State of Illinois
91st General Assembly

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SB363 Enrolled                                LRB9100321JSpcB

 1        AN ACT concerning the licensing of insurance producers.

 2        Be it enacted by the People of  the  State  of  Illinois,
 3    represented in the General Assembly:

 4        Section  5.  The  Illinois  Insurance  Code is amended by
 5    changing Sections 491.1, 492.2, 494.1, 496.2,  497.1,  499.1,
 6    505.1,  508.2,  509.1,  and 510.2 and adding Section 495.2 as
 7    follows:

 8        (215 ILCS 5/491.1) (from Ch. 73, par. 1065.38-1)
 9        Sec. 491.1.  Definitions.  In addition to the definitions
10    in  Section  2,  the  following  definitions  apply  to  this
11    Article.
12        "Car rental limited licensee" means a  person  authorized
13    pursuant  to  the provisions of Section 495.2 to sell certain
14    coverages relating to the rental of vehicles.
15        (a)  Insurance.  Insurance  is  any  of  the  classes  of
16    insurance found in Section 4.
17        (b)  Insurance  producer.   An  insurance  producer is an
18    individual  who  solicits,  negotiates,  effects,   procures,
19    renews,  continues  or  binds  policies of insurance covering
20    property or risks located in Illinois.
21        (c)  License.  A license is  a  document  authorizing  an
22    individual to act as an insurance producer, limited insurance
23    representative  or temporary insurance producer, as specified
24    in such document.
25        (d)  Limited   insurance   representative.    A   limited
26    insurance representative is an  individual  appointed  by  an
27    insurance   company,   health  maintenance  organization,  or
28    limited health service organization to represent that company
29    or organization regarding the types of insurance set forth in
30    Section 495.1.
31        (e)  Registered   firm.    A   registered   firm   is   a
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 1    corporation, partnership, or limited liability company  which
 2    transacts the business of insurance as an insurance agency.
 3        "Rental  agreement"  means  a  written  agreement setting
 4    forth the terms and conditions governing the use of a vehicle
 5    provided by a rental company for rental or lease.
 6        "Rental company" means a person, or a franchisee of  such
 7    person,  in  the  business  of  providing  primarily  private
 8    passenger vehicles to the public under a rental agreement for
 9    a period not to exceed 30 days.
10        "Rental period" means the term of the rental agreement.
11        "Renter"  means  a  person obtaining the use of a vehicle
12    from a rental company under the terms of a  rental  agreement
13    for a period not to exceed 30 days.
14        "Vehicle"  or  "rental  vehicle" means a motor vehicle of
15    (1) the private passenger  type,  including  passenger  vans,
16    minivans,  and  sport utility vehicles or (2) the cargo type,
17    including cargo vans, pickup trucks, and trucks with a  gross
18    vehicle  weight  of  less than 26,000 pounds the operation of
19    which does not require the operator to possess  a  commercial
20    driver's license.
21    (Source: P.A. 90-499, eff. 8-19-97.)

22        (215 ILCS 5/492.2) (from Ch. 73, par. 1065.39-2)
23        Sec. 492.2.  License Required.
24        (a)  No  person shall act as or hold himself out to be an
25    insurance producer unless duly licensed  in  accordance  with
26    this  Article  for  the  class  or classes of insurance as to
27    which he acts or holds himself out as an insurance producer.
28        (b)  No person shall, for a fee, engage in  the  business
29    of  offering  any  advice,  counsel,  opinion or service with
30    respect to the benefits, advantages  or  disadvantages  under
31    any  policy  of  insurance  that could be issued in Illinois,
32    unless that person is
33        (1)  engaged or  employed  as  an  attorney  licensed  to
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 1    practice   law  and  performing  duties  incidental  to  that
 2    position;
 3        (2)  a licensed  insurance  producer,  limited  insurance
 4    representative   or  temporary  insurance  producer  offering
 5    advice concerning a class of insurance  as  to  which  he  is
 6    licensed to transact business;
 7        (3)  a   trust   officer  of  a  bank  performing  duties
 8    incidental to his position;
 9        (4)  an actuary or a certified public accountant  engaged
10    or  employed  in  a  consulting  capacity,  performing duties
11    incidental to that position; or
12        (5)  a licensed public adjuster acting within  the  scope
13    of his license.
14        (c)  In  addition  to any other penalty set forth in this
15    Article, any individual violating paragraph  (a)  or  (b)  is
16    guilty  of  a  Class A misdemeanor.  Any individual violating
17    paragraph (a) or (b) and misappropriating or  converting  any
18    monies collected in conjunction with such violation is guilty
19    of a Class 4 felony.
20    (Source: P.A. 83-801.)

21        (215 ILCS 5/494.1) (from Ch. 73, par. 1065.41-1)
22        Sec.  494.1.  Insurance producer license; application and
23    examination.
24        (a) Each application for an  insurance  producer  license
25    shall  be made on a form specified by the Director, and shall
26    be  signed  by  the  applicant  declaring  under  penalty  of
27    refusal, suspension or revocation of  the  license  that  the
28    statements  made  in  the  application  are true, correct and
29    complete to the best of the applicant's knowledge and belief.
30    Before approving the application, the Director shall  satisfy
31    himself  that  the applicant (1) is at least 18 years of age;
32    (2)  is  competent,  trustworthy   and   of   good   business
33    reputation;  (3)  has  completed  a  pre-licensing  course of
SB363 Enrolled              -4-               LRB9100321JSpcB
 1    study; and (4) has certified that the,  pursuant  to  Section
 2    508.2,  filed  a  bond  required by Section 508.2 which is in
 3    force and effect or that the applicant  is  exempt  from  the
 4    requirement  of  obtaining filing such bond; and (5) has paid
 5    the fees required by Section 509.1.  A  pre-licensing  course
 6    of  study  for each class of insurance for which an insurance
 7    producer  license  is  requested  shall  be  established   in
 8    accordance  with  rules  and  regulations  prescribed  by the
 9    Director and shall consist of the following minimum hours:
10    Class of Insurance                       Number of Hours
11    Life (Class 1 (a))                             15
12    Accident/Health (Class 1(b) or 2(a))           15
13    Fire (Class 3)                                 15
14    Casualty (Class 2)                             15
15    Motor Vehicle (Class 2(b) or 3(e))            7 1/2
16        (b)  Applicants for an insurance producer  license  shall
17    pass,  within 90 days of each other, both part one and part 2
18    of a written examination unless exempt  pursuant  to  Section
19    498.1.   The  examination shall reasonably test the knowledge
20    of the applicant concerning the class or classes of insurance
21    for  which   a   license   is   applied,   the   duties   and
22    responsibilities  of  an insurance producer and the insurance
23    laws and rules of Illinois.  The examinations provided for by
24    this Section shall be conducted under rules  and  regulations
25    prescribed   by   the   Director.    The  Director  may  make
26    arrangements, including  contracting with an outside  testing
27    service,  for  administering such examinations and collecting
28    the non-refundable application fee provided  for  by  Section
29    509.1.
30        Each  applicant required to take an examination shall, at
31    the  time  of  request  for  examination,  enclose  with  the
32    application a non-refundable application fee payable  to  the
33    Director,  as  provided for in Section 509.1, plus a separate
34    remittance payable to the designated testing service for  the
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 1    total  fees  the  testing  service  charges  for  each of the
 2    various  services  being  requested  by  the  applicant.   An
 3    applicant  who  fails  to  appear  for  the  examination   as
 4    scheduled,  or  appears  but  fails  to  pass,  shall  not be
 5    entitled to any refund, and shall be required to submit a new
 6    request for examination together with all  of  the  requisite
 7    fees  before  being  rescheduled for another examination at a
 8    later date.
 9        (c)  Before each license renewal, an  insurance  producer
10    shall  satisfactorily complete at least 30 15 hours of course
11    study in accordance with rules prescribed  by  the  Director.
12    The  Director  may  not  approve a course of study unless the
13    course  provides  for  classroom,  seminar,   or   self-study
14    instruction   methods.   A  course  given  in  a  combination
15    instruction method of classroom  or  seminar  and  self-study
16    shall  be  deemed  to  be  a  self-study  course  unless  the
17    classroom   or  seminar  certified  hours  meets  or  exceeds
18    two-thirds of total hours  certified  for  the  course.   The
19    self-study  material  used  in the combination course must be
20    directly related to and complement the classroom  portion  of
21    the  course  in  order  to  be  considered  for  credit.   An
22    instruction  method  other than classroom or seminar shall be
23    considered  as  self-study  methodology.   Self-study  credit
24    hours require the successful  completion  of  an  examination
25    covering   the   self-study  material,  which  shall  not  be
26    self-evaluated.  Provided, however, that  if  the  self-study
27    material   is  completed  through  the  use  of  an  approved
28    computerized  interactive   format   whereby   the   computer
29    validates   the   successful  completion  of  the  self-study
30    material, no additional examination shall be  required.   The
31    self-study credit hours contained in a certified course shall
32    be considered classroom hours when at least two-thirds of the
33    hours are given as classroom or seminar instruction.
34        (d)  An  insurance  producer  license shall automatically
SB363 Enrolled              -6-               LRB9100321JSpcB
 1    terminate when an insurance producer  fails  to  successfully
 2    meet the requirements of paragraph (c) of this Section.
 3        (e)  The  holder  of  an insurance producer license shall
 4    inform the Director in writing of a change in his residential
 5    address within 30 days of such change.
 6        (f)  Each  provider  of  a  prelicensing  or   continuing
 7    education  course  required  by  this  Section  shall  pay  a
 8    registration  fee  and  a  course  certification fee for each
 9    course being certified as provided by Section 509.1.
10    (Source: P.A. 89-152, eff. 1-1-97.)

11        (215 ILCS 5/495.2 new)
12        Sec.  495.2.  Car  rental  limited  license  for   rental
13    companies.
14        (a)  A  rental  company  must  obtain a producer license,
15    become a registered firm, or  obtain  a  car  rental  limited
16    license  before  offering  or selling insurance in connection
17    with and incidental to the rental of vehicles.  The  sale  of
18    the   insurance   may  occur  at  the  rental  office  or  by
19    pre-selection of  coverage  in  a  master,  corporate,  group
20    rental,  or  individual  agreement.   The  following  general
21    categories of coverage may be offered or sold:
22             (1)  personal  accident insurance covering the risks
23        of travel including, but not  limited  to,  accident  and
24        health  insurance  that provides coverage, as applicable,
25        to  renters  and  other  rental  vehicle  occupants   for
26        accidental  death  or dismemberment and reimbursement for
27        medical expenses resulting from an accident  that  occurs
28        during the rental period;
29             (2)  liability  insurance,  including  uninsured and
30        underinsured motorist coverage, that  provides  coverage,
31        as applicable, to renters and other authorized drivers of
32        rental  vehicles for liability arising from the operation
33        of the rental vehicle;
SB363 Enrolled              -7-               LRB9100321JSpcB
 1             (3)  personal  effects   insurance   that   provides
 2        coverage,  as  applicable,  to  renters and other vehicle
 3        occupants for the loss of, or damage to, personal effects
 4        that occurs during the rental period;
 5             (4)  roadside  assistance  and  emergency   sickness
 6        protection programs;
 7             (5)  any  other travel or auto-related coverage that
 8        a rental company offers in connection with and incidental
 9        to the rental of vehicles.
10        (b)  No insurance may be offered by a car rental  limited
11    licensee pursuant to this Section unless:
12             (1)  the rental company has applied for and obtained
13        a car rental limited license;
14             (2)  the  rental period of the rental agreement does
15        not exceed 30 consecutive days;
16             (3)  at   every   rental   location   where   rental
17        agreements  are  executed,  brochures  or  other  written
18        materials are readily available to the prospective renter
19        that:
20                  (A)  summarize  clearly  and   correctly,   the
21             material  terms  of  coverage  offered  to  renters,
22             including the identity of the insurer;
23                  (B)  disclose  that the coverage offered by the
24             rental company may provide a duplication of coverage
25             already provided by a renter's  personal  automobile
26             insurance   policy,  homeowner's  insurance  policy,
27             personal liability insurance policy, or other source
28             of coverage;
29                  (C)  state that the purchase by the  renter  of
30             the  kinds  of coverage specified in this Section is
31             not required in order to rent a vehicle; and
32                  (D)  describe the process for filing a claim in
33             the event the renter elects to purchase coverage and
34             in the event of a claim; and
SB363 Enrolled              -8-               LRB9100321JSpcB
 1             (4)  evidence of coverage in the rental agreement is
 2        disclosed to every renter who  elects  to  purchase  such
 3        coverage.
 4        (c)  Car rental company franchisees shall apply for a car
 5    rental  limited  license  independent  of  the  franchisor if
 6    insurance provided pursuant to this Section is offered by the
 7    franchisee.
 8        (d)  A car  rental  limited  license  issued  under  this
 9    Section  shall  also authorize any employee of the car rental
10    limited licensee to act individually on behalf and under  the
11    supervision  of  the car rental limited licensee with respect
12    to the kinds of coverage specified in this Section.
13        (e)  A rental company licensed pursuant to  this  Section
14    shall  conduct  a  training  program in which employees being
15    trained shall receive basic instruction about  the  kinds  of
16    coverage  specified  in this Section and offered for purchase
17    by prospective renters of rental vehicles.
18        (f)  Notwithstanding any other provision of this  Section
19    or  any  rule  adopted  by the Director, a car rental limited
20    licensee pursuant to this Section shall not  be  required  to
21    treat moneys collected from renters purchasing insurance when
22    renting  vehicles  as funds received in a fiduciary capacity,
23    provided that the charges for coverage shall be itemized  and
24    be ancillary to a rental transaction.
25        (g)  The  sale  of  insurance  not  in conjunction with a
26    rental transaction shall not be permitted.
27        (h)  No car rental limited licensee  under  this  Section
28    shall  advertise,  represent, or otherwise hold itself or any
29    of  its  employees  out  as  licensed   insurers,   insurance
30    producers, insurance agents, or insurance brokers.
31        (i)  No  direct  commissions  may  be  paid to rental car
32    company employees by the insurer or the  customer  purchasing
33    insurance  products.   The  rental  car  company  may include
34    insurance  products  in  an  overall   employee   performance
SB363 Enrolled              -9-               LRB9100321JSpcB
 1    compensation incentive program.
 2        (j)  An  application  for  a  car  rental limited license
 3    shall be made on a form specified by the Director.

 4        (215 ILCS 5/496.2) (from Ch. 73, par. 1065.43-2)
 5        Sec. 496.2.  License.
 6        (a)  Insurance producer.
 7             (1) An applicant who has  met  the  requirements  of
 8        Section  494.1  shall  be  issued  a  perpetual insurance
 9        producer license.
10             (2)  Each insurance producer license shall remain in
11        effect as long as the holder of the license maintains  in
12        force  and  effect the bond required by Section 508.2 and
13        pays the annual fee required by Section 509.1 by the date
14        due, unless the license is revoked or suspended  pursuant
15        to  Section  505.1.  The  annual  fee required by Section
16        509.1 shall not  be  required  of  a  licensed  insurance
17        producer  who  enters  the military service of the United
18        States. This waiver shall continue in effect  until  such
19        time  as  the  insurance  producer is discharged from the
20        military service.
21             (3)  An insurance producer who does not maintain his
22        insurance  producer  license  in   effect   pursuant   to
23        paragraph  (a)(2)  of this subsection Section may, within
24        36 months from the due date of  the  unpaid  annual  fee,
25        make   application  for  the  same  license  without  the
26        necessity of passing a written examination.   Payment  of
27        the  annual  fee  and  proof  a  bond  is  in  force must
28        accompany  the  application.   In  addition,   proof   of
29        compliance  with Section 494.1(c) must be received by the
30        Department before the license  is  issued  accompany  the
31        application, where applicable.
32             If an insurance producer fails to pay the annual fee
33        by  the  due  date  but  applies for reinstatement of the
SB363 Enrolled              -10-              LRB9100321JSpcB
 1        license within 36  months  of  the  due  date,  then  the
 2        producer  shall  pay  the  reinstatement  fee required by
 3        Section 509.1 of this Code and either:
 4                  A.  The annual license fee which will  cause  a
 5             license  to be issued with a current effective date;
 6             or
 7                  B.  The annual license fee which will  cause  a
 8             license  to be dated the expiration date of the last
 9             active license, provided the  producer  applies  for
10             reinstatement within 2 months of the due date.
11                  If  a license is issued pursuant to option A of
12             this  paragraph  with  a  lapse  in  licensing,  the
13             producer must sign a statement attesting that he has
14             not been active as an insurance producer during  the
15             period since the last active license.
16             (4)  Of  the  insurance  producer  licenses  renewed
17        during  the  one-year period following the effective date
18        of this amendatory Act of  the  91st  General   Assembly,
19        approximately 50% shall be for a duration of one year and
20        approximately  50%  shall  be  for a duration of 2 years.
21        All subsequent renewals shall be  for  a  duration  of  2
22        years.
23        For  the  first  license  renewal  period  following  the
24    effective  date  of  this  amendatory Act of the 91st General
25    Assembly, producers renewing a license  for  one  year  shall
26    have  no continuing education requirement; producers renewing
27    a license for 2 years shall satisfactorily complete at  least
28    15  hours  of  continuing education.  All subsequent renewals
29    shall meet the continuing education requirements pursuant  to
30    subsection (c) of Section 494.1 of this Act.
31        (b)  Limited Insurance Representative.
32             (1)  An  applicant  who  has met the requirements of
33        Section  495.1  shall  be  issued  a  perpetual   limited
34        insurance representative license.
SB363 Enrolled              -11-              LRB9100321JSpcB
 1             (2)  A Each limited insurance representative license
 2        shall   remain  in  effect  as  long  as  the  appointing
 3        insurance company pays the  respective  fee  required  by
 4        Section 509.1 prior to January 1 of each year, unless the
 5        license  is  revoked  or  suspended  pursuant  to Section
 6        505.1.  Failure of  the  insurance  company  to  pay  the
 7        license  fee  or  to  submit the required documents shall
 8        cause immediate  termination  of  the  limited  insurance
 9        representative   license  regarding  which  such  failure
10        occurs.
11             (3)  A Each limited insurance representative license
12        may  be  terminated  by  the  insurance  company  or  the
13        licensee.
14        (c)  Car rental limited licenses.
15             (1)  An applicant who has met  the  requirements  of
16        Section  495.2  shall  be  issued  a  car  rental limited
17        license.
18             (2)  A car  rental  limited  license  for  a  rental
19        company  shall remain in effect as long as the car rental
20        limited licensee pays  the  respective  fee  required  by
21        Section  509.1  prior to the next fee date unless the car
22        rental  license  is  revoked  or  suspended  pursuant  to
23        Section  505.1.   Failure  of  the  car  rental   limited
24        licensee to pay the license fee or to submit the required
25        documents  shall  cause  immediate  suspension of the car
26        rental limited license.
27             (3)  A  car  rental  limited  license   for   rental
28        companies may be voluntarily terminated by the car rental
29        limited  licensee.  The license fee shall not be refunded
30        upon termination of the car rental limited license by the
31        car rental limited licensee.
32        (d) (c)  License Content. The Each license shall  contain
33    the  name,  residential  address  and personal identification
34    number of the licensee, the  date  the  license  was  issued,
SB363 Enrolled              -12-              LRB9100321JSpcB
 1    general  conditions  relative  to the license's expiration or
 2    termination, the class or classes of insurance covered by the
 3    license, and any other  information  the  Director  considers
 4    proper.   A  Each  limited  insurance  representative license
 5    shall also contain the name and  address  of  the  appointing
 6    insurance company.
 7    (Source: P.A. 88-313.)

 8        (215 ILCS 5/497.1) (from Ch. 73, par. 1065.44-1)
 9        Sec. 497.1. Nonresident licensing.
10        (a)  A  nonresident  may  apply for an insurance producer
11    license or limited insurance representative  license  if  (1)
12    the  applicant  holds  a  similar  license  from his state of
13    residence and (2) the applicant's state of residence  accepts
14    Illinois  residents for licensing. Each nonresident applicant
15    shall be in compliance with the  requirements  of  subsection
16    paragraph  (a)  of Section 494.1, except that requirement (3)
17    of subsection  paragraph  (a)  shall  not  be  applicable  to
18    nonresident applicants.
19        (b)  The  requirements  of  subsection  paragraph  (c) of
20    Section 494.1 shall not apply to nonresident applicants.   If
21    an applicant's state of residence accepts compliance with the
22    requirements  of subsection paragraph (c) of Section 494.1 by
23    an  Illinois  insurance  producer  as  compliance  with  that
24    state's  continuing  education  requirements,  a  nonresident
25    applicant  may  fulfill  the   requirements   of   subsection
26    paragraph  (c)  of  Section 494.1 by demonstrating compliance
27    with the continuing education requirements of the applicant's
28    state of residence.  A nonresident applicant may be  licensed
29    without  written  examination  if  (1) the state in which the
30    applicant resides requires no similar examination or (2)  the
31    public  official  having  supervision  of  insurance  in  the
32    applicant's  state  of residence certifies that the applicant
33    has passed a written examination for the classes of insurance
SB363 Enrolled              -13-              LRB9100321JSpcB
 1    applied for or was licensed  prior  to  the  time  a  written
 2    examination was required.
 3        (c)  A nonresident applicant shall file with the Director
 4    an affidavit appointing the Director and his or her successor
 5    in  office  as  such  applicant's  agent upon whom all lawful
 6    process in any action, suit or legal proceeding  against  the
 7    applicant may be served, and shall agree that any such lawful
 8    process  is  of the same legal force and validity as personal
 9    service of process upon such applicant.  The Director  shall,
10    within  10  days  after  receiving process, forward a copy of
11    such  process  by  registered  or  certified  mail   to   the
12    individual  for  whom  he  has  received  such process at the
13    individual's address of record.
14        (d)  Whenever, by the laws or regulations  of  any  other
15    state,  any  limitation  of rights and privileges, conditions
16    precedent,  or  any  other  requirements  are  imposed   upon
17    residents  of  this  State  who are nonresident applicants or
18    licensees of such other state in addition to,  or  in  excess
19    of,  those  imposed on nonresidents under this Code, the same
20    such requirements shall be imposed  upon  such  residents  of
21    such other state.
22    (Source: P.A. 89-152, eff. 1-1-97.)

23        (215 ILCS 5/499.1) (from Ch. 73, par. 1065.46-1)
24        Sec. 499.1.  Registered firms.
25        (a)  Any  corporation,  partnership, or limited liability
26    company transacting insurance business as an insurance agency
27    shall register with the Director before transacting insurance
28    business in this State. Such  registration  shall  remain  in
29    effect  as  long  as the firm pays the annual fee required by
30    Section 509.1 of this  Code  by  the  date  due,  unless  the
31    registration  is  revoked  or  suspended  pursuant to Section
32    505.1 of this Code.
33        (b)  Each firm required to register before  acting  as  a
SB363 Enrolled              -14-              LRB9100321JSpcB
 1    registered firm pursuant to this Article shall appoint one or
 2    more   licensed   insurance   producers   who  are  officers,
 3    directors, or partners in the firm to be responsible for  the
 4    firm's compliance with the insurance laws and Title 50 of the
 5    Illinois Administrative Code.  Such individual or individuals
 6    shall submit to the Director a registration form and the fees
 7    required  by Section 509.1.  The Director shall prescribe the
 8    registration form and may require  any  documents  reasonably
 9    necessary   to   verify  the  information  contained  in  the
10    registration form. Within 30 days of a  change  in  officers,
11    directors,  or  partners  who are appointed to be responsible
12    for the firm's compliance with the insurance laws  and  Title
13    50 of the Illinois Administrative Code, the firm shall report
14    the change to the Department.
15        (c)  The  registered  firm  shall  inform the Director in
16    writing of a change in its business address within 30 days of
17    such change.
18        (d)  Each registered firm  shall  disclose  its  members,
19    officers  or directors who are authorized to act as insurance
20    producers, and report any changes in such  personnel  to  the
21    Director within 30 days of such changes.
22        (e)  (Blank).
23    (Source:  P.A.  89-240,  eff.  1-1-96;  90-41,  eff. 10-1-97;
24    90-499, eff. 8-19-97; 90-655, eff. 7-30-98.)

25        (215 ILCS 5/505.1) (from Ch. 73, par. 1065.52-1)
26        Sec. 505.1.  License suspension, revocation, or denial.
27        (a)  Any  license  issued  under  this  Article  may   be
28    suspended  or  revoked, and any application for a license may
29    be denied,  if  the  Director  finds  that  the  licensee  or
30    applicant:
31             (1)  has  wilfully  violated  any  provision of this
32        Code  or  any  rule  or  regulation  promulgated  by  the
33        Director;
SB363 Enrolled              -15-              LRB9100321JSpcB
 1             (2)  has intentionally made a material  misstatement
 2        in his application for a license;
 3             (3)  has  obtained  or attempted to obtain a license
 4        through misrepresentation or fraud;
 5             (4)  has misappropriated or  converted  to  his  own
 6        use, or improperly withheld, money required to be held in
 7        a fiduciary capacity;
 8             (5)  has  intentionally  misrepresented the terms of
 9        any actual or proposed insurance policy;
10             (6)  has, in the transaction of business  under  his
11        license,   used   fraudulent,   coercive   or   dishonest
12        practices,     or    has    demonstrated    incompetence,
13        untrustworthiness or financial irresponsibility;
14             (7)  has been, within the past 3 years, convicted of
15        a felony,  unless  the  individual  demonstrates  to  the
16        Director  sufficient rehabilitation to warrant the public
17        trust;
18             (8)  has knowingly accepted insurance business  from
19        an individual who is not licensed;
20             (9)  has  failed  to appear without reasonable cause
21        or excuse in response to a subpoena  lawfully  issued  by
22        the Director;
23             (10)  has  had  his  license suspended or revoked or
24        his application denied  in  any  other  State,  district,
25        territory  or province on grounds similar to those stated
26        in this Section;
27             (11)  (Blank) has violated any of the provisions  of
28        Section 504.1;
29             (12)  has  failed to meet the education requirements
30        of subsection paragraph (c) of Section 494.1;
31             (13)  has failed to report a felony  conviction,  as
32        required by Section 503.1;
33             (14)  has  knowingly employed, contracted or engaged
34        in  any  insurance  related  capacity  any  person  whose
SB363 Enrolled              -16-              LRB9100321JSpcB
 1        license as an insurance  producer  or  limited  insurance
 2        representative has been revoked within the previous three
 3        years  or whose request for a license has been refused or
 4        suspended pursuant to this Section at the  time  of  such
 5        employment, engaging or contracting; or
 6             (15)  has  failed  to make satisfactory repayment to
 7        the  Illinois  Student  Assistance   Commission   for   a
 8        delinquent or defaulted student loan.
 9        (b)  Suspension  or revocation of a license or the denial
10    of an application  pursuant  to  this  Section  shall  be  by
11    written  order sent to the licensee or applicant by certified
12    or registered mail at the address specified in the records of
13    the Department.  The licensee or  applicant  may  in  writing
14    request  a  hearing  within 30 days from the date of mailing.
15    If no written request is made, such order shall be final upon
16    the expiration of said 30 days.
17        (c)  If the licensee  or  applicant  requests  a  hearing
18    pursuant  to  this Section the Director shall issue a written
19    notice of hearing  sent  to  the  licensee  or  applicant  by
20    certified  or registered mail at his address, as specified in
21    the records of the Department, and stating:
22             (1)  the grounds, charges or conduct which justifies
23        suspension or revocation or denial under this Section;
24             (2)  a specific time for the hearing, which may  not
25        be  less  than 20 nor more than 30 days after the mailing
26        of the notice of hearing; and
27             (3)  a specific place for the hearing, which may  be
28        either  in  the  City of Springfield or Chicago or in the
29        county where the licensee's principal place  of  business
30        is located.
31        (d)  Upon  the suspension or revocation of a license, the
32    licensee or other person having possession or custody of such
33    license shall promptly deliver it to the Director  in  person
34    or  by  mail.  The Director shall publish all suspensions and
SB363 Enrolled              -17-              LRB9100321JSpcB
 1    revocations after  such  suspensions  or  revocations  become
 2    final  in  a  manner  designed to notify interested insurance
 3    companies and other persons.
 4        (e)  Any individual whose license  is  revoked  or  whose
 5    application  is  denied  pursuant  to  this  Section shall be
 6    ineligible to apply for any license for 3  years.  No  person
 7    whose   license   as   an   insurance   producer  or  limited
 8    representative has been revoked, suspended or denied shall be
 9    employed, contracted or  engaged  in  any  insurance  related
10    capacity during the time the revocation, suspension or denial
11    is  in effect.   A suspension pursuant to this Section may be
12    for a period of up to 2 years.
13        (f)  In addition to or instead of a denial, suspension or
14    revocation  of  a  license  pursuant  to  this  Section,  the
15    licensee may be subjected to a civil penalty of up to  $1,000
16    for  each  cause  for  denial, suspension or revocation. Such
17    penalty is enforceable under Section 403A(5) of this Code.
18    (Source: P.A. 89-318, eff. 1-1-96.)

19        (215 ILCS 5/508.2) (from Ch. 73, par. 1065.55-2)
20        Sec. 508.2.  Bond required of Insurance Producers.
21        (1)  Each  producer  and  registered  firm   who   places
22    insurance  either directly or indirectly with an insurer with
23    which the producer or registered firm does not have an  agent
24    contact  shall  maintain  in  force  while licensed a bond in
25    favor of the people of the State of Illinois executed  by  an
26    authorized  surety  company  and payable to any party injured
27    under the terms of the bond. The bond shall be continuous  in
28    form  and  in  the  amount  of  $2,500  or 5% of the premiums
29    brokered in the previous calendar year, whichever is greater,
30    but not to exceed $50,000 total aggregate liability. The bond
31    shall be conditioned upon full accounting and due payment  to
32    the  person or company entitled thereto, of funds coming into
33    the  insurance  producer's  possession  as  an  incident   to
SB363 Enrolled              -18-              LRB9100321JSpcB
 1    insurance  transactions under the his license or surplus line
 2    insurance transactions under the his  license  as  a  surplus
 3    line producer.
 4        (2)  Authorized  insurance producers of a registered firm
 5    may meet the requirements of this Section with a bond in  the
 6    name  of  the registered firm, continuous in form and  in the
 7    amounts set forth in subsection (1) of this Section.
 8        Insurance producers may meet  the  requirements  of  this
 9    Section  with  a  bond  in  the  name  of an association.  An
10    individual producer remains responsible for assuring  that  a
11    producer  bond  is  in  effect and is for the correct amount.
12    The association must have been in existence for 5 years, have
13    common membership, and been formed for a purpose  other  than
14    obtaining a bond.
15        (3)  Such bond shall remain in force and effect until the
16    surety  is  released  from liability by the Director or until
17    the bond is canceled by the surety. The surety may cancel the
18    bond and be released from further liability  thereunder  upon
19    30 days' written notice in advance to the Principal Director.
20    Such  cancellation shall not affect any liability incurred or
21    accrued thereunder  before  the  termination  of  the  30-day
22    period.  Upon  receipt  of  any  notice  of cancellation, the
23    Director shall immediately notify the licensee.
24             (4)  Such license may be revoked shall automatically
25    terminate upon there being  no  bond  in  force,  or  if  the
26    producer  acts  without  a bond which is required pursuant to
27    this Section, and the license shall be returned by its lawful
28    custodian to the Director for cancellation.
29        (5)  If a party injured  under  the  terms  of  the  bond
30    requests  the  producer to provide the name of the surety and
31    the bond number, the producer must  provide  the  information
32    within 3 working days after receiving the request.
33        (6)  An  association  may  meet  the requirements of this
34    Section for all of its members with a bond in the name of the
SB363 Enrolled              -19-              LRB9100321JSpcB
 1    association that is continuous in form and in the amounts set
 2    forth in subsection (1) of this Section.
 3    (Source: P.A. 88-313.)

 4        (215 ILCS 5/509.1) (from Ch. 73, par. 1065.56-1)
 5        Sec. 509.1.  Fees.
 6        (a)  The fees required by this Article are as follows:
 7             (1)  A  An  annual  fee  of  $75  per  year  for  an
 8        insurance producer license;
 9             (2)  A fee of $25 for the issuance  of  a  temporary
10        insurance producer license;
11             (3)  A  An  annual  registration  fee of $50 payable
12        once every 2 years $25 for a business firm to register;
13             (4)  An annual  $25  fee  for  a  limited  insurance
14        representative license;
15             (5)  A  $25  application  fee  for the processing of
16        each request to  take  the  written  examination  for  an
17        insurance producer license;
18             (6)  An  annual  registration  fee  of  $500  for an
19        education provider to register;
20             (7)  A certification fee of $25 for  each  certified
21        prelicensing or continuing education course and an annual
22        fee  of  $10  for renewing the certification of each such
23        course; and
24             (8)  A  license  reinstatement  fee   of   $50   for
25        reinstating a license which lapsed because the annual fee
26        was not received by the due date;.
27             (9)  A  registration  fee  of  $15 for reinstating a
28        firm registration that lapsed because the annual fee  was
29        not received by the due date; and.
30             (10)  A  fee of $50 payable once every 2 years for a
31        car rental limited license.
32        (b)  Except as otherwise provided, all fees paid  to  and
33    collected  by  the  Director under this Section shall be paid
SB363 Enrolled              -20-              LRB9100321JSpcB
 1    promptly after receipt  thereof,  together  with  a  detailed
 2    statement  of  such  fees,  into  a special fund in the State
 3    Treasury to be known as the Insurance Producer Administration
 4    Fund.  The  monies  deposited  into  the  Insurance  Producer
 5    Administration  Fund  shall  be  used only for payment of the
 6    expenses of the Department in the execution,  administration,
 7    and  enforcement  of  the  insurance  laws of this State, and
 8    shall be appropriated as otherwise provided by  law  for  the
 9    payment  of  such  expenses  with  first  priority  being any
10    expenses incident to or associated  with  the  administration
11    and enforcement of this Article.
12    (Source:  P.A.  89-152,  eff.  1-1-97;  90-372,  eff. 7-1-98;
13    90-655, eff. 7-30-98.)

14        (215 ILCS 5/510.2) (from Ch. 73, par. 1065.57-2)
15        Sec. 510.2.  Exemptions from licensing requirements.  The
16    provisions of Sections 492.2,  494.1,  495.1,  495.2,  496.2,
17    497.1, 498.1, 499.1, 500.1 and 501.2 shall not apply to:
18        (a)  any  regularly  salaried  officer  or employee of an
19    insurance company, who is engaged in the performance of usual
20    and customary executive, administrative or clerical duties;
21        (b)  salaried employees in the  office  of  an  insurance
22    producer,   limited   insurance  representative,  car  rental
23    limited licensee, or registered firm, who devote  their  full
24    time  to  clerical and administrative services, including the
25    incidental taking of insurance applications  and  receipt  of
26    premiums  in  the  office  of their employer, as long as such
27    employees do not receive any commissions on such applications
28    and their  compensation  is  not  varied  by  the  volume  of
29    applications   or  premiums  taken  or  received,  except  as
30    authorized under subsection (g) of Section 495.2;
31        (c)  persons who secure and furnish information  for  the
32    purpose  of group life insurance, annuities, group or blanket
33    accident  and  health  insurance,  or  for  the  purpose   of
SB363 Enrolled              -21-              LRB9100321JSpcB
 1    enrolling  individuals under such plans, issuing certificates
 2    under such plans or otherwise assisting in administering such
 3    plans, where no commission is paid for such service;
 4        (d)  advisory organizations, according to Article VIIA of
 5    this Code, or persons who furnish information for the purpose
 6    of life or accident and health  insurance  distributed  on  a
 7    mass merchandise basis and administered by group methods;
 8        (e)  employers  or  their  officers  or employees, or the
 9    trustees of any employee trust plan, to the extent that  such
10    employers, officers, employees or trustees are engaged in the
11    administration  or  operation  of  any  program  of  employee
12    benefits  for  their  own employees or the employees of their
13    subsidiaries or affiliates, which program involves the use of
14    insurance issued by an insurance company,  as  long  as  such
15    employers,  officers,  employees  or  trustees are not in any
16    manner compensated, directly or indirectly,  by  the  company
17    issuing the contracts; or
18        (f)  employees  of  insurance  companies or organizations
19    employed by insurance  companies  who  are  engaging  in  the
20    inspection,  rating  or  classification  of  risks, or in the
21    supervision of the training of insurance  producers,  limited
22    insurance  representatives,  car rental limited licensees, or
23    temporary insurance producers, and who are  not  individually
24    engaged  in  the  solicitation  or negotiation of policies or
25    contracts for insurance.
26    (Source: P.A. 83-1299.)

27        Section 99.   Effective  date.   This  Act  takes  effect
28    January 1, 2000.

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