Public Act 93-0288

SB1150 Enrolled                      LRB093 09649 LRD 09888 b

    AN ACT concerning insurance.

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

    Section  5.  The  Illinois  Insurance  Code is amended by
changing Sections  500-10  and  500-135  and  adding  Section
500-107 as follows:

    (215 ILCS 5/500-10)
    Sec.    500-10.  Definitions.    In   addition   to   the
definitions  in  Section  2  of  the  Code,   the   following
definitions apply to this Article:
    "Business   entity"  means  a  corporation,  association,
partnership, limited  liability  company,  limited  liability
partnership, or other legal entity.
    "Car   rental  limited  line  licensee"  means  a  person
authorized under the provisions of Section  500-105  to  sell
certain coverages relating to the rental of vehicles.
    "Home state" means the District of Columbia and any state
or  territory  of  the  United  States  in which an insurance
producer maintains his or her principal place of residence or
principal place of business and is  licensed  to  act  as  an
insurance producer.
    "Insurance"  means  any  of  the  lines  of  authority in
Section  500-35,  any  health  care  plan  under  the  Health
Maintenance Organization Act, or any limited health care plan
under the Limited Health Service Organization Act.
    "Insurance  producer"  means  a  person  required  to  be
licensed under the laws of this State to  sell,  solicit,  or
negotiate insurance.
    "Insurer" means a company as defined in subsection (e) of
Section  2 of this Code, a health maintenance organization as
defined in the Health  Maintenance  Organization  Act,  or  a
limited health service organization as defined in the Limited
Health Service Organization Act.
    "License"   means  a  document  issued  by  the  Director
authorizing an individual to act as an insurance producer for
the  lines  of  authority  specified  in  the   document   or
authorizing   a  business  entity  to  act  as  an  insurance
producer.  The license itself does not create any  authority,
actual,  apparent, or inherent, in the holder to represent or
commit an insurance carrier.
    "Limited lines insurance" means those lines of  insurance
defined  in  Section  500-100  or any other line of insurance
that the Director may deem it necessary to recognize for  the
purposes of complying with subsection (e) of Section 500-40.
    "Limited lines producer" means a person authorized by the
Director   to  sell,  solicit,  or  negotiate  limited  lines
insurance.
    "Negotiate" means the act of conferring directly with  or
offering  advice  directly  to  a  purchaser  or  prospective
purchaser  of  a  particular contract of insurance concerning
any of the substantive benefits, terms, or conditions of  the
contract, provided that the person engaged in that act either
sells  insurance  or  obtains  insurance  from  insurers  for
purchasers.
    "Person" means an individual or a business entity.
    "Rental  agreement"  means  a  written  agreement setting
forth the terms and conditions governing the use of a vehicle
provided by a rental company for rental or lease.
    "Rental company" means a person, or a franchisee  of  the
person,  in  the  business  of  providing  primarily  private
passenger vehicles to the public under a rental agreement for
a period not to exceed 30 days.
    "Rental period" means the term of the rental agreement.
    "Renter"  means  a  person obtaining the use of a vehicle
from a rental company under the terms of a  rental  agreement
for a period not to exceed 30 days.
    "Self-service  storage  facility  limited  line licensee"
means a person authorized under  the  provisions  of  Section
500-107  to  sell certain coverages relating to the rental of
self-service storage facilities.
    "Sell" means to exchange a contract of insurance  by  any
means, for money or its equivalent, on behalf of an insurance
company.
    "Solicit" means attempting to sell insurance or asking or
urging  a  person to apply for a particular kind of insurance
from a particular company.
    "Terminate" means the cancellation  of  the  relationship
between   an  insurance  producer  and  the  insurer  or  the
termination of a producer's authority to transact insurance.
    "Uniform Business Entity Application" means  the  current
version    of   the   National   Association   of   Insurance
Commissioners'  Uniform  Business  Entity   Application   for
nonresident business entities.
    "Uniform  Application"  means  the current version of the
National  Association  of  Insurance  Commissioners'  Uniform
Application for nonresident producer licensing.
    "Vehicle" or "rental vehicle" means a  motor  vehicle  of
(1)  the  private  passenger  type, including passenger vans,
mini vans, and sport utility vehicles or (2) the cargo  type,
including  cargo vans, pickup trucks, and trucks with a gross
vehicle weight of less than 26,000 pounds  the  operation  of
which  does  not require the operator to possess a commercial
driver's license.
(Source: P.A. 92-386, eff. 1-1-02.)

    (215 ILCS 5/500-107 new)
    Sec. 500-107.  Self-service storage facility limited line
license for self-storage facilities.
    (a)  Except  as  permitted  by  subsection  (j)  of  this
Section,  a  self-service  storage  facility  must  obtain  a
producer license or obtain a  self-service  storage  facility
limited  line license before offering or selling insurance in
connection with and incidental to the rental of storage space
provided by a self-service  storage  facility.  The  sale  of
insurance  may  occur at the rental office or by preselection
of  coverage  in  a  master,  corporate,  group  rental,   or
individual  agreement.  The  following  general categories of
coverage may be offered or sold:
         (1)  insurance  that   provides   hazard   insurance
    coverage  to  renters  for  the  loss  of,  or damage to,
    tangible personal  property  in  storage  or  in  transit
    during the rental period; or
         (2)  any  other coverage the Director may approve as
    meaningful and appropriate in connection with the  rental
    of storage space.
    (b)  Insurance  may  not  be  offered  by  a self-service
storage  limited  line  producer  pursuant  to  this  Section
unless:
         (1)  the self-service storage facility  has  applied
    for  and obtained a self-service storage facility limited
    line license;
         (2)  at   every   rental   location   where   rental
    agreements  are  executed,  brochures  or  other  written
    materials are readily available to the prospective renter
    that:
              (A)  summarize  clearly   and   correctly   the
         material  terms  of  coverage  offered  to  renters,
         including the identity of the insurer;
              (B)  disclose  that the coverage offered by the
         self-service  storage   facility   may   provide   a
         duplication  of  coverage  already  provided  by the
         renter's  personal  homeowner's  insurance   policy,
         automobile   insurance  policy,  personal  liability
         insurance policy, or other source of coverage;
              (C)  state that the purchase by the  renter  of
         the  kinds  of coverage specified in this Section is
         not required in order to rent storage space; and
              (D)  describe the process for filing a claim in
         the event the consumer elects to  purchase  coverage
         and in the event of a claim; and
         (3)  evidence of coverage is provided to each renter
    who elects to purchase the coverage.
    (c)  A self-service storage facility limited line license
issued  under  this Section shall also authorize any employee
of the self-service storage facility limited line licensee to
act individually on behalf and under the supervision  of  the
self-service  storage  facility  limited  line  licensee with
respect to the kinds of coverage specified in this Section.
    (d)  A self-service storage facility licensed pursuant to
this  Section  must  conduct  a  training  program  in  which
employees being trained shall receive basic instruction about
the kinds of coverage specified in this Section  and  offered
for purchase by prospective renters of storage space.
    (e)  Notwithstanding  any other provision of this Section
or any rule adopted by the Director, a  self-service  storage
facility  limited  line  producer pursuant to this Section is
not  required  to  treat  moneys   collected   from   renters
purchasing  insurance  when  renting  storage  space as funds
received in a fiduciary capacity, provided that  the  charges
for  coverage  shall  be  itemized  and ancillary to a rental
transaction.
    (f)  The sale of insurance  not  in  conjunction  with  a
rental transaction shall not be permitted.
    (g)  A   self-service   storage   facility  limited  line
producer under this Section may not advertise, represent,  or
otherwise hold itself or any of its employees out as licensed
insurers, insurance producers, insurance agents, or insurance
brokers.
    (h)  Direct  commissions  may not be paid to self-service
storage facility employees by the  insurer  or  the  customer
purchasing   insurance  products.  The  self-service  storage
facility  may  include  insurance  products  in  an   overall
employee performance compensation incentive program.
    (i)  An  application  for a self-service storage facility
limited line license must be made on a form specified by  the
Director.
    (j)  Nothing  contained in this Section shall prohibit an
unlicensed  person  from  enrolling,  issuing,  or  otherwise
distributing certificates of insurance under a  group  master
policy lawfully issued in this or another state when:
         (1)  the   enrollment   or  distribution  is  by  an
    employee of the group master policyholder;
         (2)  no commission is paid for  such  enrollment  or
    distribution;
         (3)  the distribution is incidental and ancillary to
    the   primary   rental   business  of  the  group  master
    policyholder; and
         (4)  the group master policy is sold  to  the  group
    master policyholder by a licensed producer.
    (k)  Nothing in this Section applies to or affects common
carriers regulated by the Illinois Commerce Commission.

    (215 ILCS 5/500-135)
    Sec. 500-135.  Fees.
    (a)  The fees required by this Article are as follows:
         (1)  a fee of $150 payable once every 2 years for an
    insurance producer license;
         (2)  a  fee  of  $25 for the issuance of a temporary
    insurance producer license;
         (3)  a fee of $50 payable once every 2 years  for  a
    business entity;
         (4)  an  annual  $25 fee for a limited line producer
    license issued under items (1) through (7) of  subsection
    (a) of Section 500-100;
         (5)  a  $25  application fee for the processing of a
    request to take the written examination for an  insurance
    producer license;
         (6)  an   annual   registration   fee  of  $500  for
    registration of an education provider;
         (7)  a certification fee of $25 for  each  certified
    pre-licensing  or  continuing  education  course  and  an
    annual  fee of $10 for renewing the certification of each
    such course;
         (8)  a fee of $50 payable once every 2 years  for  a
    car rental limited line license;
         (9)  a  fee of $150 payable once every 2 years for a
    limited lines license  other  than  the  licenses  issued
    under  items (1) through (7) of subsection (a) of Section
    500-100, or a car  rental  limited  line  license,  or  a
    self-service storage facility limited line license;.
         (10)  a  fee of $50 payable once every 2 years for a
    self-service storage facility limited line license.
    (b)  Except as otherwise provided, all fees paid  to  and
collected  by  the  Director under this Section shall be paid
promptly after receipt  thereof,  together  with  a  detailed
statement  of  such  fees,  into  a special fund in the State
Treasury to be known as the Insurance Producer Administration
Fund.  The moneys  deposited  into  the   Insurance  Producer
Administration  Fund  may  be  used  only  for payment of the
expenses of the Department in the execution,  administration,
and  enforcement  of  the  insurance  laws of this State, and
shall be appropriated as otherwise provided by  law  for  the
payment  of  those  expenses  with  first  priority being any
expenses incident to or associated  with  the  administration
and enforcement of this Article.
(Source: P.A. 92-386, eff. 1-1-02.)