SB2590 EngrossedLRB098 12398 RPM 46783 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 500-10 and 500-100 and by adding Section
6500-108 as follows:
 
7    (215 ILCS 5/500-10)
8    (Section scheduled to be repealed on January 1, 2017)
9    Sec. 500-10. Definitions. In addition to the definitions in
10Section 2 of the Code, the following definitions apply to this
11Article:
12    "Business entity" means a corporation, association,
13partnership, limited liability company, limited liability
14partnership, or other legal entity.
15    "Car rental limited line licensee" means a person
16authorized under the provisions of Section 500-105 to sell
17certain coverages relating to the rental of vehicles.
18    "Home state" means the District of Columbia and any state
19or territory of the United States in which an insurance
20producer maintains his or her principal place of residence or
21principal place of business and is licensed to act as an
22insurance producer.
23    "Insurance" means any of the lines of authority in Section

 

 

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1500-35, any health care plan under the Health Maintenance
2Organization Act, or any limited health care plan under the
3Limited Health Service Organization Act.
4    "Insurance producer" means a person required to be licensed
5under the laws of this State to sell, solicit, or negotiate
6insurance.
7    "Insurer" means a company as defined in subsection (e) of
8Section 2 of this Code, a health maintenance organization as
9defined in the Health Maintenance Organization Act, or a
10limited health service organization as defined in the Limited
11Health Service Organization Act.
12    "License" means a document issued by the Director
13authorizing an individual to act as an insurance producer for
14the lines of authority specified in the document or authorizing
15a business entity to act as an insurance producer. The license
16itself does not create any authority, actual, apparent, or
17inherent, in the holder to represent or commit an insurance
18carrier.
19    "Limited lines insurance" means those lines of insurance
20defined in Section 500-100 or any other line of insurance that
21the Director may deem it necessary to recognize for the
22purposes of complying with subsection (e) of Section 500-40.
23    "Limited lines producer" means a person authorized by the
24Director to sell, solicit, or negotiate limited lines
25insurance.
26    "Negotiate" means the act of conferring directly with or

 

 

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1offering advice directly to a purchaser or prospective
2purchaser of a particular contract of insurance concerning any
3of the substantive benefits, terms, or conditions of the
4contract, provided that the person engaged in that act either
5sells insurance or obtains insurance from insurers for
6purchasers.
7    "Person" means an individual or a business entity.
8    "Rental agreement" means a written agreement setting forth
9the terms and conditions governing the use of a vehicle
10provided by a rental company for rental or lease.
11    "Rental company" means a person, or a franchisee of the
12person, in the business of providing primarily private
13passenger vehicles to the public under a rental agreement for a
14period not to exceed 30 days.
15    "Rental period" means the term of the rental agreement.
16    "Renter" means a person obtaining the use of a vehicle from
17a rental company under the terms of a rental agreement for a
18period not to exceed 30 days.
19    "Self-service storage facility limited line licensee"
20means a person authorized under the provisions of Section
21500-107 to sell certain coverages relating to the rental of
22self-service storage facilities.
23    "Sell" means to exchange a contract of insurance by any
24means, for money or its equivalent, on behalf of an insurance
25company.
26    "Solicit" means attempting to sell insurance or asking or

 

 

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1urging a person to apply for a particular kind of insurance
2from a particular company.
3    "Terminate" means the cancellation of the relationship
4between an insurance producer and the insurer or the
5termination of a producer's authority to transact insurance.
6    "Travel insurance" means insurance coverage for personal
7risks incident to planned travel, including, but not limited
8to: (1) the interruption or cancellation of a trip or event,
9(2) the loss of baggage or personal effects, (3) damages to
10accommodations or rental vehicles, or (4) sickness, accident,
11disability, or death occurring during travel. "Travel
12insurance" does not include major medical plans that provide
13comprehensive medical protection for travelers with trips
14lasting 6 months or longer, including those working overseas as
15an ex-patriot or as military personnel on deployment.
16    "Uniform Business Entity Application" means the current
17version of the National Association of Insurance
18Commissioners' Uniform Business Entity Application for
19nonresident business entities.
20    "Uniform Application" means the current version of the
21National Association of Insurance Commissioners' Uniform
22Application for nonresident producer licensing.
23    "Vehicle" or "rental vehicle" means a motor vehicle of (1)
24the private passenger type, including passenger vans, mini
25vans, and sport utility vehicles or (2) the cargo type,
26including cargo vans, pickup trucks, and trucks with a gross

 

 

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1vehicle weight of less than 26,000 pounds the operation of
2which does not require the operator to possess a commercial
3driver's license.
4    "Webinar" means an online educational presentation during
5which a live and participating instructor and participating
6viewers, whose attendance is periodically verified throughout
7the presentation, actively engage in discussion and in the
8submission and answering of questions.
9(Source: P.A. 97-113, eff. 7-14-11.)
 
10    (215 ILCS 5/500-100)
11    (Section scheduled to be repealed on January 1, 2017)
12    Sec. 500-100. Limited lines producer license.
13    (a) An individual who is at least 18 years of age and whom
14the Director considers to be competent, trustworthy, and of
15good business reputation may obtain a limited lines producer
16license for one or more of the following classes:
17        (1) travel insurance, as defined in Section 500-10 of
18    this Article on baggage or limited travel health, accident,
19    or trip cancellation insurance sold in connection with
20    transportation provided by a common carrier;
21        (2) industrial life insurance, as defined in Section
22    228 of this Code;
23        (3) industrial accident and health insurance, as
24    defined in Section 368 of this Code;
25        (4) insurance issued by a company organized under the

 

 

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1    Farm Mutual Insurance Company Act of 1986;
2        (5) legal expense insurance;
3        (6) enrollment of recipients of public aid or medicare
4    in a health maintenance organization;
5        (7) a limited health care plan issued by an
6    organization having a certificate of authority under the
7    Limited Health Service Organization Act;
8        (8) credit life and credit accident and health
9    insurance and other credit insurance policies approved or
10    permitted by the Director; a credit insurance company must
11    conduct a training program in which an applicant shall
12    receive basic instruction about the credit insurance
13    products that he or she they will be selling.
14    (b) The application for a limited lines producer license
15must be submitted on a form prescribed by the Director by a
16designee of the insurance company, health maintenance
17organization, or limited health service organization
18appointing the limited insurance representative. The insurance
19company, health maintenance organization, or limited health
20service organization must pay the fee required by Section
21500-135.
22    (c) A limited lines producer may represent more than one
23insurance company, health maintenance organization, or limited
24health service organization.
25    (d) An applicant who has met the requirements of this
26Section shall be issued a perpetual limited lines producer

 

 

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1license.
2    (e) A limited lines producer license shall remain in effect
3as long as the appointing insurance company pays the respective
4fee required by Section 500-135 prior to January 1 of each
5year, unless the license is revoked or suspended pursuant to
6Section 500-70. Failure of the insurance company to pay the
7license fee or to submit the required documents shall cause
8immediate termination of the limited line insurance producer
9license with respect to which the failure occurs.
10    (f) A limited lines producer license may be terminated by
11the insurance company or the licensee.
12    (g) A person whom the Director considers to be competent,
13trustworthy, and of good business reputation may be issued a
14car rental limited line license. A car rental limited line
15license for a rental company shall remain in effect as long as
16the car rental limited line licensee pays the respective fee
17required by Section 500-135 prior to the next fee date unless
18the car rental license is revoked or suspended pursuant to
19Section 500-70. Failure of the car rental limited line licensee
20to pay the license fee or to submit the required documents
21shall cause immediate suspension of the car rental limited line
22license. A car rental limited line license for rental companies
23may be voluntarily terminated by the car rental limited line
24licensee. The license fee shall not be refunded upon
25termination of the car rental limited line license by the car
26rental limited line licensee.

 

 

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1    (h) A limited lines producer issued a license pursuant to
2this Section is not subject to the requirements of Section
3500-30.
4    (i) A limited lines producer license must contain the name,
5address and personal identification number of the licensee, the
6date the license was issued, general conditions relative to the
7license's expiration or termination, and any other information
8the Director considers proper. A limited line producer license,
9if applicable, must also contain the name and address of the
10appointing insurance company.
11(Source: P.A. 98-159, eff. 8-2-13; revised 11-12-13.)
 
12    (215 ILCS 5/500-108 new)
13    Sec. 500-108. Travel insurance business enterprise
14license.
15    (a) As used in this Section:
16    "Offer and disseminate" means providing general
17information, including a description of the coverage and price,
18as well as processing the application, collecting premiums, and
19performing other non-licensable activities permitted by the
20State.
21    "Travel insurance business enterprise" means a licensed
22insurance producer designated by an insurer as set forth in
23subsection (i) of this Section.
24    "Travel retailer" means a business organization that
25makes, arranges, or offers travel services.

 

 

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1    (b) The Director may issue, to a travel insurance business
2enterprise that registers travel retailers under its license as
3described in paragraph (2) of subsection (d) of this Section, a
4producer license as provided in paragraph (6) of subsection (a)
5of Section 500-35 of this Code. A travel insurance business
6enterprise license issued under this Section shall also
7authorize any employee of the travel insurance business
8enterprise to act individually on behalf and under the
9supervision of the travel insurance business enterprise
10licensee with respect to the coverage specified in this
11Section.
12    (c) The Director may issue to a travel retailer a limited
13line producer license. A travel retailer license issued under
14this Section shall also authorize any employee of the travel
15retailer limited line licensee to act individually on behalf
16and under the supervision of the travel retailer limited line
17licensee with respect to the coverage specified in this
18Section.
19    (d) Notwithstanding any other provision of law, a travel
20retailer may do the limited activities of offering and
21disseminating travel insurance on behalf of and under the
22license of a supervising travel insurance business enterprise
23if the following conditions are met:
24        (1) the travel insurance business enterprise or travel
25    retailer provides to purchasers of travel insurance:
26            (A) a description of the material terms or the

 

 

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1        actual material terms of the insurance coverage;
2            (B) a description of the process for filing a
3        claim;
4            (C) a description of the review or cancellation
5        process for the travel insurance policy; and
6            (D) the identity and contact information of the
7        insurer and travel insurance business enterprise;
8        (2) at the time of licensure, the travel insurance
9    business enterprise shall establish and maintain a
10    register on a form prescribed by the Director of each
11    travel retailer that offers travel insurance on the travel
12    insurance business enterprise's behalf; the register shall
13    be maintained and updated annually by the travel insurance
14    business enterprise and shall include the name, address,
15    and contact information of the travel retailer and an
16    officer or person who directs or controls the travel
17    retailer's operations and the travel retailer's federal
18    tax identification number; the travel insurance business
19    enterprise shall submit the register to the Director upon
20    reasonable request; the limited lines producer shall also
21    certify that the travel retailer registered complies with
22    18 U.S.C. 1033;
23        (3) the travel insurance business enterprise has
24    designated one of its employees as a licensed individual
25    producer (a designated responsible producer or DRP)
26    responsible for the travel insurance business enterprise's

 

 

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1    compliance with the travel insurance laws, rules, and
2    regulations of the State;
3        (4) the travel insurance business enterprise has paid
4    all applicable insurance producer licensing fees as set
5    forth in this Code; and
6        (5) the travel insurance business enterprise requires
7    each employee and authorized representative of the travel
8    retailer whose duties include offering and disseminating
9    travel insurance to receive a program of instruction or
10    training that shall be subject to review by the Director;
11    the training material shall, at a minimum, contain
12    instructions on the types of insurance offered, ethical
13    sales practices, and required disclosures to prospective
14    customers.
15    (e) Any travel retailer offering or disseminating travel
16insurance shall make available to prospective purchasers
17brochures or other written materials that:
18        (1) provide the identity and contact information of the
19    insurer and the travel insurance business enterprise;
20        (2) explain that the purchase of travel insurance is
21    not required in order to purchase any other product or
22    service from the travel retailer; and
23        (3) explain that an unlicensed travel retailer is
24    permitted to provide general information about the
25    insurance offered by the travel retailer, including a
26    description of the coverage and price, but is not qualified

 

 

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1    or authorized to answer technical questions about the terms
2    and conditions of the insurance offered by the travel
3    retailer or to evaluate the adequacy of the customer's
4    existing insurance coverage.
5    (f) A travel retailer's employee or authorized
6representative who is not licensed as an insurance producer may
7not:
8        (1) evaluate or interpret the technical terms,
9    benefits, and conditions of the offered travel insurance
10    coverage;
11        (2) evaluate or provide advice concerning a
12    prospective purchaser's existing insurance coverage; or
13        (3) hold himself, herself, or itself out as a licensed
14    insurer, licensed producer, or insurance expert.
15    (g) A travel retailer whose insurance-related activities,
16and those of its employees and authorized representatives, are
17limited to offering and disseminating travel insurance on
18behalf of and under the direction of a travel insurance
19business enterprise meeting the conditions stated in this
20Section is authorized to do so and receive related compensation
21upon registration by the travel insurance business enterprise
22as described in paragraph (2) of subsection (d) of this
23Section.
24    (h) Travel insurance may be provided under an individual
25policy or under a group or master policy.
26    (i) As the insurer designee, the travel insurance business

 

 

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1enterprise is responsible for the acts of the travel retailer
2that is registered under its license and shall use reasonable
3means to ensure compliance by the travel retailer within this
4Section.