215 ILCS 5/ Illinois Insurance Code.

(215 ILCS 5/1550)

Sec. 1550. Applicant convictions.

(a) The Director and the Department shall not require applicants to report the following information and shall not collect or consider the following criminal history records in connection with a public adjuster license application:

(1) Juvenile adjudications of delinquent minors as defined in Section 5-105 of the Juvenile Court Act of 1987, subject to the restrictions set forth in Section 5-130 of that Act.

(2) Law enforcement records, court records, and conviction records of an individual who was 17 years old at the time of the offense and before January 1, 2014, unless the nature of the offense required the individual to be tried as an adult.

(3) Records of arrest not followed by a formal charge or conviction.

(4) Records of arrest where charges were dismissed unless related to the duties and responsibilities of a public adjuster. However, applicants shall not be asked to report any arrests, and any arrest not followed by a conviction shall not be the basis of a denial and may be used only to assess an applicant's rehabilitation.

(5) Convictions overturned by a higher court.

(6) Convictions or arrests that have been sealed or expunged.

(b) The Director, upon a finding that an applicant for a license under this Act was previously convicted of any felony or a misdemeanor involving dishonesty or fraud, shall consider any mitigating factors and evidence of rehabilitation contained in the applicant's record, including any of the following factors and evidence, to determine if a license may be denied because the prior conviction will impair the ability of the applicant to engage in the position for which a license is sought:

(1) the bearing, if any, of the offense for which the applicant was previously convicted on the duties, functions, and responsibilities of the position for which a license is sought;

(2) whether the conviction suggests a future propensity to endanger the safety and property of others while performing the duties and responsibilities for which a license is sought;

(3) if the applicant was previously licensed or employed in this State or other states or jurisdictions, then the lack of prior misconduct arising from or related to the licensed position or position of employment;

(4) whether 5 years since a felony conviction or 3 years since release from confinement for the conviction, whichever is later, have passed without a subsequent conviction;

(5) successful completion of sentence and, for applicants serving a term of parole or probation, a progress report provided by the applicant's probation or parole officer that documents the applicant's compliance with conditions of supervision;

(6) evidence of the applicant's present fitness and professional character;

(7) evidence of rehabilitation or rehabilitative effort during or after incarceration or during or after a term of supervision, including, but not limited to, a certificate of good conduct under Section 5-5.5-25 of the Unified Code of Corrections or certificate of relief from disabilities under Section 5-5.5-10 of the Unified Code of Corrections; and

(8) any other mitigating factors that contribute to the person's potential and current ability to perform the duties and responsibilities of a public adjuster.

(c) If a nonresident licensee meets the standards set forth in items (1) through (4) of subsection (a) of Section 1540 and has received consent pursuant to 18 U.S.C. 1033(e)(2) from his or her home state, the Director shall grant the nonresident licensee a license.

(d) If the Director refuses to issue a license to an applicant based on a conviction or convictions, in whole or in part, then the Director shall notify the applicant of the denial in writing with the following included in the notice of denial:

(1) a statement about the decision to refuse to issue a license;

(2) a list of convictions that the Director determined will impair the applicant's ability to engage in the position for which a license is sought;

(3) a list of the convictions that were the sole or partial basis for the refusal to issue a license; and

(4) a summary of the appeal process or the earliest the applicant may reapply for a license, whichever is applicable.

(Source: P.A. 103-216, eff. 1-1-24.)

(215 ILCS 5/1555)

Sec. 1555. License denial, nonrenewal, or revocation.

(a) The Director may place on probation, suspend, revoke, deny, or refuse to issue or renew a public adjuster's license or may levy a civil penalty or any combination of actions, for any one or more of the following causes:

(1) providing incorrect, misleading, incomplete, or materially untrue information in the license application;

(2) violating any insurance laws, or violating any regulation, subpoena, or order of the Director or of another state's Director;

(3) obtaining or attempting to obtain a license through misrepresentation or fraud;

(4) improperly withholding, misappropriating, or converting any monies or properties received in the course of doing insurance business;

(5) intentionally misrepresenting the terms of an actual or proposed insurance contract or application for insurance;

(6) having been convicted of any felony or a misdemeanor involving dishonesty or fraud, unless the individual demonstrates to the Director sufficient rehabilitation to warrant the public trust; consideration of such conviction of an applicant shall be in accordance with Section 1550;

(7) having admitted or been found to have committed any insurance unfair trade practice or insurance fraud;

(8) using fraudulent, coercive, or dishonest practices; or demonstrating incompetence, untrustworthiness, or financial irresponsibility in the conduct of business in this State or elsewhere;

(9) having an insurance license or public adjuster license or its equivalent, denied, suspended, or revoked in any other state, province, district, or territory;

(10) forging another's name to an application for insurance or to any document related to an insurance transaction;

(11) cheating, including improperly using notes or any other reference material, to complete an examination for an insurance license or public adjuster license;

(12) knowingly accepting insurance business from or transacting business with an individual who is not licensed but who is required to be licensed by the Director;

(13) failing to comply with an administrative or court order imposing a child support obligation;

(14) failing to pay State income tax or comply with any administrative or court order directing payment of State income tax;

(15) failing to comply with or having violated any of the standards set forth in Section 1590 of this Law;

(16) failing to maintain the records required by Section 1585 of this Law.

(b) If the action by the Director is to nonrenew, suspend, or revoke a license or to deny an application for a license, the Director shall notify the applicant or licensee and advise, in writing, the applicant or licensee of the reason for the suspension, revocation, denial, or nonrenewal of the applicant's or licensee's license. The applicant or licensee may make written demand upon the Director within 30 days after the date of mailing for a hearing before the Director to determine the reasonableness of the Director's action. The hearing must be held within not fewer than 20 days nor more than 30 days after the mailing of the notice of hearing and shall be held pursuant to 50 Ill. Adm. Code 2402.

(c) The license of a business entity may be suspended, revoked, or refused if the Director finds, after hearing, that an individual licensee's violation was known or should have been known by one or more of the partners, officers, or managers acting on behalf of the business entity and the violation was neither reported to the Director, nor corrective action taken.

(d) In addition to or in lieu of any applicable denial, suspension or revocation of a license, a person may, after hearing, be subject to a civil penalty. In addition to or instead of any applicable denial, suspension, or revocation of a license, a person may, after hearing, be subject to a civil penalty of up to $10,000 for each cause for denial, suspension, or revocation, however, the civil penalty may total no more than $100,000.

(e) The Director shall retain the authority to enforce the provisions of and impose any penalty or remedy authorized by this Article against any person who is under investigation for or charged with a violation of this Article even if the person's license or registration has been surrendered or has lapsed by operation of law.

(f) Any individual whose public adjuster's license is revoked or whose application is denied pursuant to this Section shall be ineligible to apply for a public adjuster's license for 5 years. A suspension pursuant to this Section may be for any period of time up to 5 years.

(Source: P.A. 103-216, eff. 1-1-24.)

(215 ILCS 5/1560)

Sec. 1560. Bond or letter of credit.

(a) Prior to the issuance of a license as a public adjuster and for the duration of the license, the applicant shall secure evidence of financial responsibility in a format prescribed by the Director through a surety bond or irrevocable letter of credit, subject to all of the following requirements:

(1) A surety bond executed and issued by an insurer authorized to issue surety bonds in this State, which bond:

(A) shall be in the minimum amount of $50,000;

(B) shall be in favor of this State and shall specifically authorize recovery by the Director on behalf of any person in this State who sustained damages as the result of erroneous acts, failure to act, conviction of fraud, or conviction of unfair practices in his or her capacity as a public adjuster; and

(C) shall not be terminated unless at least 30 days' prior written notice will have been filed with the Director and given to the licensee; and

(2) An irrevocable letter of credit issued by a qualified financial institution, which letter of credit:

(A) shall be in the minimum amount of $50,000;

(B) shall be to an account to the Director and subject to lawful levy of execution on behalf of any person to whom the public adjuster has been found to be legally liable as the result of erroneous acts, failure to act, fraudulent acts, or unfair practices in his or her capacity as a public adjuster; and

(C) shall not be terminated unless at least 30 days' prior written notice will have been filed with the and given to the licensee.

(b) The issuer of the evidence of financial responsibility shall notify the Director upon termination of the bond or letter of credit, unless otherwise directed by the Director.

(c) The Director may ask for the evidence of financial responsibility at any time he or she deems relevant.

(d) The authority to act as a public adjuster shall automatically terminate if the evidence of financial responsibility terminates or becomes impaired.

(Source: P.A. 103-216, eff. 1-1-24.)

(215 ILCS 5/1563)

Sec. 1563. Fees. The fees required by this Article are as follows:

(1) Public adjuster license fee of $250, payable once every 2 years.

(2) Business entity license fee of $250, payable once every 2 years.

(3) Application fee of $50 for processing each request to take the written examination for a public adjuster license.

(Source: P.A. 100-863, eff. 8-14-18.)

(215 ILCS 5/1565)

Sec. 1565. Continuing education.

(a) An individual who holds a public adjuster license and who is not exempt under subsection (b) of this Section shall satisfactorily complete a minimum of 24 hours of continuing education courses, including 3 hours of classroom or webinar ethics instruction, reported on a biennial basis in conjunction with the license renewal cycle.

The Director may not approve a course of study unless the course provides for classroom, seminar, or self-study instruction methods. A course given in a combination instruction method of classroom or seminar and self-study shall be deemed to be a self-study course unless the classroom or seminar certified hours meets or exceeds two-thirds of the total hours certified for the course. The self-study material used in the combination course must be directly related to and complement the classroom portion of the course in order to be considered for credit. An instruction method other than classroom or seminar shall be considered as self-study methodology. Self-study credit hours require the successful completion of an examination covering the self-study material. The examination may not be self-evaluated. However, if the self-study material is completed through the use of an approved computerized interactive format whereby the computer validates the successful completion of the self-study material, no additional examination is required. The self-study credit hours contained in a certified course shall be considered classroom hours when at least two-thirds of the hours are given as classroom or seminar instruction.

The public adjuster must complete the course in advance of the renewal date to allow the education provider time to report the credit to the Department.

(b) This Section shall not apply to:

(1) licensees not licensed for one full year prior to the end of the applicable continuing education biennium; or

(2) licensees holding nonresident public adjuster licenses who have met the continuing education requirements of their home state and whose home state gives credit to residents of this State on the same basis.

(c) Only continuing education courses approved by the Director shall be used to satisfy the continuing education requirement of subsection (a) of this Section.

(Source: P.A. 102-135, eff. 7-23-21.)

(215 ILCS 5/1570)

Sec. 1570. Public adjuster fees.

(a) A public adjuster shall not pay a commission, service fee, or other valuable consideration to a person for investigating or settling claims in this State if that person is required to be licensed under this Article and is not so licensed.

(b) A person shall not accept a commission, service fee, or other valuable consideration for investigating or settling claims in this State if that person is required to be licensed under this Article and is not so licensed.

(c) A public adjuster may pay or assign commission, service fees, or other valuable consideration to persons who do not investigate or settle claims in this State, unless the payment would violate State law.

(d) If the loss giving rise to the claim for which the public adjuster was retained arises from damage to property that is anything but a personal residence, a public adjuster may not charge, agree to, or accept any compensation, payment, commission, fee, or other valuable consideration in excess of 10% of the amount of the insurance settlement claim paid by the insurer on any claim resulting from a catastrophic event, unless approved in writing by the Director. Application for exception to the 10% limit must be made in writing. The request must contain specific reasons as to why the consideration should be in excess of 10% and proof that the policyholder would accept the consideration. The Director must act on any request within 5 business days after receipt of the request.

For the purpose of this subsection (d), "catastrophic event" means an occurrence of widespread or severe damage or loss of property producing an overwhelming demand on State and local response resources and mechanisms and a severe long-term effect on general economic activity, and that severely affects State, local, and private sector capabilities to begin to sustain response activities resulting from any catastrophic cause, including, but not limited to, fire, including arson (provided the fire was not caused by the willful action of an owner or resident of the property), flood, earthquake, wind, storm, explosion, or extended periods of severe inclement weather as determined by declaration of a State of disaster by the Governor. This declaration may be made on a county-by-county basis and shall be in effect for 90 days, but may be renewed for 30-day intervals thereafter.

(e) If the loss giving rise to the claim for which the public adjuster was retained arises from damage to a personal residence, a public adjuster may not charge, agree to, or accept any compensation, payment, commission, fee, or other valuable consideration in excess of 10% of the amount of the insurance settlement claim paid by the insurer on any claim.

(Source: P.A. 103-216, eff. 1-1-24.)

(215 ILCS 5/1575)

Sec. 1575. Contract between public adjuster and insured.

(a) Public adjusters shall ensure that all contracts for their services are in writing and contain the following terms:

(1) legible full name of the adjuster signing the contract, as specified in Department records;

(2) permanent home state business address, email address, and phone number;

(3) license number;

(4) title of "Public Adjuster Contract";

(5) the insured's full name, street address, insurance company name, and policy number, if known or upon notification;

(6) a description of the loss and its location;

(7) description of services to be provided to the insured;

(8) signatures of the public adjuster and the insured;

(9) date and time the contract was signed by the public adjuster and date and time the contract was signed by the insured;

(10) attestation language stating that the public adjuster is fully bonded pursuant to State law; and

(11) full salary, fee, commission, compensation, or other considerations the public adjuster is to receive for services, including any applicable cap under Section 1570.

(b) The contract may specify that the public adjuster shall be named as a co-payee on an insurer's payment of a claim.

(1) If the compensation is based on a share of the insurance settlement, the exact percentage shall be specified.

(2) Initial expenses to be reimbursed to the public adjuster from the proceeds of the claim payment shall be specified by type, with dollar estimates set forth in the contract and with any additional expenses first approved by the insured.

(3) Compensation provisions in a public adjuster contract shall not be redacted in any copy of the contract provided to the Director.

(c) If the insurer, not later than 5 business days after the date on which the loss is reported to the insurer, either pays or commits in writing to pay to the insured the policy limit of the insurance policy, the public adjuster shall:

(1) not receive a commission consisting of a percentage of the total amount paid by an insurer to resolve a claim;

(2) inform the insured that loss recovery amount might not be increased by insurer; and

(3) be entitled only to reasonable compensation from the insured for services provided by the public adjuster on behalf of the insured, based on the time spent on a claim and expenses incurred by the public adjuster, until the claim is paid or the insured receives a written commitment to pay from the insurer.

(d) A public adjuster shall provide the insured a written disclosure concerning any direct or indirect financial interest that the public adjuster has with any other party who is involved in any aspect of the claim, other than the salary, fee, commission, or other consideration established in the written contract with the insured, including, but not limited to, any ownership of or any compensation expected to be received from, any construction firm, salvage firm, building appraisal firm, board-up company, or any other firm that provides estimates for work, or that performs any work, in conjunction with damages caused by the insured loss on which the public adjuster is engaged. The word "firm" shall include any corporation, partnership, association, joint-stock company, or person.

(e) A public adjuster contract may not contain any contract term that:

(1) allows the public adjuster's percentage fee to be collected when money is due from an insurance company, but not paid, or that allows a public adjuster to collect the entire fee from the first check issued by an insurance company, rather than as a percentage of each check issued by an insurance company;

(2) requires the insured to authorize an insurance company to issue a check only in the name of the public adjuster;

(3) precludes a public adjuster or an insured from pursuing civil remedies;

(4) includes any hold harmless agreement that provides indemnification to the public adjuster by the insured for liability resulting from the public adjuster's negligence; or

(5) provides power of attorney by which the public adjuster can act in the place and instead of the insured.

(f) The following provisions apply to a contract between a public adjuster and an insured:

(1) Prior to the signing of the contract, the public adjuster shall provide the insured with a separate signed and dated disclosure document regarding the claim process that states:

"Property insurance policies obligate the insured to present a claim to his or her insurance company for consideration. There are 3 types of adjusters that could be involved in that process. The definitions of the 3 types are as follows:

(A) "Company adjuster" means the insurance adjusters who are employees of an insurance company. They represent the interest of the insurance company and are paid by the insurance company. They will not charge you a fee.

(B) "Independent adjuster" means the insurance adjusters who are hired on a contract basis by an insurance company to represent the insurance company's interest in the settlement of the claim. They are paid by your insurance company. They will not charge you a fee.

(C) "Public adjuster" means the insurance adjusters who do not work for any insurance company. They represent the insured to assist in the preparation, presentation and settlement of the claim. The insured hires them by signing a contract agreeing to pay them a fee or commission based on a percentage of the settlement, or other method of compensation.".

(2) The insured is not required to hire a public adjuster to help the insured meet his or her obligations under the policy, but has the right to do so.

(3) The public adjuster is not a representative or employee of the insurer or the Department of Insurance.

(4) The salary, fee, commission, or other consideration is the obligation of the insured, not the insurer, except when rights have been assigned to the public adjuster by the insured.

(g) The contracts shall be executed in duplicate to provide an original contract to the public adjuster, and an original contract to the insured. The public adjuster's original contract shall be available at all times for inspection without notice by the Director.

(h) The public adjuster shall provide the insurer or its authorized representative for receiving notice of loss or damage with an exact copy of the contract with the insured by email no later than 5 business days after execution of the contract, authorizing the public adjuster to represent the insured's interest.

(i) The public adjuster shall give the insured written notice of the insured's rights as a consumer under the law of this State.

(j) A public adjuster shall not provide services, other than emergency services, until a written contract with the insured has been executed, on a form filed with and approved by the Director, and an exact copy of the contract has been provided to the insurer in accordance with subsection (h). At the option of the insured, any such contract shall be voidable for 5 business days after the contract is received by the insurer. The insured may void the contract by notifying the public adjuster in writing by (i) registered or certified mail, return receipt requested, to the address shown on the contract, (ii) personally serving the notice on the public adjuster, or (iii) sending an email to the email address shown on the contract.

(k) If the insured exercises the right to rescind the contract, anything of value given by the insured under the contract will be returned to the insured within 15 business days following the receipt by the public adjuster of the cancellation notice.

(l) All contracts entered into that are in violation of this Section are void and invalid.

(Source: P.A. 103-216, eff. 1-1-24.)

(215 ILCS 5/1580)

Sec. 1580. Escrow or trust accounts. A public adjuster who receives, accepts, or holds any funds on behalf of an insured towards the settlement of a claim for loss or damage shall deposit the funds in a non-interest bearing escrow or trust account in a financial institution that is insured by an agency of the federal government in the public adjuster's home state or where the loss occurred.

(Source: P.A. 96-1332, eff. 1-1-11.)

(215 ILCS 5/1585)

Sec. 1585. Record retention.

(a) A public adjuster shall maintain a complete record of each transaction as a public adjuster. The records required by this Section shall include the following:

(1) name of the insured;

(2) date, location and amount of the loss;

(3) a copy of the contract between the public adjuster and insured and a copy of the separate disclosure documents;

(4) name of the insurer, amount, expiration date and number of each policy carried with respect to the loss;

(5) itemized statement of the insured's recoveries;

(6) itemized statement of all compensation received by the public adjuster, from any source whatsoever, in connection with the loss;

(7) a register of all monies received, deposited, disbursed, or withdrawn in connection with a transaction with an insured, including fees transfers and disbursements from a trust account and all transactions concerning all interest bearing accounts;

(8) name of public adjuster who executed the contract;

(9) name of the attorney representing the insured, if applicable, and the name of the claims representatives of the insurance company; and

(10) evidence of financial responsibility in a format prescribed by the Director.

(b) Records shall be maintained for at least 7 years after the termination of the transaction with an insured and shall be open to examination by the Director at all times.

(c) Records submitted to the Director in accordance with this Section that contain information identified in writing as proprietary by the public adjuster shall be treated as confidential by the Director and shall not be subject to the Freedom of Information Act.

(Source: P.A. 103-216, eff. 1-1-24.)

(215 ILCS 5/1590)

Sec. 1590. Standards of conduct of public adjuster.

(a) A public adjuster is obligated, under his or her license, to serve with objectivity and complete loyalty for the interests of his client alone, and to render to the insured such information, counsel, and service, as within the knowledge, understanding, and opinion in good faith of the licensee, as will best serve the insured's insurance claim needs and interest.

(b) A public adjuster may not propose or attempt to propose to any person that the public adjuster represent that person while a loss-producing occurrence is continuing, nor while the fire department or its representatives are engaged at the damaged premises, nor between the hours of 7:00 p.m. and 8:00 a.m.

(c) A public adjuster shall not permit an unlicensed employee or representative of the public adjuster to conduct business for which a license is required under this Article.

(d) A public adjuster shall not have a direct or indirect financial interest in any aspect of the claim, other than the salary, fee, commission, or other consideration established in the written contract with the insured, unless full written disclosure has been made to the insured as set forth in subsection (d) of Section 1575.

(e) A public adjuster shall not acquire any interest in the salvage of property subject to the contract with the insured unless the public adjuster obtains written permission from the insured after settlement of the claim with the insurer as set forth in subsection (d) of Section 1575 of this Article.

(f) The public adjuster shall abstain from referring or directing the insured to get needed repairs or services in connection with a loss from any person, unless disclosed to the insured:

(1) with whom the public adjuster has a direct or indirect financial interest; or

(2) from whom the public adjuster may receive direct or indirect compensation for the referral.

(g) The public adjuster shall disclose to an insured if he or she has any interest or will be compensated by any construction firm, salvage firm, building appraisal firm, board-up company, or any other firm that performs any work in conjunction with damages caused by the insured loss. The word "firm" shall include any corporation, partnership, association, joint-stock company or individual as set forth in Section 1575 of this Article.

(h) Any compensation or anything of value in connection with an insured's specific loss that will be received by a public adjuster shall be disclosed by the public adjuster to the insured in writing including the source and amount of any such compensation.

(i) In all cases where the loss giving rise to the claim for which the public adjuster was retained arise from damage to a personal residence, the insurance proceeds shall be delivered to the named insured or his or her designee. Where proceeds paid by an insurance company are paid jointly to the insured and the public adjuster, the insured shall release such portion of the proceeds that are due the public adjuster within 30 calendar days after the insured's receipt of the insurance company's check, money order, draft, or release of funds. If the proceeds are not so released to the public adjuster within 30 calendar days, the insured shall provide the public adjuster with a written explanation of the reason for the delay.

(j) Public adjusters shall adhere to the following general ethical requirements:

(1) a public adjuster shall not undertake the adjustment of any claim if the public adjuster is not competent and knowledgeable as to the terms and conditions of the insurance coverage, or which otherwise exceeds the public adjuster's current expertise;

(2) a public adjuster shall not knowingly make any oral or written material misrepresentations or statements which are false or maliciously critical and intended to injure any person engaged in the business of insurance to any insured client or potential insured client;

(3) no public adjuster, while so licensed by the Department, may represent or act as a company adjuster or independent adjuster on the same claim;

(4) the contract shall not be construed to prevent an insured from pursuing any civil remedy after the 5-business day revocation or cancellation period;

(5) a public adjuster shall not enter into a contract or accept a power of attorney that vests in the public adjuster the effective authority to choose the persons who shall perform repair work;

(6) a public adjuster shall ensure that all contracts for the public adjuster's services are in writing and set forth all terms and conditions of the engagement; and

(7) a public adjuster shall not advance money or any valuable consideration, except emergency services to an insured pending adjustment of a claim.

(k) A public adjuster may not agree to any loss settlement without the insured's knowledge and consent and shall, upon the insured's request, provide the insured with a document setting forth the scope, amount, and value of the damages prior to request by the insured for authority to settle the loss.

(l) A public adjuster shall not provide legal advice or representation to the insured or engage in the unauthorized practice of law.

(m) A public adjuster shall not represent that he or she is a representative of an insurance company, a fire department, or the State of Illinois, that he or she is a fire investigator, that his or her services are required for the insured to submit a claim to the insured's insurance company, or that he or she may provide legal advice or representation to the insured. A public adjuster may represent that he or she has been licensed by the State of Illinois.

(Source: P.A. 103-216, eff. 1-1-24.)

(215 ILCS 5/1595)

Sec. 1595. Reporting of actions.

(a) The public adjuster shall report to the Director any administrative action taken against the public adjuster in another jurisdiction or by another governmental agency in this State within 30 days of the final disposition of the matter. This report shall include a copy of the order, consent to order, or other relevant legal documents.

(b) Within 30 days of the initial pretrial hearing date, the public adjuster shall report to the Director any criminal prosecution of the public adjuster taken in any jurisdiction. The report shall include a copy of the initial complaint filed, the order resulting from the hearing, and any other relevant legal documents.

(Source: P.A. 96-1332, eff. 1-1-11.)

(215 ILCS 5/1600)

Sec. 1600. Examinations.

(a) The Director shall have the power to examine any applicant or any person licensed or registered pursuant to this Article.

(b) Every person being examined and its officers, directors, and members must provide to the Director convenient and free access, at all reasonable hours, to all books, records, documents, and other papers relating to its public adjusting affairs. The officers, directors, members, and employees must facilitate and aid in such examinations so far as it is in their power to do so.

(c) Examiners may be designated by the Director. Such examiners shall make their reports to the Director pursuant to this Section. Any report alleging substantive violations shall be in writing and shall be based upon the facts ascertained from the books, records, documents, papers, and other evidence obtained by the examiners or ascertained from the testimony of the officers, directors, members, or other individuals examined under oath or ascertained by notarized affidavits received by the examiners. The reports shall be verified by the examiners.

(Source: P.A. 96-1332, eff. 1-1-11.)

(215 ILCS 5/1605)

Sec. 1605. Injunctive relief. Any person who acts as or holds himself out to be a public adjuster without holding a valid and current license to do so is hereby declared to be inimical to the public welfare and to constitute a public nuisance. The Director may report such practice to the Attorney General of the State of Illinois whose duty it is to apply forthwith by complaint on relation of the Director in the name of the people of the State of Illinois, as plaintiff, for injunctive relief in the circuit court of the county where such practice occurred to enjoin the person from engaging in such practice; and upon the filing of a verified petition in such court, the court, if satisfied by affidavit or otherwise that the person has been engaged in such practice without a valid and current license to do so, may enter a temporary restraining order without notice or bond enjoining the defendant from such further practice. A copy of the verified complaint shall be served upon the defendant and the proceedings shall thereafter be conducted as in other civil cases. If it is established that the defendant has been or is engaged in such unlawful practice, then the court may enter an order or judgment perpetually enjoining the defendant from such further practice. In all proceedings hereunder, the court, in its discretion, may apportion the costs among the parties interested in the action, including the costs of filing the complaint, service of process, witness fees and expenses, court reporter charges, and reasonable attorney fees. In case of violation of any injunctive order entered under the provisions of this Section, the court may try and punish the offender for contempt of court. Such injunction proceedings shall be in addition to, and not in lieu of, all penalties and other remedies.

(Source: P.A. 96-1332, eff. 1-1-11.)

(215 ILCS 5/1610)

Sec. 1610. Additional penalties. In addition to any other penalty set forth in this Article, any person violating Section 1605 of this Code shall be guilty of a Class A misdemeanor and any person misappropriating or converting any monies collected as a public adjuster, whether licensed or not, shall be guilty of a Class 4 felony.

(Source: P.A. 96-1332, eff. 1-1-11.)

(215 ILCS 5/1615)

Sec. 1615. Rules. The Director shall promulgate reasonable rules as are necessary or proper to carry out the purposes of this Article.

(Source: P.A. 96-1332, eff. 1-1-11.)

(215 ILCS 5/Art. XLVI heading) ARTICLE XLVI. TRAVEL INSURANCE (Source: P.A. 102-212, eff. 10-28-21.)

(215 ILCS 5/1620)

Sec. 1620. Short title. This Article may be cited as the Travel Insurance Act.

(Source: P.A. 102-212, eff. 10-28-21.)

(215 ILCS 5/1625)

Sec. 1625. Scope and purposes.

(a) The purpose of this Article is to promote the public welfare by creating a comprehensive legal framework within which travel insurance may be sold in this State.

(b) This Article applies to travel insurance that covers any resident of this State, and is sold, solicited, negotiated, or offered in this State, and policies and certificates that are delivered or issued for delivery in this State. This Article does not apply to cancellation fee waivers or travel assistance services except as expressly provided in this Article.

(c) All other applicable provisions of this State's insurance laws shall continue to apply to travel insurance, except that the specific provisions of this Article shall supersede any general provisions of law that would otherwise be applicable to travel insurance.

(Source: P.A. 102-212, eff. 10-28-21.)

(215 ILCS 5/1630)

Sec. 1630. Definitions. As used in this Article:

"Aggregator site" means a website that provides access to information regarding insurance products from more than one insurer, including product and insurer information, for use in comparison shopping.

"Blanket travel insurance" means a policy of travel insurance issued to any eligible group providing coverage for specific classes of persons defined in the policy with coverage provided to all members of the eligible group without a separate charge to individual members of the eligible group.

"Cancellation fee waiver" means a contractual agreement between a supplier of travel services and its customer to waive some or all of the nonrefundable cancellation fee provisions of the supplier's underlying travel contract with or without regard to the reason for the cancellation or form of reimbursement. A "cancellation fee waiver" is not insurance.

"Eligible group", solely for the purposes of travel insurance, means 2 or more persons who are engaged in a common enterprise, or have an economic, educational, or social affinity or relationship, including, but not limited to, any of the following:

(1) any entity engaged in the business of providing travel or travel services, including, but not limited to: tour operators, lodging providers, vacation property owners, hotels and resorts, travel clubs, travel agencies, property managers, cultural exchange programs, and common carriers or the operator, owner, or lessor of a means of transportation of passengers, including, but not limited to, airlines, cruise lines, railroads, steamship companies, and public bus carriers, wherein with regard to any particular travel or type of travel or travelers, all members or customers of the group must have a common exposure to risk attendant to such travel;

(2) any college, school, or other institution of learning covering students, teachers, employees, or volunteers;

(3) any employer covering any group of employees, volunteers, contractors, board of directors, dependents, or guests;

(4) any sports team, camp, or sponsor of any sports team or camp covering participants, members, campers, employees, officials, supervisors, or volunteers;

(5) any religious, charitable, recreational, educational, or civic organization, or branch of an organization covering any group of members, participants, or volunteers;

(6) any financial institution or financial institution vendor, or parent holding company, trustee, or agent of or designated by one or more financial institutions or financial institution vendors, including account holders, credit card holders, debtors, guarantors, or purchasers;

(7) any incorporated or unincorporated association, including labor unions, having a common interest, constitution and bylaws, and organized and maintained in good faith for purposes other than obtaining insurance for members or participants of such association covering its members;

(8) any trust or the trustees of a fund established, created, or maintained for the benefit of and covering members, employees or customers, subject to the Director's permitting the use of a trust and the State's premium tax provisions, of one or more associations meeting the requirements of paragraph (7) of this definition;

(9) any entertainment production company covering any group of participants, volunteers, audience members, contestants, or workers;

(10) any volunteer fire department, ambulance, rescue, police, court, or any first aid, civil defense, or other such volunteer group;

(11) preschools, day care institutions for children or adults, and senior citizen clubs;

(12) any automobile or truck rental or leasing company covering a group of individuals who may become renters, lessees, or passengers defined by their travel status on the rented or leased vehicles. The common carrier, the operator, owner or lessor of a means of transportation, or the automobile or truck rental or leasing company, is the policyholder under a policy to which this Section applies; or

(13) any other group where the Director has determined that the members are engaged in a common enterprise, or have an economic, educational, or social affinity or relationship, and that issuance of the policy would not be contrary to the public interest.

"Fulfillment materials" means documentation sent to the purchaser of a travel protection plan confirming the purchase and providing the travel protection plan's coverage and assistance details.

"Group travel insurance" means travel insurance issued to any eligible group.

"Limited lines travel insurance producer" means one of the following:

(1) a licensed managing general agent or third-party administrator;

(2) a licensed insurance producer, including a limited lines producer; or

(3) a travel administrator.

"Offering and disseminating" means the following:

(1) Providing information to a prospective or current policyholder on behalf of a limited lines travel insurance entity, including brochures, buyer guides, descriptions of coverage, and price.

(2) Referring specific questions regarding coverage features and benefits from a prospective or current policyholder to a limited lines travel insurance entity.

(3) Disseminating and processing applications for coverage, coverage selection forms, or other similar forms in response to a request from a prospective or current policyholder.

(4) Collecting premiums from a prospective or current policyholder on behalf of a limited lines travel insurance entity.

(5) Receiving and recording information from a policyholder to share with a limited lines travel insurance entity.

"Primary policyholder" means an individual person who elects and purchases individual travel insurance.

"Travel administrator" means a person who directly or indirectly underwrites, collects charges, collateral, or premiums from, or adjusts or settles claims on residents of this State in connection with travel insurance, except that a person shall not be considered a travel administrator if that person's only actions that would otherwise cause the person to be considered a travel administrator are among the following:

(1) a person working for a travel administrator to the extent that the person's activities are subject to the supervision and control of the travel administrator;

(2) an insurance producer selling insurance or engaged in administrative and claims-related activities within the scope of the producer's license;

(3) a travel retailer offering and disseminating travel insurance and registered under the license of a limited lines travel insurance producer in accordance with Section 1635;

(4) an individual adjusting or settling claims in the normal course of that individual's practice or employment as an attorney-at-law and who does not collect charges or premiums in connection with insurance coverage; or

(5) a business entity that is affiliated with a licensed insurer while acting as a travel administrator for the direct and assumed insurance business of an affiliated insurer.

"Travel assistance services" means noninsurance services for which the consumer is not indemnified based on a fortuitous event, and where providing the service does not result in transfer or shifting of risk that would constitute the business of insurance. "Travel assistance services" include, but are not limited to: security advisories; destination information; vaccination and immunization information services; travel reservation services; entertainment; activity and event planning; translation assistance; emergency messaging; international legal and medical referrals; medical case monitoring; coordination of transportation arrangements; emergency cash transfer assistance; medical prescription replacement assistance; passport and travel document replacement assistance; lost luggage assistance; concierge services; and any other service that is furnished in connection with planned travel. "Travel assistance services" are not insurance and are not related to insurance.

"Travel insurance" means insurance coverage for personal risks incident to planned travel, including, but not limited to:

(1) the interruption or cancellation of a trip or event;

(2) the loss of baggage or personal effects;

(3) damages to accommodations or rental vehicles;

(4) sickness, accident, disability, or death occurring during travel;

(5) emergency evacuation;

(6) repatriation of remains; or

(7) any other contractual obligations to indemnify or pay a specified amount to the traveler upon determinable contingencies related to travel as approved by the Director.

"Travel insurance" does not include major medical plans that provide comprehensive medical protection for travelers with trips lasting 6 months or longer, including those working overseas as expatriates or as military personnel on deployment.

"Travel insurance business entity" means a licensed insurance producer designated by an insurer as set forth in subsection (h) of Section 1635.

"Travel protection plans" means plans that provide one or more of the following: travel insurance, travel assistance services, and cancellation fee waivers.

"Travel retailer" means a business organization that makes, arranges, or offers travel services and, with respect to travel insurance, is limited to offering and disseminating as defined in this Section, unless otherwise licensed under subsection (b) of Section 1635.

(Source: P.A. 102-212, eff. 10-28-21.)

(215 ILCS 5/1635)

Sec. 1635. Licensing and registration.

(a) The Director may issue to a travel insurance business entity that registers travel retailers under its license as described in paragraph (2) of subsection (c) of this Section a producer license as provided in paragraph (6) of subsection (a) of Section 500-35 of this Code. A travel insurance business entity license issued under this Section shall also authorize any employee of the travel insurance business entity to act individually on behalf and under the supervision of the travel insurance business entity licensee with respect to the coverage specified in this Section. Each travel insurance business entity licensed under this Section shall pay the Department a fee of $500 for its initial license and $500 for each renewal license, payable on May 31 annually.

(b) The Director may issue to a travel retailer a limited lines producer license. A travel retailer license issued under this Section shall also authorize any employee of the travel retailer limited line licensee to act individually on behalf and under the supervision of the travel retailer limited line licensee with respect to the coverage specified in this Section.

(c) Notwithstanding any other provision of law, a travel retailer may do the limited activities of offering and disseminating travel insurance on behalf of and under the license of a supervising travel insurance business entity if the following conditions are met:

(1) the travel insurance business entity or travel retailer provides to purchasers of travel insurance:

(A) a description of the material terms or the actual material terms of the insurance coverage;

(B) a description of the process for filing a claim;

(C) a description of the review or cancellation process for the travel insurance policy; and

(D) the identity and contact information of the insurer and travel insurance business entity;

(2) at the time of licensure, the travel insurance business entity shall establish and maintain a register on a form prescribed by the Director of each travel retailer that offers travel insurance on the travel insurance business entity's behalf; the register shall be maintained and updated continuously by the travel insurance business entity and shall include the name, address, and contact information of the travel retailer and an officer or person who directs or controls the travel retailer's operations and the travel retailer's federal tax identification number; the travel insurance business entity shall submit the register to the Director annually on a form and in a manner approved by the Director; the limited lines producer shall also certify that the travel retailer personnel who are offering and disseminating insurance under the travel retailer's registration complies with 18 U.S.C. 1033;

(3) the travel insurance business entity has designated one of its employees as a licensed individual producer (a designated responsible producer or DRP) responsible for the travel insurance business entity's and its travel retailer's compliance with the travel insurance laws, rules, and regulations of this State;

(4) the travel insurance business entity has paid all applicable insurance producer licensing fees as set forth in this Code; and

(5) the travel insurance business entity requires each employee and authorized representative of the travel retailer whose duties include offering and disseminating travel insurance to receive a program of instruction or training that shall be subject to review by the Director; the training material shall, at a minimum, contain instructions on the types of insurance offered, ethical sales practices, and required disclosures to prospective customers.

(d) Any travel retailer offering or disseminating travel insurance shall make available to prospective purchasers brochures or other written materials that:

(1) provide the identity and contact information of the insurer and the travel insurance business entity;

(2) explain that the purchase of travel insurance is not required in order to purchase any other product or service from the travel retailer; and

(3) explain that an unlicensed travel retailer is permitted to provide general information about the insurance offered by the travel retailer, including a description of the coverage and price, but is not qualified or authorized to answer technical questions about the terms and conditions of the insurance offered by the travel retailer or to evaluate the adequacy of the customer's existing insurance coverage.

(e) A travel retailer's employee or authorized representative who is not licensed as an insurance producer may not:

(1) evaluate or interpret the technical terms, benefits, and conditions of the offered travel insurance coverage;

(2) evaluate or provide advice concerning a prospective purchaser's existing insurance coverage; or

(3) hold himself, herself, or itself out as a licensed insurer, licensed producer, or insurance expert.

(f) A travel retailer whose insurance-related activities, and those of its employees and authorized representatives, are limited to offering and disseminating travel insurance on behalf of and under the direction of a travel insurance business entity meeting the conditions stated in this Section is authorized to do so and receive related compensation upon registration by the travel insurance business entity as described in paragraph (2) of subsection (c) of this Section.

(g) Travel insurance may be provided under an individual policy or under a group, blanket, or master policy.

(h) As the insurer designee, the travel insurance business entity is responsible for the acts of the travel retailer that is registered under its license.

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

(j) Any person licensed in a major line of authority as an insurance producer is authorized to sell, solicit, and negotiate travel insurance. A property and casualty insurance producer is not required to become appointed by an insurer in order to sell, solicit, or negotiate travel insurance.

(Source: P.A. 102-212, eff. 10-28-21.)

(215 ILCS 5/1640)

Sec. 1640. Travel protection plans. Travel protection plans may be offered for one price for the combined features that the travel protection plan offers in this State if:

(1) the travel protection plan clearly discloses to the consumer, at or before the time of purchase, that it includes travel insurance, travel assistance services, and cancellation fee waivers, as applicable, and provides information and an opportunity, at or before the time of purchase, for the consumer to obtain additional information regarding the features and pricing of each; and

(2) the fulfillment materials:

(A) describe and delineate the travel insurance, travel assistance services, and cancellation fee waivers in the travel protection plan; and

(B) include the travel insurance disclosures and the contact information for persons providing travel assistance services, and cancellation fee waivers, as applicable.

(Source: P.A. 102-212, eff. 10-28-21.)

(215 ILCS 5/1645)

Sec. 1645. Sales practices.

(a) All persons offering travel insurance to residents of this State are subject to the Unfair Methods of Competition and Unfair and Deceptive Acts and Practices Article of this Code, except as otherwise provided in this Section. In the event of a conflict between this Article and other provisions of this Code regarding the sale and marketing of travel insurance and travel protection plans, the provisions of this Article shall control.

(b) Offering or selling a travel insurance policy that could never result in payment of any claims for any insured under the policy is an unfair trade practice under Section 424.

(c) Marketing of travel insurance policies shall comply with the following:

(1) All documents provided to consumers before the purchase of travel insurance, including, but not limited to, sales materials, advertising materials, and marketing materials, shall be consistent with the travel insurance policy itself, including, but not limited to, forms, endorsements, policies, rate filings, and certificates of insurance.

(2) For travel insurance policies or certificates that contain preexisting condition exclusions, information and an opportunity to learn more about the preexisting condition exclusions shall be provided any time prior to the time of purchase, and in the coverage's fulfillment materials.

(3) The fulfillment materials and the information described in subparagraphs (A) through (D) of paragraph (1) of subsection (c) of Section 1635 shall be provided to a policyholder or certificate holder as soon as practicable following the purchase of a travel protection plan. Unless the insured has either started a covered trip or filed a claim under the travel insurance coverage, a policyholder or certificate holder may cancel a policy or certificate for a full refund of the travel protection plan price from the date of purchase of a travel protection plan until at least:

(A) 15 days following the date of delivery of the travel protection plan's fulfillment materials by postal mail; or

(B) 10 days following the date of delivery of the travel protection plan's fulfillment materials by means other than postal mail. For the purposes of this Section, delivery means handing fulfillment materials to the policyholder or certificate holder or sending fulfillment materials by postal mail or electronic means to the policyholder or certificate holder.

(4) The company shall disclose in the policy documentation and fulfillment materials whether the travel insurance is primary or secondary to other applicable coverage.

(5) Where travel insurance is marketed directly to a consumer through an insurer's website or by others through an aggregator site, it shall not be an unfair trade practice or other violation of law where an accurate summary or short description of coverage is provided on the web page, so long as the consumer has access to the full provisions of the policy through electronic means.

(d) No person offering, soliciting, or negotiating travel insurance or travel protection plans on an individual or group basis may do so by using negative option or opt out, which would require a consumer to take an affirmative action to deselect coverage, such as unchecking a box on an electronic form, when the consumer purchases a trip.

(e) It shall be an unfair trade practice under Section 424 to market blanket travel insurance coverage as free.

(f) Where a consumer's destination jurisdiction requires insurance coverage, it shall not be an unfair trade practice to require that a consumer choose between the following options as a condition of purchasing a trip or travel package:

(1) purchasing the coverage required by the destination jurisdiction through the travel retailer or limited lines travel insurance producer supplying the trip or travel package; or

(2) agreeing to obtain and provide proof of coverage that meets the destination jurisdiction's requirements before departure.

(Source: P.A. 102-212, eff. 10-28-21.)

(215 ILCS 5/1650)

Sec. 1650. Travel insurance administrators.

(a) Notwithstanding any other provisions of this Code, no entity shall act or represent itself as a travel administrator for travel insurance in this State unless that entity:

(1) is a licensed property and casualty insurance producer in this State for activities permitted under that producer license;

(2) holds a valid managing general agent license in this State; or

(3) holds a valid third-party administrator license in this State.

(b) An insurer is responsible for the acts of a travel administrator administering travel insurance underwritten by the insurer, and is responsible for ensuring that the travel administrator maintains all books and records relevant to the insurer to be made available by the travel administrator to the Director upon request.

(Source: P.A. 102-212, eff. 10-28-21.)

(215 ILCS 5/1655)

Sec. 1655. Policy.

(a) Notwithstanding any other provision of this Code, travel insurance shall be classified and filed for purposes of rates and forms under an inland marine line of insurance; however, travel insurance that provides coverage for sickness, accident, disability, or death occurring during travel, either exclusively, or in conjunction with related coverages of emergency evacuation or repatriation of remains, or incidental limited property and casualty benefits such as baggage or trip cancellation may be filed under either an accident and health line of insurance or an inland marine line of insurance.

(b) Travel insurance may be in the form of an individual, group, master, or blanket policy.

(c) Eligibility and underwriting standards for travel insurance may be developed and provided based on travel protection plans designed for individual or identified marketing or distribution channels, provided those standards also meet this State's underwriting standards for inland marine.

(Source: P.A. 102-212, eff. 10-28-21; 102-672, eff. 11-30-21.)

(215 ILCS 5/1660)

Sec. 1660. Rules. The Department may adopt rules to implement this Article.

(Source: P.A. 102-212, eff. 10-28-21.)

(215 ILCS 5/Art. XLVII heading)

(This Section may contain text from a Public Act with a delayed effective date)ARTICLE XLVII. INSURANCE BUSINESS TRANSFERS (Source: P.A. 103-75, eff. 1-1-25.)

(215 ILCS 5/1701)

(This Section may contain text from a Public Act with a delayed effective date)

Sec. 1701. Short title. This Article may be cited as the Insurance Business Transfer Law.

(Source: P.A. 103-75, eff. 1-1-25.)

(215 ILCS 5/1703)

(This Section may contain text from a Public Act with a delayed effective date)

Sec. 1703. Purpose and intent. The purpose of this Article is to provide a mechanism for insurers to transfer or assume blocks of insurance business in an efficient and cost-effective manner that provides needed legal finality for such transfers in order to provide for improved operational and capital efficiency for insurance companies, while protecting the interests of the policyholders, reinsurers, and claimants of the subject business. This new process is intended to stimulate the economy by attracting segments of the insurance industry to this State, make this State an attractive home jurisdiction for insurance companies, encourage economic growth and increased investment in the financial services sector, and increase the availability of quality insurance industry jobs in this State. These purposes are accomplished by providing a basis and procedures for the transfer and statutory novation of policies from a transferring insurer to an assuming insurer by way of an insurance business transfer without the affirmative consent of policyholders or reinsureds, but with consideration of their interests. This Article establishes the requirements for notice and disclosure and standards and procedures for the approval of the transfer and novation by a court pursuant to an insurance business transfer plan. This Article does not limit or restrict other means of effecting a transfer or novation.

(Source: P.A. 103-75, eff. 1-1-25.)

(215 ILCS 5/1705)

(This Section may contain text from a Public Act with a delayed effective date)

Sec. 1705. Definitions. As used in this Article:

"Affiliate" means a person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with the person specified.

"Applicant" means a transferring insurer or reinsurer applying under this Article.

"Assuming insurer" means an insurer domiciled in Illinois and authorized to transact the type of business described in clause (c) of Class 1, clauses (b) through (l) of Class 2, or Class 3 of Section 4 that seeks to assume policies from a transferring insurer pursuant to this Article.

"Court" means the circuit court of Sangamon County or Cook County.

"Department" means the Department of Insurance.

"Director" means the Director of Insurance.

"Implementation order" means an order issued by a court under this Article.

"Insurance business transfer" means a transfer and novation that, once approved pursuant to this Article, transfers insurance obligations or risks, or both, of existing or in-force contracts of insurance or reinsurance from a transferring insurer to an assuming insurer, and effects a novation of the transferred contracts of insurance or reinsurance with the result that the assuming insurer becomes directly liable to the policyholders of the transferring insurer and the transferring insurer's insurance obligations or risks, or both, under the contracts are extinguished.

"Insurance business transfer plan" means the plan submitted to the Department to accomplish the transfer and novation pursuant to an insurance business transfer, including any associated transfer of assets and rights from or on behalf of the transferring insurer to the assuming insurer. An "insurance business transfer plan" is limited to the types of insurance described in clause (c) of Class 1, clauses (b) through (l) of Class 2, or Class 3 of Section 4.

"Independent expert" means the impartial person procured to assist the Director and the court in connection with their review of a proposed transaction. The independent expert shall:

(i) have no current or past, direct or indirect, financial interest in either the assuming insurer or transferring insurer or any of their respective affiliates,

(ii) have not been employed by or acted as an officer, director, consultant, or other independent contractor for either the assuming insurer or transferring insurer or any of their respective affiliates within the past 12 months,

(iii) not currently be appointed by the Director to assist in any capacity in any proceeding initiated under Article XIII, and

(iv) receive no compensation in connection with the transaction governed by this Article other than a fee based on a fixed or hourly basis that is not contingent on the approval or consummation of an insurance business transfer.

"Insurer" means an insurance, surety, or reinsurance company, corporation, partnership, association, society, order, individual, or aggregation of individuals engaging in or proposing or attempting to engage in insurance or surety business, including the exchanging of reciprocal or inter-insurance contracts between individuals, partnerships, and corporations.

"Policy" means a policy, certificate of insurance, or a contract of reinsurance pursuant to which an insurer agrees to assume an obligation or risk, or both, of the policyholder or to make payments on behalf of, or to, the policyholder or its beneficiaries, and includes property and casualty insurance. "Policy" does not include any policy, contract, or certificate of life, accident, or health insurance, including those defined in clause (a) or (b) of Class 1 or clause (a) of Class 2 of Section 4.

"Policyholder" means an insured or a reinsured under a policy that is part of the subject business.

"State guaranty association" means the Illinois Insurance Guaranty Fund, the Illinois Life and Health Guaranty Association, or any similar organization in another state.

"Subject business" means the policy or policies that are the subject of the insurance business transfer plan.

"Transfer and novation" means the transfer of insurance obligations or risks, or both, of existing or in-force policies from a transferring insurer to an assuming insurer that is intended to effect a novation of the transferred policies with the result that the assuming insurer becomes directly liable to the policyholders of the transferring insurer on the transferred policies and the transferring insurer's obligations or risks, or both, under the transferred policies are extinguished.

"Transferring insurer" means an insurer or reinsurer that transfers and novates or seeks to transfer and novate obligations or risks, or both, under one or more policies to an assuming insurer pursuant to an insurance business transfer plan.

(Source: P.A. 103-75, eff. 1-1-25.)

(215 ILCS 5/1710)

(This Section may contain text from a Public Act with a delayed effective date)

Sec. 1710. Court authority. Notwithstanding any other provision of law, a court may issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this Article. No provision of this Article shall be construed to preclude a court from, on its own motion, taking any action or making any determination necessary or appropriate to enforce or implement court orders or rules or to prevent an abuse of power.

(Source: P.A. 103-75, eff. 1-1-25.)

(215 ILCS 5/1715)

(This Section may contain text from a Public Act with a delayed effective date)

Sec. 1715. Notice requirements.

(a) Whenever notice is required to be given by an applicant under this Article, except as otherwise permitted by a court or the Director, the applicant shall within 15 days after the event triggering the requirement transmit the notice:

(1) to the chief insurance regulator in each jurisdiction:

(A) in which the applicant holds or has ever held a certificate of authority; and

(B) in which policies that are part of the subject business were issued or policyholders currently reside;

(2) to the National Conference of Insurance Guaranty Funds, the National Organization of Life and Health Insurance Guaranty Associations, and all state insurance guaranty associations for the states:

(A) in which the applicant holds or has ever held a certificate of authority; and

(B) in which policies that are part of the subject business were issued or policyholders currently reside;

(3) to reinsurers of the applicant pursuant to the notice provisions of the reinsurance agreements applicable to the policies that are part of the subject business or, where an agreement has no provision for notice, by internationally recognized delivery service;

(4) to all policyholders holding policies that are part of the subject business at their last known address as indicated by the records of the applicant or to the address to which premium notices or other policy documents are sent. A notice of transfer shall also be sent to the transferring insurer's agents or brokers of record on the subject business; and

(5) by publication in a newspaper of general circulation in the state in which the applicant has its principal place of business and in such other publications that the Director requires.

(b) If notice is given in accordance with this Section, any orders under this Article shall be conclusive with respect to all intended recipients of the notice whether or not they receive actual notice.

(c) If this Article requires that the applicant provide notice but the Director has been named receiver of the applicant pursuant to Article XIII, the Director shall provide the required notice.

(d) Notice under this Section may take the form of first-class mail, facsimile, or electronic notice. The court may order that notice take a specific form.

(Source: P.A. 103-75, eff. 1-1-25.)

(215 ILCS 5/1720)

(This Section may contain text from a Public Act with a delayed effective date)

Sec. 1720. Application procedure.

(a) Before filing an insurance business transfer plan, the applicant shall file with the Department a notice of its intention to file a plan and shall pay the required fee. Upon request, the applicant and the assuming insurer shall provide the Department with any information necessary for the Department to procure an independent expert that meets the requirements of this Article.

(b) An insurance business transfer plan shall be filed by the applicant with the Director for his or her review and approval. The plan may be supplemented by other information deemed necessary by the Director, and shall contain the following information or an explanation as to why the following information is not included:

(1) the name, address, and telephone number of the transferring insurer and the assuming insurer and their respective direct and indirect controlling persons, if any;

(2) a summary of the insurance business transfer plan;

(3) an identification and description of the subject business;

(4) the most recent audited financial statements and statutory annual and quarterly reports of the transferring insurer and the assuming insurer filed with their domiciliary regulator;

(5) the most recent actuarial report and opinion that quantify the liabilities associated with the subject business;

(6) pro forma financial statements showing the projected statutory balance sheet, results of operation, and cash flows of the assuming insurer for the 3 years following the proposed transfer and novation;

(7) officers' certificates of the transferring insurer and the assuming insurer attesting that each has obtained all required internal approvals and authorizations regarding the insurance business transfer plan and completed all necessary and appropriate actions relating thereto;

(8) a proposal for plan implementation and administration, including the form of notice to be provided under the insurance business transfer plan to any policyholder whose policy is part of the subject business;

(9) a full description as to how notice under the insurance business transfer plan shall be provided;

(10) a description of any reinsurance arrangements that would pass to the assuming insurer under the insurance business transfer plan;

(11) a description of any guarantees or additional reinsurance that will cover the subject business following the transfer and novation;

(12) a statement describing the assuming insurer's proposed investment policies and any contemplated third-party claims management and administration arrangements;

(13) a description of how the transferring and assuming insurers will be licensed for the purpose of preserving state guaranty association coverage;

(14) a description of the financial implications of the transaction including solvency, capital adequacy, cash flow, reserves, asset quality, and risk-based capital;

(15) an analysis of the assuming insurer's corporate governance structure to ensure that there is proper board management oversight and expertise to manage the subject business;

(16) an evaluation of the competency, experience, and integrity of the persons who would control the operation of an involved insurer;

(17) a certified statement that the transaction is not being made for improper purposes, including fraud;

(18) evidence of approval or nonobjection of the transfer from the chief insurance regulator of the state of the transferring insurer's domicile; and

(19) a report from the independent expert that shall provide the following:

(A) a statement of the independent expert's professional qualifications and descriptions of the experience that qualifies him or her as an expert suitable for the engagement;

(B) a certified statement from the independent expert that he or she meets the standards for an independent expert under this Article;

(C) a description of the scope of the report;

(D) a summary of the terms of the insurance business transfer plan to the extent relevant to the report;

(E) a listing and summaries of documents, reports, and other material information the independent expert has considered in preparing the report and whether any information requested was not provided;

(F) the extent to which the independent expert has relied on information provided by or judgment of others;

(G) the people on whom the independent expert has relied and why, in his or her opinion, such reliance is reasonable;

(H) the independent expert's opinion of the likely effects of the insurance business transfer plan on policyholders, reinsurers, and claimants, distinguishing between:

(i) transferring policyholders, reinsurers, and claimants;

(ii) policyholders, reinsurers, and claimants of the transferring insurer whose policies will not be transferred; and

(iii) policyholders, reinsurers, and claimants of the assuming insurer;

(I) the facts and circumstances supporting each opinion that the independent expert expresses in the report; and

(J) consideration as to whether the security position of policyholders that are affected by the insurance business transfer are materially adversely affected by the transfer, including, but not limited to, state guaranty association coverage.

(c) The independent expert's report as required by paragraph (19) of subsection (b) shall also include, but not be limited to, a review of and report on the following:

(1) analysis of the transferring insurer's actuarial review of resources for the subject business to determine the reserve adequacy;

(2) analysis of the financial condition of the transferring and assuming insurers and the effect the transfer will have on the financial condition of each company;

(3) review of the plans or proposals the assuming insurer has with respect to the administration of the policies subject to the proposed transfer;

(4) whether the proposed transfer has a material, adverse impact on the policyholders, reinsurers, and claimants of the transferring and the assuming insurers;

(5) analysis of the assuming insurer's corporate governance structure to ensure that there is proper board and management oversight and expertise to manage the subject business;

(6) analysis of whether any policyholder or group of policyholders will lose or gain state guaranty association coverage as a result of the transaction; and

(7) any other information that the Director requests in order to review the insurance business transfer.

(d) After the receipt of a complete insurance business transfer plan, the Director shall review the plan to determine if the applicant is authorized to submit it to a court.

(e) The Director shall authorize the submission of the insurance business transfer plan to a court unless he or she finds that the insurance business transfer would have a material adverse impact on the interests of policyholders, reinsurers, or claimants that are part of the subject business.

(f) If the Director determines that the insurance business transfer would have a material adverse impact on the interests of policyholders, reinsurers, or claimants that are part of the subject business, he or she shall notify the applicant and specify any modifications, supplements, or amendments and any additional information or documentation with respect to the plan that must be provided to the Director before he or she shall allow the applicant to proceed with the court filing.

(g) The applicant shall have 30 days following the date the Director notifies him or her of a determination under subsection (f) to file an amended insurance business transfer plan providing the modifications, supplements, or amendments and additional information or documentation as requested by the Director. If necessary, the applicant may request in writing an extension of time of 30 days. If the applicant does not make an amended filing within the time period provided in this subsection, including any extension of time granted by the Director, the insurance business transfer plan filing shall terminate and a subsequent filing by the applicant shall be considered a new filing which shall require compliance with all provisions of this Article as if the prior filing had never been made.

(h) When the modification, supplement, amendment, or additional information requested in subsection (f) is received, the Director shall review the amended plan in accordance with subsection (c).

(i) If the Director determines that the plan may proceed with the court filing, the Director shall confirm that fact in writing to the applicant.

(Source: P.A. 103-75, eff. 1-1-25.)

(215 ILCS 5/1725)

(This Section may contain text from a Public Act with a delayed effective date)

Sec. 1725. Application to the court for approval of a plan.

(a) Within 30 days after notice from the Director that the applicant may proceed with the court filing, the applicant shall apply to the court for approval of the insurance business transfer plan. Upon written request by the applicant, the Director may extend the period for filing an application with the court for an additional 30 days.

(b) The applicant shall inform the court of the reasons why he or she petitions the court to find no material adverse impact to policyholders, reinsurers, or claimants affected by the proposed transfer.

(c) The application shall be in the form of a verified petition for implementation of the insurance business transfer plan in the court. The petition shall include the insurance business transfer plan and shall identify any documents and witnesses which the applicant intends to present at a hearing regarding the petition.

(d) The Director shall be a party to the proceedings before the court concerning the petition and shall be served with copies of all filings. The Director's position in the proceeding shall not be limited by his or her initial review of the plan. The Director shall have all the rights of a litigant under the Illinois Supreme Court Rules and the Code of Civil Procedure, including, but not limited to, the right to appeal.

(e) Following the filing of the petition, the applicant shall file a motion for a scheduling order setting a hearing on the petition.

(f) Within 15 days after receipt of the scheduling order, the applicant shall cause notice of the hearing to be provided in accordance with the notice provisions of Section 1715. Following the date of distribution of the notice, there shall be a 60-day comment period. The notice and all comments received shall be part of the court record.

(g) The notice shall be filed with and approved by the court before distribution, and the Director shall be given the opportunity to review and comment on the sufficiency of the notice before court approval. The notice shall state or provide:

(1) the date and time of the approval hearing;

(2) the name, address, and telephone number of the assuming insurer and transferring insurer;

(3) that the recipient may comment on or object to the transfer and novation;

(4) the procedures and deadline for submitting comments or objections on the plan;

(5) a summary of any effect that the transfer and novation will have on the policyholder's rights;

(6) a statement that the assuming insurer is authorized to assume the subject business and that court approval of the plan shall extinguish all rights of policyholders under policies that are part of the subject business against the transferring insurer;

(7) a statement regarding whether any policyholder or group of policyholders may or will lose or gain state guaranty association coverage as a result of the transfer and the implication of losing or gaining state guaranty association coverage;

(8) that recipients shall not have the opportunity to opt out of or otherwise reject the transfer and novation;

(9) contact information for the Department where the policyholder may obtain further information;

(10) information on how an electronic copy of the insurance business transfer plan may be accessed. If policyholders are unable to readily access electronic copies, the applicant shall provide hard copies by first-class mail; and

(11) any other information that the court may require.

(h) Any person, including by their legal representative, who considers himself, herself, or itself to be adversely affected can present evidence or comments to the court at the approval hearing. Any person participating in the approval hearing must follow the process established by the court and shall bear his or her own costs and attorney's fees.

(Source: P.A. 103-75, eff. 1-1-25.)

(215 ILCS 5/1730)

(This Section may contain text from a Public Act with a delayed effective date)

Sec. 1730. Approval; denial; insurance business transfer plans.

(a) After the comment period pursuant to subsection (f) of Section 1725 has ended the insurance business transfer plan shall be presented by the applicant for approval by the court.

(b) At any time before the court issues an order approving the insurance business transfer plan, the applicant may withdraw the petition without prejudice.

(c) If the court finds that the implementation of the insurance business transfer plan would not materially adversely affect the interests of policyholders, reinsurers, or claimants that are part of the subject business, the court shall enter a judgment and implementation order. The judgment and implementation order shall:

(1) order implementation of the insurance business transfer plan;

(2) order a statutory novation with respect to all policyholders or reinsureds and their respective policies and reinsurance agreements under the subject business, including the extinguishment of all rights of policyholders under policies that are part of the subject business against the transferring insurer, and providing that the transferring insurer shall have no further rights, obligations, or liabilities with respect to such policies, and that the assuming insurer shall have all such rights, obligations, and liabilities as if it were the original insurer of such policies;

(3) release the transferring insurer from all obligations or liabilities under policies that are part of the subject business;

(4) authorize and order the transfer of property or liabilities, including, but not limited to, the ceded reinsurance of transferred policies and contracts on the subject business, notwithstanding any non-assignment provisions in any such reinsurance contracts. The subject business shall vest in and become liabilities of the assuming insurer;

(5) order that the applicant provide notice of the transfer and novation in accordance with the notice provisions in Section 1715; and

(6) make such other provisions with respect to incidental, consequential, and supplementary matters as are necessary to assure the insurance business transfer plan is fully and effectively carried out.

(d) If the court finds that the insurance business transfer plan should not be approved, the court by its order shall deny the petition.

(e) The applicant shall have 30 days following the withdrawal or denial of the petition to file an amended business transfer plan with the Director in accordance with Section 1720.

(f) Nothing in this Section in any way affects the right of appeal of any party.

(Source: P.A. 103-75, eff. 1-1-25.)

(215 ILCS 5/1735)

(This Section may contain text from a Public Act with a delayed effective date)

Sec. 1735. Rules. The Department may adopt rules that are consistent with the provisions of this Article.

(Source: P.A. 103-75, eff. 1-1-25.)

(215 ILCS 5/1740)

(This Section may contain text from a Public Act with a delayed effective date)

Sec. 1740. Confidentiality. The portion of the application for an insurance business transfer that would otherwise be confidential, including any documents, materials, communications, or other information submitted to the Director in contemplation of such application, shall not lose such confidentiality, except (i) the Director may disclose confidential information as needed to procure the independent expert and ensure that the expert meets the requirements under this Article and (ii) if the Director determines that disclosure of confidential information is necessary to fully and fairly advise policyholders and others entitled to notice of the material implications of the insurance business transfer plan.

(Source: P.A. 103-75, eff. 1-1-25.)

(215 ILCS 5/1745)

(This Section may contain text from a Public Act with a delayed effective date)

Sec. 1745. Department oversight. Insurers engaging in an insurance business transfer under this Article consent to the jurisdiction of the Director with regard to any aspect of the transferred business or business transfer plan, including the authority of the Director to conduct financial analysis and examinations, regardless of whether the insurer has a certificate of authority or another basis for the Director's jurisdiction exists.

(Source: P.A. 103-75, eff. 1-1-25.)

(215 ILCS 5/1750)

(This Section may contain text from a Public Act with a delayed effective date)

Sec. 1750. Fees and costs.

(a) All expenses incurred by the Director for the compensation, costs, and expenses of the independent expert and any consultants retained by the independent expert incurred in fulfilling the obligations of the independent expert under this Article shall be paid by the applicant.

(b) The Director may retain the services of any attorneys, actuaries, accountants, and other professionals and specialists as may be reasonably necessary to assist the Director in reviewing the insurance business transfer plan. All expenses incurred by the Director in connection with proceedings under this Article, including, but not limited to, expenses for the services of any attorneys, actuaries, accountants, and other professionals and specialists, shall be paid by the applicant.

(c) The transferring insurer and the assuming insurer shall jointly be obligated to pay all debts incurred pursuant to this Section. Nothing in this Article shall be construed to create any duty for the independent expert to any party other than the Department or a court.

(d) Failure to pay any of the requisite fees or costs within 30 days after demand shall be grounds for the Director to request that a court dismiss the petition for approval of the insurance business transfer plan before the filing of an implementation order by the court or, if after the filing of an implementation order, the Director may suspend or revoke the assuming insurer's certificate of authority to transact insurance business in this State. The Director may also take any other action authorized by law against an insurer who fails to pay the requisite fees or costs.

(Source: P.A. 103-75, eff. 1-1-25.)