Bill Text: IL SB2979 | 2013-2014 | 98th General Assembly | Enrolled
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Amends the Illinois Insurance Code. With regard to an assuming insurer's trust fund, provides that not later than February 28 of each year, the assuming insurer's chief executive officer or chief financial officer shall certify to the Director that the trust fund contains funds in an amount not less than the assuming insurer's liabilities attributable to reinsurance ceded by U.S. ceding insurers, and in addition, a trusteed surplus of not less than $20,000,000. Permits a reduction in the required trusteed surplus in specified circumstances. Provides that in the event that the provision concerning the reduction in the required trusteed surplus applies to the trust, the assuming insurer's chief executive officer or chief financial officer shall then certify to the Director that the trust fund contains funds in an amount not less than the assuming insurer's liabilities attributable to reinsurance ceded by U.S. ceding insurers, and in addition, a reduced trusteed surplus of not less than the amount that has been authorized by the regulatory authority having principal regulatory oversight of the trust. Makes changes to the provisions concerning financial strength ratings. Sets forth provisions concerning downgrades by rating agencies, the Director's authority, upgrading the rating of a certified reinsurer, and the revocation of the certification of a certified reinsurer. Makes other changes.
Spectrum: Moderate Partisan Bill (Democrat 10-2)
Status: (Passed) 2015-01-09 - Public Act . . . . . . . . . 98-1165 [SB2979 Detail]
Download: Illinois-2013-SB2979-Enrolled.html
Bill Title: Amends the Illinois Insurance Code. With regard to an assuming insurer's trust fund, provides that not later than February 28 of each year, the assuming insurer's chief executive officer or chief financial officer shall certify to the Director that the trust fund contains funds in an amount not less than the assuming insurer's liabilities attributable to reinsurance ceded by U.S. ceding insurers, and in addition, a trusteed surplus of not less than $20,000,000. Permits a reduction in the required trusteed surplus in specified circumstances. Provides that in the event that the provision concerning the reduction in the required trusteed surplus applies to the trust, the assuming insurer's chief executive officer or chief financial officer shall then certify to the Director that the trust fund contains funds in an amount not less than the assuming insurer's liabilities attributable to reinsurance ceded by U.S. ceding insurers, and in addition, a reduced trusteed surplus of not less than the amount that has been authorized by the regulatory authority having principal regulatory oversight of the trust. Makes changes to the provisions concerning financial strength ratings. Sets forth provisions concerning downgrades by rating agencies, the Director's authority, upgrading the rating of a certified reinsurer, and the revocation of the certification of a certified reinsurer. Makes other changes.
Spectrum: Moderate Partisan Bill (Democrat 10-2)
Status: (Passed) 2015-01-09 - Public Act . . . . . . . . . 98-1165 [SB2979 Detail]
Download: Illinois-2013-SB2979-Enrolled.html
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1 | AN ACT concerning regulation.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 5. The Illinois Insurance Code is amended by | ||||||
5 | changing Sections 500-10 and 500-100 and by adding Section | ||||||
6 | 500-108 as follows:
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7 | (215 ILCS 5/500-10)
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8 | (Section scheduled to be repealed on January 1, 2017)
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9 | Sec. 500-10. Definitions. In addition to the definitions in | ||||||
10 | Section 2 of
the
Code, the following
definitions apply to this | ||||||
11 | Article:
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12 | "Business entity" means a corporation, association, | ||||||
13 | partnership, limited
liability
company, limited liability | ||||||
14 | partnership, or other legal entity.
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15 | "Car rental limited line licensee" means a person | ||||||
16 | authorized under the
provisions of
Section 500-105 to sell | ||||||
17 | certain coverages relating to the rental of vehicles.
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18 | "Home state" means the District of Columbia and any state | ||||||
19 | or territory of the
United
States in which an insurance | ||||||
20 | producer maintains his or her principal place of
residence or
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21 | principal place of business and is licensed to act as an | ||||||
22 | insurance producer.
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23 | "Insurance" means any of the lines of authority in Section |
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1 | 500-35, any health
care plan
under the Health Maintenance | ||||||
2 | Organization Act, or any limited health care plan
under the
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3 | Limited Health Service Organization Act.
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4 | "Insurance producer" means a person required to be licensed | ||||||
5 | under the laws of
this State
to sell, solicit, or negotiate | ||||||
6 | insurance.
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7 | "Insurer" means a company as defined in subsection (e) of | ||||||
8 | Section 2 of this
Code, a
health maintenance organization as | ||||||
9 | defined in the Health Maintenance
Organization Act, or a
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10 | limited health service organization as defined in the Limited | ||||||
11 | Health
Service Organization Act.
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12 | "License" means a document issued by the Director | ||||||
13 | authorizing an individual
to act as an
insurance producer for | ||||||
14 | the lines of authority specified in the document or
authorizing | ||||||
15 | a business
entity to act as an insurance producer. The license | ||||||
16 | itself does not create any
authority, actual,
apparent, or | ||||||
17 | inherent, in the holder to represent or commit
an insurance | ||||||
18 | carrier.
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19 | "Limited lines insurance" means those lines of insurance | ||||||
20 | defined in Section
500-100 or
any other line of insurance that | ||||||
21 | the Director may deem it necessary to
recognize for the | ||||||
22 | purposes
of complying with subsection (e) of Section 500-40.
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23 | "Limited lines producer" means a person authorized by the | ||||||
24 | Director to sell,
solicit, or
negotiate limited lines | ||||||
25 | insurance.
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26 | "Negotiate" means the act of conferring directly with or |
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1 | offering advice
directly to a
purchaser or prospective | ||||||
2 | purchaser of a particular contract of insurance
concerning any
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3 | of the substantive benefits, terms, or conditions of the | ||||||
4 | contract, provided
that the person
engaged in that act either | ||||||
5 | sells insurance or obtains insurance from
insurers for | ||||||
6 | purchasers.
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7 | "Person" means an individual or a business entity.
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8 | "Rental agreement" means a written agreement setting forth | ||||||
9 | the terms and
conditions
governing the use of a vehicle | ||||||
10 | provided by a rental company for
rental or lease.
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11 | "Rental company" means a person, or a franchisee of the | ||||||
12 | person, in the
business of
providing primarily private | ||||||
13 | passenger vehicles to the public under a
rental agreement for a | ||||||
14 | period
not to exceed 30 days.
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15 | "Rental period" means the term of the rental agreement.
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16 | "Renter" means a person obtaining the use of a vehicle from | ||||||
17 | a
rental company under the
terms of a rental agreement for a | ||||||
18 | period not to exceed 30 days.
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19 | "Self-service storage facility limited line licensee" | ||||||
20 | means a person
authorized under the provisions of Section | ||||||
21 | 500-107 to sell certain coverages
relating to the rental of | ||||||
22 | self-service storage facilities.
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23 | "Sell" means to exchange a contract of insurance by any | ||||||
24 | means, for
money or its equivalent, on
behalf of an insurance | ||||||
25 | company.
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26 | "Solicit" means attempting to
sell insurance or asking or |
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1 | urging a person to apply for a
particular kind of insurance | ||||||
2 | from a particular company.
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3 | "Terminate" means the cancellation of the relationship | ||||||
4 | between an insurance
producer and the
insurer or the | ||||||
5 | termination of a producer's authority to transact insurance.
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6 | "Travel insurance" means insurance coverage for personal | ||||||
7 | risks incident to planned travel, including, but not limited | ||||||
8 | to: (1) the interruption or cancellation of a trip or event, | ||||||
9 | (2) the loss of baggage or personal effects, (3) damages to | ||||||
10 | accommodations or rental vehicles, or (4) sickness, accident, | ||||||
11 | disability, or death occurring during travel. "Travel | ||||||
12 | insurance" does not include major medical plans that provide | ||||||
13 | comprehensive medical protection for travelers with trips | ||||||
14 | lasting 6 months or longer, including those working overseas as | ||||||
15 | an ex-patriot or as military personnel on deployment. | ||||||
16 | "Uniform Business Entity Application" means the current | ||||||
17 | version of the
National Association of Insurance | ||||||
18 | Commissioners' Uniform
Business Entity Application for | ||||||
19 | nonresident business entities.
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20 | "Uniform Application" means the current version of the | ||||||
21 | National Association
of Insurance Commissioners' Uniform
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22 | Application for
nonresident producer licensing.
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23 | "Vehicle" or "rental vehicle" means a motor vehicle of (1) | ||||||
24 | the private
passenger
type, including passenger vans, mini | ||||||
25 | vans, and sport utility vehicles or (2)
the cargo type,
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26 | including cargo vans, pickup trucks, and trucks with a gross |
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1 | vehicle
weight of less than
26,000 pounds the operation of | ||||||
2 | which does not require the operator to possess a
commercial
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3 | driver's license.
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4 | "Webinar" means an online educational presentation during | ||||||
5 | which a live and participating instructor and participating | ||||||
6 | viewers, whose attendance is periodically verified throughout | ||||||
7 | the presentation, actively engage in discussion and in the | ||||||
8 | submission and answering of questions. | ||||||
9 | (Source: P.A. 97-113, eff. 7-14-11.)
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10 | (215 ILCS 5/500-100)
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11 | (Section scheduled to be repealed on January 1, 2017)
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12 | Sec. 500-100. Limited lines producer license.
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13 | (a) An individual who is at least 18 years of age and whom | ||||||
14 | the Director
considers to
be competent, trustworthy, and of | ||||||
15 | good business reputation may obtain a limited
lines producer
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16 | license for one or more of the following classes:
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17 | (1) travel insurance , as defined in Section 500-10 of | ||||||
18 | this Article on baggage or limited travel health, accident, | ||||||
19 | or trip
cancellation
insurance sold in connection with | ||||||
20 | transportation provided by a common carrier ;
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21 | (2) industrial life insurance, as defined in Section | ||||||
22 | 228 of this Code;
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23 | (3) industrial accident and health insurance, as | ||||||
24 | defined in
Section 368 of this
Code;
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25 | (4) insurance issued by a company organized under the |
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1 | Farm Mutual
Insurance Company Act of 1986;
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2 | (5) legal expense insurance;
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3 | (6) enrollment of recipients of public aid or medicare | ||||||
4 | in a health
maintenance
organization;
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5 | (7) a limited health care plan issued by an | ||||||
6 | organization having a
certificate of
authority under the | ||||||
7 | Limited Health Service Organization Act;
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8 | (8) credit life and credit accident and health | ||||||
9 | insurance and other credit insurance policies approved or | ||||||
10 | permitted by the Director; a credit insurance company must | ||||||
11 | conduct a training program in which an applicant shall | ||||||
12 | receive basic instruction about the credit insurance | ||||||
13 | products that he or she will be selling. | ||||||
14 | (b) The application for a limited lines producer license | ||||||
15 | must be submitted
on a form
prescribed by the Director by a | ||||||
16 | designee of the insurance company, health
maintenance
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17 | organization, or limited health service organization | ||||||
18 | appointing the limited
insurance
representative. The insurance | ||||||
19 | company, health maintenance organization, or
limited health
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20 | service organization must pay the fee required by Section | ||||||
21 | 500-135.
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22 | (c) A limited lines producer may represent more than one | ||||||
23 | insurance company,
health
maintenance organization, or limited | ||||||
24 | health service organization.
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25 | (d) An applicant who has met the requirements of this | ||||||
26 | Section shall be
issued a
perpetual limited lines producer |
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1 | license.
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2 | (e) A limited lines producer license shall remain in effect | ||||||
3 | as long as the
appointing
insurance company pays the respective | ||||||
4 | fee required by Section 500-135 prior to
January 1 of
each | ||||||
5 | year, unless the license is revoked or suspended pursuant to
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6 | Section 500-70. Failure of the
insurance company to pay the | ||||||
7 | license fee or to submit the required documents
shall cause
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8 | immediate termination of the limited line insurance producer | ||||||
9 | license with
respect to which the
failure occurs.
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10 | (f) A limited lines producer license may be terminated by | ||||||
11 | the insurance
company or
the licensee.
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12 | (g) A person whom the Director considers to be competent, | ||||||
13 | trustworthy, and
of
good
business reputation may be issued a | ||||||
14 | car rental limited line license. A car
rental limited line
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15 | license for a rental company shall remain in effect as long as | ||||||
16 | the car rental
limited line licensee
pays the respective fee | ||||||
17 | required by Section 500-135 prior to the next fee date
unless | ||||||
18 | the car rental
license is revoked or suspended pursuant to | ||||||
19 | Section 500-70. Failure of the car
rental limited line
licensee | ||||||
20 | to pay the license fee or to submit the required documents | ||||||
21 | shall cause
immediate
suspension of the car rental limited line | ||||||
22 | license. A car rental limited line
license for rental
companies | ||||||
23 | may be voluntarily
terminated by the car rental limited line | ||||||
24 | licensee. The license fee
shall not be refunded upon | ||||||
25 | termination of the car rental limited line license
by the car | ||||||
26 | rental
limited line licensee.
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1 | (h) A limited lines producer issued a license pursuant to | ||||||
2 | this Section is
not
subject to
the requirements of Section | ||||||
3 | 500-30.
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4 | (i) A limited lines producer license must contain the name, | ||||||
5 | address and
personal
identification number of the licensee, the | ||||||
6 | date the license was issued,
general conditions relative
to the | ||||||
7 | license's expiration or termination, and any other information | ||||||
8 | the
Director considers
proper. A limited line producer license, | ||||||
9 | if applicable, must also contain the
name and address of
the | ||||||
10 | appointing insurance company.
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11 | (Source: P.A. 98-159, eff. 8-2-13; 98-756, eff. 7-16-14.)
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12 | (215 ILCS 5/500-108 new) | ||||||
13 | Sec. 500-108. Travel insurance business entity license. | ||||||
14 | (a) As used in this Section: | ||||||
15 | "Offering and disseminating" means the following: | ||||||
16 | (1) Providing information to a prospective or current | ||||||
17 | policyholder on behalf of a limited lines travel insurance | ||||||
18 | entity, including brochures, buyer guides, descriptions of | ||||||
19 | coverage, and price. | ||||||
20 | (2) Referring specific questions regarding coverage | ||||||
21 | features and benefits from a prospective or current | ||||||
22 | policyholder to a limited lines travel insurance entity. | ||||||
23 | (3) Disseminating and processing applications for | ||||||
24 | coverage, coverage selection forms, or other similar forms | ||||||
25 | in response to a request from a prospective or current |
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1 | policyholder. | ||||||
2 | (4) Collecting premiums from a prospective or current | ||||||
3 | policyholder on behalf of a limited lines travel insurance | ||||||
4 | entity. | ||||||
5 | (5) Receiving and recording information from a | ||||||
6 | policyholder to share with a limited lines travel insurance | ||||||
7 | entity. | ||||||
8 | "Travel insurance business entity" means a licensed | ||||||
9 | insurance producer designated
by an insurer as set forth in | ||||||
10 | subsection (i) of this Section. | ||||||
11 | "Travel retailer" means a business organization that | ||||||
12 | makes, arranges, or offers travel services and, with respect to | ||||||
13 | travel insurance, is limited to offering and disseminating as | ||||||
14 | defined in this Section, unless otherwise licensed under | ||||||
15 | subsection (c) of this Section. | ||||||
16 | (b) The Director may issue to a travel insurance business | ||||||
17 | entity that registers travel
retailers under its license as | ||||||
18 | described in paragraph (2) of subsection (d) of this Section a | ||||||
19 | producer license as provided in paragraph (6) of subsection (a) | ||||||
20 | of Section 500-35 of this Code. A travel insurance business | ||||||
21 | entity license issued under this Section shall also authorize | ||||||
22 | any employee of the travel insurance business entity to act | ||||||
23 | individually on behalf and under the supervision of the travel | ||||||
24 | insurance business entity licensee with respect to the coverage | ||||||
25 | specified in this Section. Each travel insurance business | ||||||
26 | entity licensed under this Section shall pay the Department a |
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1 | fee of $500 for its initial license and $500 for each renewal | ||||||
2 | license, payable on May 31 annually. | ||||||
3 | (c) The Director may issue to a travel retailer a limited | ||||||
4 | lines producer license. A travel retailer license issued under | ||||||
5 | this Section shall also authorize any employee of the travel | ||||||
6 | retailer limited line licensee to act individually on behalf | ||||||
7 | and under the supervision of the travel retailer limited line | ||||||
8 | licensee with respect to the coverage specified in this | ||||||
9 | Section. | ||||||
10 | (d) Notwithstanding any other provision of law, a travel | ||||||
11 | retailer may do the limited activities of offering and | ||||||
12 | disseminating travel insurance on behalf of and under the | ||||||
13 | license of a supervising travel insurance business entity if | ||||||
14 | the following conditions are met: | ||||||
15 | (1) the travel insurance business entity or travel | ||||||
16 | retailer provides to purchasers of travel insurance: | ||||||
17 | (A) a description of the material terms or the | ||||||
18 | actual material terms of the
insurance coverage; | ||||||
19 | (B) a description of the process for filing a | ||||||
20 | claim; | ||||||
21 | (C) a description of the review or cancellation | ||||||
22 | process for the travel insurance policy; and | ||||||
23 | (D) the identity and contact information of the | ||||||
24 | insurer and travel insurance business entity; | ||||||
25 | (2) at the time of licensure, the travel insurance | ||||||
26 | business entity shall establish and maintain a register on |
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1 | a form prescribed by the Director of each travel retailer | ||||||
2 | that offers travel insurance on the travel insurance | ||||||
3 | business entity's behalf; the register shall be maintained | ||||||
4 | and updated continuously by the travel insurance business | ||||||
5 | entity and shall include the name, address, and contact | ||||||
6 | information of the travel retailer and an officer or person | ||||||
7 | who directs or controls the travel retailer's operations | ||||||
8 | and the travel retailer's federal tax identification | ||||||
9 | number; the travel insurance business entity shall submit | ||||||
10 | the register to the Director annually on a form and in a | ||||||
11 | manner approved by the Director; the limited lines producer | ||||||
12 | shall also certify that the travel retailer personnel who | ||||||
13 | is offering and disseminating insurance under the travel | ||||||
14 | retailer's registration complies with 18 U.S.C. 1033; | ||||||
15 | (3) the travel insurance business entity has | ||||||
16 | designated one of its employees as a licensed individual | ||||||
17 | producer (a designated responsible producer or DRP) | ||||||
18 | responsible for the travel insurance business entity's and | ||||||
19 | its travel retailer's compliance with the travel insurance | ||||||
20 | laws, rules, and regulations of the State; | ||||||
21 | (4) the travel insurance business entity has paid all | ||||||
22 | applicable insurance producer licensing fees as set forth | ||||||
23 | in this Code; and | ||||||
24 | (5) the travel insurance business entity requires each | ||||||
25 | employee and authorized representative of the travel | ||||||
26 | retailer whose duties include offering and disseminating |
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1 | travel insurance to receive a program of instruction or | ||||||
2 | training that shall be subject to review by the Director; | ||||||
3 | the training material shall, at a minimum, contain | ||||||
4 | instructions on the types of insurance offered, ethical | ||||||
5 | sales practices, and required disclosures to prospective | ||||||
6 | customers. | ||||||
7 | (e) Any travel retailer offering or disseminating travel | ||||||
8 | insurance shall make available to prospective purchasers | ||||||
9 | brochures or other written materials that: | ||||||
10 | (1) provide the identity and contact information of the | ||||||
11 | insurer and the travel
insurance business entity; | ||||||
12 | (2) explain that the purchase of travel insurance is | ||||||
13 | not required in order to
purchase any other product or | ||||||
14 | service from the travel retailer; and | ||||||
15 | (3) explain that an unlicensed travel retailer is | ||||||
16 | permitted to provide general information about the | ||||||
17 | insurance offered by the travel retailer, including a | ||||||
18 | description of the coverage and price, but is not qualified | ||||||
19 | or authorized to answer technical questions about the terms | ||||||
20 | and conditions of the insurance offered by the travel | ||||||
21 | retailer or to evaluate the adequacy of the customer's | ||||||
22 | existing insurance coverage. | ||||||
23 | (f) A travel retailer's employee or authorized | ||||||
24 | representative who is not licensed as an insurance producer may | ||||||
25 | not: | ||||||
26 | (1) evaluate or interpret the technical terms, |
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1 | benefits, and conditions of the
offered travel insurance | ||||||
2 | coverage; | ||||||
3 | (2) evaluate or provide advice concerning a | ||||||
4 | prospective purchaser's existing
insurance coverage; or | ||||||
5 | (3) hold himself, herself, or itself out as a licensed | ||||||
6 | insurer, licensed producer, or insurance expert. | ||||||
7 | (g) A travel retailer whose insurance-related activities, | ||||||
8 | and those of its employees and authorized representatives, are | ||||||
9 | limited to offering and disseminating travel insurance on | ||||||
10 | behalf of and under the direction of a travel insurance | ||||||
11 | business entity meeting the conditions stated in this Section | ||||||
12 | is authorized to do so and receive related compensation upon | ||||||
13 | registration by the travel insurance business entity as | ||||||
14 | described in paragraph (2) of subsection (d) of this Section. | ||||||
15 | (h) Travel insurance may be provided under an individual | ||||||
16 | policy or under a group or master policy. | ||||||
17 | (i) As the insurer designee, the travel insurance business | ||||||
18 | entity is responsible for the acts of the travel retailer that | ||||||
19 | is registered under its license. | ||||||
20 | (j) Any entity that violates any provision of this Article | ||||||
21 | shall be subject to all appropriate regulatory action as set | ||||||
22 | forth in this Code.
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