99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016
SB3024

 

Introduced 2/18/2016, by Sen. William R. Haine

 

SYNOPSIS AS INTRODUCED:
 
215 ILCS 5/500-100
215 ILCS 5/1403

    Amends the Illinois Insurance Code. In a provision concerning limited lines producer licenses, provides that nothing in the Code shall be construed to require a limited lines producer license or any other form or class of producer's license for financial institutions, or their employees, if the financial institution has purchased or sponsored a group credit life, credit accident and health, credit casualty, or credit property insurance policy or program, under which the financial institution enrolls or performs other administrative services to enable individuals to purchase insurance coverage under the group credit insurance policy from a licensed producer in compliance with provisions concerning license exceptions and credit life and credit accident and health insurance policies under the Code. In a provision concerning licensure requirements for financial institutions, provides that nothing in the Code or in any other law of this State shall be construed to require a financial institution, or the officers or employees of the financial institution, to become licensed under the Code in order to offer any line of insurance that is excluded from the definition of insurance under the Code if that line of insurance is offered in relation to the financial institution's banking business. Provides that for limited purposes, a financial institution, or its officers or employees, that perform administrative services related to lines of insurance excluded from the definition of insurance under the Code, including, but not limited to, marketing, sponsorship, enrollment, and insurance plan certificate issuance services, shall be deemed to be offering insurance related to the financial institution's banking business. Effective immediately.


LRB099 20642 EGJ 45237 b

 

 

A BILL FOR

 

SB3024LRB099 20642 EGJ 45237 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 500-100 and 1403 as follows:
 
6    (215 ILCS 5/500-100)
7    (Section scheduled to be repealed on January 1, 2017)
8    Sec. 500-100. Limited lines producer license.
9    (a) An individual who is at least 18 years of age and whom
10the Director considers to be competent, trustworthy, and of
11good business reputation may obtain a limited lines producer
12license for one or more of the following classes:
13        (1) travel insurance, as defined in Section 500-10 of
14    this Article;
15        (2) industrial life insurance, as defined in Section
16    228 of this Code;
17        (3) industrial accident and health insurance, as
18    defined in Section 368 of this Code;
19        (4) insurance issued by a company organized under the
20    Farm Mutual Insurance Company Act of 1986;
21        (5) legal expense insurance;
22        (6) enrollment of recipients of public aid or medicare
23    in a health maintenance organization;

 

 

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1        (7) a limited health care plan issued by an
2    organization having a certificate of authority under the
3    Limited Health Service Organization Act;
4        (8) credit life and credit accident and health
5    insurance and other credit insurance policies approved or
6    permitted by the Director; a credit insurance company must
7    conduct a training program in which an applicant shall
8    receive basic instruction about the credit insurance
9    products that he or she will be selling; nothing in this
10    Code shall be construed to require a limited producer
11    license or any other form or class of producer's license
12    for financial institutions, or their employees, if the
13    financial institution has purchased or sponsored a group
14    credit life, credit accident and health, credit casualty,
15    or credit property insurance policy or program, under which
16    the financial institution enrolls or performs other
17    administrative services to enable individuals to purchase
18    insurance coverage under the group credit insurance policy
19    from a licensed producer in compliance with Section 155.56
20    and paragraph (2) of subsection (b) of Section 500-20 of
21    this Code.
22    (b) The application for a limited lines producer license
23must be submitted on a form prescribed by the Director by a
24designee of the insurance company, health maintenance
25organization, or limited health service organization
26appointing the limited insurance representative. The insurance

 

 

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1company, health maintenance organization, or limited health
2service organization must pay the fee required by Section
3500-135.
4    (c) A limited lines producer may represent more than one
5insurance company, health maintenance organization, or limited
6health service organization.
7    (d) An applicant who has met the requirements of this
8Section shall be issued a perpetual limited lines producer
9license.
10    (e) A limited lines producer license shall remain in effect
11as long as the appointing insurance company pays the respective
12fee required by Section 500-135 prior to January 1 of each
13year, unless the license is revoked or suspended pursuant to
14Section 500-70. Failure of the insurance company to pay the
15license fee or to submit the required documents shall cause
16immediate termination of the limited line insurance producer
17license with respect to which the failure occurs.
18    (f) A limited lines producer license may be terminated by
19the insurance company or the licensee.
20    (g) A person whom the Director considers to be competent,
21trustworthy, and of good business reputation may be issued a
22car rental limited line license. A car rental limited line
23license for a rental company shall remain in effect as long as
24the car rental limited line licensee pays the respective fee
25required by Section 500-135 prior to the next fee date unless
26the car rental license is revoked or suspended pursuant to

 

 

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1Section 500-70. Failure of the car rental limited line licensee
2to pay the license fee or to submit the required documents
3shall cause immediate suspension of the car rental limited line
4license. A car rental limited line license for rental companies
5may be voluntarily terminated by the car rental limited line
6licensee. The license fee shall not be refunded upon
7termination of the car rental limited line license by the car
8rental limited line licensee.
9    (g-5) A business entity may be issued a limited lines
10producer license for credit life and credit accident and health
11insurance and other credit insurance policies approved or
12permitted by the Director, provided that:
13        (1) application for the limited lines producer license
14    for credit insurance is made on a form specified by the
15    Director;
16        (2) the appointing insurance company has paid the
17    application fee amount required by the Director for the
18    business entity's application; and
19        (3) the business entity has designated an individual
20    with an in force limited license producer license issued
21    under paragraph (8) of subsection (a) of this Section to be
22    responsible for the business entity's compliance with the
23    insurance laws and regulations of this State related to
24    credit life and credit accident and health insurance and
25    other credit insurance policies approved or permitted by
26    the Director that are offered or sold by that business

 

 

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1    entity.
2    Except as specifically authorized by paragraph (8) of
3subsection (a) of this Section or this subsection (g-5), a
4business entity holding a limited lines license under this
5subsection (g-5) may not advertise, represent, or otherwise
6hold itself or any of its employees out as licensed insurers,
7insurance producers, insurance agents, or insurance brokers.
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; 98-756, eff. 7-16-14;
1998-1165, eff. 6-1-15; 99-161, eff. 1-1-16.)
 
20    (215 ILCS 5/1403)
21    Sec. 1403. Licensure requirements for financial
22institutions.
23    (a) A financial institution transacting insurance business
24in this State shall register with the Director pursuant to the
25Illinois Insurance Code and shall be subject to the laws,

 

 

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1rules, and penalties of the Illinois Insurance Code.
2    (b) The solicitation and sale of insurance by a financial
3institution shall be conducted only by individuals who have
4been issued and maintain an insurance producer's license
5pursuant to the Illinois Insurance Code and shall be subject to
6the laws, rules, and penalties of the Illinois Insurance Code.
7    (c) For the purposes of this Section, a "financial
8institution" means the subsidiary of a financial institution
9when the financial institution is transacting insurance
10business in this State only through the subsidiary. For the
11purposes of Section 499.1 of the Illinois Insurance Code, a
12financial institution shall be deemed to be a corporation.
13    (d) Nothing in this Code or in any other law of this State
14shall be construed to require a financial institution, or the
15officers or employees of the financial institution, to become
16licensed under this Code in order to offer any line of
17insurance that is excluded from the definition of insurance, as
18defined by Section 1402, if that line of insurance is offered
19in relation to the financial institution's banking business.
20For purposes of this subsection (d), a financial institution,
21or its officers or employees, that perform administrative
22services related to lines of insurance excluded from the
23definition of insurance, as defined by Section 1402, including,
24but not limited to, marketing, sponsorship, enrollment, and
25insurance plan certificate issuance services, shall be deemed
26to be offering insurance related to the financial institution's

 

 

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1banking business.
2(Source: P.A. 90-41, eff. 10-1-97.)
 
3    Section 99. Effective date. This Act takes effect upon
4becoming law.