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90_HB2284
215 ILCS 5/141.02 from Ch. 73, par. 753.02
Amends the Illinois Insurance Code. Adds a caption to a
Section concerning the termination of contracts between an
independent agent and an insurance company.
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1 AN ACT to amend the Illinois Insurance Code by changing
2 Section 141.02.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 5. The Illinois Insurance Code is amended by
6 changing Section 141.02 as follows:
7 (215 ILCS 5/141.02) (from Ch. 73, par. 753.02)
8 Sec. 141.02. Independent agents; company contracts.
9 (1) Definitions. For purposes of this Section an
10 independent insurance agent is any licensed agent
11 representing an insurance company on an independent
12 contractor basis and not as an employee. This term shall
13 include only those agents not obligated by contract to place
14 insurance accounts with any insurance company or group of
15 companies. This Section shall only apply to contracts which
16 have been effective for more than one year between an
17 independent insurance agent and any company authorized in
18 this State for the purpose of transacting the kind or kinds
19 of business enumerated in Class 2 or Class 3 of Section 4 of
20 this Code, except accident and health insurance.
21 (2) Rehabilitation. In an effort to avoid termination,
22 the company and agent may endeavor to reach mutual agreement
23 on a written plan for rehabilitation for a period of time
24 agreed by them. Any written plan agreed upon shall identify
25 the problem areas and specify what the agent must do in an
26 effort to avoid termination.
27 (3) Notice of Termination. Contracts between the
28 independent insurance agent and any company shall not be
29 terminated by the company except by signed mutual agreement
30 at the time of written termination notice or unless the
31 company provides 180 days written notice to the independent
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1 insurance agent prior to the effective date of termination.
2 The effective date of termination shall be 180 days from the
3 date of mailing of the termination notice. The company must
4 maintain proof of mailing of the termination notice on a
5 recognized U.S. Post Office form.
6 (4) Renewals following termination. A. During the 180
7 days notice or other mutually agreed time period the
8 independent insurance agent shall not write or bind any new
9 business on behalf of the terminating company without
10 specific written approval.
11 B. The terminating company shall, following the date of
12 termination, renew all policies written by the independent
13 insurance agent for one policy term or for a period of one
14 year if the policy period is longer than one year unless:
15 (a) the policies do not meet the insurer's underwriting
16 standards; or
17 (b) the independent insurance agent notifies the insurer
18 in writing that the policy has been placed with another
19 insurer.
20 C. If a renewal policy does not meet the underwriting
21 requirements, the terminating insurer must give the
22 independent insurance agent 60 days notice of its intention
23 not to renew.
24 D. The rate of commission and renewal terms shall be in
25 accordance with those in effect immediately prior to
26 termination. The commission must be paid only through the
27 first renewal subsequent to the effective date of the
28 termination.
29 (5) Paragraphs (1) through (4) of this Section shall not
30 apply to terminations for abandonment, insolvency of the
31 terminating company, gross and willful misconduct, refusal,
32 suspension, revocation or termination of the agent's license
33 by the Director of Insurance, sale or material change of
34 ownership of agency, fraud, material misrepresentation or
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1 failure to pay such independent insurance agent's account
2 less the independent insurance agent's commission and any
3 disputed items within 30 days after written demand by the
4 company.
5 (Source: P.A. 85-334.)