Full Text of SB0520 95th General Assembly
SB0520 95TH GENERAL ASSEMBLY
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95TH GENERAL ASSEMBLY
State of Illinois
2007 and 2008 SB0520
Introduced 2/8/2007, by Sen. Mike Jacobs SYNOPSIS AS INTRODUCED: |
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Amends the Illinois Insurance Code. Provides that when an insurance producer or business entity charges any fee or
compensation separate from commissions deductible from, or directly
attributable to, premiums on insurance
policies or contracts, it must provide written disclosure to the consumer or
contracting party
that clearly specifies the amount or extent of the compensation or fee prior to
the delivery of the corresponding policy or the performance of the service (now, only the delivery of the corresponding policy). Makes a technical change. Effective immediately.
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A BILL FOR
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SB0520 |
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LRB095 04840 KBJ 24901 b |
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| AN ACT concerning insurance.
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| Be it enacted by the People of the State of Illinois,
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| represented in the General Assembly:
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| Section 5. The Illinois Insurance Code is amended by | 5 |
| changing Section 500-80 as follows:
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| (215 ILCS 5/500-80)
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| Sec. 500-80. Commissions.
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| (a) An insurer or insurance producer may not pay a | 9 |
| commission, service fee,
brokerage, or other valuable | 10 |
| consideration to a person for selling, soliciting,
or | 11 |
| negotiating
insurance in this State if that person is required | 12 |
| to be licensed under this
Article and is not so
licensed at the | 13 |
| time of selling, soliciting, or negotiating the insurance.
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| (b) A person may not accept a commission, service fee, | 15 |
| brokerage, or other
valuable
consideration for selling, | 16 |
| soliciting, or negotiating insurance in this State
if that | 17 |
| person is
required to be licensed under this Article and is not | 18 |
| so licensed.
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| (c) Renewal or other deferred commissions may be paid to a | 20 |
| person for
selling,
soliciting, or negotiating
insurance in | 21 |
| this State if the person was required to be licensed under
this | 22 |
| Article at the time of
the sale, solicitation, or negotiation | 23 |
| and was so licensed at that time.
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SB0520 |
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LRB095 04840 KBJ 24901 b |
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| (d) An insurer or insurance producer may pay or assign | 2 |
| commissions, service
fees,
brokerages, or other valuable | 3 |
| consideration to an insurance agency or to
persons who do not | 4 |
| sell,
solicit, or negotiate insurance in this State, unless the | 5 |
| payment would violate
Section 151 of this
Code.
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| (e) When an insurance producer or business entity charges | 7 |
| any fee or
compensation separate from commissions deductible | 8 |
| from, or directly
attributable to, premiums on insurance
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| policies or contracts, it must comply with all of the | 10 |
| following:
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| (1) It must provide written disclosure to the consumer | 12 |
| or
contracting party
that clearly specifies the amount or | 13 |
| extent of the compensation or fee prior to
the delivery of | 14 |
| the corresponding policy or the performance of the service . | 15 |
| A copy of the written disclosure
must
be
maintained for a | 16 |
| period of 7 years by the producer or business entity that | 17 |
| collects the compensation or
fee for a
period of 7 years .
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| (2) If the combined compensation or fee exceeds 10% of | 19 |
| a directly
attributable premium amount
of a corresponding | 20 |
| contract or policy, the disclosure must also
include the
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| signature of the consumer or contracting party | 22 |
| acknowledging the compensation
or fee.
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| (3) If an insurance policy or contract is cancelled for | 24 |
| any
reason within 90 days following the inception date, the | 25 |
| producer or
business entity shall refund to the consumer a | 26 |
| prorated portion of the
fee or compensation within 30 days |
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SB0520 |
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LRB095 04840 KBJ 24901 b |
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| after the producer or business
entity receives proper | 2 |
| documentation that the corresponding insurance
policy or | 3 |
| contract has been cancelled. At no time shall a producer or
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| business entity charge the consumer a fee or compensation | 5 |
| for
cancellation of any insurance policy or contract.
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| (4) If the
policy file contains documentation that the | 7 |
| producer performed a
service corresponding to the | 8 |
| applicable coverage or policy and the written
disclosure | 9 |
| stated that the fees were fully earned, then those fees | 10 |
| shall be
fully
earned at
inception of the disclosure's | 11 |
| execution.
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| (Source: P.A. 92-386, eff. 1-1-02; 92-587, eff. 6-26-02.)
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| Section 99. Effective date. This Act takes effect upon | 14 |
| becoming law.
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