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| Public Act 097-0527
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| SB1607 Enrolled | LRB097 08415 RPM 48542 b |
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AN ACT concerning insurance.
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Be it enacted by the People of the State of Illinois,
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represented in the General Assembly:
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Section 5. The Illinois Insurance Code is amended by |
changing Sections 224 and 424 and by adding Section 155.43 as |
follows:
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(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 |
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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 |
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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 |
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(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.
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(215 ILCS 5/224) (from Ch. 73, par. 836)
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Sec. 224. Standard provisions for life policies.
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(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:
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(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 |
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the policyholder.
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(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
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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.
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(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
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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 |
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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
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incontestable from date of issue.
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(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.
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(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
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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 |
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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
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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
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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
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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.
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(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
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with Section 229.5, a sum equal to, or at the
option of the |
insured less than the amount required by Section 229.3
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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, |
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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
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to term insurance.
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(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.
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(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.
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(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
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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 |
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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.
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(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.
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(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.
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(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,
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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 |
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the liability, and the appropriate payee legally
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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
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all policies now in force, as well as those written after |
the effective
date of this amendment.
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(m) Title on the face and on the back of the policy |
briefly
describing its form.
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(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
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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.
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(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.
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(3) Any of the foregoing provisions or portions thereof not
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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.
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(Source: P.A. 92-139, eff. 7-24-01.)
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(215 ILCS 5/424) (from Ch. 73, par. 1031)
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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:
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(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.
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(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.
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(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.
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(4) Engaging in any of the acts or practices defined in or |
prohibited by
Sections 154.5 through 154.8 of this Code.
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(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.
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(Source: P.A. 92-399, eff. 8-16-01; 92-651, eff. 7-11-02; |
92-669, eff.
1-1-03.)
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Section 99. Effective date. This Act takes effect upon |
becoming law.
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