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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 1510 and 1575 as follows: | |||||||||||||||||||||||
6 | (215 ILCS 5/1510)
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7 | Sec. 1510. Definitions. In this Article: | |||||||||||||||||||||||
8 | "Adjusting a claim for loss or damage covered by an | |||||||||||||||||||||||
9 | insurance contract" means negotiating values, damages, or | |||||||||||||||||||||||
10 | depreciation or applying the loss circumstances to insurance | |||||||||||||||||||||||
11 | policy provisions. | |||||||||||||||||||||||
12 | "Adjusting insurance claims" means representing an insured | |||||||||||||||||||||||
13 | with an insurer for compensation, and while representing that | |||||||||||||||||||||||
14 | insured either negotiating values, damages, or depreciation, | |||||||||||||||||||||||
15 | or applying the loss circumstances to insurance policy | |||||||||||||||||||||||
16 | provisions. | |||||||||||||||||||||||
17 | "Business entity" means a corporation, association, | |||||||||||||||||||||||
18 | partnership, limited liability company, limited liability | |||||||||||||||||||||||
19 | partnership, or other legal entity. | |||||||||||||||||||||||
20 | "Compensation" includes, but is not limited to, the | |||||||||||||||||||||||
21 | following: | |||||||||||||||||||||||
22 | (1) any assignment of insurance proceeds or a | |||||||||||||||||||||||
23 | percentage of the insurance proceeds; |
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1 | (2) any agreement to make repairs for the amount of | ||||||
2 | the insurance proceeds payable; or | ||||||
3 | (3) assertion of any lien against insurance proceeds | ||||||
4 | payable. | ||||||
5 | "Department" means the Department of Insurance. | ||||||
6 | "Director" means the Director of Insurance. | ||||||
7 | "Fingerprints" means an impression of the lines on the | ||||||
8 | finger taken for the purpose of identification. The impression | ||||||
9 | may be electronic or in ink converted to electronic format. | ||||||
10 | "Home state" means the District of Columbia and any state | ||||||
11 | or territory of the United States where the public adjuster's | ||||||
12 | principal place of residence or principal place of business is | ||||||
13 | located. If neither the state in which the public adjuster | ||||||
14 | maintains the principal place of residence nor the state in | ||||||
15 | which the public adjuster maintains the principal place of | ||||||
16 | business has a substantially similar law governing public | ||||||
17 | adjusters, the public adjuster may declare another state in | ||||||
18 | which it becomes licensed and acts as a public adjuster to be | ||||||
19 | the home state. | ||||||
20 | "Individual" means a natural person. | ||||||
21 | "Person" means an individual or a business entity. | ||||||
22 | "Public adjuster" means any person who, for compensation | ||||||
23 | or any other thing of value on behalf of the insured: | ||||||
24 | (i) acts , or aids, or represents the insured solely in | ||||||
25 | relation to first party claims arising under insurance | ||||||
26 | contracts that insure the real or personal property of the |
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1 | insured , on behalf of an insured in adjusting an insurance | ||||||
2 | a claim for loss or damage covered by an insurance | ||||||
3 | contract; | ||||||
4 | (ii) advertises for employment as a public adjuster of | ||||||
5 | insurance claims or solicits business or represents | ||||||
6 | himself or herself to the public as a public adjuster of | ||||||
7 | first party insurance claims for losses or damages arising | ||||||
8 | out of policies of insurance that insure real or personal | ||||||
9 | property; or | ||||||
10 | (iii) directly or indirectly solicits business, | ||||||
11 | investigates or adjusts losses, or advises an insured | ||||||
12 | about first party claims for losses or damages arising out | ||||||
13 | of policies of insurance that insure real or personal | ||||||
14 | property for another person engaged in the business of | ||||||
15 | adjusting losses or damages covered by an insurance policy | ||||||
16 | for the insured. | ||||||
17 | "Uniform individual application" means the current version | ||||||
18 | of the National Association of Directors (NAIC) Uniform | ||||||
19 | Individual Application for resident and nonresident | ||||||
20 | individuals. | ||||||
21 | "Uniform business entity application" means the current | ||||||
22 | version of the National Association of Insurance Commissioners | ||||||
23 | (NAIC) Uniform Business Entity Application for resident and | ||||||
24 | nonresident business entities.
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25 | "Webinar" means an online educational presentation during | ||||||
26 | which a live and participating instructor and participating |
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1 | viewers, whose attendance is periodically verified throughout | ||||||
2 | the presentation, actively engage in discussion and in the | ||||||
3 | submission and answering of questions. | ||||||
4 | (Source: P.A. 102-135, eff. 7-23-21.) | ||||||
5 | (215 ILCS 5/1575)
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6 | Sec. 1575. Contract between public adjuster and insured. | ||||||
7 | (a) Public adjusters shall ensure that all contracts for | ||||||
8 | their services are in writing and contain the following terms: | ||||||
9 | (1) legible full name of the adjuster signing the | ||||||
10 | contract, as specified in Department records; | ||||||
11 | (2) permanent home state business address , email | ||||||
12 | address, and phone number; | ||||||
13 | (3) license number; | ||||||
14 | (4) title of "Public Adjuster Contract"; | ||||||
15 | (5) the insured's full name, street address, insurance | ||||||
16 | company name, and policy number, if known or upon | ||||||
17 | notification; | ||||||
18 | (6) a description of the loss and its location, if | ||||||
19 | applicable; | ||||||
20 | (7) description of services to be provided to the | ||||||
21 | insured; | ||||||
22 | (8) signatures of the public adjuster and the insured; | ||||||
23 | (9) date and time the contract was signed by the | ||||||
24 | public adjuster and date and time the contract was signed | ||||||
25 | by the insured; |
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1 | (10) attestation language stating that the public | ||||||
2 | adjuster is fully bonded pursuant to State law; and | ||||||
3 | (11) full salary, fee, commission, compensation, or | ||||||
4 | other considerations the public adjuster is to receive for | ||||||
5 | services. | ||||||
6 | (b) The contract may specify that the public adjuster | ||||||
7 | shall be named as a co-payee on an insurer's payment of a | ||||||
8 | claim. | ||||||
9 | (1) If the compensation is based on a share of the | ||||||
10 | insurance settlement, the exact percentage shall be | ||||||
11 | specified. | ||||||
12 | (2) Initial expenses to be reimbursed to the public | ||||||
13 | adjuster from the proceeds of the claim payment shall be | ||||||
14 | specified by type, with dollar estimates set forth in the | ||||||
15 | contract and with any additional expenses first approved | ||||||
16 | by the insured. | ||||||
17 | (3) Compensation provisions in a public adjuster | ||||||
18 | contract shall not be redacted in any copy of the contract | ||||||
19 | provided to the Director. | ||||||
20 | (c) If the insurer, not later than 5 business days after | ||||||
21 | the date on which the loss is reported to the insurer, either | ||||||
22 | pays or commits in writing to pay to the insured the policy | ||||||
23 | limit of the insurance policy, the public adjuster shall: | ||||||
24 | (1) not receive a commission consisting of a | ||||||
25 | percentage of the total amount paid by an insurer to | ||||||
26 | resolve a claim; |
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1 | (2) inform the insured that loss recovery amount might | ||||||
2 | not be increased by insurer; and | ||||||
3 | (3) be entitled only to reasonable compensation from | ||||||
4 | the insured for services provided by the public adjuster | ||||||
5 | on behalf of the insured, based on the time spent on a | ||||||
6 | claim and expenses incurred by the public adjuster, until | ||||||
7 | the claim is paid or the insured receives a written | ||||||
8 | commitment to pay from the insurer. | ||||||
9 | (d) A public adjuster shall provide the insured a written | ||||||
10 | disclosure concerning any direct or indirect financial | ||||||
11 | interest that the public adjuster has with any other party who | ||||||
12 | is involved in any aspect of the claim, other than the salary, | ||||||
13 | fee, commission, or other consideration established in the | ||||||
14 | written contract with the insured, including, but not limited | ||||||
15 | to, any ownership of or any compensation expected to be | ||||||
16 | received from, any construction firm, salvage firm, building | ||||||
17 | appraisal firm, board-up company, or any other firm that | ||||||
18 | provides estimates for work, or that performs any work, in | ||||||
19 | conjunction with damages caused by the insured loss on which | ||||||
20 | the public adjuster is engaged. The word "firm" shall include | ||||||
21 | any corporation, partnership, association, joint-stock | ||||||
22 | company, or person. | ||||||
23 | (e) A public adjuster contract may not contain any | ||||||
24 | contract term that: | ||||||
25 | (1) allows the public adjuster's percentage fee to be | ||||||
26 | collected when money is due from an insurance company, but |
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1 | not paid, or that allows a public adjuster to collect the | ||||||
2 | entire fee from the first check issued by an insurance | ||||||
3 | company, rather than as a percentage of each check issued | ||||||
4 | by an insurance company; | ||||||
5 | (2) requires the insured to authorize an insurance | ||||||
6 | company to issue a check only in the name of the public | ||||||
7 | adjuster; | ||||||
8 | (3) precludes a public adjuster or an insured from | ||||||
9 | pursuing civil remedies; | ||||||
10 | (4) includes any hold harmless agreement that provides | ||||||
11 | indemnification to the public adjuster by the insured for | ||||||
12 | liability resulting from the public adjuster's negligence; | ||||||
13 | or | ||||||
14 | (5) provides power of attorney by which the public | ||||||
15 | adjuster can act in the place and instead of the insured. | ||||||
16 | (f) The following provisions apply to a contract between a | ||||||
17 | public adjuster and an insured: | ||||||
18 | (1) Prior to the signing of the contract, the public | ||||||
19 | adjuster shall provide the insured with a separate signed | ||||||
20 | and dated disclosure document regarding the claim process | ||||||
21 | that states: | ||||||
22 | "Property insurance policies obligate the insured to | ||||||
23 | present a claim to his or her insurance company for | ||||||
24 | consideration. There are 3 types of adjusters that could | ||||||
25 | be involved in that process. The definitions of the 3 | ||||||
26 | types are as follows: |
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1 | (A) "Company adjuster" means the insurance | ||||||
2 | adjusters who are employees of an insurance company. | ||||||
3 | They represent the interest of the insurance company | ||||||
4 | and are paid by the insurance company. They will not | ||||||
5 | charge you a fee. | ||||||
6 | (B) "Independent adjuster" means the insurance | ||||||
7 | adjusters who are hired on a contract basis by an | ||||||
8 | insurance company to represent the insurance company's | ||||||
9 | interest in the settlement of the claim. They are paid | ||||||
10 | by your insurance company. They will not charge you a | ||||||
11 | fee. | ||||||
12 | (C) "Public adjuster" means the insurance | ||||||
13 | adjusters who do not work for any insurance company. | ||||||
14 | They represent work for the insured to assist in the | ||||||
15 | preparation, presentation , and settlement of the | ||||||
16 | claim. The insured hires them by signing a contract | ||||||
17 | agreeing to pay them a fee or commission based on a | ||||||
18 | percentage of the settlement, or other method of | ||||||
19 | compensation.". | ||||||
20 | (2) The insured is not required to hire a public | ||||||
21 | adjuster to help the insured meet his or her obligations | ||||||
22 | under the policy, but has the right to do so. | ||||||
23 | (3) The public adjuster is not a representative or | ||||||
24 | employee of the insurer. | ||||||
25 | (4) The salary, fee, commission, or other | ||||||
26 | consideration is the obligation of the insured, not the |
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1 | insurer, except when rights have been assigned to the | ||||||
2 | public adjuster by the insured. | ||||||
3 | (g) The contracts shall be executed in duplicate to | ||||||
4 | provide an original contract to the public adjuster, and an | ||||||
5 | original contract to the insured. The public adjuster's | ||||||
6 | original contract shall be available at all times for | ||||||
7 | inspection without notice by the Director. | ||||||
8 | (h) The public adjuster shall provide the insurer , or its | ||||||
9 | authorized representative for receiving notice of loss or | ||||||
10 | damage, with an exact copy of the contract with by the insured | ||||||
11 | by email after execution of the contract , authorizing the | ||||||
12 | public adjuster to represent the insured's interest. | ||||||
13 | (i) The public adjuster shall give the insured written | ||||||
14 | notice of the insured's rights as a consumer under the law of | ||||||
15 | this State. | ||||||
16 | (j) A public adjuster shall not provide services , other | ||||||
17 | than emergency services, until a written contract with the | ||||||
18 | insured has been executed, on a form filed with and approved by | ||||||
19 | the Director , and an exact copy of the contract has been | ||||||
20 | provided to the insurer, or its authorized representative for | ||||||
21 | receiving notice of loss or damage . Except as provided in the | ||||||
22 | Fire Damage Representation Agreement Act, at At the option of | ||||||
23 | the insured, any such contract shall be voidable for 5 | ||||||
24 | business days after the copy has been received by the insurer | ||||||
25 | execution . The insured may void the contract by notifying the | ||||||
26 | public adjuster in writing by (i) registered or certified |
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1 | mail, return receipt requested, to the address shown on the | ||||||
2 | contract , or (ii) personally serving the notice on the public | ||||||
3 | adjuster , or (iii) sending an email to the email address shown | ||||||
4 | on the contract . | ||||||
5 | (k) If the insured exercises the right to rescind the | ||||||
6 | contract, anything of value given by the insured under the | ||||||
7 | contract will be returned to the insured within 15 business | ||||||
8 | days following the receipt by the public adjuster of the | ||||||
9 | cancellation notice.
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10 | (Source: P.A. 96-1332, eff. 1-1-11; 97-333, eff. 8-12-11.) | ||||||
11 | (215 ILCS 5/Art. XXXI.75 rep.) | ||||||
12 | Section 10. The Illinois Insurance Code is amended by | ||||||
13 | repealing Article XXXI 3/4.
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14 | Section 99. Effective date. This Act takes effect upon | ||||||
15 | becoming law.
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