Public Act 097-0527
 
SB1607 EnrolledLRB097 08415 RPM 48542 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 224 and 424 and by adding Section 155.43 as 
follows:
 
    (215 ILCS 5/155.43 new)
    Sec. 155.43. Misrepresentation of Senior-Specific 
Certification.
    (a)  No insurance producer shall use a senior-specific 
certification or professional designation that indicates or 
implies in such a way as to mislead a purchaser or prospective 
purchaser that the insurance producer has a special 
certification or training in advising or servicing seniors in 
connection with the solicitation, sale, or purchase of a life 
insurance or annuity product or in the provision of advice as 
to the value of or the advisability of purchasing or selling a 
life insurance or annuity product, either directly or 
indirectly through publications, writings, or by issuing or 
promulgating analyses or reports related to a life insurance or 
annuity product.
    (b) "Use of senior-specific certifications or professional 
designations" includes, but is not limited to, all of the 
following:
        (1)  Use of a certification or professional designation 
    by an insurance producer who has not actually earned or is 
    otherwise ineligible to use such certification or 
    designation.
        (2)  Use of a nonexistent or self-conferred 
    certification or professional designation.
        (3)  Use of a certification or professional designation 
    that indicates or implies a level of occupational 
    qualifications obtained through education, training, or 
    experience that the insurance producer using the 
    certification or designation does not have.
        (4) Use of a certification or professional designation 
    that was obtained from a certifying or designating 
    organization that:
            (i) is primarily engaged in the business of 
        instruction in sales or marketing;
            (ii)  does not have reasonable standards or 
        procedures for assuring the competency of its 
        certificate holders or designees;
            (iii) does not have reasonable standards or 
        procedures for monitoring and disciplining its 
        certificate holders or designees for improper or 
        unethical conduct; or
            (iv) does not have reasonable continuing education 
        requirements for its certificate holders or designees 
        in order to maintain the certificate or designation.
    (c)  There is a rebuttable presumption that a certifying or 
designating organization is not disqualified under this 
Section if the certification or designation issued from the 
organization does not primarily apply to sales or marketing and 
if the organization or the certification or designation in 
question has been accredited by any of the following entities:
        (i)  the American National Standards Institute;
        (ii) the National Commission for Certifying Agencies; 
    or
        (iii) any organization included on the list 
    "Accrediting Agencies Recognized for Title IV Purposes" 
    prepared by the United States Department of Education.
    (d) In determining whether a combination of words or an 
acronym standing for a combination of words constitutes a 
certification or professional designation indicating or 
implying that a person has a special certification or training 
in advising or servicing seniors, the Department of Insurance 
shall consider all of the following:
        (1) Use of one or more words, such as "senior", 
    "retirement", "elder", or like words combined with one or 
    more words, such as "certified", "registered", 
    "chartered", "advisor", "specialist", "consultant", 
    "planner", or like words in the name of the certification 
    or professional designation.
        (2)  The manner in which the words listed in paragraph 
    (1) of subsection (b) are combined.
    (e)  For purposes of this Section, a job title within an 
organization that is licensed or registered by a State or 
federal financial services regulatory agency is not a 
certification or professional designation, unless it is used in 
a manner that would confuse or mislead a reasonable consumer, 
if the job title indicates seniority or standing within the 
organization or specifies an individual's area of 
specialization within the organization.  For purposes of this 
subsection (e), "financial services regulatory agency" 
includes, but is not limited to, an agency that regulates 
insurers, insurance producers, broker-dealers, investment 
advisers, or investment companies.
 



    (215 ILCS 5/224)  (from Ch. 73, par. 836)



    Sec. 224. Standard provisions for life policies. 

    (1) After the
first day of July, 1937, no policy of life 
insurance other than
industrial, group or annuities and pure 
endowments with or without
return of premiums or of premiums 
and interest, may be issued or
delivered in this State, unless 
such policy contains in substance the
following provisions:


        (a) A provision that all premiums after the first shall 
    be payable
in advance either at the home office of the 
    company or to an agent of
the company, upon delivery of a 
    receipt signed by one or more of the
officers who shall be 
    designated in the policy, when such receipt is
requested by 
    the policyholder.


        (b) A provision that the insured is entitled to a grace 
    period
either of 30 days or of one month within which the 
    payment of any
premium after the first may be made, subject 
    at the option of the
company to an interest charge not in 
    excess of 6% per annum for the
number of days of grace 
    elapsing before the payment of the premium,
during which 
    period of grace the policy shall continue in force, but in

    case the policy becomes a claim during the grace period 
    before the
overdue premium is paid, or the deferred 
    premiums of the current policy
year, if any, are paid, the 
    amount of such premium or premiums with
interest thereon 
    may be deducted in any settlement under the policy.


        (c) A provision that the policy, together with the 
    application
therefor, a copy of which shall be endorsed 
    upon or attached to the
policy and made a part thereof, 
    shall constitute the entire contract
between the parties 
    and that after it has been in force during the
lifetime of 
    the insured a specified time, not later than 2 years from

    its date, it shall be incontestable except for nonpayment 
    of premiums
and except at the option of the company, with 
    respect to provisions
relative to benefits in the event of 
    total and permanent disability, and
provisions which grant 
    additional insurance specifically against death
by 
    accident and except for violations of the conditions of the 
    policy
relating to naval or military service in time of war 
    or for violation of
an express condition, if any, relating 
    to aviation, (except riding as a
fare-paying passenger of a 
    commercial air line flying on regularly
scheduled routes 
    between definitely established airports) in which case
the 
    liability of the company shall be fixed at a definitely 
    determined
amount not less than the full reserve for the 
    policy and any dividend
additions; provided that the 
    application therefor need not be attached
to or made a part 
    of any policy containing a clause making the policy

    incontestable from date of issue.


        (d) A provision that if it is found at any time before 
    final
settlement under the policy that the age of the 
    insured (or the age of
the beneficiary, if considered in 
    determining the premium) has been
misstated, the amount 
    payable under the policy shall be such as the
premium would 
    have purchased at the correct age or ages, according to
the 
    company's published rate at date of issue.


        (e) A provision that the policy shall participate 
    annually in the
surplus of the company beginning not later 
    than the end of the third
policy year; and any policy 
    containing provision for annual
participation beginning at 
    the end of the first policy year, may also
provide that 
    each dividend be paid subject to the payment of the

    premiums for the next ensuing year; and the insured under 
    any annual
dividend policy shall have the right each year 
    to have the dividend
arising from such participation either 
    paid in cash, or applied in
reduction of premiums, or 
    applied to the purchase of paid-up additional
insurance, or 
    be left to accumulate to the credit of the policy, with

    interest at such rate as may be determined from time to 
    time by the
company, but not less than a guaranteed minimum 
    rate specified in the
policy, and payable at the maturity 
    of the policy, but withdrawable on
any anniversary date, 
    subject to such further provisions as the policy may

    provide regarding the application of dividends toward the 
    payment of any
premiums unpaid at the end of the grace 
    period; and if the insured fails
to notify the company in

    writing of his election within the period of grace allowed 
    for the
payment of premium, the policy shall further 
    provide which of such
options are effective.


        (f) A provision that after the policy has been in force 
    3 full years
the company at any time, while the policy is 
    in force, will advance, on
proper assignment or pledge of 
    the policy and on the sole security
thereof, at a specified 
    maximum fixed or adjusted rate of interest in
accordance

    with Section 229.5, a sum equal to, or at the
option of the 
    insured less than the amount required by Section 229.3

    under the conditions specified thereby and with 
    notification as required
by Section 229.5; and that the 
    company will deduct
from such loan value any indebtedness 
    not already deducted in
determining such value and any 
    unpaid balance of the premium for the
current policy year, 
    and may collect interest in advance on the loan to
the end 
    of the current policy year; and any policy may also provide 
    that
if the interest on the loan is not paid when due it 
    shall be added to
the existing loan and shall bear interest 
    at the same rate.  No
condition other than as provided 
    herein or in Sections 229.3 and 229.5 shall be
exacted as a 
    prerequisite to any such loan.  This clause shall not apply

    to term insurance.


        (g) A provision for nonforfeiture benefits and cash 
    surrender
values in accordance with the requirements of 
    paragraph (1) of Section
229.1 or, Section 229.2.


        (h) A table showing in figures the loan values and the 
    options
available under the policy each year, upon default 
    in premium payments,
during at least the first 20 years of 
    the policy; the policy to contain
a provision that the 
    company will furnish upon request an extension of
such 
    table beyond the years shown in the policy.


        (i) A provision that in event of default in premium 
    payments the
value of the policy is applied to the purchase 
    of other insurance as
provided in this Section, and if such 
    insurance is in force and the
original policy is not 
    surrendered to the company and cancelled, the
policy may be 
    reinstated within 3 years from such default, upon evidence

    of insurability satisfactory to the company and payment of 
    arrears of
premiums and the payment or reinstatement of any 
    other indebtedness to
the company upon the policy, with 
    interest on the premiums
at a rate not exceeding 6% per 
    annum payable annually and with interest
on the 
    indebtedness at a rate not exceeding the rate prescribed by 
    Section
229.5.


        (j) A provision that when a policy is a claim by the 
    death of the
insured settlement shall be made upon receipt 
    of due proof of death and
not later than 2 months after the 
    receipt of such proof. The policy may require that due 
    proof of the death of the insured
shall consist of a 
    certified copy of the death certificate of the insured, or 
    other lawful
evidence providing equivalent information, 
    and proof of the claimant's interest in the
proceeds.


        (k) If the policy provides for payment of its proceeds 
    in
installments, a table showing the amount and period of 
    such installments
shall be included in the policy.


        (l) Interest shall accrue on the proceeds payable 
    because of the
death of the insured, from date of death, at 
    the rate of 10% annually 9% on the
total
amount payable or 
    the face amount if payments are to be made in
installments 
    until the total payment or first installment is paid,

    unless payment is made within 31 fifteen (15) days from the 
    latest of the
following to occur:
            (1) the date that due proof of death is received by 
        the company;
            (2) the date that the company receives sufficient 
        information to determine its
liability, the extent of 
        the liability, and the appropriate payee legally

        entitled to the proceeds; or
            (3) the date that legal impediments to payment of 
        proceeds that depend on
the action of parties other 
        than the company are resolved and sufficient
evidence 
        of the same is provided to the company;  legal 
        impediments to
payment include, but are not limited to, 
        (A) the establishment of
guardianships and 
        conservatorships, (B) the appointment and 
        qualification
of trustees, executors, and 
        administrators, and (C) the submission of
information 
        required to satisfy State and federal reporting 
        requirements. 
    date of receipt
by the company of due proof of loss. This 
    provision need not appear in
the policy, however, the 
    company shall notify the beneficiary at the
time of claim 
    of this provision.  The payment of interest shall apply to

    all policies now in force, as well as those written after 
    the effective
date of this amendment.


        (m) Title on the face and on the back of the policy 
    briefly
describing its form.


        (n) A provision, or a notice attached to the policy, to 
    the effect
that during a period of ten days from the date 
    the policy is delivered
to the policy owner, it may be 
    surrendered to the insurer together with
a written request 
    for cancellation of the policy and in such event, the

    insurer will refund any premium paid therefor, including 
    any policy fees
or other charges. The Director may by rule 
    exempt specific types of
policies from the requirements of 
    this subsection.

    (2) In the case of the replacement of life insurance, as 
defined in the
rule promulgated by the Director, the replacing 
insurer shall either (1)
delay the issuance of its policy for 
not less than 20 days from the date
it has transmitted a policy 
summary to the existing insurer, or (2) provide
in a form 
titled "Notice Regarding Replacement of Life Insurance", as 
well
as in its policy, or in a separate notice delivered with 
the policy, that
the insured has the right to an unconditional 
refund of all premiums paid,
and that such right may be 
exercised within a period of 20 days commencing
from the date 
of delivery of such policy. Where option (2) is exercised,
the 
replacing insurer shall also transmit a policy summary to the 
existing
insurer within 3 working days after the date the 
replacement policy is issued.

    (3) Any of the foregoing provisions or portions thereof not

applicable to single premium or nonparticipating or term 
policies shall
to that extent not be incorporated therein.  This 
Section shall not
apply to policies of reinsurance nor to 
policies issued or granted
pursuant to the nonforfeiture 
provisions prescribed in subparagraph (g)
of paragraph (1) of 
this Section.

(Source: P.A. 92-139, eff. 7-24-01.)

 



    (215 ILCS 5/424)  (from Ch. 73, par. 1031)



    Sec. 424. Unfair methods of competition and unfair or 
deceptive acts or
practices defined.   The following are hereby 
defined as unfair methods of
competition and unfair and 
deceptive acts or practices in the business of
insurance:

    (1) The commission by any person of any one or more of the 
acts
defined or prohibited by Sections 134, 143.24c, 147, 148, 
149, 151, 155.22,
155.22a, 155.42,
236, 237, 364, and 469 of 
this Code.

    (2) Entering into any agreement to commit, or by any 
concerted
action committing, any act of boycott, coercion or 
intimidation
resulting in or tending to result in unreasonable 
restraint of, or
monopoly in, the business of insurance.

    (3) Making or permitting, in the case of insurance of the 
types
enumerated in Classes 1, 2, and 3 of Section 4, any 
unfair discrimination
between individuals or risks of the same 
class or of essentially the same
hazard and expense element 
because of the race, color, religion, or national
origin of 
such insurance risks or applicants.  The application of this 
Article
to the types of insurance enumerated in Class 1 of 
Section 4 shall in no way
limit, reduce, or impair the 
protections and remedies already provided for by
Sections 236 
and 364 of this Code or any other provision of this Code.

    (4) Engaging in any of the acts or practices defined in or 
prohibited by
Sections 154.5 through 154.8 of this Code.

    (5) Making or charging any rate for insurance against 
losses arising
from the use or ownership of a motor vehicle 
which requires a higher
premium of any person by reason of his 
physical handicap, race, color,
religion, or national origin.

(Source: P.A. 92-399, eff. 8-16-01; 92-651, eff. 7-11-02; 
92-669, eff.
1-1-03.)

 
 
    Section 99. Effective date. This Act takes effect upon 
becoming law. 
  


Effective Date:  8/23/2011