Insurance Committee

Filed: 2/16/2005

 

 


 

 


 
09400HB0316ham001 LRB094 06684 LJB 41233 a

1
AMENDMENT TO HOUSE BILL 316

2     AMENDMENT NO. ______. Amend House Bill 316 by replacing the
3 title with the following:
4     "AN ACT in relation to insurance."; and
 
5 by replacing everything after the enacting clause with the
6 following:
 
7     "Section 5. The Illinois Insurance Code is amended by
8 changing Section 500-77 as follows:
 
9     (215 ILCS 5/500-77)
10     Sec. 500-77. Policyholder information and exclusive
11 ownership of expirations.
12     (a) As used in this Section, "expirations" means all
13 information relative to an insurance policy including, but not
14 limited to, the name and address of the insured, the location
15 and description of the property insured, the value of the
16 insurance policy, the inception date, the renewal date, and the
17 expiration date of the insurance policy, the premiums, the
18 limits and a description of the terms and coverage of the
19 insurance policy, and any other personal and privileged
20 information, as defined by Section 1003 of this Code, compiled
21 by a business entity registered firm or furnished by the
22 insured to the insurer or any agent, contractor, or
23 representative of the insurer.

 

 

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1     For purposes of this Section only, a business entity
2 registered firm also includes a sole proprietorship that
3 transacts the business of insurance as an insurance agency.
4     (b) All "expirations" as defined in subsection (a) of this
5 Section shall be mutually and exclusively owned by the insured
6 and the business entity registered firm. The limitations on the
7 use of expirations as provided in subsections (c) and (d) of
8 this Section shall be for mutual benefit of the insured and the
9 business entity registered firm.
10     (c) Except as otherwise provided in this Section, for
11 purposes of soliciting, selling, or negotiating the renewal or
12 sale of insurance coverage, insurance products, or insurance
13 services or for any other marketing purpose, a business entity
14 registered firm shall own and have the exclusive use of
15 expirations, records, and other written or electronically
16 stored information directly related to an insurance
17 application submitted by, or an insurance policy written
18 through, the business entity registered firm. No insurance
19 company, managing general agent, surplus lines insurance
20 broker, wholesale broker, group self-insurance fund,
21 third-party administrator, or any other entity, other than a
22 financial institution as defined in Section 1402 of this Code,
23 shall use such expirations, records, or other written or
24 electronically stored information to solicit, sell, or
25 negotiate the renewal or sale of insurance coverage, insurance
26 products, or insurance services to the insured or for any other
27 marketing purposes, either directly or by providing such
28 information to others, without, separate from the general
29 agency contract, the written consent of the business entity
30 registered firm. However, such expirations, records, or other
31 written or electronically stored information may be used for
32 any purpose necessary for placing such business through the
33 insurance producer including reviewing an application and
34 issuing or renewing a policy and for loss control services.

 

 

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1     (d) With respect to a business entity registered firm, this
2 Section shall not apply:
3         (1) when the insured requests either orally or in
4     writing that another business entity registered firm
5     obtain quotes for insurance from another insurance company
6     or when the insured requests in writing individually or
7     through another business entity registered firm, that the
8     insurance company renew the policy;
9         (2) to policies in the Illinois Fair Plan, the Illinois
10     Automobile Insurance Plan, or the Illinois Assigned Risk
11     Plan for coverage under the Workers' Compensation Act and
12     the Workers' Occupational Diseases Act;
13         (3) when the insurance producer is employed by or has
14     agreed to act exclusively or primarily for one company or
15     group of affiliated insurance companies or to a producer
16     who submits to the company or group of affiliated companies
17     that are organized to transact business in this State as a
18     reciprocal company, as defined in Article IV of this Code,
19     every request or application for insurance for the classes
20     and lines underwritten by the company or group of
21     affiliated companies;
22         (4) to policies providing life and accident and health
23     insurance;
24         (5) when the business entity registered firm is in
25     default for nonpayment of premiums under the contract with
26     the insurer or is guilty of conversion of the insured's or
27     insurer's premiums or its license is revoked by or
28     surrendered to the Department;
29         (6) to any insurance company's obligations under
30     Sections 143.17 and 143.17a of this Code; or
31         (7) to any insurer that, separate from a producer or
32     business entity registered firm, creates, develops,
33     compiles, and assembles its own, identifiable expirations
34     as defined in subsection (a).

 

 

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1     For purposes of this Section, an insurance producer shall
2 be deemed to have agreed to act primarily for one company or a
3 group of affiliated insurance companies if the producer (i)
4 receives 75% or more of his or her insurance related
5 commissions from one company or a group of affiliated companies
6 or (ii) places 75% or more of his or her policies with one
7 company or a group of affiliated companies.
8     Nothing in this Section prohibits an insurance company,
9 with respect to any items herein, from conveying to the insured
10 or the business entity registered firm any additional benefits
11 or ownership rights including, but not limited to, the
12 ownership of expirations on any policy issued or the imposition
13 of further restrictions on the insurance company's use of the
14 insured's personal information.
15     (e) Nothing in this Section prevents a financial
16 institution, as defined in Section 1402 of this Code, from
17 obtaining from the insured, the insurer, or the business entity
18 registered firm the expiration dates of an insurance policy
19 placed on collateral or otherwise used as security in
20 connection with a loan made or serviced by the financial
21 institution when the financial institution requires the
22 expiration dates for evidence of insurance.
23     (f) For purposes of this Section, "financial institution"
24 does not include an insurance company, business entity
25 registered firm, managing general agent, surplus lines broker,
26 wholesale broker, group self-funded insurance fund, or
27 third-party administrator.
28     (g) The Director may adopt rules in accordance with Section
29 401 of this Code for the enforcement of this Section.
30     (h) This Section applies to the expirations relative to all
31 policies of insurance bound, applied for, sold, renewed, or
32 otherwise taking effect on or after June 1, 2001 the effective
33 date of this amendatory Act of the 92nd General Assembly.
34 (Source: P.A. 92-5, eff. 6-1-01; 92-651, eff. 7-11-02.)
 

 

 

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1     Section 99. Effective date. This Act takes effect upon
2 becoming law.".