ADMINISTRATIVE CODE

TITLE 50: INSURANCE
CHAPTER I: DEPARTMENT OF INSURANCE
SUBCHAPTER ii: INSURANCE PRODUCERS, LIMITED INSURANCE REPRESENTATIVES AND BUSINESS ENTITIES
PART 3118 LICENSING OF PUBLIC ADJUSTERS

Section 3118.10 Authority (Repealed)

Section 3118.20 Purpose and Scope

Section 3118.25 Definitions

Section 3118.30 Engaged in the Business of Adjusting Insurance Claims (Repealed)

Section 3118.35 License Required

Section 3118.40 Valuable Consideration (Repealed)

Section 3118.45 Fingerprinting

Section 3118.50 Records Material

Section 3118.60 Grandfather License Provisions (Repealed)

Section 3118.65 Resident License

Section 3118.70 Nonresident Public Adjusters (Repealed)

Section 3118.80 Contract Between Public Adjuster and Insured

Section 3118.85 Financial Disclosure and Consumer Rights Notice

Section 3118.90 Charges for Services

Section 3118.95 Required Disclosure (Repealed)

Section 3118.100 Maintenance of Records (Repealed)

Section 3118.110 Performance Standards Applicable to All Public Adjusters (Repealed)

Section 3118.115 Performance Standards Applicable to All Public Adjusters

Section 3118.120 Hearings

Section 3118.130 Severability

TITLE 50: INSURANCE
CHAPTER I: DEPARTMENT OF INSURANCE
SUBCHAPTER ii: INSURANCE PRODUCERS, LIMITED INSURANCE REPRESENTATIVES AND BUSINESS ENTITIES
PART 3118 LICENSING OF PUBLIC ADJUSTERS
SECTION 3118.10 AUTHORITY (REPEALED)

Section 3118.10 Authority (Repealed)

(Source: Repealed at 47 Ill. Reg. 2301, effective February 1, 2023)

Section 3118.20 Purpose and Scope

The purpose of this Part is to regulate the activities of public adjusters. This Part applies to all public adjusters licensed in accordance with Article XLV of the Code.

(Source: Amended at 47 Ill. Reg. 2301, effective February 1, 2023)

Section 3118.25 Definitions

"Code" means the Illinois Insurance Code [215 ILCS 5].

"Department" means the Illinois Department of Insurance.

"Director" means the Director of the Illinois Department of Insurance.

(Source: Amended at 47 Ill. Reg. 2301, effective February 1, 2023)

Section 3118.30 Engaged in the Business of Adjusting Insurance Claims (Repealed)

(Source: Repealed at 14 Ill. Reg. 17978, effective October 18, 1990)

Section 3118.35 License Required

All contracts entered into by anyone violating Section 1515 or Section 1575 of the Code are void and invalid.

(Source: Amended at 48 Ill. Reg. 7257, effective April 30, 2024)

Section 3118.40 Valuable Consideration (Repealed)

(Source: Repealed at 14 Ill. Reg. 17978, effective October 18, 1990)

Section 3118.45 Fingerprinting

Prior to the Department's issuance of a public adjuster's license or a renewal of the existing license, the applicant or adjuster (resident and non-resident) must have his or her fingerprints on file with the Department in accordance with Section 1520 of the Code.

(Source: Amended at 47 Ill. Reg. 2301, effective February 1, 2023)

Section 3118.50 Records Material

As used in Section 1585 of the Code, records material means all books, papers, and documentary materials regardless of physical form or characteristics made, produced, executed, or received by any public adjuster pursuant to a law or in connection with the transaction of its business and preserved or appropriate for preservation by that adjuster or its successors as evidence of the organization, function, policies, decisions, procedures, obligations, and business of the adjuster or because of the informational data contained therein.

(Source: Amended at 47 Ill. Reg. 2301, effective February 1, 2023)

Section 3118.60 Grandfather License Provisions (Repealed)

(Source: Repealed at 39 Ill. Reg. 1528, effective January 9, 2015)

Section 3118.65 Resident License

a) Each public adjuster shall complete continuing education in accordance with Section 1565 of the Code. The public adjuster must complete the continuing education no later than 30 days prior to the license renewal date to allow time for the continuing education provider to submit proof of completion to the Department;

b) Courses completed prior to the original issue date of the license shall not be used to meet the continuing education requirements.

c) The public adjuster may accumulate a maximum of 36 credit hours on file with the Department. Ethics instruction hours shall not be accumulated to meet the next compliance period, and must be completed in the continuing education compliance period for the renewal.

(Source: Amended at 47 Ill. Reg. 2301, effective February 1, 2023)

Section 3118.70 Nonresident Public Adjusters (Repealed)

(Source: Repealed at 14 Ill. Reg. 17978, effective October 18, 1990)

Section 3118.80 Contract Between Public Adjuster and Insured

a) Each public adjuster shall file with and secure the approval of the Director of each contract before it is used in the State of Illinois.

b) Each contract form filing submitted for approval must include provisions required by Section 1575 of the Code and must be consistent with the provisions of Article XLV of the Code. Contract form filings must include:

1) The names and license numbers of the public adjusters making the filing;

2) Notification as to whether the filing is new or supersedes a current filing. Identification of all changes in all superseding filings, as well as identification of all superseded forms, is required; and

3) The effective date of use.

c) All contracts must contain the following and be formatted in no less than 10-point font:

1) Legible full name of the person signing the contract, as specified in the Department records;

2) Form number and edition of the form must appear in the lower left-hand corner of the contract form to be approved;

3) Effective date of use;

4) Permanent home state business address, email address, and phone number;

5) License number or space for indicating the license number if more than one public adjuster will be using the contract;

6) The title "Public Adjuster Contract" printed at the head of the contract form with the name of the public adjuster or the public adjuster business entity and the location and telephone number of the public adjuster's principal place of business. Unless located in a rural area that does not use a street address, P.O. Box addresses are not permitted unless the street address is also included;

7) A place to list the insured's full name, street address, insurance company name, and policy number, if known or upon notification;

8) A description of the loss and its location;

9) A description of services to be provided to the insured;

10) A place for the signatures of the public adjuster and the insured;

11) A place for the date and time the contract was signed by the public adjuster and date and time the contract was signed by the insured;

12) Attestation language stating that the public adjuster is fully bonded pursuant to State law;

13) Disclosure of full salary, fee, commission, compensation or other considerations the public adjuster is to receive for services, including any applicable cap under Section 1570 of the Code; [215 ILCS 5/1575(a)]

14) Notice that the written contract shall constitute the entire agreement between the public adjuster and the insured;

15) Notice that, 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 insurance adjuster in writing by:

A) registered or certified mail, return receipt requested, to the address shown on the contract with a postmark date within 5 days of execution of the contract;

B) personally serving the notice on the public insurance adjuster; or

C) sending an email to the email address shown on the contract. [215 ILCS 5/1575(j)]

16) Notice that, if not later than 5 business days after the date of the loss is reported to the insurer, the insurer either pays or commits in writing to pay the policy limit, the public adjuster shall not receive a commission but only reasonable compensation for services provided.

17) Attestation language stating that the public adjuster who signed the contract is the public adjuster who solicited the public adjuster business.

(Source: Amended at 48 Ill. Reg. 7257, effective April 30, 2024)

Section 3118.85 Financial Disclosure and Consumer Rights Notice

a) Public adjusters must provide full written financial disclosure consistent with Sections 1575(d) and 1590(d), (f), (g), and (h) of the Code. The financial disclosure must contain, at a minimum, the following wording in 10-point font:

1) "You are not required to use any person recommended to you by the public adjuster. You have a right to receive quotes or estimates from other contractors or vendors. You are free to hire the contractor or vendor of your choice."; and

2) A statement clarifying the amount of ownership in the recommended contractor by the public adjuster or any immediate family and/or the specific amount of compensation the public adjuster will receive from the recommended contractor if the client uses the recommended contractor. This disclosure may be stated in an actual dollar amount or a percentage of the payment.

b) The Department shall create a standard Consumer Right Notice explaining and referencing Illinois laws and regulations applicable to the public adjuster and client relationship. Public adjusters must provide this Notice to all clients. The Department shall publish the Consumer Rights Notice on the Department's website and provide a copy to all licensed public adjusters via email each time the Consumer Rights Notice is revised.

c) The Consumer Rights Notice shall include the client's right to obtain quotes or estimates from other contractors or vendors when a public adjuster recommends a contractor or vendor, regardless of whether that public adjuster has a disclosable financial interest in the recommended contractor under subsection (a).

d) The Department's availability must be included in the Consumer Rights Notice and must include information on how consumers can file a complaint with the Department.

e) The public adjuster must provide all written disclosures regarding financial interests and the Consumer Rights Notice to the client before the client signs the public adjuster contract.

(Source: Amended at 48 Ill. Reg. 7257, effective April 30, 2024)

Section 3118.90 Charges for Services

a) A public adjuster client shall not be required by the licensed public adjuster, or its agent, to pay higher fees to the public adjuster if the client does not elect to work with the contractor or vendor preferred or primarily recommended by the public adjuster.

b) A public adjuster commission, charges or fee shall not include the deductible amount and shall only be based on net claim payment made by the insurer.

(Source: Amended at 48 Ill. Reg. 7257, effective April 30, 2024)

Section 3118.95 Required Disclosure (Repealed)

(Source: Repealed at 47 Ill. Reg. 2301, effective February 1, 2023)

Section 3118.100 Maintenance of Records (Repealed)

(Source: Repealed at 14 Ill. Reg. 17978, effective October 18, 1990)

Section 3118.110 Performance Standards Applicable to All Public Adjusters (Repealed)

(Source: Repealed at 14 Ill. Reg. 17978, effective October 18, 1990)

Section 3118.115 Performance Standards Applicable to All Public Adjusters

a) A public adjuster shall not allow any unlicensed individual or entity in which the public adjuster has any interest, or that will compensate the adjuster, to solicit a loss in violation of Section 1590(b) of the Code.

b) A public adjuster shall not recommend any contractor unless the public adjuster first receives confirmation from the contractor that the contractor has liability insurance, a performance bond, any necessary licenses required to perform the particular work, and a written warranty of workmanship in the contractor's contract.

(Source: Amended at 48 Ill. Reg. 7257, effective April 30, 2024)

Section 3118.120 Hearings

Any hearing granted under this Part shall be in accordance with 50 Ill. Adm. Code 2402 entitled Administrative Hearing Procedures.

(Source: Amended at 30 Ill. Reg. 19367, effective November 29, 2006)

Section 3118.130 Severability

If any provision of this Part shall be held invalid, the remainder of the Part shall not be affected.

(Source: Amended at 30 Ill. Reg. 19367, effective November 29, 2006)

AUTHORITY: Implementing Article XLV and authorized by Section 1615 of the Illinois Insurance Code [215 ILCS 5].

SOURCE: Adopted and codified at 6 Ill. Reg. 14622, effective November 16, 1982; amended at 14 Ill. Reg. 17978, effective October 18, 1990; amended at 30 Ill. Reg. 19367, effective November 29, 2006; recodified from the Department of Financial and Professional Regulation to the Department of Insurance pursuant to Executive Order 2009-04 at 38 Ill. Reg. 24069; amended at 39 Ill. Reg. 1528, effective January 9, 2015; amended at 40 Ill. Reg. 12786, effective August 16, 2016; amended at 47 Ill. Reg. 2301, effective February 1, 2023; amended at 48 Ill. Reg. 7257, effective April 30, 2024.