriates or as military personnel on deployment. "Travel insurance business entity" means a licensed insurance producer designated by an insurer as set forth in subsection (h) of Section 1635. "Travel protection plans" means plans that provide one or more of the following: travel insurance, travel assistance services, and cancellation fee waivers. "Travel retailer" means a business organization that makes, arranges, or offers travel services and, with respect to travel insurance, is limited to offering and disseminating as defined in this Section, unless otherwise licensed under subsection (b) of Section 1635.
(Source: P.A. 102-212, eff. 10-28-21 .) |
(215 ILCS 5/1635) Sec. 1635. Licensing and registration. (a) The Director may issue to a travel insurance business entity that registers travel retailers under its license as described in paragraph (2) of subsection (c) of this Section a producer license as provided in paragraph (6) of subsection (a) of Section 500-35 of this Code. A travel insurance business entity license issued under this Section shall also authorize any employee of the travel insurance business entity to act individually on behalf and under the supervision of the travel insurance business entity licensee with respect to the coverage specified in this Section. Each travel insurance business entity licensed under this Section shall pay the Department a fee of $500 for its initial license and $500 for each renewal license, payable on May 31 annually. (b) The Director may issue to a travel retailer a limited lines producer license. A travel retailer license issued under this Section shall also authorize any employee of the travel retailer limited line licensee to act individually on behalf and under the supervision of the travel retailer limited line licensee with respect to the coverage specified in this Section. (c) Notwithstanding any other provision of law, a travel retailer may do the limited activities of offering and disseminating travel insurance on behalf of and under the license of a supervising travel insurance business entity if the following conditions are met: (1) the travel insurance business entity or travel | ||
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(A) a description of the material terms or the | ||
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(B) a description of the process for filing a | ||
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(C) a description of the review or cancellation | ||
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(D) the identity and contact information of the | ||
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(2) at the time of licensure, the travel insurance | ||
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(3) the travel insurance business entity has | ||
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(4) the travel insurance business entity has paid all | ||
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(5) the travel insurance business entity requires | ||
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(d) Any travel retailer offering or disseminating travel insurance shall make available to prospective purchasers brochures or other written materials that: (1) provide the identity and contact information of | ||
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(2) explain that the purchase of travel insurance is | ||
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(3) explain that an unlicensed travel retailer is | ||
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(e) A travel retailer's employee or authorized representative who is not licensed as an insurance producer may not: (1) evaluate or interpret the technical terms, | ||
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(2) evaluate or provide advice concerning a | ||
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(3) hold himself, herself, or itself out as a | ||
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(f) 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 travel insurance business entity meeting the conditions stated in this Section is authorized to do so and receive related compensation upon registration by the travel insurance business entity as described in paragraph (2) of subsection (c) of this Section. (g) Travel insurance may be provided under an individual policy or under a group, blanket, or master policy. (h) As the insurer designee, the travel insurance business entity is responsible for the acts of the travel retailer that is registered under its license. (i) Any entity that violates any provision of this Article shall be subject to all appropriate regulatory action as set forth in this Code. (j) Any person licensed in a major line of authority as an insurance producer is authorized to sell, solicit, and negotiate travel insurance. A property and casualty insurance producer is not required to become appointed by an insurer in order to sell, solicit, or negotiate travel insurance.
(Source: P.A. 102-212, eff. 10-28-21 .) |
(215 ILCS 5/1640) Sec. 1640. Travel protection plans. Travel protection plans may be offered for one price for the combined features that the travel protection plan offers in this State if: (1) the travel protection plan clearly discloses to | ||
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(2) the fulfillment materials: (A) describe and delineate the travel | ||
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(B) include the travel insurance disclosures | ||
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(Source: P.A. 102-212, eff. 10-28-21 .) |
(215 ILCS 5/1645) Sec. 1645. Sales practices. (a) All persons offering travel insurance to residents of this State are subject to the Unfair Methods of Competition and Unfair and Deceptive Acts and Practices Article of this Code, except as otherwise provided in this Section. In the event of a conflict between this Article and other provisions of this Code regarding the sale and marketing of travel insurance and travel protection plans, the provisions of this Article shall control. (b) Offering or selling a travel insurance policy that could never result in payment of any claims for any insured under the policy is an unfair trade practice under Section 424. (c) Marketing of travel insurance policies shall comply with the following: (1) All documents provided to consumers before the | ||
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(2) For travel insurance policies or certificates | ||
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(3) The fulfillment materials and the information | ||
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(A) 15 days following the date of delivery of the | ||
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(B) 10 days following the date of delivery of the | ||
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(4) The company shall disclose in the policy | ||
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(5) Where travel insurance is marketed directly to | ||
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(d) No person offering, soliciting, or negotiating travel insurance or travel protection plans on an individual or group basis may do so by using negative option or opt out, which would require a consumer to take an affirmative action to deselect coverage, such as unchecking a box on an electronic form, when the consumer purchases a trip. (e) It shall be an unfair trade practice under Section 424 to market blanket travel insurance coverage as free. (f) Where a consumer's destination jurisdiction requires insurance coverage, it shall not be an unfair trade practice to require that a consumer choose between the following options as a condition of purchasing a trip or travel package: (1) purchasing the coverage required by the | ||
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(2) agreeing to obtain and provide proof of | ||
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(Source: P.A. 102-212, eff. 10-28-21 .) |
(215 ILCS 5/1650) Sec. 1650. Travel insurance administrators. (a) Notwithstanding any other provisions of this Code, no entity shall act or represent itself as a travel administrator for travel insurance in this State unless that entity: (1) is a licensed property and casualty insurance | ||
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(2) holds a valid managing general agent license in | ||
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(3) holds a valid third-party administrator license | ||
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(b) An insurer is responsible for the acts of a travel administrator administering travel insurance underwritten by the insurer, and is responsible for ensuring that the travel administrator maintains all books and records relevant to the insurer to be made available by the travel administrator to the Director upon request.
(Source: P.A. 102-212, eff. 10-28-21 .) |
(215 ILCS 5/1655) Sec. 1655. Policy. (a) Notwithstanding any other provision of this Code, travel insurance shall be classified and filed for purposes of rates and forms under an inland marine line of insurance; however, travel insurance that provides coverage for sickness, accident, disability, or death occurring during travel, either exclusively, or in conjunction with related coverages of emergency evacuation or repatriation of remains, or incidental limited property and casualty benefits such as baggage or trip cancellation may be filed under either an accident and health line of insurance or an inland marine line of insurance. (b) Travel insurance may be in the form of an individual, group, master, or blanket policy. (c) Eligibility and underwriting standards for travel insurance may be developed and provided based on travel protection plans designed for individual or identified marketing or distribution channels, provided those standards also meet this State's underwriting standards for inland marine.
(Source: P.A. 102-212, eff. 10-28-21; 102-672, eff. 11-30-21.) |
(215 ILCS 5/1660) Sec. 1660. Rules. The Department may adopt rules to implement this Article.
(Source: P.A. 102-212, eff. 10-28-21 .) |
(215 ILCS 5/Art. XLVII heading) (This Section may contain text from a Public Act with a delayed effective date ) ARTICLE XLVII. INSURANCE BUSINESS TRANSFERS
(Source: P.A. 103-75, eff. 1-1-25.) |
(215 ILCS 5/1701) (This Section may contain text from a Public Act with a delayed effective date ) Sec. 1701. Short title. This Article may be cited as the Insurance Business Transfer Law.
(Source: P.A. 103-75, eff. 1-1-25.) |
(215 ILCS 5/1703) (This Section may contain text from a Public Act with a delayed effective date ) Sec. 1703. Purpose and intent. The purpose of this Article is to provide a mechanism for insurers to transfer or
assume blocks of insurance business in an efficient and
cost-effective manner that provides needed legal finality for
such transfers in order to provide for improved operational
and capital efficiency for insurance companies, while protecting the interests of the policyholders, reinsurers, and claimants of the subject business. This new process is intended to stimulate the
economy by attracting segments of the insurance industry to this State, make this State an attractive home jurisdiction
for insurance companies, encourage economic growth and
increased investment in the financial services sector, and
increase the availability of quality insurance industry jobs
in this State. These purposes are accomplished by providing a
basis and procedures for the transfer and statutory novation
of policies from a transferring insurer to an assuming insurer
by way of an insurance business transfer without the
affirmative consent of policyholders or reinsureds, but with consideration of their interests. This Article
establishes the requirements for notice and disclosure and standards and procedures for the approval of the transfer and
novation by a court pursuant to an insurance
business transfer plan. This Article does not limit or restrict
other means of effecting a transfer or novation.
(Source: P.A. 103-75, eff. 1-1-25.) |
(215 ILCS 5/1705) (This Section may contain text from a Public Act with a delayed effective date ) Sec. 1705. Definitions. As used in this Article: "Affiliate" means a person that directly or indirectly,
through one or more intermediaries, controls, is controlled
by, or is under common control with the person specified. "Applicant" means a transferring insurer or reinsurer applying under this Article. "Assuming insurer" means an insurer domiciled in Illinois and authorized to transact the type of business described in clause (c) of Class 1, clauses (b) through (l) of Class 2, or Class 3 of Section 4 that
seeks to assume policies from a
transferring insurer pursuant to this Article. "Court" means the circuit court of Sangamon County or Cook County. "Department" means the Department of Insurance. "Director" means the Director of Insurance. "Implementation order" means an order issued by a court
under this Article. "Insurance business transfer" means a transfer and
novation that, once approved pursuant to this Article, transfers
insurance obligations or risks, or both, of existing or
in-force contracts of insurance or reinsurance from a
transferring insurer to an assuming insurer, and effects a
novation of the transferred contracts of insurance or
reinsurance with the result that the assuming insurer becomes
directly liable to the policyholders of the transferring
insurer and the transferring insurer's insurance obligations
or risks, or both, under the contracts are extinguished. "Insurance business transfer plan" means the plan
submitted to the Department to accomplish the transfer and
novation pursuant to an insurance business transfer, including
any associated transfer of assets and rights from or on behalf
of the transferring insurer to the assuming insurer. An "insurance business transfer plan" is limited to the types of insurance described in clause (c) of Class 1, clauses (b) through (l) of Class 2, or Class 3 of Section 4. "Independent expert" means the impartial person procured to assist the Director and the court in connection with their review of a proposed transaction. The independent expert shall: (i) have no current or past, direct or indirect, | ||
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(ii) have not been employed by or acted as an | ||
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(iii) not currently be appointed by the Director to | ||
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(iv) receive no compensation in connection with the | ||
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"Insurer" means an insurance, surety, or reinsurance
company, corporation, partnership, association, society,
order, individual, or aggregation of individuals engaging in
or proposing or attempting to engage in insurance
or surety business, including the exchanging of reciprocal or
inter-insurance contracts between individuals, partnerships,
and corporations. "Policy" means a policy, certificate of
insurance, or a contract of reinsurance pursuant to which an
insurer agrees to assume an obligation or risk, or both, of the
policyholder or to make payments on behalf of, or to, the
policyholder or its beneficiaries, and includes property and
casualty insurance. "Policy" does not include any policy, contract, or certificate of life, accident, or health insurance, including those defined in clause (a) or (b) of Class 1 or clause (a) of Class 2 of Section 4. "Policyholder" means an insured or a reinsured under a
policy that is part of the subject business. "State guaranty association" means the Illinois Insurance Guaranty Fund, the Illinois Life and Health Guaranty Association, or any similar organization in another state. "Subject business" means the policy or policies that are
the subject of the insurance business transfer plan. "Transfer and novation" means the transfer of insurance
obligations or risks, or both, of existing or in-force
policies from a transferring insurer to an assuming insurer
that is intended to effect a novation of the transferred
policies with the result that the assuming insurer becomes
directly liable to the policyholders of the transferring
insurer on the transferred policies and the transferring
insurer's obligations or risks, or both, under the transferred
policies are extinguished. "Transferring insurer" means an insurer or reinsurer that
transfers and novates or seeks to transfer and novate
obligations or risks, or both, under one or more policies to an
assuming insurer pursuant to an insurance business transfer
plan.
(Source: P.A. 103-75, eff. 1-1-25.) |
(215 ILCS 5/1710) (This Section may contain text from a Public Act with a delayed effective date ) Sec. 1710. Court authority. Notwithstanding any other
provision of law, a court may issue any order, process, or
judgment that is necessary or appropriate to carry out the
provisions of this Article. No provision of this Article shall be
construed to preclude a court from, on its own motion, taking
any action or making any determination necessary or
appropriate to enforce or implement court orders or rules or
to prevent an abuse of power.
(Source: P.A. 103-75, eff. 1-1-25.) |
(215 ILCS 5/1715) (This Section may contain text from a Public Act with a delayed effective date ) Sec. 1715. Notice requirements. (a) Whenever notice is required to be given by an
applicant under this Article, except as otherwise permitted by a
court or the Director, the applicant shall within 15 days
after the event triggering the requirement transmit the
notice: (1) to the chief insurance regulator in each | ||
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(A) in which the applicant holds or has ever held | ||
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(B) in which policies that are part of the | ||
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(2) to the National Conference of Insurance Guaranty | ||
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(A) in which the applicant holds or has ever held | ||
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(B) in which policies that are part of the | ||
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(3) to reinsurers of the applicant pursuant to the | ||
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(4) to all policyholders holding policies that are | ||
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(5) by publication in a newspaper of general | ||
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(b) If notice is given in accordance with this Section,
any orders under this Article shall be conclusive with respect to
all intended recipients of the notice whether or not they
receive actual notice. (c) If this Article requires that the applicant provide notice
but the Director has been named receiver of the applicant pursuant to Article XIII, the
Director shall provide the required notice. (d) Notice under this Section may take the form of
first-class mail, facsimile, or electronic notice. The court may order that notice take a specific form.
(Source: P.A. 103-75, eff. 1-1-25.) |
(215 ILCS 5/1720) (This Section may contain text from a Public Act with a delayed effective date ) Sec. 1720. Application procedure. (a) Before filing an insurance business transfer plan, the applicant shall file with the Department a notice of its intention to file a plan and shall pay the required fee. Upon request, the applicant and the assuming insurer shall provide the Department with any information necessary for the Department to procure an independent expert that meets the requirements of this Article. (b) An insurance business transfer plan shall be filed by
the applicant with the Director for his or her review and
approval. The plan may be supplemented by other information
deemed necessary by the Director, and shall contain the
following information or an explanation as to why the
following information is not included: (1) the name, address, and telephone number of the | ||
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(2) a summary of the insurance business transfer | ||
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(3) an identification and description of the subject | ||
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(4) the most recent audited financial statements and | ||
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(5) the most recent actuarial report and opinion that | ||
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(6) pro forma financial statements showing the | ||
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(7) officers' certificates of the transferring | ||
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(8) a proposal for plan implementation and | ||
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(9) a full description as to how notice under the | ||
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(10) a description of any reinsurance arrangements | ||
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(11) a description of any guarantees or additional | ||
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(12) a statement describing the assuming insurer's | ||
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(13) a description of how the transferring and | ||
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(14) a description of the financial implications of | ||
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(15) an analysis of the assuming insurer's | ||
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(16) an evaluation of the competency, experience, and | ||
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(17) a certified statement that the transaction is | ||
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(18) evidence of approval or nonobjection of the | ||
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(19) a report from the independent expert that shall | ||
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(A) a statement of the independent expert's | ||
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(B) a certified statement from the independent | ||
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(C) a description of the scope of the report; (D) a summary of the terms of the insurance | ||
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(E) a listing and summaries of documents, | ||
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(F) the extent to which the independent expert | ||
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(G) the people on whom the independent expert has | ||
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(H) the independent expert's opinion of the | ||
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(i) transferring policyholders, reinsurers, | ||
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(ii) policyholders, reinsurers, and claimants | ||
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(iii) policyholders, reinsurers, and | ||
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(I) the facts and circumstances supporting each | ||
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(J) consideration as to whether the security | ||
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(c) The independent expert's report as required by
paragraph (19) of subsection (b) shall also include, but not be
limited to, a review of and report on the following: (1) analysis of the transferring insurer's actuarial | ||
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(2) analysis of the financial condition of the | ||
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(3) review of the plans or proposals the assuming | ||
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(4) whether the proposed transfer has a material, | ||
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(5) analysis of the assuming insurer's corporate | ||
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(6) analysis of whether any policyholder or group of | ||
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(7) any other information that the Director requests | ||
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(d) After the
receipt of a complete insurance business transfer plan,
the Director shall review the plan to determine if the applicant is authorized
to submit it to a court. (e) The Director shall authorize the submission of the
insurance business transfer plan to a court unless he or she
finds that the insurance business transfer would have a
material adverse impact on the interests of policyholders,
reinsurers, or claimants that are part of the subject
business. (f) If the Director determines that the insurance business
transfer would have a material adverse impact on the interests
of policyholders, reinsurers, or claimants that are part of
the subject business, he or she shall notify the applicant and
specify any modifications, supplements, or amendments and any
additional information or documentation with respect to the
plan that must be provided to the Director before he or she
shall allow the applicant to proceed with the court filing. (g) The applicant shall have 30 days following the date
the Director notifies him or her of a determination under
subsection (f) to file an amended insurance business transfer
plan providing the modifications, supplements, or amendments
and additional information or documentation as requested by
the Director. If necessary, the applicant may request in
writing an extension of time of 30 days. If the applicant does
not make an amended filing within the time period provided in
this subsection, including any extension of time granted by
the Director, the insurance business transfer plan filing
shall terminate and a subsequent filing by the applicant shall
be considered a new filing which shall require compliance with
all provisions of this Article as if the prior filing had never
been made. (h)
When the modification, supplement, amendment, or
additional information requested in subsection (f) is
received, the Director shall review the amended plan in accordance with subsection (c). (i) If the Director determines that the plan may proceed
with the court filing, the Director shall confirm that fact in
writing to the applicant.
(Source: P.A. 103-75, eff. 1-1-25.) |
(215 ILCS 5/1725) (This Section may contain text from a Public Act with a delayed effective date ) Sec. 1725. Application to the court for approval of a plan. (a) Within 30 days after notice from the Director that the applicant may proceed with the court filing, the applicant shall apply to the court for approval of the insurance business transfer plan. Upon written request by the applicant, the Director may extend the period for filing an application with the court for an additional 30 days. (b) The applicant shall inform the court of the reasons why he or she petitions the court to find no material adverse impact to policyholders, reinsurers, or claimants affected by the proposed transfer. (c) The application shall be in the form of a verified petition for implementation of the insurance business transfer plan in the court. The petition shall include the insurance business transfer plan and shall identify any documents and witnesses which the applicant intends to present at a hearing regarding the petition. (d) The Director shall be a party to the proceedings before the court concerning the petition and shall be served with copies of all filings. The Director's position in the proceeding shall not be limited by his or her initial review of the plan. The Director shall have all the rights of a litigant under the Illinois Supreme Court Rules and the Code of Civil Procedure, including, but not limited to, the right to appeal. (e) Following the filing of the petition, the applicant shall file a motion for a scheduling order setting a hearing on the petition. (f) Within 15 days after receipt of the scheduling order, the applicant shall cause notice of the hearing to be provided in accordance with the notice provisions of Section 1715. Following the date of distribution of the notice, there shall be a 60-day comment period. The notice and all comments received shall be part of the court record. (g) The notice shall be filed with and approved by the court before distribution, and the Director shall be given the opportunity to review and comment on the sufficiency of the notice before court approval. The notice shall state or provide: (1) the date and time of the approval hearing; (2) the name, address, and telephone number of the | ||
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(3) that the recipient may comment on or object to | ||
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(4) the procedures and deadline for submitting | ||
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(5) a summary of any effect that the transfer and | ||
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(6) a statement that the assuming insurer is | ||
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(7) a statement regarding whether any policyholder | ||
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(8) that recipients shall not have the opportunity to | ||
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(9) contact information for the Department where | ||
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(10) information on how an electronic copy of the | ||
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(11) any other information that the court may | ||
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(h) Any person, including by their legal representative, who considers himself, herself, or itself to be adversely affected can present evidence or comments to the court at the approval hearing. Any person participating in the approval hearing must follow the process established by the court and shall bear his or her own costs and attorney's fees.
(Source: P.A. 103-75, eff. 1-1-25.) |
(215 ILCS 5/1730) (This Section may contain text from a Public Act with a delayed effective date ) Sec. 1730. Approval; denial; insurance business transfer plans. (a) After the comment period pursuant to subsection (f) of Section 1725 has ended the insurance business transfer plan shall be presented by the applicant for approval by the court. (b) At any time before the court issues an order approving the insurance business transfer plan, the applicant may withdraw the petition without prejudice. (c) If the court finds that the implementation of the insurance business transfer plan would not materially adversely affect the interests of policyholders, reinsurers, or claimants that are part of the subject business, the court shall enter a judgment and implementation order. The judgment and implementation order shall: (1) order implementation of the insurance business | ||
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(2) order a statutory novation with respect to all | ||
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(3) release the transferring insurer from all | ||
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(4) authorize and order the transfer of property | ||
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(5) order that the applicant provide notice of the | ||
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(6) make such other provisions with respect to | ||
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(d) If the court finds that the insurance business transfer plan should not be approved, the court by its order shall deny the petition. (e) The applicant shall have 30 days following the withdrawal or denial of the petition to file an amended business transfer plan with the Director in accordance with Section 1720. (f) Nothing in this Section in any way affects the right of appeal of any party.
(Source: P.A. 103-75, eff. 1-1-25.) |
(215 ILCS 5/1735) (This Section may contain text from a Public Act with a delayed effective date ) Sec. 1735. Rules. The Department may adopt rules that are consistent with the provisions of this Article.
(Source: P.A. 103-75, eff. 1-1-25.) |
(215 ILCS 5/1740) (This Section may contain text from a Public Act with a delayed effective date ) Sec. 1740. Confidentiality. The portion of the application for an insurance business transfer that would otherwise be confidential, including any documents, materials, communications, or other information submitted to the Director in contemplation of such application, shall not lose such confidentiality, except (i) the Director may disclose confidential information as needed to procure the independent expert and ensure that the expert meets the requirements under this Article and (ii) if the Director determines that disclosure of confidential information is necessary to fully and fairly advise policyholders and others entitled to notice of the material implications of the insurance business transfer plan.
(Source: P.A. 103-75, eff. 1-1-25.) |
(215 ILCS 5/1745) (This Section may contain text from a Public Act with a delayed effective date ) Sec. 1745. Department oversight. Insurers engaging in an insurance business transfer under this Article consent to the jurisdiction of the Director with regard to any aspect of the transferred business or business transfer plan, including the authority of the Director to conduct financial analysis and examinations, regardless of whether the insurer has a certificate of authority or another basis for the Director's jurisdiction exists.
(Source: P.A. 103-75, eff. 1-1-25.) |
(215 ILCS 5/1750) (This Section may contain text from a Public Act with a delayed effective date ) Sec. 1750. Fees and costs. (a) All expenses incurred by the Director for the compensation, costs, and expenses of the independent expert and any consultants retained by the independent expert incurred in fulfilling the obligations of the independent expert under this Article shall be paid by the applicant. (b) The Director may retain the services of any attorneys, actuaries, accountants, and other professionals and specialists as may be reasonably necessary to assist the Director in reviewing the insurance business transfer plan. All expenses incurred by the Director in connection with proceedings under this Article, including, but not limited to, expenses for the services of any attorneys, actuaries, accountants, and other professionals and specialists, shall be paid by the applicant. (c) The transferring insurer and the assuming insurer shall jointly be obligated to pay all debts incurred pursuant to this Section. Nothing in this Article shall be construed to create any duty for the independent expert to any party other than the Department or a court. (d) Failure to pay any of the requisite fees or costs within 30 days after demand shall be grounds for the Director to request that a court dismiss the petition for approval of the insurance business transfer plan before the filing of an implementation order by the court or, if after the filing of an implementation order, the Director may suspend or revoke the assuming insurer's certificate of authority to transact insurance business in this State. The Director may also take any other action authorized by law against an insurer who fails to pay the requisite fees or costs.
(Source: P.A. 103-75, eff. 1-1-25.) |