Illinois General Assembly - Full Text of HB1555
Illinois General Assembly

Previous General Assemblies

Full Text of HB1555  95th General Assembly



HB1555 Enrolled LRB095 08568 KBJ 28751 b

1     AN ACT concerning insurance.
2     Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
4     Section 5. The Illinois Insurance Code is amended by
5 changing Sections 512.52, 512.53, 512.55, 512.57, 512.58,
6 512.59, 512.60, 512.61, and 512.64 as follows:
7     (215 ILCS 5/512.52)  (from Ch. 73, par. 1065.59-52)
8     Sec. 512.52. Definitions. As used in this Article unless
9 the context clearly otherwise requires:
10     (a)   "Adjusting insurance claims" means representing an
11 insured with an insurer for compensation, and while
12 representing that insured either negotiating values, damages,
13 or depreciation, or applying the loss circumstances to
14 insurance policy provisions.
15     (b) "Public Insurance Adjuster" means a person engaged in
16 the business of adjusting insurance claims who is licensed
17 pursuant to this Article.
18     (c) "Registered Firm" means a person registered with the
19 Director under Section 512.57.
20     (d) "Compensation" shall include, but need not be limited
21 to, the following:
22     1. any assignment of insurance proceeds or a percentage
23 thereof;



HB1555 Enrolled - 2 - LRB095 08568 KBJ 28751 b

1     2. any agreement to make repairs for the amount of the
2 insurance proceeds payable;
3     3. assertion of any lien against insurance proceeds
4 payable.
5     (e) "Person" embraces both natural persons and business
6 entities of whatever type.
7 (Source: P.A. 84-335; 84-832.)
8     (215 ILCS 5/512.53)  (from Ch. 73, par. 1065.59-53)
9     Sec. 512.53. License Required. (a) No person may engage in
10 the business of adjusting insurance claims, nor advertise,
11 solicit or hold himself out to be in the business of adjusting
12 insurance claims, solicit or hold himself out to be a Public
13 Insurance Adjuster, nor attempt to obtain a contract for Public
14 Adjusting services, unless licensed or registered in
15 accordance with the provisions of this Article, except that the
16 provisions of this paragraph do not apply to a person admitted
17 to the practice of law in this State, to a licensed agent
18 adjusting loss or damage under a policy within his control or
19 to a marine surveyor or average adjuster.
20     (b) In addition to any other penalty set forth in this
21 Article, any person violating paragraph (a) of this Section
22 shall be guilty of a Class A misdemeanor, and any person
23 misappropriating or converting any monies collected as a Public
24 Insurance Adjuster, whether licensed or not, shall be guilty of
25 a Class 4 felony.



HB1555 Enrolled - 3 - LRB095 08568 KBJ 28751 b

1     (c) All contracts entered into by any person violating
2 subsection (a) of this Section are void and invalid.
3 (Source: P.A. 83-1362.)
4     (215 ILCS 5/512.55)  (from Ch. 73, par. 1065.59-55)
5     Sec. 512.55. Public Insurance Adjuster license. (a) The
6 Director shall issue a Public Insurance Adjuster license to an
7 applicant who has:
8     (1) met the requirements of Section 512.54; and
9     (2) paid the fee as set forth in Section 512.63; and
10     (3) filed with the Director a bond as prescribed in Section
11 512.56.
12     (b) Every Public Insurance Adjuster license shall remain in
13 effect for one year from the date of its issuance.
14     (c) Each Public Insurance Adjuster license shall contain
15 the name, business address, resident address and personal
16 identification number of the Public Insurance Adjuster, the
17 date of issue, general conditions relative to expiration or
18 termination and any other information the Director considers
19 proper.
20     (d) The holder of a Public Insurance Adjuster license shall
21 notify the Director, in writing, of a change of either business
22 or residence address within 30 days of such change.
23     (e) Each Public Insurance Adjuster license shall remain in
24 effect as long as the holder of the license maintains in force
25 and effect the bond required by Section 512.56 and pays the



HB1555 Enrolled - 4 - LRB095 08568 KBJ 28751 b

1 annual fee required by Section 512.63 by the date due as
2 prescribed by the Director, unless the license is revoked or
3 suspended pursuant to Section 512.61.
4     The Department may refuse to issue or may suspend the
5 license of any person who fails to file a return, or to pay the
6 tax, penalty or interest shown in a filed return, or to pay any
7 final assessment of tax, penalty or interest, as required by
8 any tax Act administered by the Illinois Department of Revenue,
9 until such time as the requirements of any such tax Act are
10 satisfied.
11 (Source: P.A. 84-221; 84-832.)
12     (215 ILCS 5/512.57)  (from Ch. 73, par. 1065.59-57)
13     Sec. 512.57. Registered Firms. (a) No person shall may
14 engage in the business of adjusting insurance claims employ one
15 or more Public Insurance Adjustors in their professional
16 capacity, other than for the purpose of using their
17 professional services to negotiate or adjust such person's own
18 losses and insurance claims, unless such person is licensed
19 pursuant to this Article and registered with the Director under
20 subsection (b) of this Section.
21     No Public Insurance Adjuster may form or participate in any
22 association, partnership or other business entity with any
23 other Public Insurance Adjustor for the purpose of engaging in
24 the business of adjusting insurance claims, unless such
25 business entity is registered with the Director under



HB1555 Enrolled - 5 - LRB095 08568 KBJ 28751 b

1 subsection (b) of this Section.
2     (b) To become a Registered Firm, a person must submit to
3 the Director an application, on a form specified by the
4 Director, and the fee required by Section 512.63. The Director
5 may require any documents reasonably necessary to verify the
6 information contained in the application.
7     (c) Each Registered Firm must notify the Director, in
8 writing, of any change in its business or residence address
9 within 30 days of such change.
10     (d) Each Registered Firm must notify the Director of each
11 Public Insurance Adjuster who is a member, officer, director or
12 employee of the Registered Firm, and report any changes in such
13 status of any such Public Insurance Adjuster to the Director
14 within 30 days thereof.
15     (e) Each Registered Firm shall appoint one or more Public
16 Insurance Adjusters who is an officer, director or member of
17 the Firm to be responsible for the compliance of the Registered
18 Firm with the laws of this State and the rules and regulations
19 of the Director. The Registered Firm shall be responsible for
20 the actions of its officers, directors, members and employees.
21     (f) Each Registered Firm which, for any of the causes
22 listed in Section 512.61, terminates its relationship with a
23 Public Insurance Adjuster who is an officer, director, employee
24 or member of the Registered Firm shall notify the Director, in
25 writing, within 30 days of such termination of the specific
26 reasons for such termination. The Registered Firm shall provide



HB1555 Enrolled - 6 - LRB095 08568 KBJ 28751 b

1 the Director with information, documents, records or
2 statements pertaining to the termination. Any materials
3 provided may be used by the Director in any action taken
4 pursuant to Section 512.62. There shall be no liability on the
5 part of, nor any cause of action against, the Director or the
6 Registered Firm, or any authorized representative of either,
7 for any statement made or materials provided pursuant to this
8 paragraph.
9     (g) The Director shall terminate any registration which
10 does not comply with the requirements of this Article.
11     (h) A registered firm may only be comprised of licensed
12 Public Insurance Adjusters. All shareholders, officers, and
13 directors of registered firms must be licensed pursuant to this
14 Act. Any Public Insurance Adjuster who has a license that has
15 been revoked, suspended, or not renewed, whether voluntarily or
16 not, must withdraw from a registered firm within 30 days and
17 give written notice of his or her resignation to the licensed
18 firm within 30 days.
19 (Source: P.A. 84-832.)
20     (215 ILCS 5/512.58)  (from Ch. 73, par. 1065.59-58)
21     Sec. 512.58. Rate Schedules and Contract Forms. (a) A
22 Public Insurance Adjuster shall not provide services until a
23 written contract with the insured has been executed, on a form
24 filed with and approved by the Director. At the option of the
25 insured, any such contract which is executed within 5 business



HB1555 Enrolled - 7 - LRB095 08568 KBJ 28751 b

1 days after conclusion of the loss-producing occurrence shall be
2 voidable for 10 days after execution. The insured may void the
3 contract by notifying the Public Insurance Adjuster in writing
4 by (i) registered or certified mail, return receipt requested,
5 to the address shown on the contract; or (ii) personally
6 serving the notice on the Public Insurance Adjuster.
7     (b) The written contract required by paragraph (a) shall
8 constitute the entire agreement between the Public Insurance
9 Adjuster and the insured. A copy of the contract shall be given
10 to the insured when the contract is executed. Such contract
11 forms may not include any hold harmless agreement which
12 provides indemnification to the Public Insurance Adjuster by
13 the insured for liability resulting from the Public Insurance
14 Adjuster's negligence, nor any power-of-attorney by which the
15 Public Insurance Adjuster can act in the place and instead of
16 the insured.
17 (Source: P.A. 83-1362.)
18     (215 ILCS 5/512.59)  (from Ch. 73, par. 1065.59-59)
19     Sec. 512.59. Performance standards applicable to all
20 Public Insurance Adjusters.
21     (a) A Public Insurance Adjuster shall may not represent
22 that he is a representative of an insurance company, a fire
23 department, or the State of Illinois, or that he is a fire
24 investigator, or that his services are required for the insured
25 to submit a claim to the insured's insurance company, or that



HB1555 Enrolled - 8 - LRB095 08568 KBJ 28751 b

1 he may provide legal advice or representation to the insured. A
2 Public Insurance Adjuster may represent that he has been
3 licensed by the State of Illinois.
4     (b) A Public Insurance Adjuster shall may not agree to any
5 loss settlement without the insured's knowledge and consent and
6 shall provide the insured with a document setting forth the
7 scope, amount, and value of the damages prior to requesting the
8 insured for authority to settling any loss.
9     (c) If the Public Insurance Adjuster refers the insured to
10 a contractor, the Public Insurance Adjuster warrants that all
11 work will be performed in a workmanlike manner and conform to
12 all statutes, ordinances and codes. Should the work not be
13 completed in a workmanlike manner, the Public Insurance
14 Adjuster shall be responsible for any and all costs and expense
15 required to complete or repair the work in a workmanlike
16 manner.
17     (d) In all cases where the loss giving rise to the claim
18 for which the Public Insurance Adjuster was retained arise from
19 damage to a personal residence, the insurance proceeds shall be
20 delivered in person to the named insured or his or her
21 designee. Where proceeds paid by an insurance company are paid
22 jointly to the insured and the Public Insurance Adjuster, the
23 insured Public Insurance Adjuster shall release such portion of
24 the proceeds which are due the Public Insurance Adjuster
25 insured within 30 calendar days after the insured's Public
26 Insurance Adjuster's receipt of the insurance company's check,



HB1555 Enrolled - 9 - LRB095 08568 KBJ 28751 b

1 money order, draft, or release of funds. If the proceeds are
2 not so released to the insured within 30 calendar days, the
3 insured Public Insurance Adjuster shall provide the Public
4 Insurance Adjuster insured and the Illinois Department of
5 Insurance with a written explanation of the reason for the
6 delay.
7     (e) A Public Insurance Adjuster may not propose or attempt
8 to propose to any person that the Public Insurance Adjuster
9 represent that person while a loss-producing occurrence is
10 continuing nor while the fire department or its representatives
11 are engaged at the damaged premises nor between the hours of
12 7:00 p.m. and 8:00 a.m..
13     (f) A Public Insurance Adjuster shall may not advance money
14 or any valuable consideration, except emergency services or the
15 commencement of repairs, to an insured pending adjustment of a
16 claim.
17     (g) A Public Insurance Adjuster shall may not provide legal
18 advice or representation to the insured, or engage in the
19 unauthorized practice of law.
20 (Source: P.A. 84-335.)
21     (215 ILCS 5/512.60)  (from Ch. 73, par. 1065.59-60)
22     Sec. 512.60. Maintenance of records. (a) All Public
23 Insurance Adjusters shall maintain a complete record of each of
24 their transactions as a Public Insurance Adjuster. The records
25 required by this Section shall include:



HB1555 Enrolled - 10 - LRB095 08568 KBJ 28751 b

1     (1) name of the insured;
2     (2) date, location and amount of loss;
3     (3) copy of the contract between the Public Insurance
4 Adjuster and insured;
5     (4) name of the insurer, amount, expiration date and number
6 of each policy carried with respect to the loss;
7     (5) itemized statement of the insured's recoveries;
8     (6) name of the Public Insurance Adjuster who executed the
9 contract; and
10     (7) name of the attorney representing the insured, if
11 applicable, and the name of the representative of the insurance
12 company; and .
13     (8) copy of the statement provided to the insured
14 explaining the amount and value of the damages to the insured
15 premises, the amount of insurance proceeds recovered from the
16 insured, and the amount and values of all expenses incurred to
17 adjust the claim and the amount and value of the Public
18 Insurance Adjuster's fees and charges.
19     (b) Records shall be maintained for at least three years
20 after the termination of the transaction with an insured and
21 shall be open to examination by the Director at any time.
22     (c) A Public Insurance Adjuster shall not divulge
23 information regarding any insured without written consent from
24 the insured, except that the Public Insurance Adjuster may
25 divulge such information to an insurance company or its
26 representative which insures the insured, to the Department of



HB1555 Enrolled - 11 - LRB095 08568 KBJ 28751 b

1 Insurance, or upon a court order or an Internal Revenue Service
2 subpoena.
3     (d) Where a Public Insurance Adjuster is engaged or
4 employed by a Registered Firm, the records required by this
5 Section may be maintained by such Registered Firm on behalf of
6 the Public Insurance Adjuster.
7 (Source: P.A. 84-335.)
8     (215 ILCS 5/512.61)  (from Ch. 73, par. 1065.59-61)
9     Sec. 512.61. License suspension, revocation or denial. (a)
10 Any license issued under this Article may, after notice to the
11 licensee and hearing as provided by Section 402, be suspended
12 or revoked, and any application for a license may be denied, if
13 the Director finds that the holder of or applicant for a
14 license has:
15     (1) willfully violated any provision of this Code or any
16 rule or regulation promulgated by the Director; or
17     (2) intentionally made a material misstatement in an
18 application for a license as a Public Insurance Adjuster; or
19     (3) obtained or attempted to obtain a license as a Public
20 Insurance Adjuster through misrepresentation or fraud; or
21     (4) misappropriated, converted to his own use or improperly
22 withheld money due others; or
23     (5) intentionally misrepresented the terms of any
24 insurance policy; or
25     (6) used fraudulent, coercive or dishonest practices, or



HB1555 Enrolled - 12 - LRB095 08568 KBJ 28751 b

1 demonstrated incompetence, untrustworthiness or financial
2 irresponsibility in the transaction of business as a Public
3 Insurance Adjuster; or
4     (7) been convicted of any a felony or misdemeanor involving
5 dishonesty or fraud, unless the individual demonstrates to the
6 Director sufficient rehabilitation to warrant the public
7 trust; or
8     (8) knowingly transacted the business of a Public Insurance
9 Adjuster in conjunction with an individual who was not licensed
10 at the time; or
11     (9) failed to appear without reasonable cause or excuse in
12 response to a subpoena lawfully issued by the Director; or
13     (10) a license as a Public Insurance Adjuster suspended or
14 revoked or an application denied in any other state, district,
15 territory or province on a ground similar to one of the grounds
16 stated in this Section; or
17     (11) failed to comply with or violated any of the standards
18 set forth in Section 512.59; or
19     (12) failed to maintain the records required by Section
20 512.60; or
21     (13) engaged in the unauthorized practice of law.
22     (b) Revocation, suspension, or the denial Denial of an
23 application pursuant to this Section shall be by written notice
24 served upon the applicant by certified or registered mail sent
25 to the address specified in the application. The applicant may
26 request a hearing in writing within 30 days from the date of



HB1555 Enrolled - 13 - LRB095 08568 KBJ 28751 b

1 mailing as provided in Section 402. The hearing shall be held
2 pursuant to Section 2402 of Title 50 of the Code.
3     (c) Upon notification of the issuance of an order
4 suspending or revoking a Public Insurance Adjuster's license,
5 the licensee or other person having possession or custody of
6 such license shall promptly deliver it to the Director in
7 person or by mail. The Director shall publish the name of each
8 Public Insurance Adjuster whose license is suspended or
9 revoked, after such suspension or revocation becomes final, in
10 a manner designed to notify interested insurance companies and
11 other persons.
12     (d) Any individual whose Public Insurance Adjuster's
13 license is revoked or whose application is denied pursuant to
14 this Section shall be ineligible to apply for a Public
15 Insurance Adjuster's license for 5 2 years. A suspension
16 pursuant to this Section may be for any period of time up to 5 2
17 years.
18 (Source: P.A. 84-335; 84-832.)
19     (215 ILCS 5/512.64)  (from Ch. 73, par. 1065.59-64)
20     Sec. 512.64. Injunctive Relief. Any person who acts as or
21 holds himself out to be either engaged in the business of
22 adjusting insurance claims or a Public Insurance Adjuster
23 without holding a valid and current Public Insurance Adjuster's
24 license to do so is hereby declared to be inimical to the
25 public welfare and to constitute a public nuisance. The



HB1555 Enrolled - 14 - LRB095 08568 KBJ 28751 b

1 Director may report such practice to the Attorney General of
2 the State of Illinois, whose duty it is to apply forthwith by
3 complaint on relation of the Director in the name of the people
4 of the State of Illinois, as plaintiff, for injunctive relief
5 in the circuit court of the county where such practice occurred
6 to enjoin such person from engaging in such practice; and, upon
7 the filing of a verified petition in such court, the court, if
8 satisfied by affidavit or otherwise that such person has been
9 engaged in such practice without a valid and current license to
10 do so, may enter a temporary restraining order without notice
11 or bond, enjoining the defendant from such further practice. A
12 copy of the verified complaint shall be served upon the
13 defendant and the proceedings shall thereafter be conducted as
14 in other civil cases. If it is established that the defendant
15 has been or is engaged in such unlawful practice, the court may
16 enter an order or judgment perpetually enjoining the defendant
17 from further such practice. In all proceedings hereunder the
18 court, in its discretion, may apportion the costs among the
19 parties interested in the action, including cost of filing the
20 complaint, service of process, witness fees and expenses, court
21 reporter charges and reasonable attorney fees. In case of
22 violation of any injunctive order entered under the provisions
23 of this Section, the court may try and punish the offender for
24 contempt of court. Such injunction proceedings shall be in
25 addition to, and not in lieu of, all penalties and other
26 remedies.



HB1555 Enrolled - 15 - LRB095 08568 KBJ 28751 b

1 (Source: P.A. 84-548.)