Rep. Frank J. Mautino

Filed: 5/6/2014

 

 


 

 


 
09800SB2590ham001LRB098 12398 RPM 58595 a

1
AMENDMENT TO SENATE BILL 2590

2    AMENDMENT NO. ______. Amend Senate Bill 2590 by replacing
3everything after the enacting clause with the following:
 
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8    (Section scheduled to be repealed on January 1, 2017)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

 

 

09800SB2590ham001- 2 -LRB098 12398 RPM 58595 a

1certain coverages relating to the rental of vehicles.
2    "Home state" means the District of Columbia and any state
3or territory of the United States in which an insurance
4producer maintains his or her principal place of residence or
5principal place of business and is licensed to act as an
6insurance producer.
7    "Insurance" means any of the lines of authority in Section
8500-35, any health care plan under the Health Maintenance
9Organization Act, or any limited health care plan under the
10Limited Health Service Organization Act.
11    "Insurance producer" means a person required to be licensed
12under the laws of this State to sell, solicit, or negotiate
13insurance.
14    "Insurer" means a company as defined in subsection (e) of
15Section 2 of this Code, a health maintenance organization as
16defined in the Health Maintenance Organization Act, or a
17limited health service organization as defined in the Limited
18Health Service Organization Act.
19    "License" means a document issued by the Director
20authorizing an individual to act as an insurance producer for
21the lines of authority specified in the document or authorizing
22a business entity to act as an insurance producer. The license
23itself does not create any authority, actual, apparent, or
24inherent, in the holder to represent or commit an insurance
25carrier.
26    "Limited lines insurance" means those lines of insurance

 

 

09800SB2590ham001- 3 -LRB098 12398 RPM 58595 a

1defined in Section 500-100 or any other line of insurance that
2the Director may deem it necessary to recognize for the
3purposes of complying with subsection (e) of Section 500-40.
4    "Limited lines producer" means a person authorized by the
5Director to sell, solicit, or negotiate limited lines
6insurance.
7    "Negotiate" means the act of conferring directly with or
8offering advice directly to a purchaser or prospective
9purchaser of a particular contract of insurance concerning any
10of the substantive benefits, terms, or conditions of the
11contract, provided that the person engaged in that act either
12sells insurance or obtains insurance from insurers for
13purchasers.
14    "Person" means an individual or a business entity.
15    "Rental agreement" means a written agreement setting forth
16the terms and conditions governing the use of a vehicle
17provided by a rental company for rental or lease.
18    "Rental company" means a person, or a franchisee of the
19person, in the business of providing primarily private
20passenger vehicles to the public under a rental agreement for a
21period not to exceed 30 days.
22    "Rental period" means the term of the rental agreement.
23    "Renter" means a person obtaining the use of a vehicle from
24a rental company under the terms of a rental agreement for a
25period not to exceed 30 days.
26    "Self-service storage facility limited line licensee"

 

 

09800SB2590ham001- 4 -LRB098 12398 RPM 58595 a

1means a person authorized under the provisions of Section
2500-107 to sell certain coverages relating to the rental of
3self-service storage facilities.
4    "Sell" means to exchange a contract of insurance by any
5means, for money or its equivalent, on behalf of an insurance
6company.
7    "Solicit" means attempting to sell insurance or asking or
8urging a person to apply for a particular kind of insurance
9from a particular company.
10    "Terminate" means the cancellation of the relationship
11between an insurance producer and the insurer or the
12termination of a producer's authority to transact insurance.
13    "Travel insurance" means insurance coverage for personal
14risks incident to planned travel, including, but not limited
15to: (1) the interruption or cancellation of a trip or event,
16(2) the loss of baggage or personal effects, (3) damages to
17accommodations or rental vehicles, or (4) sickness, accident,
18disability, or death occurring during travel. "Travel
19insurance" does not include major medical plans that provide
20comprehensive medical protection for travelers with trips
21lasting 6 months or longer, including those working overseas as
22an ex-patriot or as military personnel on deployment.
23    "Uniform Business Entity Application" means the current
24version of the National Association of Insurance
25Commissioners' Uniform Business Entity Application for
26nonresident business entities.

 

 

09800SB2590ham001- 5 -LRB098 12398 RPM 58595 a

1    "Uniform Application" means the current version of the
2National Association of Insurance Commissioners' Uniform
3Application for nonresident producer licensing.
4    "Vehicle" or "rental vehicle" means a motor vehicle of (1)
5the private passenger type, including passenger vans, mini
6vans, and sport utility vehicles or (2) the cargo type,
7including cargo vans, pickup trucks, and trucks with a gross
8vehicle weight of less than 26,000 pounds the operation of
9which does not require the operator to possess a commercial
10driver's license.
11    "Webinar" means an online educational presentation during
12which a live and participating instructor and participating
13viewers, whose attendance is periodically verified throughout
14the presentation, actively engage in discussion and in the
15submission and answering of questions.
16(Source: P.A. 97-113, eff. 7-14-11.)
 
17    (215 ILCS 5/500-100)
18    (Section scheduled to be repealed on January 1, 2017)
19    Sec. 500-100. Limited lines producer license.
20    (a) An individual who is at least 18 years of age and whom
21the Director considers to be competent, trustworthy, and of
22good business reputation may obtain a limited lines producer
23license for one or more of the following classes:
24        (1) travel insurance, as defined in Section 500-10 of
25    this Article on baggage or limited travel health, accident,

 

 

09800SB2590ham001- 6 -LRB098 12398 RPM 58595 a

1    or trip cancellation insurance sold in connection with
2    transportation provided by a common carrier;
3        (2) industrial life insurance, as defined in Section
4    228 of this Code;
5        (3) industrial accident and health insurance, as
6    defined in Section 368 of this Code;
7        (4) insurance issued by a company organized under the
8    Farm Mutual Insurance Company Act of 1986;
9        (5) legal expense insurance;
10        (6) enrollment of recipients of public aid or medicare
11    in a health maintenance organization;
12        (7) a limited health care plan issued by an
13    organization having a certificate of authority under the
14    Limited Health Service Organization Act;
15        (8) credit life and credit accident and health
16    insurance and other credit insurance policies approved or
17    permitted by the Director; a credit insurance company must
18    conduct a training program in which an applicant shall
19    receive basic instruction about the credit insurance
20    products that he or she they will be selling.
21    (b) The application for a limited lines producer license
22must be submitted on a form prescribed by the Director by a
23designee of the insurance company, health maintenance
24organization, or limited health service organization
25appointing the limited insurance representative. The insurance
26company, health maintenance organization, or limited health

 

 

09800SB2590ham001- 7 -LRB098 12398 RPM 58595 a

1service organization must pay the fee required by Section
2500-135.
3    (c) A limited lines producer may represent more than one
4insurance company, health maintenance organization, or limited
5health service organization.
6    (d) An applicant who has met the requirements of this
7Section shall be issued a perpetual limited lines producer
8license.
9    (e) A limited lines producer license shall remain in effect
10as long as the appointing insurance company pays the respective
11fee required by Section 500-135 prior to January 1 of each
12year, unless the license is revoked or suspended pursuant to
13Section 500-70. Failure of the insurance company to pay the
14license fee or to submit the required documents shall cause
15immediate termination of the limited line insurance producer
16license with respect to which the failure occurs.
17    (f) A limited lines producer license may be terminated by
18the insurance company or the licensee.
19    (g) A person whom the Director considers to be competent,
20trustworthy, and of good business reputation may be issued a
21car rental limited line license. A car rental limited line
22license for a rental company shall remain in effect as long as
23the car rental limited line licensee pays the respective fee
24required by Section 500-135 prior to the next fee date unless
25the car rental license is revoked or suspended pursuant to
26Section 500-70. Failure of the car rental limited line licensee

 

 

09800SB2590ham001- 8 -LRB098 12398 RPM 58595 a

1to pay the license fee or to submit the required documents
2shall cause immediate suspension of the car rental limited line
3license. A car rental limited line license for rental companies
4may be voluntarily terminated by the car rental limited line
5licensee. The license fee shall not be refunded upon
6termination of the car rental limited line license by the car
7rental limited line licensee.
8    (h) A limited lines producer issued a license pursuant to
9this Section is not subject to the requirements of Section
10500-30.
11    (i) A limited lines producer license must contain the name,
12address and personal identification number of the licensee, the
13date the license was issued, general conditions relative to the
14license's expiration or termination, and any other information
15the Director considers proper. A limited line producer license,
16if applicable, must also contain the name and address of the
17appointing insurance company.
18(Source: P.A. 98-159, eff. 8-2-13; revised 11-12-13.)
 
19    (215 ILCS 5/500-108 new)
20    Sec. 500-108. Travel insurance business entity license.
21    (a) As used in this Section:
22    "Offering and disseminating" means the following:
23        (1) Providing information to a prospective or current
24    policyholder on behalf of a limited lines travel insurance
25    entity, including brochures, buyer guides, descriptions of

 

 

09800SB2590ham001- 9 -LRB098 12398 RPM 58595 a

1    coverage, and price.
2        (2) Referring specific questions regarding coverage
3    features and benefits from a prospective or current
4    policyholder to a limited lines travel insurance entity.
5        (3) Disseminating and processing applications for
6    coverage, coverage selection forms, or other similar forms
7    in response to a request from a prospective or current
8    policyholder.
9        (4) Collecting premiums from a prospective or current
10    policyholder on behalf of a limited lines travel insurance
11    entity.
12        (5) Receiving and recording information from a
13    policyholder to share with a limited lines travel insurance
14    entity.
15    "Travel insurance business entity" means a licensed
16insurance producer designated by an insurer as set forth in
17subsection (i) of this Section.
18    "Travel retailer" means a business organization that
19makes, arranges, or offers travel services and, with respect to
20travel insurance, is limited to offering and disseminating as
21defined in this Section, unless otherwise licensed under
22subsection (c) of this Section.
23    (b) The Director may issue to a travel insurance business
24entity, that registers travel retailers under its license as
25described in paragraph (2) of subsection (d) of this Section, a
26producer license as provided in paragraph (6) of subsection (a)

 

 

09800SB2590ham001- 10 -LRB098 12398 RPM 58595 a

1of Section 500-35 of this Code. A travel insurance business
2entity license issued under this Section shall also authorize
3any employee of the travel insurance business entity to act
4individually on behalf and under the supervision of the travel
5insurance business entity licensee with respect to the coverage
6specified in this Section. Each travel insurance business
7entity licensed under this Section shall pay the Department a
8fee of $500 for its initial license and $500 for each renewal
9license, payable on May 31 annually.
10    (c) The Director may issue to a travel retailer a limited
11line producer license. A travel retailer license issued under
12this Section shall also authorize any employee of the travel
13retailer limited line licensee to act individually on behalf
14and under the supervision of the travel retailer limited line
15licensee with respect to the coverage specified in this
16Section.
17    (d) Notwithstanding any other provision of law, a travel
18retailer may do the limited activities of offering and
19disseminating travel insurance on behalf of and under the
20license of a supervising travel insurance business entity if
21the following conditions are met:
22        (1) the travel insurance business entity or travel
23    retailer provides to purchasers of travel insurance:
24            (A) a description of the material terms or the
25        actual material terms of the insurance coverage;
26            (B) a description of the process for filing a

 

 

09800SB2590ham001- 11 -LRB098 12398 RPM 58595 a

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

 

 

09800SB2590ham001- 12 -LRB098 12398 RPM 58595 a

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

 

 

09800SB2590ham001- 13 -LRB098 12398 RPM 58595 a

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

 

 

09800SB2590ham001- 14 -LRB098 12398 RPM 58595 a

1    (j) Any entity that violates any provision of this Article
2shall be subject to all appropriate regulatory action as set
3forth in this Code.".