(215 ILCS 5/513a1)
(from Ch. 73, par. 1065.60a1)
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
(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
(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 5/513a4)
(from Ch. 73, par. 1065.60a4)
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
(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
(4) attach with the application a non-refundable
(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
(Source: P.A. 93-32, eff. 7-1-03.)
(215 ILCS 5/513a7)
(from Ch. 73, par. 1065.60a7)
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;
(2) has intentionally made a material misstatement in
the application for a license;
(3) has obtained or attempted to obtain a license
through misrepresentation or fraud;
(4) has misappropriated or converted to his own use
or improperly withheld monies;
(5) has used fraudulent, coercive, or dishonest
practices or has demonstrated incompetence, untrustworthiness, or financial irresponsibility;
(6) has been, within the past 3 years, convicted of a
felony, unless the individual demonstrates to the Director sufficient rehabilitation to warrant public trust;
(7) has failed to appear without reasonable cause or
excuse in response to a subpoena issued by the Director;
(8) has had a license suspended, revoked, or denied
in any other state on grounds similar to those stated in this Section; or
(9) has failed to report a felony conviction as
required by Section 513a6.
(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
suspension, revocation, or denial under this Section;
(2) the specific time for the hearing, which may not
be fewer than 20 nor more than 30 days after the mailing of the notice of hearing; and
(3) a specific place for the hearing, which may be
either in the City of Springfield or in the county where the licensee's principal place of business is located.
(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,
revocation. The penalty is enforceable under subsection (5) of Section
403A of this Code.
(Source: P.A. 93-32, eff. 7-1-03.)
(215 ILCS 5/513a9)
(from Ch. 73, par. 1065.60a9)
Premium finance agreement.
(a) A premium finance
agreement must be dated and signed by or on behalf of the named
insured, and the printed
portion shall be in at least 8-point type. The following items must be set
forth on the first page of the accepted finance agreement:
(1) the total amount of the premiums;
(2) the amount of the down payment;
(3) the principal balance (the difference between
(4) the amount of the finance charges expressed in
dollars and as an annual percentage rate;
(5) the balance payable by the insured (sum of items
(6) the number of installments, the due dates
thereof, and the amount of each installment expressed in dollars; and
(7) the policy numbers or binder numbers.
(b) The premium finance company is required to
furnish full and complete
disclosure of the terms and conditions of the premium finance
agreement including, but not limited to, the specific insurance coverages
financed to the named insured no later than the date that the first
premium payment notice is sent to the insured.
(c) As to policies written primarily for personal, family, or household
use, the premium finance company must:
(1) deliver or mail the premium check or checks in
the amount of the principal balance directly to the insurer or insurers unless the insurer or insurers have given written authority to the premium finance company to deliver the checks to the producer;
(2) issue the premium check or checks payable to the
insurer, insurers, or, if the insurer gives written authority to the premium finance company, to the producer; and
(3) properly identify the premium check or checks by
policy number or binder number when the premium is paid to the insurer or insurers.
(d) As to all other policies the premium finance company may:
(1) deliver or mail the premium check or checks in
the amount of the principal balance directly to the producer; and
(2) issue the premium check or checks payable to the
(e) A premium finance company that pays the financed premium to the
producer pursuant to subsection (d) establishes the producer as the agent of
the premium finance company for payment of the premium and for receipt of any
(Source: P.A. 89-265, eff. 1-1-96; 90-381, eff. 8-14-97.)
(215 ILCS 5/513a13)
Electronic delivery of notices and documents.
(a) As used in this Section:
"Delivered by electronic means" includes:
(1) delivery to an electronic mail address at which a
party has consented to receive notices or documents; or
(2) posting on an electronic network or site
accessible via the Internet, mobile application, computer, mobile device, tablet, or any other electronic device, together with separate notice of the posting, which shall be provided by electronic mail to the address at which the party has consented to receive notice or by any other delivery method that has been consented to by the party.
"Party" means any recipient of any notice or document required as part of a premium finance agreement including, but not limited to, an applicant or contracting party. For the purposes of this Section, "party" includes the producer of record.
(b) Subject to the requirements of this Section, any notice to a party or any other document required under applicable law in a premium finance agreement or that is to serve as evidence of a premium finance agreement may be delivered, stored, and presented by electronic means so long as it meets the requirements of the Uniform Electronic Transactions Act.
(c) Delivery of a notice or document in accordance with this Section shall be considered equivalent to delivery by first class mail or first class mail, postage prepaid.
(d) A notice or document may be delivered by electronic means by a premium finance company to a party under this Section if:
(1) the party has affirmatively consented to that
method of delivery and has not withdrawn the consent;
(2) the party, before giving consent, is provided
with a clear and conspicuous statement informing the party of:
(A) the right of the party to withdraw consent to
have a notice or document delivered by electronic means, at any time, and any conditions or consequences imposed in the event consent is withdrawn;
(B) the types of notices and documents to which
the party's consent would apply;
(C) the right of a party to have a notice or
document delivered in paper form; and
(D) the procedures a party must follow to
withdraw consent to have a notice or document delivered by electronic means and to update the party's electronic mail address;
(3) the party:
(A) before giving consent, is provided with a
statement of the hardware and software requirements for access to, and retention of, a notice or document delivered by electronic means; and
(B) consents electronically, or confirms consent
electronically, in a manner that reasonably demonstrates that the party can access information in the electronic form that will be used for notices or documents delivered by electronic means as to which the party has given consent; and
(4) after consent of the party is given, the premium
finance company, in the event a change in the hardware or software requirements needed to access or retain a notice or document delivered by electronic means creates a material risk that the party will not be able to access or retain a subsequent notice or document to which the consent applies:
(A) provides the party with a statement that
(i) the revised hardware and software
requirements for access to and retention of a notice or document delivered by electronic means; and
(ii) the right of the party to withdraw
consent without the imposition of any condition or consequence that was not disclosed at the time of initial consent; and
(B) complies with paragraph (2) of this
(e) Delivery of a notice or document in accordance with this Section does not affect requirements related to content or timing of any notice or document required under applicable law.
(f) The legal effectiveness, validity, or enforceability of any premium finance agreement executed by a party may not be denied solely because of the failure to obtain electronic consent or confirmation of consent of the party in accordance with subparagraph (B) of paragraph (3) of subsection (d) of this Section.
(g) A withdrawal of consent by a party does not affect the legal effectiveness, validity, or enforceability of a notice or document delivered by electronic means to the party before the withdrawal of consent is effective.
A withdrawal of consent by a party is effective within a reasonable period of time after receipt of the withdrawal by the premium finance company.
Failure by a premium finance company to comply with paragraph (4) of subsection (d) of this Section and subsection (j) of this Section may be treated, at the election of the party, as a withdrawal of consent for purposes of this Section.
(h) This Section does not apply to a notice or document delivered by a premium finance company in an electronic form before the effective date of this amendatory Act of the 100th General Assembly to a party who, before that date, has consented to receive notice or document in an electronic form otherwise allowed by law.
(i) If the consent of a party to receive certain notices or documents in an electronic form is on file with a premium finance company before the effective date of this amendatory Act of the 100th General Assembly and, pursuant to this Section, a premium finance company intends to deliver additional notices or documents to the party in an electronic form, then prior to delivering such additional notices or documents electronically, the premium finance company shall:
(1) provide the party with a statement that
(A) the notices or documents that shall be
delivered by electronic means under this Section that were not previously delivered electronically; and
(B) the party's right to withdraw consent to
have notices or documents delivered by electronic means without the imposition of any condition or consequence that was not disclosed at the time of initial consent; and
(2) comply with paragraph (2) of subsection (d)
(j) A premium finance company shall deliver a notice or document by any other delivery method permitted by law other than electronic means if:
(1) the premium finance company attempts to deliver
the notice or document by electronic means and has a reasonable basis for believing that the notice or document has not been received by the party; or
(2) the premium finance company becomes aware that
the electronic mail address provided by the party is no longer valid.
(k) The producer of record shall not be subject to civil liability for any harm or injury that occurs as a result of a party's election to receive any notice or document by electronic means or by a premium finance company's failure to deliver a notice or document by electronic means unless the harm or injury is caused by the willful and wanton misconduct of the producer of record.
(l) This Section shall not be construed to modify, limit, or supersede the provisions of the federal Electronic Signatures in Global and National Commerce Act, as amended.
(Source: P.A. 102-38, eff. 6-25-21.)