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1 | AN ACT in relation to insurance.
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2 | Be it enacted by the People of the State of Illinois, | |||||||||||||||||||||
3 | represented in the General Assembly:
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4 | Section 5. The Illinois Insurance Code is amended by | |||||||||||||||||||||
5 | changing Sections
500-77 and 500-80
as follows:
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6 | (215 ILCS 5/500-77)
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7 | Sec. 500-77. Policyholder information and exclusive | |||||||||||||||||||||
8 | ownership
of expirations.
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9 | (a) As used in this Section, "expirations" means all | |||||||||||||||||||||
10 | information relative to
an insurance policy including, but not | |||||||||||||||||||||
11 | limited to, the name and address of the
insured, the location | |||||||||||||||||||||
12 | and description of the property insured, the value of the
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13 | insurance policy, the inception date, the renewal date, and the | |||||||||||||||||||||
14 | expiration date
of the insurance policy, the premiums, the | |||||||||||||||||||||
15 | limits and a description of the
terms and coverage of the | |||||||||||||||||||||
16 | insurance policy, and any other personal and
privileged | |||||||||||||||||||||
17 | information, as defined by Section 1003 of this Code, compiled | |||||||||||||||||||||
18 | by a
business entity
registered firm or furnished by the | |||||||||||||||||||||
19 | insured to the
insurer or any agent,
contractor, or | |||||||||||||||||||||
20 | representative of the insurer.
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21 | For purposes of this Section only, a business entity
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22 | registered firm
also includes a sole
proprietorship that | |||||||||||||||||||||
23 | transacts the business of insurance as an insurance agency.
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24 | (b) All "expirations" as defined in subsection (a) of this | |||||||||||||||||||||
25 | Section shall be
mutually and exclusively owned by the insured | |||||||||||||||||||||
26 | and the business entity
registered firm . The
limitations on the | |||||||||||||||||||||
27 | use of expirations as provided in subsections (c) and (d)
of | |||||||||||||||||||||
28 | this Section shall be for mutual benefit of the insured and the | |||||||||||||||||||||
29 | business
entity
registered
firm .
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30 | (c) Except as otherwise provided in this Section, for
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31 | purposes of soliciting, selling, or negotiating the renewal or
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32 | sale of insurance coverage, insurance products, or insurance
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1 | services or for any other marketing purpose, a business entity
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2 | registered
firm shall own
and have the exclusive
use of | ||||||
3 | expirations, records, and other written or electronically
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4 | stored information directly related to an insurance | ||||||
5 | application
submitted by, or an insurance policy written | ||||||
6 | through, the
business entity
registered firm . No insurance | ||||||
7 | company, managing
general agent, surplus
lines insurance | ||||||
8 | broker, wholesale broker, group self-insurance
fund, | ||||||
9 | third-party administrator, or any other entity, other than a | ||||||
10 | financial
institution as defined in Section 1402 of this Code, | ||||||
11 | shall use such
expirations, records, or other written or | ||||||
12 | electronically stored information
to solicit, sell, or | ||||||
13 | negotiate the renewal or sale of insurance coverage,
insurance | ||||||
14 | products, or insurance services to the insured or for
any other | ||||||
15 | marketing purposes, either directly or by providing such
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16 | information to others,
without, separate from the general | ||||||
17 | agency
contract, the written consent of the business entity
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18 | registered firm .
However, such
expirations,
records, or other | ||||||
19 | written or electronically stored information may be used
for | ||||||
20 | any purpose necessary for placing such business through the
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21 | insurance producer including reviewing an application and | ||||||
22 | issuing
or renewing a policy and for loss control services.
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23 | (d) With respect to a business entity
registered firm , this | ||||||
24 | Section
shall not apply:
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25 | (1) when the insured requests either orally or in | ||||||
26 | writing that another
business entity
registered firm | ||||||
27 | obtain quotes for insurance from
another insurance company | ||||||
28 | or
when the insured requests in writing individually or
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29 | through another business entity
registered firm , that the | ||||||
30 | insurance
company renew
the policy;
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31 | (2) to policies in the Illinois Fair Plan, the Illinois | ||||||
32 | Automobile
Insurance Plan, or
the Illinois Assigned Risk | ||||||
33 | Plan for coverage under the Workers' Compensation
Act and | ||||||
34 | the Workers' Occupational Diseases Act;
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35 | (3) when the insurance producer is employed by or has
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36 | agreed to act exclusively or primarily for one company or |
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1 | group of
affiliated insurance companies or to a producer | ||||||
2 | who submits to the company or
group of affiliated companies | ||||||
3 | that are organized to transact business in this
State as a | ||||||
4 | reciprocal company, as defined in Article IV of this Code, | ||||||
5 | every
request or
application for insurance for the classes | ||||||
6 | and lines underwritten by the company
or group of | ||||||
7 | affiliated companies;
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8 | (4) to policies providing life and accident and health | ||||||
9 | insurance;
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10 | (5) when the business entity
registered firm is in | ||||||
11 | default for
nonpayment
of premiums under the contract with | ||||||
12 | the insurer or is guilty of conversion of
the insured's or | ||||||
13 | insurer's premiums or its license is revoked by or
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14 | surrendered to the Department;
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15 | (6) to any insurance company's obligations under | ||||||
16 | Sections 143.17 and
143.17a of this Code; or
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17 | (7) to any insurer that, separate from a producer or | ||||||
18 | business entity
registered firm ,
creates, develops, | ||||||
19 | compiles, and assembles its own, identifiable expirations | ||||||
20 | as
defined in subsection (a).
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21 | For purposes of this Section, an insurance producer shall | ||||||
22 | be deemed to
have
agreed to act primarily for one company or a | ||||||
23 | group of affiliated insurance
companies if the producer (i) | ||||||
24 | receives 75% or more of his or her insurance
related | ||||||
25 | commissions from one company or a group of affiliated companies | ||||||
26 | or (ii)
places 75% or more of his or her policies with one | ||||||
27 | company or a group of
affiliated companies.
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28 | Nothing in this Section prohibits an insurance company, | ||||||
29 | with respect to any
items herein, from conveying to the insured | ||||||
30 | or the business entity
registered firm any
additional benefits | ||||||
31 | or ownership rights including, but not limited to, the
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32 | ownership of expirations on any policy issued or the imposition | ||||||
33 | of further
restrictions on the insurance company's use of the | ||||||
34 | insured's personal
information.
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35 | (e) Nothing in this Section prevents a financial | ||||||
36 | institution, as defined
in Section 1402 of this Code, from |
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1 | obtaining from the insured, the insurer, or
the business entity
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2 | registered firm the expiration dates of an
insurance policy | ||||||
3 | placed on
collateral or otherwise used as security in | ||||||
4 | connection with a loan made or
serviced by the
financial | ||||||
5 | institution when the financial institution requires the | ||||||
6 | expiration
dates for evidence of insurance.
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7 | (f) For purposes of this Section, "financial institution" | ||||||
8 | does not include
an insurance company, business entity
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9 | registered firm , managing general
agent, surplus lines
broker, | ||||||
10 | wholesale broker, group self-funded insurance fund, or | ||||||
11 | third-party
administrator.
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12 | (g) The Director may adopt rules in accordance with Section
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13 | 401 of this Code for the enforcement of this Section.
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14 | (h) This Section applies to the expirations relative to all | ||||||
15 | policies of
insurance bound, applied for, sold, renewed, or | ||||||
16 | otherwise taking effect on or
after
June 1, 2001
the effective | ||||||
17 | date of this amendatory Act of the 92nd
General Assembly .
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18 | (Source: P.A. 92-5, eff. 6-1-01; 92-651, eff. 7-11-02.)
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19 | (215 ILCS 5/500-80)
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20 | Sec. 500-80. Commissions.
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21 | (a) An insurer or insurance producer may not pay a | ||||||
22 | commission, service fee,
brokerage, or other valuable | ||||||
23 | consideration to a person for selling, soliciting,
or | ||||||
24 | negotiating
insurance in this State if that person is required | ||||||
25 | to be licensed under this
Article and is not so
licensed at the | ||||||
26 | time of selling, soliciting, or negotiating the insurance.
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27 | (b) A person may not accept a commission, service fee, | ||||||
28 | brokerage, or other
valuable
consideration for selling, | ||||||
29 | soliciting, or negotiating insurance in this State
if that | ||||||
30 | person is
required to be licensed under this Article and is not | ||||||
31 | so licensed.
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32 | (c) Renewal or other deferred commissions may be paid to a | ||||||
33 | person for
selling,
soliciting, or negotiating
insurance in | ||||||
34 | this State if the person was required to be licensed under
this | ||||||
35 | Article at the time of
the sale, solicitation, or negotiation |
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1 | and was so licensed at that time.
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2 | (d) An insurer or insurance producer may pay or assign | ||||||
3 | commissions, service
fees,
brokerages, or other valuable | ||||||
4 | consideration to an insurance agency or to
persons who do not | ||||||
5 | sell,
solicit, or negotiate insurance in this State, unless the | ||||||
6 | payment would violate
Section 151 of this
Code.
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7 | (e) When an insurance producer or business entity charges | ||||||
8 | any fee or
compensation separate from commissions deductible | ||||||
9 | from, or directly
attributable to, premiums on insurance
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10 | policies or contracts, it must comply with all of the | ||||||
11 | following:
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12 | (1) It must provide written disclosure to the consumer | ||||||
13 | or
contracting party
that clearly specifies the amount or | ||||||
14 | extent of the compensation or fee prior to
the delivery of | ||||||
15 | the corresponding policy or the performance of the service .
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16 | A copy of the written disclosure
must
be
maintained for a | ||||||
17 | period of 7 years by the producer or business entity that
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18 | collects the compensation or
fee for a
period of 7 years .
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19 | (2) If the combined compensation or fee exceeds 10% of | ||||||
20 | a directly
attributable premium amount
of a corresponding | ||||||
21 | contract or policy, the disclosure must also
include the
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22 | signature of the consumer or contracting party | ||||||
23 | acknowledging the compensation
or fee.
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24 | (3) If an insurance policy or contract is cancelled for | ||||||
25 | any
reason within 90 days following the inception date, the | ||||||
26 | producer or
business entity shall refund to the consumer a | ||||||
27 | prorated portion of the
fee or compensation within 30 days | ||||||
28 | after the producer or business
entity receives proper | ||||||
29 | documentation that the corresponding insurance
policy or | ||||||
30 | contract has been cancelled. At no time shall a producer or
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31 | business entity charge the consumer a fee or compensation | ||||||
32 | for
cancellation of any insurance policy or contract.
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33 | (4) If the
policy file contains documentation that the | ||||||
34 | producer performed a
service corresponding to the | ||||||
35 | applicable coverage or policy and the written
disclosure | ||||||
36 | stated that the fees were fully earned, then those fees |
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1 | shall be
fully
earned at
inception of the disclosure's | ||||||
2 | execution.
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3 | (Source: P.A. 92-386, eff. 1-1-02; 92-587, eff. 6-26-02.)
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4 | Section 99. Effective date. This Act takes effect upon | ||||||
5 | becoming law. |