101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
SB3783

 

Introduced 2/14/2020, by Sen. Michael E. Hastings

 

SYNOPSIS AS INTRODUCED:
 
215 ILCS 5/445  from Ch. 73, par. 1057
215 ILCS 5/445.1  from Ch. 73, par. 1057.1
215 ILCS 5/445.2  from Ch. 73, par. 1057.2
215 ILCS 5/445.3  from Ch. 73, par. 1057.3

    Amends the Illinois Insurance Code. Adds provisions concerning making diligent efforts to procure surplus line insurance contracts through authorized insurers, including for master policy insurance contracts and program business. Makes changes to provisions concerning reports on surplus line insurance and fire insurance that must be filed by licensed surplus line producers with the Director of Insurance. Changes the date by which a surplus line producer shall file a report on all fire insurance procured from unauthorized insurers and submitted to the Surplus Line Association of Illinois to February 1 (rather than March 31) of each year. Adds provisions concerning submission and recording of premium-bearing endorsements. Provides that an individual officer or partner must be a licensed surplus line producer to represent a member of the Surplus Line Association of Illinois in the exercise of association affairs. Makes other changes. Defines terms. Effective January 1, 2021.


LRB101 19584 BMS 69060 b

 

 

A BILL FOR

 

SB3783LRB101 19584 BMS 69060 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Insurance Code is amended by
5changing Sections 445, 445.1, 445.2, and 445.3 as follows:
 
6    (215 ILCS 5/445)  (from Ch. 73, par. 1057)
7    Sec. 445. Surplus line.
8    (1) Definitions. For the purposes of this Section:
9    "Affiliate" means, with respect to an insured, any entity
10that controls, is controlled by, or is under common control
11with the insured. For the purpose of this definition, an entity
12has control over another entity if:
13        (A) the entity directly or indirectly or acting through
14    one or more other persons owns, controls, or has the power
15    to vote 25% or more of any class of voting securities of
16    the other entity; or
17        (B) the entity controls in any manner the election of a
18    majority of the directors or trustees of the other entity.
19    "Affiliated group" means any group of entities that are all
20affiliated.
21    "Authorized insurer" means an insurer that holds a
22certificate of authority issued by the Director but, for the
23purposes of this Section, does not include a domestic surplus

 

 

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1line insurer as defined in Section 445a or any residual market
2mechanism.
3    "Exempt commercial purchaser" means any person purchasing
4commercial insurance that, at the time of placement, meets the
5following requirements:
6        (A) The person employs or retains a qualified risk
7    manager to negotiate insurance coverage.
8        (B) The person has paid aggregate nationwide
9    commercial property and casualty insurance premiums in
10    excess of $100,000 in the immediately preceding 12 months.
11        (C) The person meets at least one of the following
12    criteria:
13            (I) The person possesses a net worth in excess of
14        $20,000,000, as such amount is adjusted pursuant to the
15        provision in this definition concerning percentage
16        change.
17            (II) The person generates annual revenues in
18        excess of $50,000,000, as such amount is adjusted
19        pursuant to the provision in this definition
20        concerning percentage change.
21            (III) The person employs more than 500 full-time or
22        full-time equivalent employees per individual insured
23        or is a member of an affiliated group employing more
24        than 1,000 employees in the aggregate.
25            (IV) The person is a not-for-profit organization
26        or public entity generating annual budgeted

 

 

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1        expenditures of at least $30,000,000, as such amount is
2        adjusted pursuant to the provision in this definition
3        concerning percentage change.
4            (V) The person is a municipality with a population
5        in excess of 50,000 persons.
6    Effective on January 1, 2015 and each fifth January 1
7occurring thereafter, the amounts in subitems (I), (II), and
8(IV) of item (C) of this definition shall be adjusted to
9reflect the percentage change for such 5-year period in the
10Consumer Price Index for All Urban Consumers published by the
11Bureau of Labor Statistics of the Department of Labor.
12    "Home state" means the following:
13        (A) With respect to an insured, except as provided in
14    item (B) of this definition:
15            (I) the state in which an insured maintains its
16        principal place of business or, in the case of an
17        individual, the individual's principal residence; or
18            (II) if 100% of the insured risk is located out of
19        the state referred to in subitem (I), the state to
20        which the greatest percentage of the insured's taxable
21        premium for that insurance contract is allocated.
22        (B) If more than one insured from an affiliated group
23    are named insureds on a single surplus line insurance
24    contract, then "home state" means the home state, as
25    determined pursuant to item (A) of this definition, of the
26    member of the affiliated group that has the largest

 

 

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1    percentage of premium attributed to it under such insurance
2    contract.
3        If more than one insured from a group that is not
4    affiliated are named insureds on a single surplus line
5    insurance contract, then:
6            (I) if individual group members pay 100% of the
7        premium for the insurance from their own funds, "home
8        state" means the home state, as determined pursuant to
9        item (A) of this definition, of each individual group
10        member; each individual group member's coverage under
11        the surplus line insurance contract shall be treated as
12        a separate surplus line contract for the purposes of
13        this Section;
14            (II) otherwise, "home state" means the home state,
15        as determined pursuant to item (A) of this definition,
16        of the group.
17    Nothing in this definition shall be construed to alter the
18terms of the surplus line insurance contract.
19    "Master policy" means a surplus line insurance contract
20with a single set of general contractual terms that are
21designed to apply on a group basis to multiple insureds who may
22or may not be affiliated and who may be added to or removed
23from the contract throughout the course of the contract period.
24A master policy may include certain provisions that vary for
25each insured depending on the insured's characteristics and the
26coverage sought.

 

 

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1    "Multi-State risk" means a risk with insured exposures in
2more than one State.
3    "NAIC" means the National Association of Insurance
4Commissioners or any successor entity.
5    "Personal lines insurance" means insurance as defined in
6subsection (a), (b), or (c) of Section 143.13 of this Code.
7    "Premium" means any amount designated as premium on the
8declarations page or elsewhere in a policy and on any
9endorsement, but does not include taxes, the Surplus Line
10Association of Illinois recording fee, or any other fee.
11    "Program business" means a clearly defined group of
12insurance contracts procured by a licensed surplus line
13producer from an unauthorized insurer, under a single agreement
14between the producer and insurer, for insureds with the same or
15similar characteristics and containing the same or similar
16contract terms.
17    "Qualified risk manager" means, with respect to a
18policyholder of commercial insurance, a person who meets all of
19the following requirements:
20        (A) The person is an employee of, or third-party
21    consultant retained by, the commercial policyholder.
22        (B) The person provides skilled services in loss
23    prevention, loss reduction, or risk and insurance coverage
24    analysis, and purchase of insurance.
25        (C) With regard to the person:
26            (I) the person has:

 

 

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1                (a) a bachelor's degree or higher from an
2            accredited college or university in risk
3            management, business administration, finance,
4            economics, or any other field determined by the
5            Director or his designee to demonstrate minimum
6            competence in risk management; and
7                (b) the following:
8                    (i) three years of experience in risk
9                financing, claims administration, loss
10                prevention, risk and insurance analysis, or
11                purchasing commercial lines of insurance; or
12                    (ii) alternatively has:
13                        (AA) a designation as a Chartered
14                    Property and Casualty Underwriter (in this
15                    subparagraph (ii) referred to as "CPCU")
16                    issued by the American Institute for
17                    CPCU/Insurance Institute of America;
18                        (BB) a designation as an Associate in
19                    Risk Management (ARM) issued by the
20                    American Institute for CPCU/Insurance
21                    Institute of America;
22                        (CC) a designation as Certified Risk
23                    Manager (CRM) issued by the National
24                    Alliance for Insurance Education &
25                    Research;
26                        (DD) a designation as a RIMS Fellow

 

 

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1                    (RF) issued by the Global Risk Management
2                    Institute; or
3                        (EE) any other designation,
4                    certification, or license determined by
5                    the Director or his designee to
6                    demonstrate minimum competency in risk
7                    management;
8            (II) the person has:
9                (a) at least 7 years of experience in risk
10            financing, claims administration, loss prevention,
11            risk and insurance coverage analysis, or
12            purchasing commercial lines of insurance; and
13                (b) has any one of the designations specified
14            in subparagraph (ii) of paragraph (b);
15            (III) the person has at least 10 years of
16        experience in risk financing, claims administration,
17        loss prevention, risk and insurance coverage analysis,
18        or purchasing commercial lines of insurance; or
19            (IV) the person has a graduate degree from an
20        accredited college or university in risk management,
21        business administration, finance, economics, or any
22        other field determined by the Director or his or her
23        designee to demonstrate minimum competence in risk
24        management.
25    "Residual market mechanism" means an association,
26organization, or other entity described in Article XXXIII of

 

 

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1this Code or Section 7-501 of the Illinois Vehicle Code or any
2similar association, organization, or other entity.
3    "State" means any state of the United States, the District
4of Columbia, the Commonwealth of Puerto Rico, Guam, the
5Northern Mariana Islands, the Virgin Islands, and American
6Samoa.
7    "Surplus line insurance" means insurance on a risk:
8        (A) of the kinds specified in Classes 2 and 3 of
9    Section 4 of this Code; and
10        (B) that is procured from an unauthorized insurer after
11    the insurance producer representing the insured or the
12    surplus line producer is unable, after diligent effort, to
13    procure the insurance from authorized insurers; and
14        (C) where Illinois is the home state of the insured,
15    for policies effective, renewed or extended on July 21,
16    2011 or later and for multiyear policies upon the policy
17    anniversary that falls on or after July 21, 2011; and
18        (D) that is located in Illinois, for policies effective
19    prior to July 21, 2011.
20    "Taxable premium" means a premium for any risk that is
21located in or attributed to any state.
22    "Unauthorized insurer" means an insurer that does not hold
23a valid certificate of authority issued by the Director but,
24for the purposes of this Section, shall also include a domestic
25surplus line insurer as defined in Section 445a.
26    (1.5) Procuring surplus line insurance; surplus line

 

 

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1insurer requirements.
2        (a) License required. Insurance producers may procure
3    surplus line insurance only if licensed as a surplus line
4    producer under this Section.
5        (b) Domestic and foreign insurer eligibility. Licensed
6    surplus line producers may procure surplus line insurance
7    from an unauthorized insurer domiciled in any state the
8    United States only if the insurer:
9            (i) is permitted in its domiciliary jurisdiction
10        to write the type of insurance involved; and
11             (ii) has, based upon information available to the
12        surplus line producer, a policyholders surplus of not
13        less than $15,000,000 determined in accordance with
14        the laws of its domiciliary jurisdiction; and
15             (iii) has standards of solvency and management
16        that are adequate for the protection of policyholders.
17         Where an unauthorized insurer does not meet the
18    standards set forth in (ii) and (iii) above, a surplus line
19    producer may, if necessary, procure insurance from that
20    insurer only if prior written warning of such fact or
21    condition is given to the insured by the insurance producer
22    or surplus line producer.
23        (c) Alien insurer eligibility. Licensed surplus line
24    producers may procure surplus line insurance from an
25    unauthorized insurer not domiciled in any state outside of
26    the United States only if the insurer meets the standards

 

 

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1    for unauthorized insurers domiciled in any state the United
2    States in paragraph (b) of this subsection (1.5) or is
3    listed on the Quarterly Listing of Alien Insurers
4    maintained by the International Insurers Department of the
5    NAIC at the time of procurement. The Director shall make
6    the Quarterly Listing of Alien Insurers available to
7    surplus line producers without charge.
8        (d) Prohibited transactions. Insurance producers shall
9    not procure from an unauthorized insurer an insurance
10    policy:
11            (i) that is designed to satisfy the proof of
12        financial responsibility and insurance requirements in
13        any Illinois law where the law requires that the proof
14        of insurance is issued by an authorized insurer or
15        residual market mechanism;
16            (ii) that covers the risk of accidental injury to
17        employees arising out of and in the course of
18        employment according to the provisions of the Workers'
19        Compensation Act; or
20            (iii) that insures any Illinois personal lines
21        risk, as defined in subsection (a), (b), or (c) of
22        Section 143.13 of this Code, that is eligible for
23        residual market mechanism coverage, unless the insured
24        or prospective insured requests limits of liability
25        greater than the limits provided by the residual market
26        mechanism. In the course of making a diligent effort to

 

 

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1        procure insurance from authorized insurers, an
2        insurance producer shall not be required to submit a
3        risk to a residual market mechanism when the risk is
4        not eligible for coverage or exceeds the limits
5        available in the residual market mechanism.
6        Where there is an insurance policy issued by an
7    authorized insurer or residual market mechanism insuring a
8    risk described in item (i), (ii), or (iii) above, nothing
9    in this paragraph shall be construed to prohibit a surplus
10    line producer from procuring from an unauthorized insurer a
11    policy insuring the risk on an excess or umbrella basis
12    where the excess or umbrella policy is written over one or
13    more underlying policies.
14        (e) Exempt commercial purchaser diligent effort.
15    Licensed surplus line producers may procure surplus line
16    insurance from an unauthorized insurer for an exempt
17    commercial purchaser without making the required diligent
18    effort to procure the insurance from authorized insurers
19    if:
20            (i) the producer has disclosed to the exempt
21        commercial purchaser that such insurance may or may not
22        be available from authorized insurers that may provide
23        greater protection with more regulatory oversight; and
24            (ii) the exempt commercial purchaser has
25        subsequently in writing requested the producer to
26        procure such insurance from an unauthorized insurer.

 

 

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1        (f) Wholesale transaction diligent effort. A licensed
2    surplus line producer may procure a surplus line insurance
3    contract, other than a personal line insurance contract,
4    from an unauthorized insurer without making the required
5    diligent effort to procure the insurance from authorized
6    insurers if the risk was referred to the surplus line
7    producer by an Illinois-licensed insurance producer who is
8    not affiliated with the surplus line producer.
9        (g) Master policy diligent effort. For master policy
10    insurance contracts, a licensed surplus line producer may
11    make the required diligent effort to procure the insurance
12    from authorized insurers annually for the master policy
13    rather than individually for each insured that is added
14    during the policy period.
15        (h) Program business diligent effort. For program
16    business, a licensed surplus line producer may make the
17    required diligent effort to procure the insurance from
18    authorized insurers annually for the program rather than
19    individually for each contract.
20    (2) Surplus line producer; license. Any licensed producer
21who is a resident of this State, or any nonresident who
22qualifies under Section 500-40, may be licensed as a surplus
23line producer upon payment of an annual license fee of $400.
24    A surplus line producer so licensed shall keep a separate
25account of the business transacted thereunder for 7 years from
26the policy effective date which shall be open at all times to

 

 

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1the inspection of the Director or his representative.
2    No later than July 21, 2012, the State of Illinois shall
3participate in the national insurance producer database of the
4NAIC, or any other equivalent uniform national database, for
5the licensure of surplus line producers and the renewal of such
6licenses.
7    (3) Taxes and reports.
8        (a) Surplus line tax and penalty for late payment. The
9    surplus line tax rate for a surplus line insurance policy
10    or contract is determined as follows:
11            (i) 3% for policies or contracts with an effective
12        date prior to July 1, 2003;
13            (ii) 3.5% for policies or contracts with an
14        effective date of July 1, 2003 or later.
15        A surplus line producer shall file with the Director on
16    or before February 1 and August 1 of each year a report in
17    the form prescribed by the Director on all surplus line
18    insurance procured from unauthorized insurers and
19    submitted to the Surplus Line Association of Illinois
20    during the preceding 6 month period ending December 31 or
21    June 30 respectively, and on the filing of such report
22    shall pay to the Director for the use and benefit of the
23    State a sum equal to the surplus line tax rate multiplied
24    by the gross taxable premiums less returned taxable
25    premiums upon all surplus line insurance submitted to the
26    Surplus Line Association of Illinois during the preceding 6

 

 

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1    months. However, if no insurance was procured from
2    unauthorized insurers and submitted to the Surplus Line
3    Association of Illinois during the period, no report shall
4    be required.
5        Any surplus line producer who fails to pay the full
6    amount due under this subsection is liable, in addition to
7    the amount due, for such late fee, penalty, and interest
8    charges as are provided for under Section 412 of this Code.
9    The Director, through the Attorney General, may institute
10    an action in the name of the People of the State of
11    Illinois, in any court of competent jurisdiction, for the
12    recovery of the amount of such taxes, late fees, interest,
13    and penalties due, and prosecute the same to final
14    judgment, and take such steps as are necessary to collect
15    the same.
16        (b) Fire Marshal Tax. Each surplus line producer shall
17    file with the Director on or before February 1 March 31 of
18    each year a report in the form prescribed by the Director
19    on all fire insurance procured from unauthorized insurers
20    and submitted to the Surplus Line Association of Illinois
21    during the previous year that is subject to tax under
22    Section 12 of the Fire Investigation Act and shall pay to
23    the Director the fire marshal tax required thereunder.
24    However, if no fire insurance subject to the tax was
25    procured from unauthorized insurers and submitted to the
26    Surplus Line Association of Illinois during that year, no

 

 

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1    report shall be required.
2        (c) Taxes and fees charged to insured. The taxes
3    imposed under this subsection and the recording
4    countersigning fees charged by the Surplus Line
5    Association of Illinois may be charged to and collected
6    from surplus line insureds.
7    (4) (Blank).
8    (5) Submission of documents to Surplus Line Association of
9Illinois. A surplus line producer shall submit every insurance
10contract and premium-bearing endorsement issued under his or
11her license to the Surplus Line Association of Illinois for
12recording and countersignature. The submission and recording
13countersignature may be effected through electronic means. The
14submission shall set forth:
15        (a) the name of the insured;
16        (b) the description and location of the insured
17    property or risk;
18        (c) (blank); the amount insured;
19        (d) the gross premiums charged or returned;
20        (e) the name of the unauthorized insurer from whom
21    coverage has been procured;
22        (f) the kind or kinds of insurance procured; and
23        (g) amount of premium subject to tax required by
24    Section 12 of the Fire Investigation Act.
25    Proposals, endorsements, and other documents which are
26incidental to the insurance but which do not affect the premium

 

 

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1charged are exempted from the submission and recording
2requirements filing and countersignature.
3    The submission of insuring contracts to the Surplus Line
4Association of Illinois constitutes a certification by the
5surplus line producer or by the referring insurance producer
6that the contracts were procured who presented the risk to the
7surplus line producer for placement as a surplus line risk that
8after diligent effort the required insurance could not be
9procured from authorized insurers and that such procurement was
10otherwise in accordance with the surplus line law and, where
11required, the surplus line producer or referring insurance
12producer made a diligent effort to procure the required
13insurance from authorized insurers.
14    (6) Evidence of recording Countersignature required. It
15shall be unlawful for an insurance producer to deliver any
16unauthorized insurer contract or premium-bearing endorsement
17unless it contains evidence of recording such insurance
18contract is countersigned by the Surplus Line Association of
19Illinois.
20    (7) Inspection of records. A surplus line producer shall
21maintain separate records of the business transacted under his
22or her license for 7 years from the policy effective date,
23including complete copies of surplus line insurance contracts
24maintained on paper or by electronic means, which records shall
25be open at all times for inspection by the Director and by the
26Surplus Line Association of Illinois.

 

 

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1    (8) Violations and penalties. The Director may suspend or
2revoke or refuse to renew a surplus line producer license for
3any violation of this Code. In addition to or in lieu of
4suspension or revocation, the Director may subject a surplus
5line producer to a civil penalty of up to $2,000 for each cause
6for suspension or revocation. Such penalty is enforceable under
7subsection (5) of Section 403A of this Code.
8    When a surplus line producer has made a documented good
9faith determination of the home state for a surplus line
10insurance contract and has paid the surplus line taxes to a
11state other than Illinois, if the Director determines that the
12producer's good faith determination was incorrect and the home
13state is Illinois, the surplus line producer can, at the
14discretion of the Director, be required to submit the contract
15to the Surplus Line Association of Illinois and pay applicable
16taxes and recording fees, but there shall be no penalty,
17interest, or late fee assessed.
18    (9) Director may declare insurer ineligible. If the
19Director determines that the further assumption of risks might
20be hazardous to the policyholders of an unauthorized insurer,
21the Director may order the Surplus Line Association of Illinois
22not to accept and record countersign insurance contracts
23evidencing insurance in such insurer and order surplus line
24producers to cease procuring insurance from such insurer.
25    (10) Service of process upon Director. Insurance contracts
26delivered under this Section from unauthorized insurers, other

 

 

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1than domestic surplus line insurers as defined in Section 445a,
2shall contain a provision designating the Director and his
3successors in office the true and lawful attorney of the
4insurer upon whom may be served all lawful process in any
5action, suit or proceeding arising out of such insurance.
6Service of process made upon the Director to be valid hereunder
7must state the name of the insured, the name of the
8unauthorized insurer and identify the contract of insurance.
9The Director at his option is authorized to forward a copy of
10the process to the Surplus Line Association of Illinois for
11delivery to the unauthorized insurer or the Director may
12deliver the process to the unauthorized insurer by other means
13which he considers to be reasonably prompt and certain.
14    (10.5) Required notice to policyholder. Insurance
15contracts delivered under this Section from unauthorized
16insurers, other than domestic surplus line insurers as defined
17in Section 445a, shall have stamped or imprinted on the first
18page thereof in not less than 12-pt. bold face type the
19following legend: "Notice to Policyholder: This contract is
20issued, pursuant to Section 445 of the Illinois Insurance Code,
21by a company not authorized and licensed to transact business
22in Illinois and as such is not covered by the Illinois
23Insurance Guaranty Fund." Insurance contracts delivered under
24this Section from domestic surplus line insurers as defined in
25Section 445a shall have stamped or imprinted on the first page
26thereof in not less than 12-pt. bold face type the following

 

 

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1legend: "Notice to Policyholder: This contract is issued by a
2domestic surplus line insurer, as defined in Section 445a of
3the Illinois Insurance Code, pursuant to Section 445, and as
4such is not covered by the Illinois Insurance Guaranty Fund."
5    (11) Marine, aviation, and transportation. The Illinois
6Surplus Line law does not apply to insurance of property and
7operations of railroads or aircraft engaged in interstate or
8foreign commerce, insurance of vessels, crafts or hulls,
9cargoes, marine builder's risks, marine protection and
10indemnity, or other risks including strikes and war risks
11insured under ocean or wet marine forms of policies.
12    (12) Applicability of Illinois Insurance Code. Surplus
13line insurance procured under this Section, including
14insurance procured from a domestic surplus line insurer, is not
15subject to the provisions of the Illinois Insurance Code other
16than Sections 123, 123.1, 401, 401.1, 402, 403, 403A, 408, 412,
17445, 445a, 445.1, 445.2, 445.3, 445.4, and all of the
18provisions of Article XXXI to the extent that the provisions of
19Article XXXI are not inconsistent with the terms of this Act.
20(Source: P.A. 97-955, eff. 8-14-12; 98-978, eff. 1-1-15.)
 
21    (215 ILCS 5/445.1)  (from Ch. 73, par. 1057.1)
22    Sec. 445.1. Surplus Line Association of Illinois. There is
23hereby created a non-profit association to be known as the
24Surplus Line Association of Illinois. All surplus line
25producers shall be and must remain individual members or part

 

 

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1of a firm membership of the Association as a condition of their
2holding a license as a surplus line producer in this State. The
3Association must perform its functions under the plan of
4operation established and approved under Section 445.3 and must
5exercise its powers through a board of directors established
6under Section 445.2 of this Code. The Association shall be
7supervised by the Director and is subject to the applicable
8provisions of the Illinois Insurance Code. The Association
9shall be authorized and have the duty to:
10        (1) receive and , record and countersign all surplus
11    line insurance contracts that which surplus line producers
12    are required to file with the Association under subsection
13    (5) of Section 445;
14        (2) prepare monthly reports for the Director on surplus
15    line insurance procured by its members during the preceding
16    month in such form and providing such information as the
17    Director may prescribe;
18        (3) prepare and deliver to the Director and, at the
19    discretion of the Director, to each licensee the reports of
20    surplus line business prescribed in subsection (3) of
21    Section 445;
22        (4) assess its members for costs of operations in
23    accordance with a schedule adopted by the Board of
24    Directors of the Association and approved by the Director;
25        (5) employ and retain such persons as are necessary to
26    carry out the duties of the Association;

 

 

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1        (6) borrow money as necessary to effect the purposes of
2    the Association;
3        (7) enter contracts as necessary to effect the purposes
4    of the Association;
5        (8) perform such other acts as will facilitate and
6    encourage compliance by its members with the surplus line
7    law of this State and rules promulgated thereunder; and
8        (9) provide such other services to its members as are
9    incidental or related to the purposes of the Association.
10    Nothing in this Act shall be construed as giving the
11Association any discretionary authority to enforce this Act or
12to withhold or decline acceptance and recording
13countersignature of insurance contracts that which meet the
14requirements of subsection (5) of Section 445.
15(Source: P.A. 98-978, eff. 1-1-15.)
 
16    (215 ILCS 5/445.2)  (from Ch. 73, par. 1057.2)
17    Sec. 445.2. Board of Directors. The Association shall
18function through a Board of Directors elected by the
19Association members, and officers who shall be elected by the
20Board of Directors.
21    The Board of Directors of the Association shall consist of
22not less than 5 nor more than 9 persons serving terms as
23established in the plan of operation. The plan of operation
24shall provide for the election of a Board of Directors by the
25members of the Association from its membership. The plan of

 

 

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1operation shall fix the manner of voting and may weigh each
2member's vote to reflect the annual surplus line insurance
3premium written by the member. Members employed by the same or
4affiliated employers may consolidate their premiums written
5and delegate an individual officer or partner who is a licensed
6surplus line producer to represent the member in the exercise
7of Association affairs, including service on the Association
8Board of Directors, submission of surplus line insurance
9contracts, and reporting and payments of taxes. The Director
10shall appoint an interim Board of Directors for the sole
11purpose of conducting an election of Directors. If no Board of
12Directors is elected within 90 days after the effective date of
13this amendatory Act of 1984, the Director shall appoint the
14initial members of the Board of Directors.
15    The Board of Directors shall elect such officers as may be
16provided in the plan of operation.
17(Source: P.A. 83-1300.)
 
18    (215 ILCS 5/445.3)  (from Ch. 73, par. 1057.3)
19    Sec. 445.3. Plan of Operation.
20    (1) The Association shall submit to the Director a plan of
21operation and any amendments thereto to provide operating
22procedures for the administration of the Association. The plan
23of operation and any amendments thereto shall become effective
24upon approval in writing by the Director.
25    (2) (Blank). If the Association fails to submit a suitable

 

 

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1plan of operation within 180 days following the effective date
2of this amendatory Act of 1984, or if at any time thereafter
3the Association fails to submit required amendments to the plan
4of operation, the Director shall, after notice and hearing
5pursuant to Sections 401, 402 and 403 of this Code, adopt and
6promulgate such rules as are necessary or advisable to
7effectuate the provisions of this Act. Such rules shall
8continue in force until modified by the Director or superseded
9by a plan of operation submitted by the Association and
10approved by the Director.
11    (3) All Association members must comply with the plan of
12operation.
13(Source: P.A. 83-1300.)
 
14    Section 99. Effective date. This Act takes effect January
151, 2021.