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INSURANCE
(215 ILCS 5/) Illinois Insurance Code.

215 ILCS 5/Art. XXXIIA

 
    (215 ILCS 5/Art. XXXIIA heading)
ARTICLE XXXIIA. PREMIUM FINANCE REGULATION

215 ILCS 5/513a1

    (215 ILCS 5/513a1) (from Ch. 73, par. 1065.60a1)
    Sec. 513a1. Scope of Article.
    (a) Except as provided in subsection (b), this Article applies to all persons engaged in the business of financing insurance premiums, entering into premium finance agreements, or otherwise acquiring premium finance agreements, and insurance companies and insurance producers as defined in this Code, except in connection with premiums on the kinds of business described as Class 1(a) or Class 1(b) of Section 4.
    (b) Except for the provisions of Section 513a11 that apply to all premium financing agreements in which the right to cancel one or more policies of insurance on behalf of the named has been assigned to the lender, this Article does not apply to the following entities:
        (1) Credit unions, as defined in the Illinois Credit
    
Union Act.
        (2) Banks, as defined in the Illinois Banking Act.
        (3) Savings and loan associations, as defined in the
    
Illinois Savings and Loan Act of 1985.
        (4) Persons operating under the provisions of Section
    
4a of the Interest Act.
        (5) Persons operating under the Consumer Installment
    
Loan Act or the Consumer Finance Act.
        (6) Persons that acquire premium finance agreements
    
from insurance companies and entities described in paragraphs (1) through (5).
(Source: P.A. 87-811.)

215 ILCS 5/513a2

    (215 ILCS 5/513a2) (from Ch. 73, par. 1065.60a2)
    Sec. 513a2. Definitions.
    (a) "Accepted agreement" means a premium finance agreement deemed to be accepted by a premium finance company when a binder number or policy number is provided for each policy premium listed on the premium finance agreement and premium payment book or when the first premium payment notice has been sent to the named insured.
    (b) "Financing insurance premiums" means to be engaged in the practice of:
        (1) advancing monies directly or indirectly to an
    
insurer pursuant to the terms of an acquired premium finance agreement; or
        (2) allowing 10% or more of a producer's or
    
registered firm's premium accounts receivable to be more than 90 days past due.
    (c) "Premium finance agreement" means a promissory note, loan contract, or agreement by which an insured or prospective insured promises to pay to another person an amount advanced or to be advanced thereunder to an insurer in payment of premiums on an insurance contract together with a service charge and which contains an assignment of or is otherwise secured by the unearned premium payable by the insurer upon cancellation of the insurance contract; provided, however, that a premium finance agreement shall not include an installment sale contract, lease agreement, security agreement, or mortgage covering personal or real property that includes a charge for insurance or pursuant to which the vendor, lessor, lienholder, or mortgagee is authorized to pay or advance the premium for insurance with respect to that property.
    (d) "Premium finance company" means any person engaged in the business of financing insurance premiums, of entering into premium finance agreements with insureds, or of acquiring premium finance agreements.
(Source: P.A. 90-655, eff. 7-30-98.)

215 ILCS 5/513a3

    (215 ILCS 5/513a3) (from Ch. 73, par. 1065.60a3)
    Sec. 513a3. License required.
    (a) No person may act as a premium finance company or hold himself out to be engaged in the business of financing insurance premiums, either directly or indirectly, without first having obtained a license as a premium finance company from the Director.
    (b) An insurance producer shall be deemed to be engaged in the business of financing insurance premiums if 10% or more of the producer's total premium accounts receivable are more than 90 days past due.
    (c) In addition to any other penalty set forth in this Article, any person violating subsection (a) of this Section may, after hearing as set forth in Article XXIV of this Code, be required to pay a civil penalty of not more than $2,000 for each offense.
    (d) In addition to any other penalty set forth in this Article, any person violating subsection (a) of this Section is guilty of a Class A misdemeanor. Any individual violating subsection (a) of this Section, and misappropriating or converting any monies collected in conjunction with the violation, is guilty of a Class 4 felony.
(Source: P.A. 93-32, eff. 7-1-03.)

215 ILCS 5/513a4

    (215 ILCS 5/513a4) (from Ch. 73, par. 1065.60a4)
    Sec. 513a4. Application and license.
    (a) Each application for a premium finance license shall be made on a form specified by the Director and shall be signed by the applicant declaring under penalty of refusal, suspension, or revocation of the license that the statements made in the application are true, correct, and complete to the best of the applicant's knowledge and belief. The Director shall cause to be issued a license to each applicant that has demonstrated to the Director that the applicant:
        (1) is competent and trustworthy and of a good
    
business reputation;
        (2) has a minimum net worth of $50,000; and
        (3) has paid the fees required by this Article.
    (b) Each applicant at the time of request for a license or renewal of a license shall:
        (1) certify that no charge for financing premiums
    
shall exceed the rates permitted by this Article;
        (2) certify that the premium finance agreement or
    
other forms being used are in compliance with the requirements of this Article;
        (3) certify that he or she has a minimum net worth of
    
$50,000; and
        (4) attach with the application a non-refundable
    
annual fee of $400.
    (c) An applicant who has met the requirements of subsection (a) and subsection (b) shall be issued a premium finance license.
    (d) Each premium finance license shall remain in effect as long as the holder of the license annually continues to meet the requirements of subsections (a) and (b) by the due date unless the license is revoked or suspended by the Director.
    (e) The individual holder of a premium finance license shall inform the Director in writing of a change in residence address within 30 days of the change, and a corporation, partnership, or association holder of a premium finance license shall inform the Director in writing of a change in business address within 30 days of the change.
    (f) Every partnership or corporation holding a license as a premium finance company shall appoint one or more partners or officers to be responsible for the firm's compliance with the Illinois Insurance Code and applicable rules and regulations. Any change in the appointed person or persons shall be reported to the Director in writing within 30 days of the change.
(Source: P.A. 93-32, eff. 7-1-03.)

215 ILCS 5/513a5

    (215 ILCS 5/513a5) (from Ch. 73, par. 1065.60a5)
    Sec. 513a5. Insurance Producer Administration Fund. All fees and penalties paid to and collected by the Director under this Article shall be paid promptly after receipt, together with a detailed statement of the fees, into the Insurance Producer Administration Fund.
(Source: P.A. 98-463, eff. 8-16-13.)

215 ILCS 5/513a6

    (215 ILCS 5/513a6) (from Ch. 73, par. 1065.60a6)
    Sec. 513a6. Felony convictions. Any person or authorized member of a partnership or corporation who, while licensed as a premium finance company, is convicted of a felony shall report the conviction to the Director within 30 days of the entry date of the judgement. Within that 30 day period, the person shall also provide the Director with a copy of the judgement, the probation or commitment order, and any other relevant document.
(Source: P.A. 87-811.)