Illinois General Assembly - Full Text of HB1555
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Full Text of HB1555  95th General Assembly


Consumer Protection Committee

Filed: 3/20/2007





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2     AMENDMENT NO. ______. Amend House Bill 1555 by replacing
3 everything after the enacting clause with the following:
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



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1 pursuant to this Article.
2     (c) "Registered Firm" means a person registered with the
3 Director under Section 512.57.
4     (d) "Compensation" shall include, but need not be limited
5 to, the following:
6     1. any assignment of insurance proceeds or a percentage
7 thereof;
8     2. any agreement to make repairs for the amount of the
9 insurance proceeds payable;
10     3. assertion of any lien against insurance proceeds
11 payable.
12     (e) "Person" embraces both natural persons and business
13 entities of whatever type.
14 (Source: P.A. 84-335; 84-832.)
15     (215 ILCS 5/512.53)  (from Ch. 73, par. 1065.59-53)
16     Sec. 512.53. License Required. (a) No person may engage in
17 the business of adjusting insurance claims, nor advertise,
18 solicit or hold himself out to be in the business of adjusting
19 insurance claims, solicit or hold himself out to be a Public
20 Insurance Adjuster, nor attempt to obtain a contract for Public
21 Adjusting services, unless licensed or registered in
22 accordance with the provisions of this Article, except that the
23 provisions of this paragraph do not apply to a person admitted
24 to the practice of law in this State, to a licensed agent
25 adjusting loss or damage under a policy within his control or



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1 to a marine surveyor or average adjuster.
2     (b) In addition to any other penalty set forth in this
3 Article, any person violating paragraph (a) of this Section
4 shall be guilty of a Class A misdemeanor, and any person
5 misappropriating or converting any monies collected as a Public
6 Insurance Adjuster, whether licensed or not, shall be guilty of
7 a Class 4 felony.
8     (c) All contracts entered into by any person violating
9 subsection (a) of this Section are void and invalid.
10 (Source: P.A. 83-1362.)
11     (215 ILCS 5/512.55)  (from Ch. 73, par. 1065.59-55)
12     Sec. 512.55. Public Insurance Adjuster license. (a) The
13 Director shall issue a Public Insurance Adjuster license to an
14 applicant who has:
15     (1) met the requirements of Section 512.54; and
16     (2) paid the fee as set forth in Section 512.63; and
17     (3) filed with the Director a bond as prescribed in Section
18 512.56.
19     (b) Every Public Insurance Adjuster license shall remain in
20 effect for one year from the date of its issuance.
21     (c) Each Public Insurance Adjuster license shall contain
22 the name, business address, resident address and personal
23 identification number of the Public Insurance Adjuster, the
24 date of issue, general conditions relative to expiration or
25 termination and any other information the Director considers



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1 proper.
2     (d) The holder of a Public Insurance Adjuster license shall
3 notify the Director, in writing, of a change of either business
4 or residence address within 30 days of such change.
5     (e) Each Public Insurance Adjuster license shall remain in
6 effect as long as the holder of the license maintains in force
7 and effect the bond required by Section 512.56 and pays the
8 annual fee required by Section 512.63 by the date due as
9 prescribed by the Director, unless the license is revoked or
10 suspended pursuant to Section 512.61.
11     The Department may refuse to issue or may suspend the
12 license of any person who fails to file a return, or to pay the
13 tax, penalty or interest shown in a filed return, or to pay any
14 final assessment of tax, penalty or interest, as required by
15 any tax Act administered by the Illinois Department of Revenue,
16 until such time as the requirements of any such tax Act are
17 satisfied.
18 (Source: P.A. 84-221; 84-832.)
19     (215 ILCS 5/512.57)  (from Ch. 73, par. 1065.59-57)
20     Sec. 512.57. Registered Firms. (a) No person shall may
21 engage in the business of adjusting insurance claims employ one
22 or more Public Insurance Adjustors in their professional
23 capacity, other than for the purpose of using their
24 professional services to negotiate or adjust such person's own
25 losses and insurance claims, unless such person is licensed



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1 pursuant to this Article and registered with the Director under
2 subsection (b) of this Section.
3     No Public Insurance Adjuster may form or participate in any
4 association, partnership or other business entity with any
5 other Public Insurance Adjustor for the purpose of engaging in
6 the business of adjusting insurance claims, unless such
7 business entity is registered with the Director under
8 subsection (b) of this Section.
9     (b) To become a Registered Firm, a person must submit to
10 the Director an application, on a form specified by the
11 Director, and the fee required by Section 512.63. The Director
12 may require any documents reasonably necessary to verify the
13 information contained in the application.
14     (c) Each Registered Firm must notify the Director, in
15 writing, of any change in its business or residence address
16 within 30 days of such change.
17     (d) Each Registered Firm must notify the Director of each
18 Public Insurance Adjuster who is a member, officer, director or
19 employee of the Registered Firm, and report any changes in such
20 status of any such Public Insurance Adjuster to the Director
21 within 30 days thereof.
22     (e) Each Registered Firm shall appoint one or more Public
23 Insurance Adjusters who is an officer, director or member of
24 the Firm to be responsible for the compliance of the Registered
25 Firm with the laws of this State and the rules and regulations
26 of the Director. The Registered Firm shall be responsible for



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1 the actions of its officers, directors, members and employees.
2     (f) Each Registered Firm which, for any of the causes
3 listed in Section 512.61, terminates its relationship with a
4 Public Insurance Adjuster who is an officer, director, employee
5 or member of the Registered Firm shall notify the Director, in
6 writing, within 30 days of such termination of the specific
7 reasons for such termination. The Registered Firm shall provide
8 the Director with information, documents, records or
9 statements pertaining to the termination. Any materials
10 provided may be used by the Director in any action taken
11 pursuant to Section 512.62. There shall be no liability on the
12 part of, nor any cause of action against, the Director or the
13 Registered Firm, or any authorized representative of either,
14 for any statement made or materials provided pursuant to this
15 paragraph.
16     (g) The Director shall terminate any registration which
17 does not comply with the requirements of this Article.
18     (h) A registered firm may only be comprised of licensed
19 Public Insurance Adjusters. All shareholders, officers, and
20 directors of registered firms must be licensed pursuant to this
21 Act. Any Public Insurance Adjuster who has a license that has
22 been revoked, suspended, or not renewed, whether voluntarily or
23 not, must withdraw from a registered firm within 30 days and
24 give written notice of his or her resignation to the licensed
25 firm within 30 days.
26 (Source: P.A. 84-832.)



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1     (215 ILCS 5/512.58)  (from Ch. 73, par. 1065.59-58)
2     Sec. 512.58. Rate Schedules and Contract Forms. (a) A
3 Public Insurance Adjuster shall not provide services until a
4 written contract with the insured has been executed, on a form
5 filed with and approved by the Director. At the option of the
6 insured, any such contract which is executed within 5 business
7 days after conclusion of the loss-producing occurrence shall be
8 voidable for 10 days after execution. The insured may void the
9 contract by notifying the Public Insurance Adjuster in writing
10 by (i) registered or certified mail, return receipt requested,
11 to the address shown on the contract; or (ii) personally
12 serving the notice on the Public Insurance Adjuster.
13     (b) The written contract required by paragraph (a) shall
14 constitute the entire agreement between the Public Insurance
15 Adjuster and the insured. A copy of the contract shall be given
16 to the insured when the contract is executed. Such contract
17 forms may not include any hold harmless agreement which
18 provides indemnification to the Public Insurance Adjuster by
19 the insured for liability resulting from the Public Insurance
20 Adjuster's negligence, nor any power-of-attorney by which the
21 Public Insurance Adjuster can act in the place and instead of
22 the insured.
23 (Source: P.A. 83-1362.)
24     (215 ILCS 5/512.59)  (from Ch. 73, par. 1065.59-59)



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1     Sec. 512.59. Performance standards applicable to all
2 Public Insurance Adjusters.
3     (a) A Public Insurance Adjuster shall may not represent
4 that he is a representative of an insurance company, a fire
5 department, or the State of Illinois, or that he is a fire
6 investigator, or that his services are required for the insured
7 to submit a claim to the insured's insurance company, or that
8 he may provide legal advice or representation to the insured. A
9 Public Insurance Adjuster may represent that he has been
10 licensed by the State of Illinois.
11     (b) A Public Insurance Adjuster shall may not agree to any
12 loss settlement without the insured's knowledge and consent and
13 shall provide the insured with a document setting forth the
14 scope, amount, and value of the damages prior to requesting the
15 insured for authority to settling any loss.
16     (c) If the Public Insurance Adjuster refers the insured to
17 a contractor, the Public Insurance Adjuster warrants that all
18 work will be performed in a workmanlike manner and conform to
19 all statutes, ordinances and codes. Should the work not be
20 completed in a workmanlike manner, the Public Insurance
21 Adjuster shall be responsible for any and all costs and expense
22 required to complete or repair the work in a workmanlike
23 manner.
24     (d) In all cases where the loss giving rise to the claim
25 for which the Public Insurance Adjuster was retained arise from
26 damage to a personal residence, the insurance proceeds shall be



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1 delivered in person to the named insured or his or her
2 designee. Where proceeds paid by an insurance company are paid
3 jointly to the insured and the Public Insurance Adjuster, the
4 insured Public Insurance Adjuster shall release such portion of
5 the proceeds which are due the Public Insurance Adjuster
6 insured within 30 calendar days after the insured's Public
7 Insurance Adjuster's receipt of the insurance company's check,
8 money order, draft, or release of funds. If the proceeds are
9 not so released to the insured within 30 calendar days, the
10 insured Public Insurance Adjuster shall provide the Public
11 Insurance Adjuster insured and the Illinois Department of
12 Insurance with a written explanation of the reason for the
13 delay.
14     (e) A Public Insurance Adjuster may not propose or attempt
15 to propose to any person that the Public Insurance Adjuster
16 represent that person while a loss-producing occurrence is
17 continuing nor while the fire department or its representatives
18 are engaged at the damaged premises nor between the hours of
19 7:00 p.m. and 8:00 a.m..
20     (f) A Public Insurance Adjuster shall may not advance money
21 or any valuable consideration, except emergency services or the
22 commencement of repairs, to an insured pending adjustment of a
23 claim.
24     (g) A Public Insurance Adjuster shall may not provide legal
25 advice or representation to the insured, or engage in the
26 unauthorized practice of law.



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2 (Source: P.A. 84-335.)
3     (215 ILCS 5/512.60)  (from Ch. 73, par. 1065.59-60)
4     Sec. 512.60. Maintenance of records. (a) All Public
5 Insurance Adjusters shall maintain a complete record of each of
6 their transactions as a Public Insurance Adjuster. The records
7 required by this Section shall include:
8     (1) name of the insured;
9     (2) date, location and amount of loss;
10     (3) copy of the contract between the Public Insurance
11 Adjuster and insured;
12     (4) name of the insurer, amount, expiration date and number
13 of each policy carried with respect to the loss;
14     (5) itemized statement of the insured's recoveries;
15     (6) name of the Public Insurance Adjuster who executed the
16 contract; and
17     (7) name of the attorney representing the insured, if
18 applicable, and the name of the representative of the insurance
19 company; and .
20     (8) copy of the statement provided to the insured
21 explaining the amount and value of the damages to the insured
22 premises, the amount of insurance proceeds recovered from the
23 insured, and the amount and values of all expenses incurred to
24 adjust the claim and the amount and value of the Public
25 Insurance Adjuster's fees and charges.



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1     (b) Records shall be maintained for at least three years
2 after the termination of the transaction with an insured and
3 shall be open to examination by the Director at any time.
4     (c) A Public Insurance Adjuster shall not divulge
5 information regarding any insured without written consent from
6 the insured, except that the Public Insurance Adjuster may
7 divulge such information to an insurance company or its
8 representative which insures the insured, to the Department of
9 Insurance, or upon a court order or an Internal Revenue Service
10 subpoena.
11     (d) Where a Public Insurance Adjuster is engaged or
12 employed by a Registered Firm, the records required by this
13 Section may be maintained by such Registered Firm on behalf of
14 the Public Insurance Adjuster.
15 (Source: P.A. 84-335.)
16     (215 ILCS 5/512.61)  (from Ch. 73, par. 1065.59-61)
17     Sec. 512.61. License suspension, revocation or denial. (a)
18 Any license issued under this Article may, after notice to the
19 licensee and hearing as provided by Section 402, be suspended
20 or revoked, and any application for a license may be denied, if
21 the Director finds that the holder of or applicant for a
22 license has:
23     (1) willfully violated any provision of this Code or any
24 rule or regulation promulgated by the Director; or
25     (2) intentionally made a material misstatement in an



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1 application for a license as a Public Insurance Adjuster; or
2     (3) obtained or attempted to obtain a license as a Public
3 Insurance Adjuster through misrepresentation or fraud; or
4     (4) misappropriated, converted to his own use or improperly
5 withheld money due others; or
6     (5) intentionally misrepresented the terms of any
7 insurance policy; or
8     (6) used fraudulent, coercive or dishonest practices, or
9 demonstrated incompetence, untrustworthiness or financial
10 irresponsibility in the transaction of business as a Public
11 Insurance Adjuster; or
12     (7) been convicted of any a felony or misdemeanor involving
13 dishonesty or fraud, unless the individual demonstrates to the
14 Director sufficient rehabilitation to warrant the public
15 trust; or
16     (8) knowingly transacted the business of a Public Insurance
17 Adjuster in conjunction with an individual who was not licensed
18 at the time; or
19     (9) failed to appear without reasonable cause or excuse in
20 response to a subpoena lawfully issued by the Director; or
21     (10) a license as a Public Insurance Adjuster suspended or
22 revoked or an application denied in any other state, district,
23 territory or province on a ground similar to one of the grounds
24 stated in this Section; or
25     (11) failed to comply with or violated any of the standards
26 set forth in Section 512.59; or



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1     (12) failed to maintain the records required by Section
2 512.60; or
3     (13) engaged in the unauthorized practice of law.
4     (b) Revocation, suspension, or the denial Denial of an
5 application pursuant to this Section shall be by written notice
6 served upon the applicant by certified or registered mail sent
7 to the address specified in the application. The applicant may
8 request a hearing in writing within 30 days from the date of
9 mailing as provided in Section 402.The hearing shall be held
10 pursuant to Section 2402 of Title 50 of the Code.
11     (c) Upon notification of the issuance of an order
12 suspending or revoking a Public Insurance Adjuster's license,
13 the licensee or other person having possession or custody of
14 such license shall promptly deliver it to the Director in
15 person or by mail. The Director shall publish the name of each
16 Public Insurance Adjuster whose license is suspended or
17 revoked, after such suspension or revocation becomes final, in
18 a manner designed to notify interested insurance companies and
19 other persons.
20     (d) Any individual whose Public Insurance Adjuster's
21 license is revoked or whose application is denied pursuant to
22 this Section shall be ineligible to apply for a Public
23 Insurance Adjuster's license for 5 2 years. A suspension
24 pursuant to this Section may be for any period of time up to 5 2
25 years.
26 (Source: P.A. 84-335; 84-832.)



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1     (215 ILCS 5/512.64)  (from Ch. 73, par. 1065.59-64)
2     Sec. 512.64. Injunctive Relief. Any person who acts as or
3 holds himself out to be either engaged in the business of
4 adjusting insurance claims or a Public Insurance Adjuster
5 without holding a valid and current Public Insurance Adjuster's
6 license to do so is hereby declared to be inimical to the
7 public welfare and to constitute a public nuisance. The
8 Director may report such practice to the Attorney General of
9 the State of Illinois, whose duty it is to apply forthwith by
10 complaint on relation of the Director in the name of the people
11 of the State of Illinois, as plaintiff, for injunctive relief
12 in the circuit court of the county where such practice occurred
13 to enjoin such person from engaging in such practice; and, upon
14 the filing of a verified petition in such court, the court, if
15 satisfied by affidavit or otherwise that such person has been
16 engaged in such practice without a valid and current license to
17 do so, may enter a temporary restraining order without notice
18 or bond, enjoining the defendant from such further practice. A
19 copy of the verified complaint shall be served upon the
20 defendant and the proceedings shall thereafter be conducted as
21 in other civil cases. If it is established that the defendant
22 has been or is engaged in such unlawful practice, the court may
23 enter an order or judgment perpetually enjoining the defendant
24 from further such practice. In all proceedings hereunder the
25 court, in its discretion, may apportion the costs among the



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1 parties interested in the action, including cost of filing the
2 complaint, service of process, witness fees and expenses, court
3 reporter charges and reasonable attorney fees. In case of
4 violation of any injunctive order entered under the provisions
5 of this Section, the court may try and punish the offender for
6 contempt of court. Such injunction proceedings shall be in
7 addition to, and not in lieu of, all penalties and other
8 remedies.
9 (Source: P.A. 84-548.)".