SB1607 EnrolledLRB097 08415 RPM 48542 b

1    AN ACT concerning insurance.
 
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 224 and 424 and by adding Section 155.43 as
6follows:
 
7    (215 ILCS 5/155.43 new)
8    Sec. 155.43. Misrepresentation of Senior-Specific
9Certification.
10    (a) No insurance producer shall use a senior-specific
11certification or professional designation that indicates or
12implies in such a way as to mislead a purchaser or prospective
13purchaser that the insurance producer has a special
14certification or training in advising or servicing seniors in
15connection with the solicitation, sale, or purchase of a life
16insurance or annuity product or in the provision of advice as
17to the value of or the advisability of purchasing or selling a
18life insurance or annuity product, either directly or
19indirectly through publications, writings, or by issuing or
20promulgating analyses or reports related to a life insurance or
21annuity product.
22    (b) "Use of senior-specific certifications or professional
23designations" includes, but is not limited to, all of the

 

 

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1following:
2        (1) Use of a certification or professional designation
3    by an insurance producer who has not actually earned or is
4    otherwise ineligible to use such certification or
5    designation.
6        (2) Use of a nonexistent or self-conferred
7    certification or professional designation.
8        (3) Use of a certification or professional designation
9    that indicates or implies a level of occupational
10    qualifications obtained through education, training, or
11    experience that the insurance producer using the
12    certification or designation does not have.
13        (4) Use of a certification or professional designation
14    that was obtained from a certifying or designating
15    organization that:
16            (i) is primarily engaged in the business of
17        instruction in sales or marketing;
18            (ii) does not have reasonable standards or
19        procedures for assuring the competency of its
20        certificate holders or designees;
21            (iii) does not have reasonable standards or
22        procedures for monitoring and disciplining its
23        certificate holders or designees for improper or
24        unethical conduct; or
25            (iv) does not have reasonable continuing education
26        requirements for its certificate holders or designees

 

 

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1        in order to maintain the certificate or designation.
2    (c) There is a rebuttable presumption that a certifying or
3designating organization is not disqualified under this
4Section if the certification or designation issued from the
5organization does not primarily apply to sales or marketing and
6if the organization or the certification or designation in
7question has been accredited by any of the following entities:
8        (i) the American National Standards Institute;
9        (ii) the National Commission for Certifying Agencies;
10    or
11        (iii) any organization included on the list
12    "Accrediting Agencies Recognized for Title IV Purposes"
13    prepared by the United States Department of Education.
14    (d) In determining whether a combination of words or an
15acronym standing for a combination of words constitutes a
16certification or professional designation indicating or
17implying that a person has a special certification or training
18in advising or servicing seniors, the Department of Insurance
19shall consider all of the following:
20        (1) Use of one or more words, such as "senior",
21    "retirement", "elder", or like words combined with one or
22    more words, such as "certified", "registered",
23    "chartered", "advisor", "specialist", "consultant",
24    "planner", or like words in the name of the certification
25    or professional designation.
26        (2) The manner in which the words listed in paragraph

 

 

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1    (1) of subsection (b) are combined.
2    (e) For purposes of this Section, a job title within an
3organization that is licensed or registered by a State or
4federal financial services regulatory agency is not a
5certification or professional designation, unless it is used in
6a manner that would confuse or mislead a reasonable consumer,
7if the job title indicates seniority or standing within the
8organization or specifies an individual's area of
9specialization within the organization. For purposes of this
10subsection (e), "financial services regulatory agency"
11includes, but is not limited to, an agency that regulates
12insurers, insurance producers, broker-dealers, investment
13advisers, or investment companies.
 
14    (215 ILCS 5/224)  (from Ch. 73, par. 836)
15    Sec. 224. Standard provisions for life policies.
16    (1) After the first day of July, 1937, no policy of life
17insurance other than industrial, group or annuities and pure
18endowments with or without return of premiums or of premiums
19and interest, may be issued or delivered in this State, unless
20such policy contains in substance the following provisions:
21        (a) A provision that all premiums after the first shall
22    be payable in advance either at the home office of the
23    company or to an agent of the company, upon delivery of a
24    receipt signed by one or more of the officers who shall be
25    designated in the policy, when such receipt is requested by

 

 

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1    the policyholder.
2        (b) A provision that the insured is entitled to a grace
3    period either of 30 days or of one month within which the
4    payment of any premium after the first may be made, subject
5    at the option of the company to an interest charge not in
6    excess of 6% per annum for the number of days of grace
7    elapsing before the payment of the premium, during which
8    period of grace the policy shall continue in force, but in
9    case the policy becomes a claim during the grace period
10    before the overdue premium is paid, or the deferred
11    premiums of the current policy year, if any, are paid, the
12    amount of such premium or premiums with interest thereon
13    may be deducted in any settlement under the policy.
14        (c) A provision that the policy, together with the
15    application therefor, a copy of which shall be endorsed
16    upon or attached to the policy and made a part thereof,
17    shall constitute the entire contract between the parties
18    and that after it has been in force during the lifetime of
19    the insured a specified time, not later than 2 years from
20    its date, it shall be incontestable except for nonpayment
21    of premiums and except at the option of the company, with
22    respect to provisions relative to benefits in the event of
23    total and permanent disability, and provisions which grant
24    additional insurance specifically against death by
25    accident and except for violations of the conditions of the
26    policy relating to naval or military service in time of war

 

 

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1    or for violation of an express condition, if any, relating
2    to aviation, (except riding as a fare-paying passenger of a
3    commercial air line flying on regularly scheduled routes
4    between definitely established airports) in which case the
5    liability of the company shall be fixed at a definitely
6    determined amount not less than the full reserve for the
7    policy and any dividend additions; provided that the
8    application therefor need not be attached to or made a part
9    of any policy containing a clause making the policy
10    incontestable from date of issue.
11        (d) A provision that if it is found at any time before
12    final settlement under the policy that the age of the
13    insured (or the age of the beneficiary, if considered in
14    determining the premium) has been misstated, the amount
15    payable under the policy shall be such as the premium would
16    have purchased at the correct age or ages, according to the
17    company's published rate at date of issue.
18        (e) A provision that the policy shall participate
19    annually in the surplus of the company beginning not later
20    than the end of the third policy year; and any policy
21    containing provision for annual participation beginning at
22    the end of the first policy year, may also provide that
23    each dividend be paid subject to the payment of the
24    premiums for the next ensuing year; and the insured under
25    any annual dividend policy shall have the right each year
26    to have the dividend arising from such participation either

 

 

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1    paid in cash, or applied in reduction of premiums, or
2    applied to the purchase of paid-up additional insurance, or
3    be left to accumulate to the credit of the policy, with
4    interest at such rate as may be determined from time to
5    time by the company, but not less than a guaranteed minimum
6    rate specified in the policy, and payable at the maturity
7    of the policy, but withdrawable on any anniversary date,
8    subject to such further provisions as the policy may
9    provide regarding the application of dividends toward the
10    payment of any premiums unpaid at the end of the grace
11    period; and if the insured fails to notify the company in
12    writing of his election within the period of grace allowed
13    for the payment of premium, the policy shall further
14    provide which of such options are effective.
15        (f) A provision that after the policy has been in force
16    3 full years the company at any time, while the policy is
17    in force, will advance, on proper assignment or pledge of
18    the policy and on the sole security thereof, at a specified
19    maximum fixed or adjusted rate of interest in accordance
20    with Section 229.5, a sum equal to, or at the option of the
21    insured less than the amount required by Section 229.3
22    under the conditions specified thereby and with
23    notification as required by Section 229.5; and that the
24    company will deduct from such loan value any indebtedness
25    not already deducted in determining such value and any
26    unpaid balance of the premium for the current policy year,

 

 

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1    and may collect interest in advance on the loan to the end
2    of the current policy year; and any policy may also provide
3    that if the interest on the loan is not paid when due it
4    shall be added to the existing loan and shall bear interest
5    at the same rate. No condition other than as provided
6    herein or in Sections 229.3 and 229.5 shall be exacted as a
7    prerequisite to any such loan. This clause shall not apply
8    to term insurance.
9        (g) A provision for nonforfeiture benefits and cash
10    surrender values in accordance with the requirements of
11    paragraph (1) of Section 229.1 or, Section 229.2.
12        (h) A table showing in figures the loan values and the
13    options available under the policy each year, upon default
14    in premium payments, during at least the first 20 years of
15    the policy; the policy to contain a provision that the
16    company will furnish upon request an extension of such
17    table beyond the years shown in the policy.
18        (i) A provision that in event of default in premium
19    payments the value of the policy is applied to the purchase
20    of other insurance as provided in this Section, and if such
21    insurance is in force and the original policy is not
22    surrendered to the company and cancelled, the policy may be
23    reinstated within 3 years from such default, upon evidence
24    of insurability satisfactory to the company and payment of
25    arrears of premiums and the payment or reinstatement of any
26    other indebtedness to the company upon the policy, with

 

 

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1    interest on the premiums at a rate not exceeding 6% per
2    annum payable annually and with interest on the
3    indebtedness at a rate not exceeding the rate prescribed by
4    Section 229.5.
5        (j) A provision that when a policy is a claim by the
6    death of the insured settlement shall be made upon receipt
7    of due proof of death and not later than 2 months after the
8    receipt of such proof. The policy may require that due
9    proof of the death of the insured shall consist of a
10    certified copy of the death certificate of the insured, or
11    other lawful evidence providing equivalent information,
12    and proof of the claimant's interest in the proceeds.
13        (k) If the policy provides for payment of its proceeds
14    in installments, a table showing the amount and period of
15    such installments shall be included in the policy.
16        (l) Interest shall accrue on the proceeds payable
17    because of the death of the insured, from date of death, at
18    the rate of 10% annually 9% on the total amount payable or
19    the face amount if payments are to be made in installments
20    until the total payment or first installment is paid,
21    unless payment is made within 31 fifteen (15) days from the
22    latest of the following to occur:
23            (1) the date that due proof of death is received by
24        the company;
25            (2) the date that the company receives sufficient
26        information to determine its liability, the extent of

 

 

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1        the liability, and the appropriate payee legally
2        entitled to the proceeds; or
3            (3) the date that legal impediments to payment of
4        proceeds that depend on the action of parties other
5        than the company are resolved and sufficient evidence
6        of the same is provided to the company; legal
7        impediments to payment include, but are not limited to,
8        (A) the establishment of guardianships and
9        conservatorships, (B) the appointment and
10        qualification of trustees, executors, and
11        administrators, and (C) the submission of information
12        required to satisfy State and federal reporting
13        requirements.
14    date of receipt by the company of due proof of loss. This
15    provision need not appear in the policy, however, the
16    company shall notify the beneficiary at the time of claim
17    of this provision. The payment of interest shall apply to
18    all policies now in force, as well as those written after
19    the effective date of this amendment.
20        (m) Title on the face and on the back of the policy
21    briefly describing its form.
22        (n) A provision, or a notice attached to the policy, to
23    the effect that during a period of ten days from the date
24    the policy is delivered to the policy owner, it may be
25    surrendered to the insurer together with a written request
26    for cancellation of the policy and in such event, the

 

 

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1    insurer will refund any premium paid therefor, including
2    any policy fees or other charges. The Director may by rule
3    exempt specific types of policies from the requirements of
4    this subsection.
5    (2) In the case of the replacement of life insurance, as
6defined in the rule promulgated by the Director, the replacing
7insurer shall either (1) delay the issuance of its policy for
8not less than 20 days from the date it has transmitted a policy
9summary to the existing insurer, or (2) provide in a form
10titled "Notice Regarding Replacement of Life Insurance", as
11well as in its policy, or in a separate notice delivered with
12the policy, that the insured has the right to an unconditional
13refund of all premiums paid, and that such right may be
14exercised within a period of 20 days commencing from the date
15of delivery of such policy. Where option (2) is exercised, the
16replacing insurer shall also transmit a policy summary to the
17existing insurer within 3 working days after the date the
18replacement policy is issued.
19    (3) Any of the foregoing provisions or portions thereof not
20applicable to single premium or nonparticipating or term
21policies shall to that extent not be incorporated therein. This
22Section shall not apply to policies of reinsurance nor to
23policies issued or granted pursuant to the nonforfeiture
24provisions prescribed in subparagraph (g) of paragraph (1) of
25this Section.
26(Source: P.A. 92-139, eff. 7-24-01.)
 

 

 

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1    (215 ILCS 5/424)  (from Ch. 73, par. 1031)
2    Sec. 424. Unfair methods of competition and unfair or
3deceptive acts or practices defined. The following are hereby
4defined as unfair methods of competition and unfair and
5deceptive acts or practices in the business of insurance:
6    (1) The commission by any person of any one or more of the
7acts defined or prohibited by Sections 134, 143.24c, 147, 148,
8149, 151, 155.22, 155.22a, 155.42, 236, 237, 364, and 469 of
9this Code.
10    (2) Entering into any agreement to commit, or by any
11concerted action committing, any act of boycott, coercion or
12intimidation resulting in or tending to result in unreasonable
13restraint of, or monopoly in, the business of insurance.
14    (3) Making or permitting, in the case of insurance of the
15types enumerated in Classes 1, 2, and 3 of Section 4, any
16unfair discrimination between individuals or risks of the same
17class or of essentially the same hazard and expense element
18because of the race, color, religion, or national origin of
19such insurance risks or applicants. The application of this
20Article to the types of insurance enumerated in Class 1 of
21Section 4 shall in no way limit, reduce, or impair the
22protections and remedies already provided for by Sections 236
23and 364 of this Code or any other provision of this Code.
24    (4) Engaging in any of the acts or practices defined in or
25prohibited by Sections 154.5 through 154.8 of this Code.

 

 

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1    (5) Making or charging any rate for insurance against
2losses arising from the use or ownership of a motor vehicle
3which requires a higher premium of any person by reason of his
4physical handicap, race, color, religion, or national origin.
5(Source: P.A. 92-399, eff. 8-16-01; 92-651, eff. 7-11-02;
692-669, eff. 1-1-03.)
 
7    Section 99. Effective date. This Act takes effect upon
8becoming law.