102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
HB0240
 
Introduced , by Rep. Thaddeus Jones
 
SYNOPSIS AS INTRODUCED:



215 ILCS 5/1575
215 ILCS 5/Art. XXXI.75 rep.

 Amends the Illinois Insurance Code. Provides that a public adjuster shall ensure that a contract between a public adjuster and insured contains the email address of the public adjuster. Provides that a public adjuster shall provide the insurer with an exact copy of the contract with the insured by email within 2 business days after execution of the contract. Provides that a public adjuster shall not provide services until a written contract with the insured has been executed and an exact copy of the contract has been provided to the insurer. Provides that, at the option of an insured, any contract between a public adjuster and the insured shall be voidable for 5 business days after the copy of the contract has been received by the insurer. Provides that the insured may void the contract by notifying the public adjuster in writing by sending an email to the email address shown on the contract. Repeals the Public Insurance Adjusters and Registered Firms Article of the Illinois Insurance Code. Effective immediately.



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A BILL FOR
 


HB0240LRB102 05098 BMS 15118 b



1 AN ACT concerning regulation.


2 Be it enacted by the People of the State of Illinois,

3represented in the General Assembly:



4 Section 5. The Illinois Insurance Code is amended by 
5changing Section 1575 as follows:

6 (215 ILCS 5/1575)

7 Sec. 1575. Contract between public adjuster and insured.
8 (a) Public adjusters shall ensure that all contracts for 
9their services are in writing and contain the following terms:
10  (1) legible full name of the adjuster signing the 
11 contract, as specified in Department records;
12  (2) permanent home state business address, email 
13 address, and phone number;
14  (3) license number;
15  (4) title of "Public Adjuster Contract";
16  (5) the insured's full name, street address, insurance 
17 company name, and policy number, if known or upon 
18 notification;
19  (6) a description of the loss and its location, if 
20 applicable;
21  (7) description of services to be provided to the 
22 insured;
23  (8) signatures of the public adjuster and the insured;
 
 
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1  (9) date and time the contract was signed by the 
2 public adjuster and date and time the contract was signed 
3 by the insured;
4  (10) attestation language stating that the public 
5 adjuster is fully bonded pursuant to State law; and
6  (11) full salary, fee, commission, compensation, or 
7 other considerations the public adjuster is to receive for 
8 services.
9 (b) The contract may specify that the public adjuster 
10shall be named as a co-payee on an insurer's payment of a 
11claim.
12  (1) If the compensation is based on a share of the 
13 insurance settlement, the exact percentage shall be 
14 specified.
15  (2) Initial expenses to be reimbursed to the public 
16 adjuster from the proceeds of the claim payment shall be 
17 specified by type, with dollar estimates set forth in the 
18 contract and with any additional expenses first approved 
19 by the insured.
20  (3) Compensation provisions in a public adjuster 
21 contract shall not be redacted in any copy of the contract 
22 provided to the Director.
23 (c) If the insurer, not later than 5 business days after 
24the date on which the loss is reported to the insurer, either 
25pays or commits in writing to pay to the insured the policy 
26limit of the insurance policy, the public adjuster shall:
 
 
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1  (1) not receive a commission consisting of a 
2 percentage of the total amount paid by an insurer to 
3 resolve a claim;
4  (2) inform the insured that loss recovery amount might 
5 not be increased by insurer; and
6  (3) be entitled only to reasonable compensation from 
7 the insured for services provided by the public adjuster 
8 on behalf of the insured, based on the time spent on a 
9 claim and expenses incurred by the public adjuster, until 
10 the claim is paid or the insured receives a written 
11 commitment to pay from the insurer.
12 (d) A public adjuster shall provide the insured a written 
13disclosure concerning any direct or indirect financial 
14interest that the public adjuster has with any other party who 
15is involved in any aspect of the claim, other than the salary, 
16fee, commission, or other consideration established in the 
17written contract with the insured, including, but not limited 
18to, any ownership of or any compensation expected to be 
19received from, any construction firm, salvage firm, building 
20appraisal firm, board-up company, or any other firm that 
21provides estimates for work, or that performs any work, in 
22conjunction with damages caused by the insured loss on which 
23the public adjuster is engaged. The word "firm" shall include 
24any corporation, partnership, association, joint-stock 
25company, or person.
26 (e) A public adjuster contract may not contain any 
 
 
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1contract term that:
2  (1) allows the public adjuster's percentage fee to be 
3 collected when money is due from an insurance company, but 
4 not paid, or that allows a public adjuster to collect the 
5 entire fee from the first check issued by an insurance 
6 company, rather than as a percentage of each check issued 
7 by an insurance company;
8  (2) requires the insured to authorize an insurance 
9 company to issue a check only in the name of the public 
10 adjuster;
11  (3) precludes a public adjuster or an insured from 
12 pursuing civil remedies;
13  (4) includes any hold harmless agreement that provides 
14 indemnification to the public adjuster by the insured for 
15 liability resulting from the public adjuster's negligence; 
16 or
17  (5) provides power of attorney by which the public 
18 adjuster can act in the place and instead of the insured. 
19 (f) The following provisions apply to a contract between a 
20public adjuster and an insured:
21  (1) Prior to the signing of the contract, the public 
22 adjuster shall provide the insured with a separate signed 
23 and dated disclosure document regarding the claim process 
24 that states:
25 "Property insurance policies obligate the insured to 
26 present a claim to his or her insurance company for 
 
 
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1 consideration. There are 3 types of adjusters that could 
2 be involved in that process. The definitions of the 3 
3 types are as follows:
4   (A) "Company adjuster" means the insurance 
5 adjusters who are employees of an insurance company. 
6 They represent the interest of the insurance company 
7 and are paid by the insurance company. They will not 
8 charge you a fee.
9   (B) "Independent adjuster" means the insurance 
10 adjusters who are hired on a contract basis by an 
11 insurance company to represent the insurance company's 
12 interest in the settlement of the claim. They are paid 
13 by your insurance company. They will not charge you a 
14 fee.
15   (C) "Public adjuster" means the insurance 
16 adjusters who do not work for any insurance company. 
17 They work for the insured to assist in the 
18 preparation, presentation and settlement of the claim. 
19 The insured hires them by signing a contract agreeing 
20 to pay them a fee or commission based on a percentage 
21 of the settlement, or other method of compensation.".
22  (2) The insured is not required to hire a public 
23 adjuster to help the insured meet his or her obligations 
24 under the policy, but has the right to do so.
25  (3) The public adjuster is not a representative or 
26 employee of the insurer.
 
 
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1  (4) The salary, fee, commission, or other 
2 consideration is the obligation of the insured, not the 
3 insurer, except when rights have been assigned to the 
4 public adjuster by the insured.
5 (g) The contracts shall be executed in duplicate to 
6provide an original contract to the public adjuster, and an 
7original contract to the insured. The public adjuster's 
8original contract shall be available at all times for 
9inspection without notice by the Director.
10 (h) The public adjuster shall provide the insurer with an 
11exact copy of the contract with by the insured by email within 
122 business days after execution of the contract, authorizing 
13the public adjuster to represent the insured's interest.
14 (i) The public adjuster shall give the insured written 
15notice of the insured's rights as a consumer under the law of 
16this State.
17 (j) A public adjuster shall not provide services until a 
18written contract with the insured has been executed, on a form 
19filed with and approved by the Director, and an exact copy of 
20the contract has been provided to the insurer. At the option of 
21the insured, any such contract shall be voidable for 5 
22business days after the copy has been received by the insurer 
23execution. The insured may void the contract by notifying the 
24public adjuster in writing by (i) registered or certified 
25mail, return receipt requested, to the address shown on the 
26contract, or (ii) personally serving the notice on the public 
 
 
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1adjuster, or (iii) sending an email to the email address shown 
2on the contract.
3 (k) If the insured exercises the right to rescind the 
4contract, anything of value given by the insured under the 
5contract will be returned to the insured within 15 business 
6days following the receipt by the public adjuster of the 
7cancellation notice.

8(Source: P.A. 96-1332, eff. 1-1-11; 97-333, eff. 8-12-11.)

9 (215 ILCS 5/Art. XXXI.75 rep.)
10 Section 10. The Illinois Insurance Code is amended by 
11repealing Article XXXI 3/4.


12 Section 99. Effective date. This Act takes effect upon 
13becoming law.