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Illinois Compiled Statutes

Information maintained by the Legislative Reference Bureau
Updating the database of the Illinois Compiled Statutes (ILCS) is an ongoing process. Recent laws may not yet be included in the ILCS database, but they are found on this site as Public Acts soon after they become law. For information concerning the relationship between statutes and Public Acts, refer to the Guide.

Because the statute database is maintained primarily for legislative drafting purposes, statutory changes are sometimes included in the statute database before they take effect. If the source note at the end of a Section of the statutes includes a Public Act that has not yet taken effect, the version of the law that is currently in effect may have already been removed from the database and you should refer to that Public Act to see the changes made to the current law.

INSURANCE
(215 ILCS 5/) Illinois Insurance Code.

215 ILCS 5/511.100

    (215 ILCS 5/511.100) (from Ch. 73, par. 1065.58-100)
    (Section scheduled to be repealed on January 1, 2027)
    Sec. 511.100. Purpose. The purpose of this Article is to recognize and provide reasonable public supervision and licensing of persons who provide administrative services in connection with insurance or alternatives to insurance.
(Source: P.A. 84-887.)

215 ILCS 5/511.101

    (215 ILCS 5/511.101) (from Ch. 73, par. 1065.58-101)
    (Section scheduled to be repealed on January 1, 2027)
    Sec. 511.101. Definitions. For the purpose of this Article:
    (a) "Administrator" means any person who on behalf of a plan sponsor or insurer receives or collects charges, contributions or premiums for, or adjusts or settles claims on residents of this State in connection with any type of life or accident or health benefit provided through or as an alternative to insurance within the scope of Class 1(a), 1(b) or 2(a) of Section 4 of the Illinois Insurance Code, other than any of the following:
        (1) A corporation, association, trust or partnership
    
which is administering a plan (i) on behalf of the employees of such corporation, association, trust or partnership or (ii) for the employees of one or more subsidiaries or affiliated corporations or affiliated associations, trusts or partnerships;
        (2) A union administering a plan for its members;
        (3) A plan sponsor administering its own plan;
        (4) An insurer to the extent regulated by the
    
Illinois Insurance Code;
        (5) A producer licensed in this State whose insurance
    
activities are limited to the scope of such license;
        (6) A trust and its trustees and employees acting
    
pursuant to its trust agreement established in conformity with 29 U.S.C. 186;
        (7) A person who adjusts or settles claims in the
    
normal course of such person's practice or employment as an attorney-at-law, and who does not collect contributions or premiums in connection with life or accident or health coverage;
        (8) A person who administers only self-insured
    
workers' compensation plans, or single employer self insured life or accident or health benefit plans;
        (9) A credit card issuing company which advances for
    
and collects premiums or charges from its credit card holders who have authorized such collection, if such company does not adjust or settle claims;
        (10) A creditor on behalf of its debtors with respect
    
to insurance covering a debt between the creditor and its debtors.
    (b) "Covered Individual" means any individual eligible for life or accident or health benefits under a plan.
    (c) "Contributions" means any money charged a covered individual, plan sponsor or other entity to fund the self-insured portion of any plan in accordance with written provisions of the plan or contracts of insurance. Contributions shall include administrative fees charged to a covered individual. Administrative fee means any compensation paid by a covered individual for services performed by the administrator.
    (d) "Premiums" means any money charged a covered individual, plan sponsor or other entity to provide life or accident or health insurance under a plan. The term premium shall include amounts paid by or charged to a covered individual plan sponsor or other entity for stop loss or excess insurance.
    (e) "Charges" means any compensation paid by a plan sponsor or insurer for services performed by the administrator.
    (f) "Administrator Trust Fund", hereinafter referred to as "ATF", means a special fiduciary account established and maintained by an administrator pursuant to Section 511.112 in which contributions and premiums are deposited.
    (g) "Claims Administration Services Account", hereinafter referred to as "CASA", means a special fiduciary account established and maintained by an administrator pursuant to Section 511.112 of this Code from which claims and claims adjustment expenses are disbursed.
    (h) "Plan Sponsor" means any person other than an insurer, who establishes or maintains a plan covering residents of this State, including but not limited to plans established or maintained by 2 or more employers or jointly by one or more employers and one or more employee organizations, the association, committee, joint board of trustees, or other similar group of representatives of the parties who establish or maintain the plan.
    Provided, however, that "Plan Sponsor" shall not include:
        (1) The employer in the case of a plan established or
    
maintained by a single employer; or
        (2) The employee organization in the case of a plan
    
established or maintained by an employee organization.
    No plan sponsor covered in whole by provisions of the Employee Retirement Income Security Act of 1974 (ERISA) shall be covered by any of the provisions of this Act to the extent that such provisions are inconsistent with or in conflict with any provisions of ERISA as now or hereafter amended.
    (i) "Financial Institution" means any federal or state chartered bank or savings and loan institution which is insured by the Federal Deposit Insurance Corporation (FDIC) or the Federal Savings and Loan Insurance Corporation (FSLIC).
    (j) "Plan" means any plan, fund or program established or maintained by a plan sponsor or insurer to the extent that such plan, fund or program was established or is maintained to provide through insurance or alternatives to insurance any type of life or accident or health benefit within the scope of Class 1(a), 1(b) or 2(a) of Section 4 of the Illinois Insurance Code.
    (k) "Insurer" means any person who transacts insurance or health care service business authorized under the laws of this State.
    (l) "Quasi-resident" means a nonresident licensee who produces 50% or more of his contributions and premium volume during a calendar year from residents of this State.
(Source: P.A. 84-1431.)

215 ILCS 5/511.102

    (215 ILCS 5/511.102) (from Ch. 73, par. 1065.58-102)
    (Section scheduled to be repealed on January 1, 2027)
    Sec. 511.102. License required.
    (a) No person may act as or hold himself out to be an administrator after July 1, 1986 unless duly licensed in accordance with this Article. An administrator doing business in this State on July 1, 1986 shall apply for a license within 90 days thereafter.
    (b) In addition to any other penalty set forth in this Article, any person violating subsection (a) above is guilty of a Class A misdemeanor.
(Source: P.A. 84-887.)

215 ILCS 5/511.103

    (215 ILCS 5/511.103) (from Ch. 73, par. 1065.58-103)
    (Section scheduled to be repealed on January 1, 2027)
    Sec. 511.103. Application. The applicant for a license shall file with the Director an application upon a form prescribed by the Director, which shall include or have attached the following:
        (1) The names, addresses and official positions of
    
the individuals who are responsible for the conduct of the affairs of the administrator, including but not limited to all members of the board of directors, board of trustees, executive committee, or other governing board or committee, the principal officers in the case of a corporation or the partners in the case of a partnership; and
        (2) A non-refundable filing fee of $200 which shall
    
become the initial administrator license fee should the Director issue an administrator license.
(Source: P.A. 93-32, eff. 7-1-03.)

215 ILCS 5/511.104

    (215 ILCS 5/511.104) (from Ch. 73, par. 1065.58-104)
    (Section scheduled to be repealed on January 1, 2027)
    Sec. 511.104. Bond requirements for administrators.
    (a) Every applicant for an administrator's license shall file with the application and shall thereafter maintain in force while so licensed, a fidelity bond in favor of the people of the State of Illinois executed by a surety company and payable to any party injured under the terms of the bond. The bond shall be continuous in form and in one of the following amounts:
        (1) For an administrator which maintains an ATF but
    
does not maintain a CASA, the greater of $50,000 or 5% of contributions and premiums projected to be received or collected in the ATF for the forthcoming plan year from Illinois residents, but not to exceed $1,000,000;
        (2) For an administrator which maintains a CASA but
    
does not maintain an ATF, the greater of $50,000 or 5% of the claims and claim expenses projected to be held in the CASA for the forthcoming year to pay claims and claim expenses for Illinois residents, but not to exceed $1,000,000;
        (3) For an administrator which maintains both an ATF
    
and a CASA, the greater of the amounts in subparagraphs (1) or (2) above, but not to exceed $1,000,000.
    Such bond is required of an administrator who maintains or should maintain funds in a fiduciary capacity as set forth in Section 511.112 of this Code unless the administrator is contracted with the insurer as an administrator and if the plan is fully insured by the insurer on whose behalf the funds are held.
    (b) Such bond shall remain in force and effect until the surety is released from liability by the Director or until the bond is cancelled by the surety. The surety may cancel the bond and be released from further liability thereunder upon 30 days' written notice in advance to the Director. Such cancellation shall not affect any liability incurred or accrued thereunder before the termination of the 30-day period. Upon receipt of any notice of cancellation, the Director shall immediately notify the licensee.
    (c) The license required by Section 511.102 shall automatically terminate if the bond required by this Section is not in force. Within 30 days thereafter, the administrator shall return the license to the Director for cancellation.
(Source: P.A. 84-1431.)

215 ILCS 5/511.105

    (215 ILCS 5/511.105) (from Ch. 73, par. 1065.58-105)
    (Section scheduled to be repealed on January 1, 2027)
    Sec. 511.105. License.
    (a) The Director shall cause a license to be issued to each applicant that has demonstrated to the Director's satisfaction compliance with the requirements of this Article.
    (b) Each administrator license shall remain in effect as long as the holder of the license maintains in force and effect the bond required by Section 511.104 and pays the annual fee of $200 prior to the anniversary date of the license, unless the license is revoked or suspended pursuant to Section 511.107.
    (c) Each license shall contain the name, business address and identification number of the licensee, the date the license was issued and any other information the Director considers proper.
(Source: P.A. 93-32, eff. 7-1-03.)

215 ILCS 5/511.106

    (215 ILCS 5/511.106) (from Ch. 73, par. 1065.58-106)
    (Section scheduled to be repealed on January 1, 2027)
    Sec. 511.106. Administrator requirements.
    (a) Each administrator shall identify to the Director any ownership interest or affiliation of any kind with any plan sponsor or insurer responsible directly or through reinsurance for providing benefits to any plan for which it provides services as an administrator.
    (b) An administrator shall provide services as an administrator pursuant to a written agreement. The written agreement shall be between the administrator and the plan sponsor or insurer and shall be retained as part of the official records of the administrator for the duration of said agreement and for 5 years thereafter.
    (c) An administrator shall maintain in its principal office for the duration of the written agreement with any plan sponsor or insurer and for 5 years thereafter adequate books and records of all transactions involving a plan sponsor or insurer and covered individuals or beneficiaries. Such books and records shall be maintained in accordance with generally accepted standards of business recordkeeping. An administrator is not required to maintain copies of books and records if such originals are returned to the plan sponsor or insurer prior to the end of such 5 year period. The administrator shall maintain evidence of the return of the originals for the balance of the 5 year period.
    (d) The administrator shall file with the Director the names and addresses of the insurers and plan sponsors with whom the administrator has written agreements. If an insurer or plan sponsor does not assume or bear the risk, the administrator must disclose the name and address of the ultimate risk bearer. This filing requirement shall apply to the initial application for an administrator's license and the renewal of such license.
    (e) An administrator shall use only advertising pertaining to the plan which has been approved in advance by the plan sponsor or insurer.
    (f) Upon receipt of instructions from the plan sponsor or insurer, an administrator shall deliver promptly to covered individuals or beneficiaries all policies, certificate booklets, termination notices or other written communications.
    (g) An administrator shall not receive compensation from a plan sponsor or insurer which is contingent upon the loss ratio of the plan. This subsection shall not, however, prevent the administrator from engaging in cost containment activities with a plan sponsor or insurer.
    (h) An administrator shall not receive from any plan sponsor, insurer, covered individual or beneficiary under a plan any compensation or other payments except as expressly set forth in the written agreement between the administrator and the plan sponsor or insurer.
    (i) Upon request of the Director, an administrator shall make available for examination, either in the City of Springfield or at the licensee's principal place of business, all basic organizational documents including but not limited to articles of incorporation, articles of association, partnership agreement, trade name certificate, trust agreement, shareholder agreement and other applicable documents and all amendments thereto, bylaws, rules and regulations or similar documents regulating the conduct of its internal affairs.
(Source: P.A. 84-887.)

215 ILCS 5/511.107

    (215 ILCS 5/511.107) (from Ch. 73, par. 1065.58-107)
    (Section scheduled to be repealed on January 1, 2027)
    Sec. 511.107. License suspension, revocation or denial.
    (a) Any license issued under this Article may be suspended or revoked, after notice to the licensee and an opportunity for hearing, and any application for a license may be denied, after notice and an opportunity for hearing, if the Director finds that the licensee or applicant:
        (1) has wilfully violated any applicable provisions
    
of the Illinois Insurance Code or applicable Part of Title 50 of the Illinois Administrative Code; or
        (2) has intentionally made a material misstatement in
    
its application for a license; or
        (3) has obtained or attempted to obtain a license
    
through misrepresentation or fraud; or
        (4) has misappropriated or converted to its own use,
    
or improperly withheld, money required to be held in a fiduciary capacity; or
        (5) has, in the transaction of business under its
    
license, used fraudulent, coercive or dishonest practices, or has demonstrated incompetence, untrustworthiness or financial irresponsibility; or is not of good personal and business reputation; or
        (6) has been, within the past 3 years, convicted of a
    
felony, unless the individual demonstrates to the Director sufficient rehabilitation to warrant the public trust; or
        (7) has failed to appear without reasonable cause or
    
excuse in response to a subpoena, examination warrant or any other order lawfully issued by the Director; or
        (8) is using such methods or practices in the conduct
    
of its business so as to render its further transaction of business in this State hazardous or injurious to covered individuals or the public; or
        (9) is affiliated with and is under the same general
    
management as another administrator which transacts business in this State without being licensed under this Article; or
        (10) has had its license suspended or revoked or its
    
application denied in any other state, district, territory or province on grounds similar to those stated in this Section; or
        (11) has failed to report under Section 511.108 a
    
felony conviction.
    (b) Denial of an application or suspension or revocation of a license, pursuant to this Section shall be by written order sent to the applicant or licensee by certified or registered mail at the address specified in the records of the Department. The written order shall state the grounds, charges or conduct on which denial, suspension or revocation is based. The applicant or licensee may in writing request a hearing within 30 days from the date of mailing. Upon receipt of a written request, the Director shall issue an order setting (i) a specific time for the hearing, which may not be less than 20 nor more than 30 days after receipt of the request and (ii) a specific place for the hearing, which may be in either the City of Springfield or in the county in Illinois where the applicant's or licensee's principal place of business is located. If no written request is received by the Director, such order shall be final upon the expiration of said 30 days.
    (c) Upon revocation of a license, the licensee or other person having possession or custody of such license shall deliver it to the Director in person or by mail within 30 days of such revocation.
    (d) Any administrator whose license is revoked or whose application is denied pursuant to this Section shall be ineligible to reapply for any license for 2 years. A suspension pursuant to this Section may be for a period of up to 2 years.
(Source: P.A. 84-887.)

215 ILCS 5/511.108

    (215 ILCS 5/511.108) (from Ch. 73, par. 1065.58-108)
    (Section scheduled to be repealed on January 1, 2027)
    Sec. 511.108. Felony convictions. Any administrator and any individual listed on the application as required by Section 511.103, who is convicted of a felony shall report such conviction to the Director within 30 days of the entry date of the judgment. Within that 30-day period, the administrator shall also provide the Director with a copy of the judgment, the probation or commitment order and any other relevant documents.
(Source: P.A. 96-328, eff. 8-11-09.)

215 ILCS 5/511.109

    (215 ILCS 5/511.109) (from Ch. 73, par. 1065.58-109)
    (Section scheduled to be repealed on January 1, 2027)
    Sec. 511.109. Examination.
    (a) The Director or his designee may examine any applicant for or holder of an administrator's license.
    (b) Any administrator being examined shall provide to the Director or his designee convenient and free access, at all reasonable hours at their offices, to all books, records, documents and other papers relating to such administrator's business affairs.
    (c) The Director or his designee may administer oaths and thereafter examine any individual about the business of the administrator.
    (d) The examiners designated by the Director pursuant to this Section may make reports to the Director. Any report alleging substantive violations of this Article, any applicable provisions of the Illinois Insurance Code, or any applicable Part of Title 50 of the Illinois Administrative Code shall be in writing and be based upon facts obtained by the examiners. The report shall be verified by the examiners.
    (e) If a report is made, the Director shall either deliver a duplicate thereof to the administrator being examined or send such duplicate by certified or registered mail to the administrator's address specified in the records of the Department. The Director shall afford the administrator an opportunity to request a hearing to object to the report. The administrator may request a hearing within 30 days after receipt of the duplicate of the examination report by giving the Director written notice of such request together with written objections to the report. Any hearing shall be conducted in accordance with Sections 402 and 403 of this Code. The right to hearing is waived if the delivery of the report is refused or the report is otherwise undeliverable or the administrator does not timely request a hearing. After the hearing or upon expiration of the time period during which an administrator may request a hearing, if the examination reveals that the administrator is operating in violation of any applicable provision of the Illinois Insurance Code, any applicable Part of Title 50 of the Illinois Administrative Code or prior order, the Director, in the written order, may require the administrator to take any action the Director considers necessary or appropriate in accordance with the report or examination hearing. If the Director issues an order, it shall be issued within 90 days after the report is filed, or if there is a hearing, within 90 days after the conclusion of the hearing. The order is subject to review under the Administrative Review Law.
(Source: P.A. 84-887.)

215 ILCS 5/511.110

    (215 ILCS 5/511.110) (from Ch. 73, par. 1065.58-110)
    (Section scheduled to be repealed on January 1, 2027)
    Sec. 511.110. Administrative fine.
    (a) If the Director finds that one or more grounds exist for the revocation or suspension of a license issued under this Article, the Director may, in lieu of or in addition to such suspension or revocation, impose a fine upon the administrator.
    (b) With respect to any knowing and wilful violation of a lawful order of the Director, any applicable portion of the Illinois Insurance Code or Part of Title 50 of the Illinois Administrative Code, or a provision of this Article, the Director may impose a fine upon the administrator in an amount not to exceed $10,000 for each such violation. In no event shall such fine exceed an aggregate amount of $50,000 for all knowing and wilful violations arising out of the same action.
(Source: P.A. 93-32, eff. 7-1-03.)

215 ILCS 5/511.111

    (215 ILCS 5/511.111) (from Ch. 73, par. 1065.58-111)
    (Section scheduled to be repealed on January 1, 2027)
    Sec. 511.111. Insurance Producer Administration Fund. All fees and fines paid to and collected by the Director under this Article shall be paid promptly after receipt thereof, together with a detailed statement of such fees, into a special fund in the State Treasury to be known as the Insurance Producer Administration Fund. The monies deposited into the Insurance Producer Administration Fund shall be used only for payment of the expenses of the Department and shall be appropriated as otherwise provided by law for the payment of such expenses. Moneys in the Insurance Producer Administration Fund may be transferred to the Professions Indirect Cost Fund, as authorized under Section 2105-300 of the Department of Professional Regulation Law of the Civil Administrative Code of Illinois.
(Source: P.A. 98-463, eff. 8-16-13.)

215 ILCS 5/511.112

    (215 ILCS 5/511.112) (from Ch. 73, par. 1065.58-112)
    (Section scheduled to be repealed on January 1, 2027)
    Sec. 511.112. Fiduciary accounts and duties.
    (a) Administrators shall hold in a fiduciary capacity all contributions and premiums received or collected on behalf of a plan sponsor or insurer. Such funds shall not be used as general operating funds of the administrator. All contributions and premiums received or collected by the administrator from residents of this State, which the Administrator holds more than 15 days or deposits into an account which is not under the control of the plan sponsor or insurer, shall be placed in a special fiduciary account, which account shall be designated an "Administrator Trust Fund Account" ("ATF"). All resident and quasi-resident licensees required to maintain an ATF pursuant to this Section shall maintain such ATF with one or more financial institutions located within the State of Illinois and subject to jurisdiction of the Illinois courts. Funds belonging to 2 or more plans may be held in the same ATF, provided the administrator's records clearly indicate the funds belonging to each plan. Checks drawn on the ATF shall indicate on their face that they are drawn on the ATF of the administrator.
    (b) The administrator may make the following disbursements from the ATF:
        (1) contributions and premiums due insurers or other
    
persons providing life, accident and health coverage for a plan;
        (2) return contributions and premiums to a plan or
    
covered individual;
        (3) commissions or administrative fees due to the
    
administrator when earned pursuant to written agreement; and
        (4) transfers into the CASA of the administrator.
    (c) For each plan where an ATF is required, the balance in the ATF shall at all times be the amount deposited plus accrued interest, if any, less authorized disbursements. If the balance at the financial institution with respect to the ATF is less than the amount deposited plus accrued interest, if any, less authorized disbursements, the administrator shall be deemed to have misappropriated fiduciary funds and to have acted in a financially irresponsible manner.
    (d) If the ATF is interest bearing or income producing, the full nature of the account must first be disclosed to the plan sponsors or insurers on whose behalf the funds are or will be held. The administrator must secure written consent and authorization from the plan sponsors or insurers for the investment of the money and disposition of the interest or earnings. No investment shall be made which assumes any risk other than the risk that the obligor shall not pay the principal when due. The use of specialized techniques or strategies which incur additional risks to generate higher returns or to extend maturities is not permitted. Such techniques would include, but not be limited to, the following: Use of financial futures or options, buying on margins and pledging of ATF balances.
    (e) Administrators may place ATF funds in interest bearing or income producing investments and retain the interest or income thereon, providing the administrator obtains the prior written authorization of the plan sponsors or insurers on whose behalf the funds are to be held. In addition to savings and checking accounts, an administrator may invest in the following:
        (1) direct obligations of the United States of
    
America or U.S. Government agency securities with maturities of not more than one year;
        (2) certificates of deposit, with a maturity of not
    
more than one year, issued by financial institutions which are insured by the Federal Deposit Insurance Corporation (FDIC) or Federal Savings and Loan Insurance Corporation (FSLIC), so long as any such deposit does not exceed the maximum level of insurance protection provided to certificates of deposits held by such institutions;
        (3) repurchase agreements with financial institutions
    
or government securities dealers recognized as primary dealers by the Federal Reserve System provided:
            (A) the value of the repurchase agreement is
        
collateralized with assets which are allowable investments for ATF funds; and
            (B) the collateral has a market value at the time
        
the repurchase agreement is entered into at least equal to the value of the repurchase agreement; and
            (C) the repurchase agreement does not exceed 30
        
days.
        (4) commercial paper, provided the commercial paper
    
is rated at least P-1 by Moody's Investors Service, Inc. or at least A-1 by Standard & Poor's Corporation;
        (5) money market funds, provided the money market
    
fund invests exclusively in assets which are allowable investments pursuant to (1) through (4) above for ATF funds;
        (6) each investment transaction must be made in the
    
name of the administrator's ATF. The administrator must maintain evidence of any such investments. Each investment transaction must flow through the administrator's ATF.
    (f) The administrator shall hold in a fiduciary capacity all moneys which the administrator receives to pay claims and claim adjustment expenses. All resident and quasi-resident licensees shall place all such money for claims and claim adjustment expenses for residents of this State, whether received from a plan sponsor or insurer or from the ATF of the administrator, in a special fiduciary account in a financial institution located in this State. The account shall be designated a "Claims Administration Service Account" ("CASA"). Funds belonging to 2 or more plans may be held in the same CASA, provided the administrator's records clearly indicate the funds belonging to each plan. Checks drawn on the CASA shall indicate on their face that they are drawn on the CASA of the administrator.
    (g) No deposit shall be made into a CASA and no disbursement shall be made from a CASA except for claims and claims adjustment expenses. For each plan where a CASA is required, the balance in the CASA shall at all times be the amount deposited less claims and claims adjustment expenses paid. If the CASA balance is less than such amount, the administrator shall be deemed to have misappropriated fiduciary funds and to have acted in a financially irresponsible manner.
    (h)(l) Administrators shall maintain detailed books and records which reflect all transactions involving the receipt and disbursement of:
        (i) contributions and premiums received on behalf of
    
a plan sponsor or insurer; and
        (ii) claims and claim adjustment expenses received
    
and paid on behalf of a plan sponsor or insurer.
    (2) The detailed preparation, journalizing and posting of such books and records must be maintained on a timely basis and all journal entries for receipts and disbursements shall be supported by evidential matter, which must be referenced in the journal entry so that it may be traced for verification. Administrators shall prepare and maintain monthly financial institution account reconciliations of any ATF and CASA established by the administrator. The minimum detail required shall be as follows:
        (i) The sources, amounts and dates of any moneys
    
received and deposited by the administrator.
        (ii) The date and person to whom a disbursement is
    
made. If the amount disbursed does not agree with the amount billed or authorized, the administrator shall prepare a written record as to the reason.
        (iii) A description of the disbursement in such
    
detail to identify the source document substantiating the purpose of the disbursement.
    (i) Failure to maintain accurately and timely the books and records required above shall be deemed untrustworthy, hazardous or injurious to participants in the plan or the public and financially irresponsible.
    (j) This Section shall not apply to nonresident administrators who are subject to substantially similar requirements in their state of domicile.
(Source: P.A. 84-1431.)

215 ILCS 5/511.113

    (215 ILCS 5/511.113) (from Ch. 73, par. 1065.58-113)
    (Section scheduled to be repealed on January 1, 2027)
    Sec. 511.113. Unauthorized Activities. Nothing in this Article shall be construed to permit any person or entity to receive, or collect charges, contributions or premiums for, or adjust or settle claims in connection with any type of life or accident or health benefit unless such person or entity is authorized through the insurance laws of a state or the ERISA of 1974, 29 USC par. 1001 et seq. as amended, to provide such benefits.
(Source: P.A. 84-887.)

215 ILCS 5/511.114

    (215 ILCS 5/511.114)
    (Section scheduled to be repealed on January 1, 2027)
    Sec. 511.114. Drug formulary; notice. All administrators must comply with Section 155.37 of this Code.
(Source: P.A. 92-440, eff. 8-17-01.)

215 ILCS 5/511.118

    (215 ILCS 5/511.118)
    (Section scheduled to be repealed on January 1, 2027)
    Sec. 511.118. Managed Care Reform and Patient Rights Act. All administrators are subject to the provisions of Sections 55 and 85 of the Managed Care Reform and Patient Rights Act.
(Source: P.A. 91-617, eff. 1-1-00.)

215 ILCS 5/Art. XXXI.5

 
    (215 ILCS 5/Art. XXXI.5 heading)
ARTICLE XXXI 1/2.
THIRD PARTY PRESCRIPTION PROGRAMS

215 ILCS 5/512-1

    (215 ILCS 5/512-1) (from Ch. 73, par. 1065.59-1)
    Sec. 512-1. Short Title. This Article shall be known and may be cited as the "Third Party Prescription Program Act".
(Source: P.A. 82-1005.)

215 ILCS 5/512-2

    (215 ILCS 5/512-2) (from Ch. 73, par. 1065.59-2)
    Sec. 512-2. Purpose. It is hereby determined and declared that the purpose of this Article is to regulate certain practices engaged in by third-party prescription program administrators.
(Source: P.A. 82-1005.)

215 ILCS 5/512-3

    (215 ILCS 5/512-3) (from Ch. 73, par. 1065.59-3)
    Sec. 512-3. Definitions. For the purposes of this Article, unless the context otherwise requires, the terms defined in this Article have the meanings ascribed to them herein:
    (a) "Third party prescription program" or "program" means any system of providing for the reimbursement of pharmaceutical services and prescription drug products offered or operated in this State under a contractual arrangement or agreement between a provider of such services and another party who is not the consumer of those services and products. Such programs may include, but need not be limited to, employee benefit plans whereby a consumer receives prescription drugs or other pharmaceutical services and those services are paid for by an agent of the employer or others.
    (b) "Third party program administrator" or "administrator" means any person, partnership or corporation who issues or causes to be issued any payment or reimbursement to a provider for services rendered pursuant to a third party prescription program, but does not include the Director of Healthcare and Family Services or any agent authorized by the Director to reimburse a provider of services rendered pursuant to a program of which the Department of Healthcare and Family Services is the third party.
(Source: P.A. 95-331, eff. 8-21-07.)

215 ILCS 5/512-4

    (215 ILCS 5/512-4) (from Ch. 73, par. 1065.59-4)
    Sec. 512-4. Registration. All third party prescription programs and administrators doing business in the State shall register with the Director of Insurance. The Director shall promulgate regulations establishing criteria for registration in accordance with the terms of this Article. The Director may by rule establish an annual registration fee for each third party administrator.
(Source: P.A. 82-1005.)

215 ILCS 5/512-5

    (215 ILCS 5/512-5) (from Ch. 73, par. 1065.59-5)
    Sec. 512-5. Fiduciary and Bonding Requirements. A third party prescription program administrator shall (1) establish and maintain a fiduciary account, separate and apart from any and all other accounts, for the receipt and disbursement of funds for reimbursement of providers of services under the program, or (2) post, or cause to be posted, a bond of indemnity in an amount equal to not less than 10% of the total estimated annual reimbursements under the program.
    The establishment of such fiduciary accounts and bonds shall be consistent with applicable State law. If a bond of indemnity is posted, it shall be held by the Director of Insurance for the benefit and indemnification of the providers of services under the third party prescription program.
    An administrator who operates more than one third party prescription program may establish and maintain a separate fiduciary account or bond of indemnity for each such program, or may operate and maintain a consolidated fiduciary account or bond of indemnity for all such programs.
    The requirements of this Section do not apply to any third party prescription program administered by or on behalf of any insurance company, Health Care Service Plan Corporation or Pharmaceutical Service Plan Corporation authorized to do business in the State of Illinois.
(Source: P.A. 82-1005.)

215 ILCS 5/512-6

    (215 ILCS 5/512-6) (from Ch. 73, par. 1065.59-6)
    Sec. 512-6. Notice. Notice of any change in the terms of a third party prescription program, including but not limited to drugs covered, reimbursement rates, co-payments, and dosage quantity, shall be given to each enrolled pharmacy at least 30 days prior to the time it becomes effective.
(Source: P.A. 82-1005.)

215 ILCS 5/512-7

    (215 ILCS 5/512-7) (from Ch. 73, par. 1065.59-7)
    Sec. 512-7. Contractual provisions.
    (a) Any agreement or contract entered into in this State between the administrator of a program and a pharmacy shall include a statement of the method and amount of reimbursement to the pharmacy for services rendered to persons enrolled in the program, the frequency of payment by the program administrator to the pharmacy for those services, and a method for the adjudication of complaints and the settlement of disputes between the contracting parties.
    (b)(1) A program shall provide an annual period of at
    
least 30 days during which any pharmacy licensed under the Pharmacy Practice Act may elect to participate in the program under the program terms for at least one year.
        (2) If compliance with the requirements of this
    
subsection (b) would impair any provision of a contract between a program and any other person, and if the contract provision was in existence before January 1, 1990, then immediately after the expiration of those contract provisions the program shall comply with the requirements of this subsection (b).
        (3) This subsection (b) does not apply if:
            (A) the program administrator is a licensed
        
health maintenance organization that owns or controls a pharmacy and that enters into an agreement or contract with that pharmacy in accordance with subsection (a); or
            (B) the program administrator is a licensed
        
health maintenance organization that is owned or controlled by another entity that also owns or controls a pharmacy, and the administrator enters into an agreement or contract with that pharmacy in accordance with subsection (a).
            (4) This subsection (b) shall be inoperative
        
after October 31, 1992.
    (c) The program administrator shall cause to be issued an identification card to each person enrolled in the program. The identification card shall include:
        (1) the name of the individual enrolled in the
    
program; and
        (2) an expiration date if required under the
    
contractual arrangement or agreement between a provider of pharmaceutical services and prescription drug products and the third party prescription program administrator.
(Source: P.A. 95-689, eff. 10-29-07.)

215 ILCS 5/512-8

    (215 ILCS 5/512-8) (from Ch. 73, par. 1065.59-8)
    Sec. 512-8. Cancellation procedures. (a) The administrator of a program shall notify all pharmacies enrolled in the program of any cancellation of the coverage of benefits of any group enrolled in the program at least 30 days prior to the effective date of such cancellation. However, if the administrator of a program is not notified at least 45 days prior to the effective date of such cancellation, the administrator shall notify all pharmacies enrolled in the program of the cancellation as soon as practicable after having received notice.
    (b) When a program is terminated, all persons enrolled therein shall be so notified, and the employer shall make every reasonable effort to gain possession of any plan identification cards in such persons' possession.
    (c) Any person who intentionally uses a program identification card to obtain services from a pharmacy after having received notice of the cancellation of his benefits shall be guilty of a Class C misdemeanor. Persons shall be liable to the program administrator for all monies paid by the program administrator for any services received pursuant to any improper use of the identification card.
(Source: P.A. 82-1005.)

215 ILCS 5/512-9

    (215 ILCS 5/512-9) (from Ch. 73, par. 1065.59-9)
    Sec. 512-9. Denial of Payment. (a) No administrator shall deny payment to any pharmacy for covered pharmaceutical services or prescription drug products rendered as a result of the misuse, fraudulent or illegal use of an identification card unless such identification card had expired, been noticeably altered, or the pharmacy was notified of the cancellation of such card. In lieu of notifying pharmacies which have a common ownership, the administrator may notify a party designated by the pharmacy to receive such notice, in which case, notification shall not become effective until 5 calendar days after the designee receives notification.
    (b) No program administrator may withhold any payment to any pharmacy for covered pharmaceutical services or prescription drug products beyond the time period specified in the payment schedule provisions of the agreement, except for individual claims for payment which have been returned to the pharmacy as incomplete or illegible. Such returned claims shall be paid if resubmitted by the pharmacy to the program administrator with the appropriate corrections made.
(Source: P.A. 82-1005.)

215 ILCS 5/512-10

    (215 ILCS 5/512-10) (from Ch. 73, par. 1065.59-10)
    Sec. 512-10. Failure to Register. Any third party prescription program or administrator which operates without a certificate of registration or fails to register with the Director and pay the fee prescribed by this Article shall be construed to be an unauthorized insurer as defined in Article VII of this Code and shall be subject to all penalties contained therein.
    The provisions of the Article shall apply to all new programs established on or after January 1, 1983. Existing programs shall comply with the provisions of this Article on the anniversary date of the programs that occurs on or after January 1, 1983.
(Source: P.A. 82-1005.)

215 ILCS 5/Art. XXXI.75

 
    (215 ILCS 5/Art. XXXI.75 heading)
ARTICLE XXXI 3/4 PUBLIC INSURANCE ADJUSTERS
AND REGISTERED FIRMS
(Article scheduled to be repealed on January 1, 2027)

215 ILCS 5/512.51

    (215 ILCS 5/512.51) (from Ch. 73, par. 1065.59-51)
    (Section scheduled to be repealed on January 1, 2027)
    Sec. 512.51. Scope of Article. This Article shall apply to all Public Insurance Adjusters and Registered Firms as defined in Section 512.52.
(Source: P.A. 84-832.)

215 ILCS 5/512.52

    (215 ILCS 5/512.52) (from Ch. 73, par. 1065.59-52)
    (Section scheduled to be repealed on January 1, 2027)
    Sec. 512.52. Definitions. As used in this Article unless the context clearly otherwise requires:
    (a) "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.
    (b) "Public Insurance Adjuster" means a person engaged in the business of adjusting insurance claims who is licensed pursuant to this Article.
    (c) "Registered Firm" means a person registered with the Director under Section 512.57.
    (d) "Compensation" shall include, but need not be limited to, the following:
        1. any assignment of insurance proceeds or a
    
percentage thereof;
        2. any agreement to make repairs for the amount of
    
the insurance proceeds payable;
        3. assertion of any lien against insurance proceeds
    
payable.
    (e) "Person" embraces both natural persons and business entities of whatever type.
(Source: P.A. 95-213, eff. 1-1-08.)

215 ILCS 5/512.53

    (215 ILCS 5/512.53) (from Ch. 73, par. 1065.59-53)
    (Section scheduled to be repealed on January 1, 2027)
    Sec. 512.53. License required.
    (a) No person may engage in the business of adjusting insurance claims, nor advertise, solicit or hold himself out to be in the business of adjusting insurance claims, solicit or hold himself out to be a Public Insurance Adjuster, nor attempt to obtain a contract for Public Adjusting services, unless licensed or registered in accordance with the provisions of this Article, except that the provisions of this paragraph do not apply to a person admitted to the practice of law in this State, to a licensed agent adjusting loss or damage under a policy within his control or to a marine surveyor or average adjuster.
    (b) In addition to any other penalty set forth in this Article, any person violating paragraph (a) of this Section shall be guilty of a Class A misdemeanor, and any person misappropriating or converting any monies collected as a Public Insurance Adjuster, whether licensed or not, shall be guilty of a Class 4 felony.
    (c) All contracts entered into by any person violating subsection (a) of this Section are void and invalid.
(Source: P.A. 95-213, eff. 1-1-08.)

215 ILCS 5/512.54

    (215 ILCS 5/512.54) (from Ch. 73, par. 1065.59-54)
    (Section scheduled to be repealed on January 1, 2027)
    Sec. 512.54. Application and examination.
    (a) Each application for a Public Insurance Adjuster license shall be made on a form specified by the Director. The application shall be signed by the applicant and shall contain the applicant's declaration, under penalty of refusal, suspension or revocation of the Public Insurance Adjuster license, that the statements made in the application are true, correct and complete to the best of the applicant's knowledge and belief. Before approving the application, the Director shall be satisfied that the applicant (1) is an individual at least 18 years of age, and (2) is competent, trustworthy and of good business reputation.
    (b) Applicants for a Public Insurance Adjuster licensee shall pass a written examination. The examination shall reasonably test the knowledge of the applicant concerning the applicable insurance laws and rules and regulations of the Director and the duties and responsibilities of a Public Insurance Adjuster. All examinations provided for by this Section shall be conducted under rules and regulations prescribed from time to time by the Director, and the Director may make such arrangements as may be appropriate, including contracting with an outside testing service for administering such examinations. Any charges assessed by any such testing service for administering such examinations shall be paid directly by the individual applicants.
    Each person subject to an examination shall at the time of request for examination enclose with the application a non-refundable application fee made payable to the Director as provided in Section 512.63, plus a separate remittance if applicable made payable to the designated testing service for the total of such fees as the testing service charges for each of the various services being requested by the applicant. In the event an applicant appears and fails to pass, such person shall not be entitled to any refund and shall be required to submit a new request for examination together with all of the requisite fees before being rescheduled at a later date.
    (c) An applicant who becomes a resident of this State and who has filed with the Director certification by a public official having supervision of Public Insurance Adjusters in the prior state of residency evidencing that the applicant has passed a written examination and has held a public insurance adjuster license in good standing for the prior 24 months is not required to complete the examination required by paragraph (b). However, the Director may require the applicant to take that portion of the examination pertaining to Illinois law and rules and regulations of the Director.
    (d) The Director may issue a Public Insurance Adjuster license to any applicant who is not an Illinois resident without an examination only if (1) the applicant holds a like license from his state of residence, and (2) the applicant's state of residence accepts Illinois residents for licensing, and (3) the state in which the applicant resides requires no examination of Illinois resident Public Insurance Adjusters, and (4) the public official having supervision of Public Insurance Adjusters in the applicant's state of residence certifies that the applicant has passed a written examination.
    (e) The Director may issue a Public Insurance Adjuster license to any applicant who is not an Illinois resident and who cannot meet the requirements of paragraph (d) if the applicant passes a written examination in Illinois.
(Source: P.A. 84-832.)

215 ILCS 5/512.55

    (215 ILCS 5/512.55) (from Ch. 73, par. 1065.59-55)
    (Section scheduled to be repealed on January 1, 2027)
    Sec. 512.55. Public Insurance Adjuster license.
    (a) The Director shall issue a Public Insurance Adjuster license to an applicant who has:
        (1) met the requirements of Section 512.54; and
        (2) paid the fee as set forth in Section 512.63; and
        (3) filed with the Director a bond as prescribed in
    
Section 512.56.
    (b) Every Public Insurance Adjuster license shall remain in effect for one year from the date of its issuance.
    (c) Each Public Insurance Adjuster license shall contain the name, business address, resident address and personal identification number of the Public Insurance Adjuster, the date of issue, general conditions relative to expiration or termination and any other information the Director considers proper.
    (d) The holder of a Public Insurance Adjuster license shall notify the Director, in writing, of a change of either business or residence address within 30 days of such change.
    (e) Each Public Insurance Adjuster license shall remain in effect as long as the holder of the license maintains in force and effect the bond required by Section 512.56 and pays the annual fee required by Section 512.63 by the date due as prescribed by the Director, unless the license is revoked or suspended pursuant to Section 512.61.
    The Department may refuse to issue or may suspend the license of any person who fails to file a return, or to pay the tax, penalty or interest shown in a filed return, or to pay any final assessment of tax, penalty or interest, as required by any tax Act administered by the Illinois Department of Revenue, until such time as the requirements of any such tax Act are satisfied.
(Source: P.A. 95-213, eff. 1-1-08.)

215 ILCS 5/512.56

    (215 ILCS 5/512.56) (from Ch. 73, par. 1065.59-56)
    (Section scheduled to be repealed on January 1, 2027)
    Sec. 512.56. Bonds. Every applicant for a Public Insurance Adjuster license shall file a bond, in a form approved by the Director and executed by a surety company authorized to do business in this State, in favor of the people of the State of Illinois and payable to any party injured under the terms of the bond. The bond shall be filed with the application for a Public Insurance Adjuster license and shall remain in force while the applicant is licensed. The bond shall be continuous in form and in the amount of $5,000. The bond shall be conditioned upon full accounting and due payment, to the person entitled thereto, of funds coming into the Public Insurance Adjuster's possession incident to a transaction under his license. The Director shall be notified by the surety company 30 days in advance of any cancellation of the bond. A Public Insurance Adjuster license shall automatically terminate when a bond is not in force.
(Source: P.A. 83-1362.)

215 ILCS 5/512.57

    (215 ILCS 5/512.57) (from Ch. 73, par. 1065.59-57)
    (Section scheduled to be repealed on January 1, 2027)
    Sec. 512.57. Registered Firms.
    (a) No person shall engage in the business of adjusting insurance claims unless such person is licensed pursuant to this Article and registered with the Director under subsection (b) of this Section.
    No Public Insurance Adjuster may form or participate in any association, partnership or other business entity for the purpose of engaging in the business of adjusting insurance claims, unless such business entity is registered with the Director under subsection (b) of this Section.
    (b) To become a Registered Firm, a person must submit to the Director an application, on a form specified by the Director, and the fee required by Section 512.63. The Director may require any documents reasonably necessary to verify the information contained in the application.
    (c) Each Registered Firm must notify the Director, in writing, of any change in its business or residence address within 30 days of such change.
    (d) Each Registered Firm must notify the Director of each Public Insurance Adjuster who is a member, officer, director or employee of the Registered Firm, and report any changes in such status of any such Public Insurance Adjuster to the Director within 30 days thereof.
    (e) Each Registered Firm shall appoint one or more Public Insurance Adjusters who is an officer, director or member of the Firm to be responsible for the compliance of the Registered Firm with the laws of this State and the rules and regulations of the Director. The Registered Firm shall be responsible for the actions of its officers, directors, members and employees.
    (f) Each Registered Firm which, for any of the causes listed in Section 512.61, terminates its relationship with a Public Insurance Adjuster who is an officer, director, employee or member of the Registered Firm shall notify the Director, in writing, within 30 days of such termination of the specific reasons for such termination. The Registered Firm shall provide the Director with information, documents, records or statements pertaining to the termination. Any materials provided may be used by the Director in any action taken pursuant to Section 512.62. There shall be no liability on the part of, nor any cause of action against, the Director or the Registered Firm, or any authorized representative of either, for any statement made or materials provided pursuant to this paragraph.
    (g) The Director shall terminate any registration which does not comply with the requirements of this Article.
    (h) A registered firm may only be comprised of licensed Public Insurance Adjusters. All shareholders, officers, and directors of registered firms must be licensed pursuant to this Act. Any Public Insurance Adjuster who has a license that has been revoked, suspended, or not renewed, whether voluntarily or not, must withdraw from a registered firm within 30 days and give written notice of his or her resignation to the licensed firm within 30 days.
(Source: P.A. 95-213, eff. 1-1-08.)

215 ILCS 5/512.58

    (215 ILCS 5/512.58) (from Ch. 73, par. 1065.59-58)
    (Section scheduled to be repealed on January 1, 2027)
    Sec. 512.58. Rate schedules and contract forms.
    (a) A Public Insurance Adjuster shall not provide services until a written contract with the insured has been executed, on a form filed with and approved by the Director. At the option of the insured, any such contract which is executed within 5 business days after conclusion of the loss-producing occurrence shall be voidable for 10 days after execution. The insured may void the contract by notifying the Public Insurance Adjuster in writing by (i) registered or certified mail, return receipt requested, to the address shown on the contract; or (ii) personally serving the notice on the Public Insurance Adjuster.
    (b) The written contract required by paragraph (a) shall constitute the entire agreement between the Public Insurance Adjuster and the insured. A copy of the contract shall be given to the insured when the contract is executed. Such contract forms may not include any hold harmless agreement which provides indemnification to the Public Insurance Adjuster by the insured for liability resulting from the Public Insurance Adjuster's negligence, nor any power-of-attorney by which the Public Insurance Adjuster can act in the place and instead of the insured.
(Source: P.A. 95-213, eff. 1-1-08.)

215 ILCS 5/512.59

    (215 ILCS 5/512.59) (from Ch. 73, par. 1065.59-59)
    (Section scheduled to be repealed on January 1, 2027)
    Sec. 512.59. Performance standards applicable to all Public Insurance Adjusters.
    (a) A Public Insurance Adjuster shall not represent that he is a representative of an insurance company, a fire department, or the State of Illinois, or that he is a fire investigator, or that his services are required for the insured to submit a claim to the insured's insurance company, or that he may provide legal advice or representation to the insured. A Public Insurance Adjuster may represent that he has been licensed by the State of Illinois.
    (b) A Public Insurance Adjuster shall not agree to any loss settlement without the insured's knowledge and consent and shall provide the insured with a document setting forth the scope, amount, and value of the damages prior to requesting the insured for authority to settling any loss.
    (c) If the Public Insurance Adjuster refers the insured to a contractor, the Public Insurance Adjuster warrants that all work will be performed in a workmanlike manner and conform to all statutes, ordinances and codes. Should the work not be completed in a workmanlike manner, the Public Insurance Adjuster shall be responsible for any and all costs and expense required to complete or repair the work in a workmanlike manner.
    (d) In all cases where the loss giving rise to the claim for which the Public Insurance Adjuster was retained arise from damage to a personal residence, the insurance proceeds shall be delivered in person 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 Insurance Adjuster, the insured shall release such portion of the proceeds which are due the Public Insurance 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 insured within 30 calendar days, the insured shall provide the Public Insurance Adjuster with a written explanation of the reason for the delay.
    (e) A Public Insurance Adjuster may not propose or attempt to propose to any person that the Public Insurance 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.
    (f) A Public Insurance Adjuster shall not advance money or any valuable consideration to an insured pending adjustment of a claim.
    (g) A Public Insurance Adjuster shall not provide legal advice or representation to the insured, or engage in the unauthorized practice of law.
(Source: P.A. 99-642, eff. 7-28-16.)

215 ILCS 5/512.60

    (215 ILCS 5/512.60) (from Ch. 73, par. 1065.59-60)
    (Section scheduled to be repealed on January 1, 2027)
    Sec. 512.60. Maintenance of records.
    (a) All Public Insurance Adjusters shall maintain a complete record of each of their transactions as a Public Insurance Adjuster. The records required by this Section shall include:
        (1) name of the insured;
        (2) date, location and amount of loss;
        (3) copy of the contract between the Public Insurance
    
Adjuster and insured;
        (4) name of the insurer, amount, expiration date and
    
number of each policy carried with respect to the loss;
        (5) itemized statement of the insured's recoveries;
        (6) name of the Public Insurance Adjuster who
    
executed the contract;
        (7) name of the attorney representing the insured, if
    
applicable, and the name of the representative of the insurance company; and
        (8) copy of the statement provided to the insured
    
explaining the amount and value of the damages to the insured premises, the amount of insurance proceeds recovered from the insured, and the amount and values of all expenses incurred to adjust the claim and the amount and value of the Public Insurance Adjuster's fees and charges.
    (b) Records shall be maintained for at least three years after the termination of the transaction with an insured and shall be open to examination by the Director at any time.
    (c) A Public Insurance Adjuster shall not divulge information regarding any insured without written consent from the insured, except that the Public Insurance Adjuster may divulge such information to an insurance company or its representative which insures the insured, to the Department of Insurance, or upon a court order or an Internal Revenue Service subpoena.
    (d) Where a Public Insurance Adjuster is engaged or employed by a Registered Firm, the records required by this Section may be maintained by such Registered Firm on behalf of the Public Insurance Adjuster.
(Source: P.A. 95-213, eff. 1-1-08.)

215 ILCS 5/512.61

    (215 ILCS 5/512.61) (from Ch. 73, par. 1065.59-61)
    (Section scheduled to be repealed on January 1, 2027)
    Sec. 512.61. License suspension, revocation or denial.
    (a) Any license issued under this Article may, be suspended or revoked, and any application for a license may be denied, if the Director finds that the holder of or applicant for a license has:
        (1) willfully violated any provision of this Code or
    
any rule or regulation promulgated by the Director; or
        (2) intentionally made a material misstatement in an
    
application for a license as a Public Insurance Adjuster; or
        (3) obtained or attempted to obtain a license as a
    
Public Insurance Adjuster through misrepresentation or fraud; or
        (4) misappropriated, converted to his own use or
    
improperly withheld money due others; or
        (5) intentionally misrepresented the terms of any
    
insurance policy; or
        (6) used fraudulent, coercive or dishonest practices,
    
or demonstrated incompetence, untrustworthiness or financial irresponsibility in the transaction of business as a Public Insurance Adjuster; or
        (7) been convicted of any felony or misdemeanor
    
involving dishonesty or fraud, unless the individual demonstrates to the Director sufficient rehabilitation to warrant the public trust; or
        (8) knowingly transacted the business of a Public
    
Insurance Adjuster in conjunction with an individual who was not licensed at the time; or
        (9) failed to appear without reasonable cause or
    
excuse in response to a subpoena lawfully issued by the Director; or
        (10) a license as a Public Insurance Adjuster
    
suspended or revoked or an application denied in any other state, district, territory or province on a ground similar to one of the grounds stated in this Section; or
        (11) failed to comply with or violated any of the
    
standards set forth in Section 512.59; or
        (12) failed to maintain the records required by
    
Section 512.60; or
        (13) engaged in the unauthorized practice of law.
    (b) Revocation, suspension, or the denial of an application pursuant to this Section shall be by written notice served upon the applicant by certified or registered mail sent to the address specified in the application. The applicant may request a hearing in writing within 30 days from the date of mailing as provided in Section 402. The hearing shall be held pursuant to Section 2402 of Title 50 of the Code.
    (c) Upon notification of the issuance of an order suspending or revoking a Public Insurance Adjuster's license, the licensee or other person having possession or custody of such license shall promptly deliver it to the Director in person or by mail. The Director shall publish the name of each Public Insurance Adjuster whose license is suspended or revoked, after such suspension or revocation becomes final, in a manner designed to notify interested insurance companies and other persons.
    (d) Any individual whose Public Insurance Adjuster's license is revoked or whose application is denied pursuant to this Section shall be ineligible to apply for a Public Insurance 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. 95-213, eff. 1-1-08.)

215 ILCS 5/512.61a

    (215 ILCS 5/512.61a) (from Ch. 73, par. 1065.59-61a)
    (Section scheduled to be repealed on January 1, 2027)
    Sec. 512.61a. In addition to other grounds specified in this Act, the Director may refuse to issue or may suspend the license of any person who has failed to file a return; or to pay the tax, penalty or interest shown on a filed return; or to pay any final assessment of any tax due to the Department of Revenue, until such time as the requirements of any such tax Act are satisfied.
(Source: P.A. 86-905.)

215 ILCS 5/512.62

    (215 ILCS 5/512.62) (from Ch. 73, par. 1065.59-62)
    (Section scheduled to be repealed on January 1, 2027)
    Sec. 512.62. 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 Insurance 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 report of examination shall be verified by the examiners.
    (d) If a report is made, the Director shall cause the report to be delivered to the person being examined either in person or by certified or registered mail to the last known address specified in the records of the Department of Insurance. The Director must afford the person an opportunity to request a hearing with reference to the facts and other evidence and allegations therein contained. The person may request a hearing within 14 calendar days after receipt of the examination report by giving the Director written notice of such request, together with a written statement of its objections. The Director must conduct the hearing in accordance with Sections 402 and 403, and must issue a written order based upon the examination report and upon the hearing within 90 days after hearing. If the report is refused or otherwise undeliverable or a hearing is not requested within 14 days, the right to a hearing shall be deemed waived. After such hearing, if the examination reveals that the person is operating in violation of any law, regulation or prior order, the Director in the written order may require the person to take any action he considers necessary or appropriate in accordance with the report of examination.
    (e) Any person who violates or aids and abets any violation of a written order issued pursuant to this Section shall be guilty of a business offense and may be fined not more than $5,000.
(Source: P.A. 83-1362.)

215 ILCS 5/512.63

    (215 ILCS 5/512.63) (from Ch. 73, par. 1065.59-63)
    (Section scheduled to be repealed on January 1, 2027)
    Sec. 512.63. Fees. The fees required by this Article are as follows:
        (1) Public Insurance Adjuster license annual fee,
    
$100;
        (2) registration of firms, $100;
        (3) application fee for processing each request to
    
take the written examination for a Public Adjuster license, $20.
(Source: P.A. 100-863, eff. 8-14-18.)

215 ILCS 5/512.64

    (215 ILCS 5/512.64) (from Ch. 73, par. 1065.59-64)
    (Section scheduled to be repealed on January 1, 2027)
    Sec. 512.64. Injunctive relief. Any person who acts as or holds himself out to be either engaged in the business of adjusting insurance claims or a Public Insurance Adjuster without holding a valid and current Public Insurance Adjuster's license 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 such 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 such 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, the court may enter an order or judgment perpetually enjoining the defendant from further such practice. In all proceedings hereunder the court, in its discretion, may apportion the costs among the parties interested in the action, including cost 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. 95-213, eff. 1-1-08.)

215 ILCS 5/Art. XXXIIA

 
    (215 ILCS 5/Art. XXXIIA heading)
ARTICLE XXXIIA. PREMIUM FINANCE REGULATION

215 ILCS 5/513a1

    (215 ILCS 5/513a1) (from Ch. 73, par. 1065.60a1)
    Sec. 513a1. Scope of Article.
    (a) Except as provided in subsection (b), this Article applies to all persons engaged in the business of financing insurance premiums, entering into premium finance agreements, or otherwise acquiring premium finance agreements, and insurance companies and insurance producers as defined in this Code, except in connection with premiums on the kinds of business described as Class 1(a) or Class 1(b) of Section 4.
    (b) Except for the provisions of Section 513a11 that apply to all premium financing agreements in which the right to cancel one or more policies of insurance on behalf of the named has been assigned to the lender, this Article does not apply to the following entities:
        (1) Credit unions, as defined in the Illinois Credit
    
Union Act.
        (2) Banks, as defined in the Illinois Banking Act.
        (3) Savings and loan associations, as defined in the
    
Illinois Savings and Loan Act of 1985.
        (4) Persons operating under the provisions of Section
    
4a of the Interest Act.
        (5) Persons operating under the Consumer Installment
    
Loan Act or the Consumer Finance Act.
        (6) Persons that acquire premium finance agreements
    
from insurance companies and entities described in paragraphs (1) through (5).
(Source: P.A. 87-811.)

215 ILCS 5/513a2

    (215 ILCS 5/513a2) (from Ch. 73, par. 1065.60a2)
    Sec. 513a2. Definitions.
    (a) "Accepted agreement" means a premium finance agreement deemed to be accepted by a premium finance company when a binder number or policy number is provided for each policy premium listed on the premium finance agreement and premium payment book or when the first premium payment notice has been sent to the named insured.
    (b) "Financing insurance premiums" means to be engaged in the practice of:
        (1) advancing monies directly or indirectly to an
    
insurer pursuant to the terms of an acquired premium finance agreement; or
        (2) allowing 10% or more of a producer's or
    
registered firm's premium accounts receivable to be more than 90 days past due.
    (c) "Premium finance agreement" means a promissory note, loan contract, or agreement by which an insured or prospective insured promises to pay to another person an amount advanced or to be advanced thereunder to an insurer in payment of premiums on an insurance contract together with a service charge and which contains an assignment of or is otherwise secured by the unearned premium payable by the insurer upon cancellation of the insurance contract; provided, however, that a premium finance agreement shall not include an installment sale contract, lease agreement, security agreement, or mortgage covering personal or real property that includes a charge for insurance or pursuant to which the vendor, lessor, lienholder, or mortgagee is authorized to pay or advance the premium for insurance with respect to that property.
    (d) "Premium finance company" means any person engaged in the business of financing insurance premiums, of entering into premium finance agreements with insureds, or of acquiring premium finance agreements.
(Source: P.A. 90-655, eff. 7-30-98.)

215 ILCS 5/513a3

    (215 ILCS 5/513a3) (from Ch. 73, par. 1065.60a3)
    Sec. 513a3. License required.
    (a) No person may act as a premium finance company or hold himself out to be engaged in the business of financing insurance premiums, either directly or indirectly, without first having obtained a license as a premium finance company from the Director.
    (b) An insurance producer shall be deemed to be engaged in the business of financing insurance premiums if 10% or more of the producer's total premium accounts receivable are more than 90 days past due.
    (c) In addition to any other penalty set forth in this Article, any person violating subsection (a) of this Section may, after hearing as set forth in Article XXIV of this Code, be required to pay a civil penalty of not more than $2,000 for each offense.
    (d) In addition to any other penalty set forth in this Article, any person violating subsection (a) of this Section is guilty of a Class A misdemeanor. Any individual violating subsection (a) of this Section, and misappropriating or converting any monies collected in conjunction with the violation, is guilty of a Class 4 felony.
(Source: P.A. 93-32, eff. 7-1-03.)

215 ILCS 5/513a4

    (215 ILCS 5/513a4) (from Ch. 73, par. 1065.60a4)
    Sec. 513a4. Application and license.
    (a) Each application for a premium finance license shall be made on a form specified by the Director and shall be signed by the applicant declaring 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. The Director shall cause to be issued a license to each applicant that has demonstrated to the Director that the applicant:
        (1) is competent and trustworthy and of a good
    
business reputation;
        (2) has a minimum net worth of $50,000; and
        (3) has paid the fees required by this Article.
    (b) Each applicant at the time of request for a license or renewal of a license shall:
        (1) certify that no charge for financing premiums
    
shall exceed the rates permitted by this Article;
        (2) certify that the premium finance agreement or
    
other forms being used are in compliance with the requirements of this Article;
        (3) certify that he or she has a minimum net worth of
    
$50,000; and
        (4) attach with the application a non-refundable
    
annual fee of $400.
    (c) An applicant who has met the requirements of subsection (a) and subsection (b) shall be issued a premium finance license.
    (d) Each premium finance license shall remain in effect as long as the holder of the license annually continues to meet the requirements of subsections (a) and (b) by the due date unless the license is revoked or suspended by the Director.
    (e) The individual holder of a premium finance license shall inform the Director in writing of a change in residence address within 30 days of the change, and a corporation, partnership, or association holder of a premium finance license shall inform the Director in writing of a change in business address within 30 days of the change.
    (f) Every partnership or corporation holding a license as a premium finance company shall appoint one or more partners or officers to be responsible for the firm's compliance with the Illinois Insurance Code and applicable rules and regulations. Any change in the appointed person or persons shall be reported to the Director in writing within 30 days of the change.
(Source: P.A. 93-32, eff. 7-1-03.)

215 ILCS 5/513a5

    (215 ILCS 5/513a5) (from Ch. 73, par. 1065.60a5)
    Sec. 513a5. Insurance Producer Administration Fund. All fees and penalties paid to and collected by the Director under this Article shall be paid promptly after receipt, together with a detailed statement of the fees, into the Insurance Producer Administration Fund.
(Source: P.A. 98-463, eff. 8-16-13.)

215 ILCS 5/513a6

    (215 ILCS 5/513a6) (from Ch. 73, par. 1065.60a6)
    Sec. 513a6. Felony convictions. Any person or authorized member of a partnership or corporation who, while licensed as a premium finance company, is convicted of a felony shall report the conviction to the Director within 30 days of the entry date of the judgement. Within that 30 day period, the person shall also provide the Director with a copy of the judgement, the probation or commitment order, and any other relevant document.
(Source: P.A. 87-811.)

215 ILCS 5/513a7

    (215 ILCS 5/513a7) (from Ch. 73, par. 1065.60a7)
    Sec. 513a7. License suspension; revocation or denial.
    (a) Any license issued under this Article may be suspended, revoked, or denied if the Director finds that the licensee or applicant:
        (1) has wilfully violated any provisions of this Code
    
or the rules and regulations thereunder;
        (2) has intentionally made a material misstatement in
    
the application for a license;
        (3) has obtained or attempted to obtain a license
    
through misrepresentation or fraud;
        (4) has misappropriated or converted to his own use
    
or improperly withheld monies;
        (5) has used fraudulent, coercive, or dishonest
    
practices or has demonstrated incompetence, untrustworthiness, or financial irresponsibility;
        (6) has been, within the past 3 years, convicted of a
    
felony, unless the individual demonstrates to the Director sufficient rehabilitation to warrant public trust;
        (7) has failed to appear without reasonable cause or
    
excuse in response to a subpoena issued by the Director;
        (8) has had a license suspended, revoked, or denied
    
in any other state on grounds similar to those stated in this Section; or
        (9) has failed to report a felony conviction as
    
required by Section 513a6.
    (b) Suspension, revocation, or denial of a license under this Section shall be by written order sent to the licensee or applicant by certified or registered mail at the address specified in the records of the Department. The licensee or applicant may in writing request a hearing within 30 days from the date of mailing. If no written request is made the order shall be final upon the expiration of that 30 day period.
    (c) If the licensee or applicant requests a hearing under this Section, the Director shall issue a written notice of hearing sent to the licensee or applicant by certified or registered mail at his address, as specified in the records of the Department, and stating:
        (1) the grounds, charges, or conduct that justifies
    
suspension, revocation, or denial under this Section;
        (2) the specific time for the hearing, which may not
    
be fewer than 20 nor more than 30 days after the mailing of the notice of hearing; and
        (3) a specific place for the hearing, which may be
    
either in the City of Springfield or in the county where the licensee's principal place of business is located.
    (d) Upon the suspension or revocation of a license, the licensee or other person having possession or custody of the license shall promptly deliver it to the Director in person or by mail. The Director shall publish all suspensions and revocations after they become final in a manner designed to notify interested insurance companies and other persons.
    (e) Any person whose license is revoked or denied under this Section shall be ineligible to apply for any license for 2 years. A suspension under this Section may be for a period of up to 2 years.
    (f) In addition to or instead of a denial, suspension, or revocation of a license under this Section, the licensee may be subjected to a civil penalty of up to $2,000 for each cause for denial, suspension, or revocation. The penalty is enforceable under subsection (5) of Section 403A of this Code.
(Source: P.A. 93-32, eff. 7-1-03.)

215 ILCS 5/513a8

    (215 ILCS 5/513a8) (from Ch. 73, par. 1065.60a8)
    Sec. 513a8. Examinations.
    (a) The Director may examine any applicant for or holder of a premium finance license.
    (b) All persons being examined, as well as their officers and directors, shall provide to the Director convenient and free access, at all reasonable hours at their offices, to all books, records, documents, and other papers relating to the person's insurance and premium financing business affairs. The licensee or its officers, directors, and employees shall facilitate and aid the Director in the examinations as much as it is in their power to do so.
    (c) The Director may designate an examiner or examiners to conduct any examination under this Section. The Director or his designee may administer oaths and examine under oath any individual relative to the business of the person being examined.
    (d) The examiners designated by the Director under this Section may make reports to the Director. Any report alleging substantive violations of this Code or the rules and regulations thereunder shall be in writing and be based upon facts obtained by the examiners. The report of examination shall be verified by the examiners.
    (e) If a report is made, the Director shall either deliver a duplicate thereof to the licensee being examined or send the duplicate by certified or registered mail to the licensee's address of record. The Director shall afford the licensee an opportunity to request a hearing with reference to the facts and other evidence contained in the report. The licensee may request a hearing within 14 calendar days after he receives the duplicate of the examination report by giving the Director written notice of that request, together with written statement of the licensee's objection to the report. The Director shall, if requested to do so, conduct a hearing in accordance with Sections 402 and 403. The Director shall issue a written order based upon the examination report within 90 days after the report is filed or within 90 days after the hearing, if a hearing is held. If the report is refused or otherwise undeliverable or a hearing is not requested in a timely fashion, the right to a hearing is waived. After the hearing or the expiration of the time period in which a licensee may request a hearing, if the examination reveals that the licensee is operating in violation of any law, this Code or rules and regulations promulgated thereunder, or prior order, the Director in the written order may require the licensee to take any action the Director considers necessary or appropriate in accordance with the report or examination hearing. The order is subject to review under the Administrative Review Law.
    (f) Any licensee who violates or aids and abets any violation of a written order issued under this Section shall be guilty of a business offense, and his license may be revoked or suspended under Section 513a7, and he may be fined not less than $501 nor more than $5,000.
(Source: P.A. 87-811.)

215 ILCS 5/513a9

    (215 ILCS 5/513a9) (from Ch. 73, par. 1065.60a9)
    Sec. 513a9. Premium finance agreement.
    (a) A premium finance agreement must be dated and signed by or on behalf of the named insured, and the printed portion shall be in at least 8-point type. The following items must be set forth on the first page of the accepted finance agreement:
        (1) the total amount of the premiums;
        (2) the amount of the down payment;
        (3) the principal balance (the difference between
    
items (1) and (2));
        (4) the amount of the finance charges expressed in
    
dollars and as an annual percentage rate;
        (5) the balance payable by the insured (sum of items
    
(3) and (4));
        (6) the number of installments, the due dates
    
thereof, and the amount of each installment expressed in dollars; and
        (7) the policy numbers or binder numbers.
    (b) The premium finance company is required to furnish full and complete disclosure of the terms and conditions of the premium finance agreement including, but not limited to, the specific insurance coverages financed to the named insured no later than the date that the first premium payment notice is sent to the insured.
    (c) As to policies written primarily for personal, family, or household use, the premium finance company must:
        (1) deliver or mail the premium check or checks in
    
the amount of the principal balance directly to the insurer or insurers unless the insurer or insurers have given written authority to the premium finance company to deliver the checks to the producer;
        (2) issue the premium check or checks payable to the
    
insurer, insurers, or, if the insurer gives written authority to the premium finance company, to the producer; and
        (3) properly identify the premium check or checks by
    
policy number or binder number when the premium is paid to the insurer or insurers.
    (d) As to all other policies the premium finance company may:
        (1) deliver or mail the premium check or checks in
    
the amount of the principal balance directly to the producer; and
        (2) issue the premium check or checks payable to the
    
producer.
    (e) A premium finance company that pays the financed premium to the producer pursuant to subsection (d) establishes the producer as the agent of the premium finance company for payment of the premium and for receipt of any return premium.
(Source: P.A. 89-265, eff. 1-1-96; 90-381, eff. 8-14-97.)

215 ILCS 5/513a10

    (215 ILCS 5/513a10) (from Ch. 73, par. 1065.60a10)
    Sec. 513a10. Maximum service charge.
    (a) No service charge shall be made for financing premiums other than as permitted by this Article.
    (b) The service charge is to be computed on the principal balance from the effective date of the insurance coverage for which the premiums are being advanced to and including the date when the final installment of the premium finance agreement is payable.
    (c) The service charge shall be a maximum of $10 per $100 per year plus an allowable charge as follows:
Allowable ChargeAmount of Principal
Per Finance AgreementBalance
$20$0 to $499
$30$500 to $999
$40$1000 or more
    (d) The service charge or any other charge made by the licensee does not have to be refunded upon cancellation or prepayment. The allowable charge is considered to be part of the service charge.
    (e) A premium finance agreement may provide for a delinquency charge of not less than $1 nor more than 5% of any installment in default for more than 5 days.
    (f) Any other charges shall be disclosed in the premium finance agreement.
(Source: P.A. 87-811.)

215 ILCS 5/513a11

    (215 ILCS 5/513a11) (from Ch. 73, par. 1065.60a11)
    Sec. 513a11. Cancellation requirements upon default.
    (a) When a premium finance agreement contains a power of attorney enabling the premium finance company to cancel any insurance contract or contracts listed in the premium finance agreement, the insurance contract or contracts shall not be cancelled by the premium finance company unless the request for cancellation is effectuated under this Section.
    (b) Not less than 10 days written notice shall be mailed to the named insured of the intent of the premium finance company to cancel the insurance contract unless the default is cured within the 10 day period.
    (c) After expiration of the 10 day period, the premium finance company may request, in the name of the named insured, cancellation of the insurance contract or contracts by mailing or hand delivering to the insurer a request for cancellation, and the insurance contract shall be cancelled as if the request for cancellation had been submitted by the named insured, but without requiring the return of the insurance contract or contracts. The premium finance company shall also mail a copy of the request for cancellation to the named insured at his last known address.
    (d) All statutory, regulatory, and contractual restrictions providing that the insurance contract may not be cancelled unless notice is given to a governmental agency, mortgagee, or other third party shall apply where cancellation is effected under provisions of this Section. The insurer shall give the notice to any governmental agency, mortgagee, or other third party on or before the fifth business day after it receives the notice of cancellation from the premium finance company. For purposes of this Section, any governmental agency, mortgagee, or other third party may opt to receive notices electronically.
    (e) In the event that the collection of return premiums for the account of the named insured results in a surplus over the amount due from the named insured, the premium finance company shall refund the excess to the named insured; however, no refund is required if it amounts to less than $5.
    (f) All cancellation provisions required of the premium finance company and insurer are applicable to any policy to which Section 143.11 applies.
(Source: P.A. 93-713, eff. 1-1-05.)