Public Act 098-1165
 
SB2979 EnrolledLRB098 19016 RPM 54166 b

    AN ACT concerning regulation.
 
    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 500-100 and by adding Section
500-108 as follows:
 
    (215 ILCS 5/500-10)
    (Section scheduled to be repealed on January 1, 2017)
    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.
    "Travel insurance" means insurance coverage for personal
risks incident to planned travel, including, but not limited
to: (1) the interruption or cancellation of a trip or event,
(2) the loss of baggage or personal effects, (3) damages to
accommodations or rental vehicles, or (4) sickness, accident,
disability, or death occurring during travel. "Travel
insurance" does not include major medical plans that provide
comprehensive medical protection for travelers with trips
lasting 6 months or longer, including those working overseas as
an ex-patriot or as military personnel on deployment.
    "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.
    "Webinar" means an online educational presentation during
which a live and participating instructor and participating
viewers, whose attendance is periodically verified throughout
the presentation, actively engage in discussion and in the
submission and answering of questions.
(Source: P.A. 97-113, eff. 7-14-11.)
 
    (215 ILCS 5/500-100)
    (Section scheduled to be repealed on January 1, 2017)
    Sec. 500-100. Limited lines producer license.
    (a) An individual who is at least 18 years of age and whom
the Director considers to be competent, trustworthy, and of
good business reputation may obtain a limited lines producer
license for one or more of the following classes:
        (1) travel insurance, as defined in Section 500-10 of
    this Article on baggage or limited travel health, accident,
    or trip cancellation insurance sold in connection with
    transportation provided by a common carrier;
        (2) industrial life insurance, as defined in Section
    228 of this Code;
        (3) industrial accident and health insurance, as
    defined in Section 368 of this Code;
        (4) insurance issued by a company organized under the
    Farm Mutual Insurance Company Act of 1986;
        (5) legal expense insurance;
        (6) enrollment of recipients of public aid or medicare
    in a health maintenance organization;
        (7) a limited health care plan issued by an
    organization having a certificate of authority under the
    Limited Health Service Organization Act;
        (8) credit life and credit accident and health
    insurance and other credit insurance policies approved or
    permitted by the Director; a credit insurance company must
    conduct a training program in which an applicant shall
    receive basic instruction about the credit insurance
    products that he or she will be selling.
    (b) The application for a limited lines producer license
must be submitted on a form prescribed by the Director by a
designee of the insurance company, health maintenance
organization, or limited health service organization
appointing the limited insurance representative. The insurance
company, health maintenance organization, or limited health
service organization must pay the fee required by Section
500-135.
    (c) A limited lines producer may represent more than one
insurance company, health maintenance organization, or limited
health service organization.
    (d) An applicant who has met the requirements of this
Section shall be issued a perpetual limited lines producer
license.
    (e) A limited lines producer license shall remain in effect
as long as the appointing insurance company pays the respective
fee required by Section 500-135 prior to January 1 of each
year, unless the license is revoked or suspended pursuant to
Section 500-70. Failure of the insurance company to pay the
license fee or to submit the required documents shall cause
immediate termination of the limited line insurance producer
license with respect to which the failure occurs.
    (f) A limited lines producer license may be terminated by
the insurance company or the licensee.
    (g) A person whom the Director considers to be competent,
trustworthy, and of good business reputation may be issued a
car rental limited line license. A car rental limited line
license for a rental company shall remain in effect as long as
the car rental limited line licensee pays the respective fee
required by Section 500-135 prior to the next fee date unless
the car rental license is revoked or suspended pursuant to
Section 500-70. Failure of the car rental limited line licensee
to pay the license fee or to submit the required documents
shall cause immediate suspension of the car rental limited line
license. A car rental limited line license for rental companies
may be voluntarily terminated by the car rental limited line
licensee. The license fee shall not be refunded upon
termination of the car rental limited line license by the car
rental limited line licensee.
    (h) A limited lines producer issued a license pursuant to
this Section is not subject to the requirements of Section
500-30.
    (i) A limited lines producer license must contain the name,
address and personal identification number of the licensee, the
date the license was issued, general conditions relative to the
license's expiration or termination, and any other information
the Director considers proper. A limited line producer license,
if applicable, must also contain the name and address of the
appointing insurance company.
(Source: P.A. 98-159, eff. 8-2-13; 98-756, eff. 7-16-14.)
 
    (215 ILCS 5/500-108 new)
    Sec. 500-108. Travel insurance business entity license.
    (a) As used in this Section:
    "Offering and disseminating" means the following:
        (1) Providing information to a prospective or current
    policyholder on behalf of a limited lines travel insurance
    entity, including brochures, buyer guides, descriptions of
    coverage, and price.
        (2) Referring specific questions regarding coverage
    features and benefits from a prospective or current
    policyholder to a limited lines travel insurance entity.
        (3) Disseminating and processing applications for
    coverage, coverage selection forms, or other similar forms
    in response to a request from a prospective or current
    policyholder.
        (4) Collecting premiums from a prospective or current
    policyholder on behalf of a limited lines travel insurance
    entity.
        (5) Receiving and recording information from a
    policyholder to share with a limited lines travel insurance
    entity.
    "Travel insurance business entity" means a licensed
insurance producer designated by an insurer as set forth in
subsection (i) of this Section.
    "Travel retailer" means a business organization that
makes, arranges, or offers travel services and, with respect to
travel insurance, is limited to offering and disseminating as
defined in this Section, unless otherwise licensed under
subsection (c) of this Section.
    (b) The Director may issue to a travel insurance business
entity that registers travel retailers under its license as
described in paragraph (2) of subsection (d) of this Section a
producer license as provided in paragraph (6) of subsection (a)
of Section 500-35 of this Code. A travel insurance business
entity license issued under this Section shall also authorize
any employee of the travel insurance business entity to act
individually on behalf and under the supervision of the travel
insurance business entity licensee with respect to the coverage
specified in this Section. Each travel insurance business
entity licensed under this Section shall pay the Department a
fee of $500 for its initial license and $500 for each renewal
license, payable on May 31 annually.
    (c) The Director may issue to a travel retailer a limited
lines producer license. A travel retailer license issued under
this Section shall also authorize any employee of the travel
retailer limited line licensee to act individually on behalf
and under the supervision of the travel retailer limited line
licensee with respect to the coverage specified in this
Section.
    (d) Notwithstanding any other provision of law, a travel
retailer may do the limited activities of offering and
disseminating travel insurance on behalf of and under the
license of a supervising travel insurance business entity if
the following conditions are met:
        (1) the travel insurance business entity or travel
    retailer provides to purchasers of travel insurance:
            (A) a description of the material terms or the
        actual material terms of the insurance coverage;
            (B) a description of the process for filing a
        claim;
            (C) a description of the review or cancellation
        process for the travel insurance policy; and
            (D) the identity and contact information of the
        insurer and travel insurance business entity;
        (2) at the time of licensure, the travel insurance
    business entity shall establish and maintain a register on
    a form prescribed by the Director of each travel retailer
    that offers travel insurance on the travel insurance
    business entity's behalf; the register shall be maintained
    and updated continuously by the travel insurance business
    entity and shall include the name, address, and contact
    information of the travel retailer and an officer or person
    who directs or controls the travel retailer's operations
    and the travel retailer's federal tax identification
    number; the travel insurance business entity shall submit
    the register to the Director annually on a form and in a
    manner approved by the Director; the limited lines producer
    shall also certify that the travel retailer personnel who
    is offering and disseminating insurance under the travel
    retailer's registration complies with 18 U.S.C. 1033;
        (3) the travel insurance business entity has
    designated one of its employees as a licensed individual
    producer (a designated responsible producer or DRP)
    responsible for the travel insurance business entity's and
    its travel retailer's compliance with the travel insurance
    laws, rules, and regulations of the State;
        (4) the travel insurance business entity has paid all
    applicable insurance producer licensing fees as set forth
    in this Code; and
        (5) the travel insurance business entity requires each
    employee and authorized representative of the travel
    retailer whose duties include offering and disseminating
    travel insurance to receive a program of instruction or
    training that shall be subject to review by the Director;
    the training material shall, at a minimum, contain
    instructions on the types of insurance offered, ethical
    sales practices, and required disclosures to prospective
    customers.
    (e) Any travel retailer offering or disseminating travel
insurance shall make available to prospective purchasers
brochures or other written materials that:
        (1) provide the identity and contact information of the
    insurer and the travel insurance business entity;
        (2) explain that the purchase of travel insurance is
    not required in order to purchase any other product or
    service from the travel retailer; and
        (3) explain that an unlicensed travel retailer is
    permitted to provide general information about the
    insurance offered by the travel retailer, including a
    description of the coverage and price, but is not qualified
    or authorized to answer technical questions about the terms
    and conditions of the insurance offered by the travel
    retailer or to evaluate the adequacy of the customer's
    existing insurance coverage.
    (f) A travel retailer's employee or authorized
representative who is not licensed as an insurance producer may
not:
        (1) evaluate or interpret the technical terms,
    benefits, and conditions of the offered travel insurance
    coverage;
        (2) evaluate or provide advice concerning a
    prospective purchaser's existing insurance coverage; or
        (3) hold himself, herself, or itself out as a licensed
    insurer, licensed producer, or insurance expert.
    (g) A travel retailer whose insurance-related activities,
and those of its employees and authorized representatives, are
limited to offering and disseminating travel insurance on
behalf of and under the direction of a travel insurance
business entity meeting the conditions stated in this Section
is authorized to do so and receive related compensation upon
registration by the travel insurance business entity as
described in paragraph (2) of subsection (d) of this Section.
    (h) Travel insurance may be provided under an individual
policy or under a group or master policy.
    (i) As the insurer designee, the travel insurance business
entity is responsible for the acts of the travel retailer that
is registered under its license.
    (j) Any entity that violates any provision of this Article
shall be subject to all appropriate regulatory action as set
forth in this Code.