102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB1753

 

Introduced 2/26/2021, by Sen. Michael E. Hastings

 

SYNOPSIS AS INTRODUCED:
 
215 ILCS 5/445  from Ch. 73, par. 1057
215 ILCS 5/445.1  from Ch. 73, par. 1057.1
215 ILCS 5/445.2  from Ch. 73, par. 1057.2
215 ILCS 5/445.3  from Ch. 73, par. 1057.3

    Amends the Illinois Insurance Code. Adds provisions concerning making diligent efforts to procure surplus line insurance contracts through authorized insurers, including for master policy insurance contracts and program business. Makes changes to provisions concerning reports on surplus line insurance and fire insurance that must be filed by licensed surplus line producers with the Director of Insurance. Changes the date by which a surplus line producer shall file a report on all fire insurance procured from unauthorized insurers and submitted to the Surplus Line Association of Illinois to February 1 (rather than March 31) of each year. Adds provisions concerning submission and recording of premium-bearing endorsements. Provides that an individual officer or partner must be a licensed surplus line producer to represent a member of the Surplus Line Association of Illinois in the exercise of association affairs. Makes other changes. Defines terms. Effective January 1, 2022.


LRB102 10455 BMS 15783 b

 

 

A BILL FOR

 

SB1753LRB102 10455 BMS 15783 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 Sections 445, 445.1, 445.2, and 445.3 as follows:
 
6    (215 ILCS 5/445)  (from Ch. 73, par. 1057)
7    Sec. 445. Surplus line.
8    (1) Definitions. For the purposes of this Section:
9    "Affiliate" means, with respect to an insured, any entity
10that controls, is controlled by, or is under common control
11with the insured. For the purpose of this definition, an
12entity has control over another entity if:
13        (A) the entity directly or indirectly or acting
14    through one or more other persons owns, controls, or has
15    the power to vote 25% or more of any class of voting
16    securities of the other entity; or
17        (B) the entity controls in any manner the election of
18    a majority of the directors or trustees of the other
19    entity.
20    "Affiliated group" means any group of entities that are
21all affiliated.
22    "Authorized insurer" means an insurer that holds a
23certificate of authority issued by the Director but, for the

 

 

SB1753- 2 -LRB102 10455 BMS 15783 b

1purposes of this Section, does not include a domestic surplus
2line insurer as defined in Section 445a or any residual market
3mechanism.
4    "Exempt commercial purchaser" means any person purchasing
5commercial insurance that, at the time of placement, meets the
6following requirements:
7        (A) The person employs or retains a qualified risk
8    manager to negotiate insurance coverage.
9        (B) The person has paid aggregate nationwide
10    commercial property and casualty insurance premiums in
11    excess of $100,000 in the immediately preceding 12 months.
12        (C) The person meets at least one of the following
13    criteria:
14            (I) The person possesses a net worth in excess of
15        $20,000,000, as such amount is adjusted pursuant to
16        the provision in this definition concerning percentage
17        change.
18            (II) The person generates annual revenues in
19        excess of $50,000,000, as such amount is adjusted
20        pursuant to the provision in this definition
21        concerning percentage change.
22            (III) The person employs more than 500 full-time
23        or full-time equivalent employees per individual
24        insured or is a member of an affiliated group
25        employing more than 1,000 employees in the aggregate.
26            (IV) The person is a not-for-profit organization

 

 

SB1753- 3 -LRB102 10455 BMS 15783 b

1        or public entity generating annual budgeted
2        expenditures of at least $30,000,000, as such amount
3        is adjusted pursuant to the provision in this
4        definition concerning percentage change.
5            (V) The person is a municipality with a population
6        in excess of 50,000 persons.
7    Effective on January 1, 2015 and each fifth January 1
8occurring thereafter, the amounts in subitems (I), (II), and
9(IV) of item (C) of this definition shall be adjusted to
10reflect the percentage change for such 5-year period in the
11Consumer Price Index for All Urban Consumers published by the
12Bureau of Labor Statistics of the Department of Labor.
13    "Home state" means the following:
14        (A) With respect to an insured, except as provided in
15    item (B) of this definition:
16            (I) the state in which an insured maintains its
17        principal place of business or, in the case of an
18        individual, the individual's principal residence; or
19            (II) if 100% of the insured risk is located out of
20        the state referred to in subitem (I), the state to
21        which the greatest percentage of the insured's taxable
22        premium for that insurance contract is allocated.
23        (B) If more than one insured from an affiliated group
24    are named insureds on a single surplus line insurance
25    contract, then "home state" means the home state, as
26    determined pursuant to item (A) of this definition, of the

 

 

SB1753- 4 -LRB102 10455 BMS 15783 b

1    member of the affiliated group that has the largest
2    percentage of premium attributed to it under such
3    insurance contract.
4        If more than one insured from a group that is not
5    affiliated are named insureds on a single surplus line
6    insurance contract, then:
7            (I) if individual group members pay 100% of the
8        premium for the insurance from their own funds, "home
9        state" means the home state, as determined pursuant to
10        item (A) of this definition, of each individual group
11        member; each individual group member's coverage under
12        the surplus line insurance contract shall be treated
13        as a separate surplus line contract for the purposes
14        of this Section;
15            (II) otherwise, "home state" means the home state,
16        as determined pursuant to item (A) of this definition,
17        of the group.
18    Nothing in this definition shall be construed to alter the
19terms of the surplus line insurance contract.
20    "Master policy" means a surplus line insurance contract
21with a single set of general contractual terms that are
22designed to apply on a group basis to multiple insureds who may
23or may not be affiliated and who may be added to or removed
24from the contract throughout the course of the contract
25period. A master policy may include certain provisions that
26vary for each insured depending on the insured's

 

 

SB1753- 5 -LRB102 10455 BMS 15783 b

1characteristics and the coverage sought.
2    "Multi-State risk" means a risk with insured exposures in
3more than one State.
4    "NAIC" means the National Association of Insurance
5Commissioners or any successor entity.
6    "Personal lines insurance" means insurance as defined in
7subsection (a), (b), or (c) of Section 143.13 of this Code.
8    "Premium" means any amount designated as premium on the
9declarations page or elsewhere in a policy and on any
10endorsement, but does not include taxes, the Surplus Line
11Association of Illinois recording fee, or any other fee.
12    "Program business" means a clearly defined group of
13insurance contracts procured by a licensed surplus line
14producer from an unauthorized insurer, under a single
15agreement between the producer and insurer, for insureds with
16the same or similar characteristics and containing the same or
17similar contract terms.
18    "Qualified risk manager" means, with respect to a
19policyholder of commercial insurance, a person who meets all
20of the following requirements:
21        (A) The person is an employee of, or third-party
22    consultant retained by, the commercial policyholder.
23        (B) The person provides skilled services in loss
24    prevention, loss reduction, or risk and insurance coverage
25    analysis, and purchase of insurance.
26        (C) With regard to the person:

 

 

SB1753- 6 -LRB102 10455 BMS 15783 b

1            (I) the person has:
2                (a) a bachelor's degree or higher from an
3            accredited college or university in risk
4            management, business administration, finance,
5            economics, or any other field determined by the
6            Director or his designee to demonstrate minimum
7            competence in risk management; and
8                (b) the following:
9                    (i) three years of experience in risk
10                financing, claims administration, loss
11                prevention, risk and insurance analysis, or
12                purchasing commercial lines of insurance; or
13                    (ii) alternatively has:
14                        (AA) a designation as a Chartered
15                    Property and Casualty Underwriter (in this
16                    subparagraph (ii) referred to as "CPCU")
17                    issued by the American Institute for
18                    CPCU/Insurance Institute of America;
19                        (BB) a designation as an Associate in
20                    Risk Management (ARM) issued by the
21                    American Institute for CPCU/Insurance
22                    Institute of America;
23                        (CC) a designation as Certified Risk
24                    Manager (CRM) issued by the National
25                    Alliance for Insurance Education &
26                    Research;

 

 

SB1753- 7 -LRB102 10455 BMS 15783 b

1                        (DD) a designation as a RIMS Fellow
2                    (RF) issued by the Global Risk Management
3                    Institute; or
4                        (EE) any other designation,
5                    certification, or license determined by
6                    the Director or his designee to
7                    demonstrate minimum competency in risk
8                    management;
9            (II) the person has:
10                (a) at least 7 years of experience in risk
11            financing, claims administration, loss prevention,
12            risk and insurance coverage analysis, or
13            purchasing commercial lines of insurance; and
14                (b) has any one of the designations specified
15            in subparagraph (ii) of paragraph (b);
16            (III) the person has at least 10 years of
17        experience in risk financing, claims administration,
18        loss prevention, risk and insurance coverage analysis,
19        or purchasing commercial lines of insurance; or
20            (IV) the person has a graduate degree from an
21        accredited college or university in risk management,
22        business administration, finance, economics, or any
23        other field determined by the Director or his or her
24        designee to demonstrate minimum competence in risk
25        management.
26    "Residual market mechanism" means an association,

 

 

SB1753- 8 -LRB102 10455 BMS 15783 b

1organization, or other entity described in Article XXXIII of
2this Code or Section 7-501 of the Illinois Vehicle Code or any
3similar association, organization, or other entity.
4    "State" means any state of the United States, the District
5of Columbia, the Commonwealth of Puerto Rico, Guam, the
6Northern Mariana Islands, the Virgin Islands, and American
7Samoa.
8    "Surplus line insurance" means insurance on a risk:
9        (A) of the kinds specified in Classes 2 and 3 of
10    Section 4 of this Code; and
11        (B) that is procured from an unauthorized insurer
12    after the insurance producer representing the insured or
13    the surplus line producer is unable, after diligent
14    effort, to procure the insurance from authorized insurers;
15    and
16        (C) where Illinois is the home state of the insured,
17    for policies effective, renewed or extended on July 21,
18    2011 or later and for multiyear policies upon the policy
19    anniversary that falls on or after July 21, 2011; and
20        (D) that is located in Illinois, for policies
21    effective prior to July 21, 2011.
22    "Taxable premium" means a premium for any risk that is
23located in or attributed to any state.
24    "Unauthorized insurer" means an insurer that does not hold
25a valid certificate of authority issued by the Director but,
26for the purposes of this Section, shall also include a

 

 

SB1753- 9 -LRB102 10455 BMS 15783 b

1domestic surplus line insurer as defined in Section 445a.
2    (1.5) Procuring surplus line insurance; surplus line
3insurer requirements.
4        (a) License required. Insurance producers may procure
5    surplus line insurance only if licensed as a surplus line
6    producer under this Section.
7        (b) Domestic and foreign insurer eligibility. Licensed
8    surplus line producers may procure surplus line insurance
9    from an unauthorized insurer domiciled in any state the
10    United States only if the insurer:
11            (i) is permitted in its domiciliary jurisdiction
12        to write the type of insurance involved; and
13             (ii) has, based upon information available to the
14        surplus line producer, a policyholders surplus of not
15        less than $15,000,000 determined in accordance with
16        the laws of its domiciliary jurisdiction; and
17             (iii) has standards of solvency and management
18        that are adequate for the protection of policyholders.
19         Where an unauthorized insurer does not meet the
20    standards set forth in (ii) and (iii) above, a surplus
21    line producer may, if necessary, procure insurance from
22    that insurer only if prior written warning of such fact or
23    condition is given to the insured by the insurance
24    producer or surplus line producer.
25        (c) Alien insurer eligibility. Licensed surplus line
26    producers may procure surplus line insurance from an

 

 

SB1753- 10 -LRB102 10455 BMS 15783 b

1    unauthorized insurer not domiciled in any state outside of
2    the United States only if the insurer meets the standards
3    for unauthorized insurers domiciled in any state the
4    United States in paragraph (b) of this subsection (1.5) or
5    is listed on the Quarterly Listing of Alien Insurers
6    maintained by the International Insurers Department of the
7    NAIC at the time of procurement. The Director shall make
8    the Quarterly Listing of Alien Insurers available to
9    surplus line producers without charge.
10        (d) Prohibited transactions. Insurance producers shall
11    not procure from an unauthorized insurer an insurance
12    policy:
13            (i) that is designed to satisfy the proof of
14        financial responsibility and insurance requirements in
15        any Illinois law where the law requires that the proof
16        of insurance is issued by an authorized insurer or
17        residual market mechanism;
18            (ii) that covers the risk of accidental injury to
19        employees arising out of and in the course of
20        employment according to the provisions of the Workers'
21        Compensation Act; or
22            (iii) that insures any Illinois personal lines
23        risk, as defined in subsection (a), (b), or (c) of
24        Section 143.13 of this Code, that is eligible for
25        residual market mechanism coverage, unless the insured
26        or prospective insured requests limits of liability

 

 

SB1753- 11 -LRB102 10455 BMS 15783 b

1        greater than the limits provided by the residual
2        market mechanism. In the course of making a diligent
3        effort to procure insurance from authorized insurers,
4        an insurance producer shall not be required to submit
5        a risk to a residual market mechanism when the risk is
6        not eligible for coverage or exceeds the limits
7        available in the residual market mechanism.
8        Where there is an insurance policy issued by an
9    authorized insurer or residual market mechanism insuring a
10    risk described in item (i), (ii), or (iii) above, nothing
11    in this paragraph shall be construed to prohibit a surplus
12    line producer from procuring from an unauthorized insurer
13    a policy insuring the risk on an excess or umbrella basis
14    where the excess or umbrella policy is written over one or
15    more underlying policies.
16        (e) Exempt commercial purchaser diligent effort.
17    Licensed surplus line producers may procure surplus line
18    insurance from an unauthorized insurer for an exempt
19    commercial purchaser without making the required diligent
20    effort to procure the insurance from authorized insurers
21    if:
22            (i) the producer has disclosed to the exempt
23        commercial purchaser that such insurance may or may
24        not be available from authorized insurers that may
25        provide greater protection with more regulatory
26        oversight; and

 

 

SB1753- 12 -LRB102 10455 BMS 15783 b

1            (ii) the exempt commercial purchaser has
2        subsequently in writing requested the producer to
3        procure such insurance from an unauthorized insurer.
4        (f) Wholesale transaction diligent effort. A licensed
5    surplus line producer may procure a surplus line insurance
6    contract, other than a personal line insurance contract,
7    from an unauthorized insurer without making the required
8    diligent effort to procure the insurance from authorized
9    insurers if the risk was referred to the surplus line
10    producer by an Illinois-licensed insurance producer who is
11    not affiliated with the surplus line producer.
12        (g) Master policy diligent effort. For master policy
13    insurance contracts, a licensed surplus line producer may
14    make the required diligent effort to procure the insurance
15    from authorized insurers annually for the master policy
16    rather than individually for each insured that is added
17    during the policy period.
18        (h) Program business diligent effort. For program
19    business, a licensed surplus line producer may make the
20    required diligent effort to procure the insurance from
21    authorized insurers annually for the program rather than
22    individually for each contract.
23    (2) Surplus line producer; license. Any licensed producer
24who is a resident of this State, or any nonresident who
25qualifies under Section 500-40, may be licensed as a surplus
26line producer upon payment of an annual license fee of $400.

 

 

SB1753- 13 -LRB102 10455 BMS 15783 b

1    A surplus line producer so licensed shall keep a separate
2account of the business transacted thereunder for 7 years from
3the policy effective date which shall be open at all times to
4the inspection of the Director or his representative.
5    No later than July 21, 2012, the State of Illinois shall
6participate in the national insurance producer database of the
7NAIC, or any other equivalent uniform national database, for
8the licensure of surplus line producers and the renewal of
9such licenses.
10    (3) Taxes and reports.
11        (a) Surplus line tax and penalty for late payment. The
12    surplus line tax rate for a surplus line insurance policy
13    or contract is determined as follows:
14            (i) 3% for policies or contracts with an effective
15        date prior to July 1, 2003;
16            (ii) 3.5% for policies or contracts with an
17        effective date of July 1, 2003 or later.
18        A surplus line producer shall file with the Director
19    on or before February 1 and August 1 of each year a report
20    in the form prescribed by the Director on all surplus line
21    insurance procured from unauthorized insurers and
22    submitted to the Surplus Line Association of Illinois
23    during the preceding 6 month period ending December 31 or
24    June 30 respectively, and on the filing of such report
25    shall pay to the Director for the use and benefit of the
26    State a sum equal to the surplus line tax rate multiplied

 

 

SB1753- 14 -LRB102 10455 BMS 15783 b

1    by the gross taxable premiums less returned taxable
2    premiums upon all surplus line insurance submitted to the
3    Surplus Line Association of Illinois during the preceding
4    6 months. However, if no insurance was procured from
5    unauthorized insurers and submitted to the Surplus Line
6    Association of Illinois during the period, no report shall
7    be required.
8        Any surplus line producer who fails to pay the full
9    amount due under this subsection is liable, in addition to
10    the amount due, for such late fee, penalty, and interest
11    charges as are provided for under Section 412 of this
12    Code. The Director, through the Attorney General, may
13    institute an action in the name of the People of the State
14    of Illinois, in any court of competent jurisdiction, for
15    the recovery of the amount of such taxes, late fees,
16    interest, and penalties due, and prosecute the same to
17    final judgment, and take such steps as are necessary to
18    collect the same.
19        (b) Fire Marshal Tax. Each surplus line producer shall
20    file with the Director on or before February 1 March 31 of
21    each year a report in the form prescribed by the Director
22    on all fire insurance procured from unauthorized insurers
23    and submitted to the Surplus Line Association of Illinois
24    during the previous year that is subject to tax under
25    Section 12 of the Fire Investigation Act and shall pay to
26    the Director the fire marshal tax required thereunder.

 

 

SB1753- 15 -LRB102 10455 BMS 15783 b

1    However, if no fire insurance subject to the tax was
2    procured from unauthorized insurers and submitted to the
3    Surplus Line Association of Illinois during that year, no
4    report shall be required.
5        (c) Taxes and fees charged to insured. The taxes
6    imposed under this subsection and the recording
7    countersigning fees charged by the Surplus Line
8    Association of Illinois may be charged to and collected
9    from surplus line insureds.
10    (4) (Blank).
11    (5) Submission of documents to Surplus Line Association of
12Illinois. A surplus line producer shall submit every insurance
13contract and premium-bearing endorsement issued under his or
14her license to the Surplus Line Association of Illinois for
15recording and countersignature. The submission and recording
16countersignature may be effected through electronic means. The
17submission shall set forth:
18        (a) the name of the insured;
19        (b) the description and location of the insured
20    property or risk;
21        (c) (blank); the amount insured;
22        (d) the gross premiums charged or returned;
23        (e) the name of the unauthorized insurer from whom
24    coverage has been procured;
25        (f) the kind or kinds of insurance procured; and
26        (g) amount of premium subject to tax required by

 

 

SB1753- 16 -LRB102 10455 BMS 15783 b

1    Section 12 of the Fire Investigation Act.
2    Proposals, endorsements, and other documents which are
3incidental to the insurance but which do not affect the
4premium charged are exempted from the submission and recording
5requirements filing and countersignature.
6    The submission of insuring contracts to the Surplus Line
7Association of Illinois constitutes a certification by the
8surplus line producer or by the referring insurance producer
9that the contracts were procured who presented the risk to the
10surplus line producer for placement as a surplus line risk
11that after diligent effort the required insurance could not be
12procured from authorized insurers and that such procurement
13was otherwise in accordance with the surplus line law and,
14where required, the surplus line producer or referring
15insurance producer made a diligent effort to procure the
16required insurance from authorized insurers.
17    (6) Evidence of recording Countersignature required. It
18shall be unlawful for an insurance producer to deliver any
19unauthorized insurer contract or premium-bearing endorsement
20unless it contains evidence of recording such insurance
21contract is countersigned by the Surplus Line Association of
22Illinois.
23    (7) Inspection of records. A surplus line producer shall
24maintain separate records of the business transacted under his
25or her license for 7 years from the policy effective date,
26including complete copies of surplus line insurance contracts

 

 

SB1753- 17 -LRB102 10455 BMS 15783 b

1maintained on paper or by electronic means, which records
2shall be open at all times for inspection by the Director and
3by the Surplus Line Association of Illinois.
4    (8) Violations and penalties. The Director may suspend or
5revoke or refuse to renew a surplus line producer license for
6any violation of this Code. In addition to or in lieu of
7suspension or revocation, the Director may subject a surplus
8line producer to a civil penalty of up to $2,000 for each cause
9for suspension or revocation. Such penalty is enforceable
10under subsection (5) of Section 403A of this Code.
11    When a surplus line producer has made a documented good
12faith determination of the home state for a surplus line
13insurance contract and has paid the surplus line taxes to a
14state other than Illinois, if the Director determines that the
15producer's good faith determination was incorrect and the home
16state is Illinois, the surplus line producer can, at the
17discretion of the Director, be required to submit the contract
18to the Surplus Line Association of Illinois and pay applicable
19taxes and recording fees, but there shall be no penalty,
20interest, or late fee assessed.
21    (9) Director may declare insurer ineligible. If the
22Director determines that the further assumption of risks might
23be hazardous to the policyholders of an unauthorized insurer,
24the Director may order the Surplus Line Association of
25Illinois not to accept and record countersign insurance
26contracts evidencing insurance in such insurer and order

 

 

SB1753- 18 -LRB102 10455 BMS 15783 b

1surplus line producers to cease procuring insurance from such
2insurer.
3    (10) Service of process upon Director. Insurance contracts
4delivered under this Section from unauthorized insurers, other
5than domestic surplus line insurers as defined in Section
6445a, shall contain a provision designating the Director and
7his successors in office the true and lawful attorney of the
8insurer upon whom may be served all lawful process in any
9action, suit or proceeding arising out of such insurance.
10Service of process made upon the Director to be valid
11hereunder must state the name of the insured, the name of the
12unauthorized insurer and identify the contract of insurance.
13The Director at his option is authorized to forward a copy of
14the process to the Surplus Line Association of Illinois for
15delivery to the unauthorized insurer or the Director may
16deliver the process to the unauthorized insurer by other means
17which he considers to be reasonably prompt and certain.
18    (10.5) Required notice to policyholder. Insurance
19contracts delivered under this Section from unauthorized
20insurers, other than domestic surplus line insurers as defined
21in Section 445a, shall have stamped or imprinted on the first
22page thereof in not less than 12-pt. bold face type the
23following legend: "Notice to Policyholder: This contract is
24issued, pursuant to Section 445 of the Illinois Insurance
25Code, by a company not authorized and licensed to transact
26business in Illinois and as such is not covered by the Illinois

 

 

SB1753- 19 -LRB102 10455 BMS 15783 b

1Insurance Guaranty Fund." Insurance contracts delivered under
2this Section from domestic surplus line insurers as defined in
3Section 445a shall have stamped or imprinted on the first page
4thereof in not less than 12-pt. bold face type the following
5legend: "Notice to Policyholder: This contract is issued by a
6domestic surplus line insurer, as defined in Section 445a of
7the Illinois Insurance Code, pursuant to Section 445, and as
8such is not covered by the Illinois Insurance Guaranty Fund."
9    (11) Marine, aviation, and transportation. The Illinois
10Surplus Line law does not apply to insurance of property and
11operations of railroads or aircraft engaged in interstate or
12foreign commerce, insurance of vessels, crafts or hulls,
13cargoes, marine builder's risks, marine protection and
14indemnity, or other risks including strikes and war risks
15insured under ocean or wet marine forms of policies.
16    (12) Applicability of Illinois Insurance Code. Surplus
17line insurance procured under this Section, including
18insurance procured from a domestic surplus line insurer, is
19not subject to the provisions of the Illinois Insurance Code
20other than Sections 123, 123.1, 401, 401.1, 402, 403, 403A,
21408, 412, 445, 445a, 445.1, 445.2, 445.3, 445.4, and all of the
22provisions of Article XXXI to the extent that the provisions
23of Article XXXI are not inconsistent with the terms of this
24Act.
25(Source: P.A. 97-955, eff. 8-14-12; 98-978, eff. 1-1-15.)
 

 

 

SB1753- 20 -LRB102 10455 BMS 15783 b

1    (215 ILCS 5/445.1)  (from Ch. 73, par. 1057.1)
2    Sec. 445.1. Surplus Line Association of Illinois. There is
3hereby created a non-profit association to be known as the
4Surplus Line Association of Illinois. All surplus line
5producers shall be and must remain individual members or part
6of a firm membership of the Association as a condition of their
7holding a license as a surplus line producer in this State. The
8Association must perform its functions under the plan of
9operation established and approved under Section 445.3 and
10must exercise its powers through a board of directors
11established under Section 445.2 of this Code. The Association
12shall be supervised by the Director and is subject to the
13applicable provisions of the Illinois Insurance Code. The
14Association shall be authorized and have the duty to:
15        (1) receive and , record and countersign all surplus
16    line insurance contracts that which surplus line producers
17    are required to file with the Association under subsection
18    (5) of Section 445;
19        (2) prepare monthly reports for the Director on
20    surplus line insurance procured by its members during the
21    preceding month in such form and providing such
22    information as the Director may prescribe;
23        (3) prepare and deliver to the Director and, at the
24    discretion of the Director, to each licensee the reports
25    of surplus line business prescribed in subsection (3) of
26    Section 445;

 

 

SB1753- 21 -LRB102 10455 BMS 15783 b

1        (4) assess its members for costs of operations in
2    accordance with a schedule adopted by the Board of
3    Directors of the Association and approved by the Director;
4        (5) employ and retain such persons as are necessary to
5    carry out the duties of the Association;
6        (6) borrow money as necessary to effect the purposes
7    of the Association;
8        (7) enter contracts as necessary to effect the
9    purposes of the Association;
10        (8) perform such other acts as will facilitate and
11    encourage compliance by its members with the surplus line
12    law of this State and rules promulgated thereunder; and
13        (9) provide such other services to its members as are
14    incidental or related to the purposes of the Association.
15    Nothing in this Act shall be construed as giving the
16Association any discretionary authority to enforce this Act or
17to withhold or decline acceptance and recording
18countersignature of insurance contracts that which meet the
19requirements of subsection (5) of Section 445.
20(Source: P.A. 98-978, eff. 1-1-15.)
 
21    (215 ILCS 5/445.2)  (from Ch. 73, par. 1057.2)
22    Sec. 445.2. Board of Directors. The Association shall
23function through a Board of Directors elected by the
24Association members, and officers who shall be elected by the
25Board of Directors.

 

 

SB1753- 22 -LRB102 10455 BMS 15783 b

1    The Board of Directors of the Association shall consist of
2not less than 5 nor more than 9 persons serving terms as
3established in the plan of operation. The plan of operation
4shall provide for the election of a Board of Directors by the
5members of the Association from its membership. The plan of
6operation shall fix the manner of voting and may weigh each
7member's vote to reflect the annual surplus line insurance
8premium written by the member. Members employed by the same or
9affiliated employers may consolidate their premiums written
10and delegate an individual officer or partner who is a
11licensed surplus line producer to represent the member in the
12exercise of Association affairs, including service on the
13Association Board of Directors, submission of surplus line
14insurance contracts, and reporting and payments of taxes. The
15Director shall appoint an interim Board of Directors for the
16sole purpose of conducting an election of Directors. If no
17Board of Directors is elected within 90 days after the
18effective date of this amendatory Act of 1984, the Director
19shall appoint the initial members of the Board of Directors.
20    The Board of Directors shall elect such officers as may be
21provided in the plan of operation.
22(Source: P.A. 83-1300.)
 
23    (215 ILCS 5/445.3)  (from Ch. 73, par. 1057.3)
24    Sec. 445.3. Plan of Operation.
25    (1) The Association shall submit to the Director a plan of

 

 

SB1753- 23 -LRB102 10455 BMS 15783 b

1operation and any amendments thereto to provide operating
2procedures for the administration of the Association. The plan
3of operation and any amendments thereto shall become effective
4upon approval in writing by the Director.
5    (2) (Blank). If the Association fails to submit a suitable
6plan of operation within 180 days following the effective date
7of this amendatory Act of 1984, or if at any time thereafter
8the Association fails to submit required amendments to the
9plan of operation, the Director shall, after notice and
10hearing pursuant to Sections 401, 402 and 403 of this Code,
11adopt and promulgate such rules as are necessary or advisable
12to effectuate the provisions of this Act. Such rules shall
13continue in force until modified by the Director or superseded
14by a plan of operation submitted by the Association and
15approved by the Director.
16    (3) All Association members must comply with the plan of
17operation.
18(Source: P.A. 83-1300.)
 
19    Section 99. Effective date. This Act takes effect January
201, 2022.