(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 |
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(2) Banks, as defined in the Illinois Banking Act.
(3) Savings and loan associations, as defined in the
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| Illinois Savings and Loan Act of 1985.
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(4) Persons operating under the provisions of Section
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(5) Persons operating under the Consumer Installment
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| Loan Act or the Consumer Finance Act.
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(6) Persons that acquire premium finance agreements
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| from insurance companies and entities described in paragraphs (1) through (5).
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(Source: P.A. 87-811.)
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(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
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(2) allowing 10% or more of a producer's or
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| registered firm's premium accounts receivable to be more than 90 days past due.
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(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.)
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(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 |
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(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
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| shall exceed the rates permitted by this Article;
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(2) certify that the premium finance agreement or
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| other forms being used are in compliance with the requirements of this Article;
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(3) certify that he or she has a minimum net worth of
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(4) attach with the application a non-refundable
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(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.)
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(215 ILCS 5/513a7) (from Ch. 73, par. 1065.60a7)
Sec. 513a7.
License suspension; revocation or denial.
(a) Any license issued under this Article may be suspended, revoked, or
denied if the Director finds that the licensee or applicant:
(1) has wilfully violated any provisions of this Code |
| or the rules and regulations thereunder;
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(2) has intentionally made a material misstatement in
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| the application for a license;
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(3) has obtained or attempted to obtain a license
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| through misrepresentation or fraud;
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(4) has misappropriated or converted to his own use
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| or improperly withheld monies;
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(5) has used fraudulent, coercive, or dishonest
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| practices or has demonstrated incompetence, untrustworthiness, or financial irresponsibility;
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(6) has been, within the past 3 years, convicted of a
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| felony, unless the individual demonstrates to the Director sufficient rehabilitation to warrant public trust;
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(7) has failed to appear without reasonable cause or
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| excuse in response to a subpoena issued by the Director;
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(8) has had a license suspended, revoked, or denied
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| in any other state on grounds similar to those stated in this Section; or
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(9) has failed to report a felony conviction as
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| required by Section 513a6.
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(b) Suspension, revocation, or denial of a license under this Section
shall be by written order sent to the licensee or applicant by certified or
registered mail at the address specified in the records of the Department.
The licensee or applicant may in writing request a hearing within 30 days
from the date of mailing. If no written request is made the order shall be
final upon the expiration of that 30 day period.
(c) If the licensee or applicant requests a hearing under this Section,
the Director shall issue a written notice of hearing sent to the licensee
or applicant by certified or registered mail at his address, as specified
in the records of the Department, and stating:
(1) the grounds, charges, or conduct that justifies
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| suspension, revocation, or denial under this Section;
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(2) the specific time for the hearing, which may not
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| be fewer than 20 nor more than 30 days after the mailing of the notice of hearing; and
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(3) a specific place for the hearing, which may be
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| either in the City of Springfield or in the county where the licensee's principal place of business is located.
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(d) Upon the suspension or revocation of a license, the licensee or
other person having possession or custody of the license shall promptly
deliver it to the Director in person or by mail. The Director shall
publish all suspensions and revocations after they become final in a manner
designed to notify interested insurance companies and other persons.
(e) Any person whose license is revoked or denied under this Section
shall be ineligible to apply for any license for 2 years. A suspension
under this Section may be for a period of up to 2 years.
(f) In addition to or instead of a denial, suspension, or revocation of
a license under this Section, the licensee may be subjected to a civil
penalty of up to $2,000 for each cause for denial, suspension,
or
revocation. The penalty is enforceable under subsection (5) of Section
403A of this Code.
(Source: P.A. 93-32, eff. 7-1-03.)
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(215 ILCS 5/513a8) (from Ch. 73, par. 1065.60a8)
Sec. 513a8.
Examinations.
(a) The Director may examine any applicant for or holder of a premium
finance license.
(b) All persons being examined, as well as their officers and directors,
shall provide to the Director convenient and free access, at all reasonable
hours at their offices, to all books, records, documents, and other papers
relating to the person's insurance and premium financing business affairs.
The licensee or its officers, directors, and employees shall facilitate and
aid the Director in the examinations as much as it is in their power to do so.
(c) The Director may designate an examiner or examiners to conduct any
examination under this Section. The Director or his designee may administer
oaths and examine under oath any individual relative to the business of the
person being examined.
(d) The examiners designated by the Director under this Section may make
reports to the Director. Any report alleging substantive violations of this
Code or the rules and regulations thereunder shall be in writing and be
based upon facts obtained by the examiners. The report of examination shall
be verified by the examiners.
(e) If a report is made, the Director shall either deliver a duplicate
thereof to the licensee being examined or send the duplicate by certified
or registered mail to the licensee's address of record. The Director shall
afford the licensee an opportunity to request a hearing with reference to
the facts and other evidence contained in the report. The licensee may
request a hearing within 14 calendar days after he receives the duplicate
of the examination report by giving the Director written notice of that
request, together with written statement of the licensee's objection to the
report. The Director shall, if requested to do so, conduct a hearing in
accordance with Sections 402 and 403. The Director shall issue a written
order based upon the examination report within 90 days after the report is
filed or within 90 days after the hearing, if a hearing is held. If the
report is refused or otherwise undeliverable or a hearing is not requested
in a timely fashion, the right to a hearing is waived. After the hearing or
the expiration of the time period in which a licensee may request a
hearing, if the examination reveals that the licensee is operating in
violation of any law, this Code or rules and regulations promulgated
thereunder, or prior order, the Director in the written order may require
the licensee to take any action the Director considers necessary or
appropriate in accordance with the report or examination hearing. The
order is subject to review under the Administrative Review Law.
(f) Any licensee who violates or aids and abets any violation of a
written order issued under this Section shall be guilty of a business
offense, and his license may be revoked or suspended under Section 513a7,
and he may be fined not less than $501 nor more than $5,000.
(Source: P.A. 87-811.)
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