Illinois General Assembly - Full Text of HB0240
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Full Text of HB0240  102nd General Assembly


Rep. Thaddeus Jones

Filed: 4/14/2021





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2    AMENDMENT NO. ______. Amend House Bill 240 by replacing
3everything after the enacting clause with the following:
4    "Section 5. The Illinois Insurance Code is amended by
5changing Sections 1510 and 1575 as follows:
6    (215 ILCS 5/1510)
7    Sec. 1510. Definitions. In this Article:
8    "Adjusting a claim for loss or damage covered by an
9insurance contract" means negotiating values, damages, or
10depreciation or applying the loss circumstances to insurance
11policy provisions.
12    "Adjusting insurance claims" means representing an insured
13with an insurer for compensation, and while representing that
14insured either negotiating values, damages, or depreciation,
15or applying the loss circumstances to insurance policy



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1    "Business entity" means a corporation, association,
2partnership, limited liability company, limited liability
3partnership, or other legal entity.
4    "Compensation" includes, but is not limited to, the
6        (1) any assignment of insurance proceeds or a
7    percentage of the insurance proceeds;
8        (2) any agreement to make repairs for the amount of
9    the insurance proceeds payable; or
10        (3) assertion of any lien against insurance proceeds
11    payable.
12    "Department" means the Department of Insurance.
13    "Director" means the Director of Insurance.
14    "Fingerprints" means an impression of the lines on the
15finger taken for the purpose of identification. The impression
16may be electronic or in ink converted to electronic format.
17    "Home state" means the District of Columbia and any state
18or territory of the United States where the public adjuster's
19principal place of residence or principal place of business is
20located. If neither the state in which the public adjuster
21maintains the principal place of residence nor the state in
22which the public adjuster maintains the principal place of
23business has a substantially similar law governing public
24adjusters, the public adjuster may declare another state in
25which it becomes licensed and acts as a public adjuster to be
26the home state.



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1    "Individual" means a natural person.
2    "Person" means an individual or a business entity.
3    "Public adjuster" means any person who, for compensation
4or any other thing of value on behalf of the insured:
5        (i) acts, or aids, or represents the insured solely in
6    relation to first party claims arising under insurance
7    contracts that insure the real or personal property of the
8    insured, on behalf of an insured in adjusting an insurance
9    a claim for loss or damage covered by an insurance
10    contract;
11        (ii) advertises for employment as a public adjuster of
12    insurance claims or solicits business or represents
13    himself or herself to the public as a public adjuster of
14    first party insurance claims for losses or damages arising
15    out of policies of insurance that insure real or personal
16    property; or
17        (iii) directly or indirectly solicits business,
18    investigates or adjusts losses, or advises an insured
19    about first party claims for losses or damages arising out
20    of policies of insurance that insure real or personal
21    property for another person engaged in the business of
22    adjusting losses or damages covered by an insurance policy
23    for the insured.
24    "Uniform individual application" means the current version
25of the National Association of Directors (NAIC) Uniform
26Individual Application for resident and nonresident



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2    "Uniform business entity application" means the current
3version of the National Association of Insurance Commissioners
4(NAIC) Uniform Business Entity Application for resident and
5nonresident business entities.
6(Source: P.A. 96-1332, eff. 1-1-11.)
7    (215 ILCS 5/1575)
8    Sec. 1575. Contract between public adjuster and insured.
9    (a) Public adjusters shall ensure that all contracts for
10their services are in writing and contain the following terms:
11        (1) legible full name of the adjuster signing the
12    contract, as specified in Department records;
13        (2) permanent home state business address, email
14    address, and phone number;
15        (3) license number;
16        (4) title of "Public Adjuster Contract";
17        (5) the insured's full name, street address, insurance
18    company name, and policy number, if known or upon
19    notification;
20        (6) a description of the loss and its location, if
21    applicable;
22        (7) description of services to be provided to the
23    insured;
24        (8) signatures of the public adjuster and the insured;
25        (9) date and time the contract was signed by the



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1    public adjuster and date and time the contract was signed
2    by the insured;
3        (10) attestation language stating that the public
4    adjuster is fully bonded pursuant to State law; and
5        (11) full salary, fee, commission, compensation, or
6    other considerations the public adjuster is to receive for
7    services.
8    (b) The contract may specify that the public adjuster
9shall be named as a co-payee on an insurer's payment of a
11        (1) If the compensation is based on a share of the
12    insurance settlement, the exact percentage shall be
13    specified.
14        (2) Initial expenses to be reimbursed to the public
15    adjuster from the proceeds of the claim payment shall be
16    specified by type, with dollar estimates set forth in the
17    contract and with any additional expenses first approved
18    by the insured.
19        (3) Compensation provisions in a public adjuster
20    contract shall not be redacted in any copy of the contract
21    provided to the Director.
22    (c) If the insurer, not later than 5 business days after
23the date on which the loss is reported to the insurer, either
24pays or commits in writing to pay to the insured the policy
25limit of the insurance policy, the public adjuster shall:
26        (1) not receive a commission consisting of a



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1    percentage of the total amount paid by an insurer to
2    resolve a claim;
3        (2) inform the insured that loss recovery amount might
4    not be increased by insurer; and
5        (3) be entitled only to reasonable compensation from
6    the insured for services provided by the public adjuster
7    on behalf of the insured, based on the time spent on a
8    claim and expenses incurred by the public adjuster, until
9    the claim is paid or the insured receives a written
10    commitment to pay from the insurer.
11    (d) A public adjuster shall provide the insured a written
12disclosure concerning any direct or indirect financial
13interest that the public adjuster has with any other party who
14is involved in any aspect of the claim, other than the salary,
15fee, commission, or other consideration established in the
16written contract with the insured, including, but not limited
17to, any ownership of or any compensation expected to be
18received from, any construction firm, salvage firm, building
19appraisal firm, board-up company, or any other firm that
20provides estimates for work, or that performs any work, in
21conjunction with damages caused by the insured loss on which
22the public adjuster is engaged. The word "firm" shall include
23any corporation, partnership, association, joint-stock
24company, or person.
25    (e) A public adjuster contract may not contain any
26contract term that:



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1        (1) allows the public adjuster's percentage fee to be
2    collected when money is due from an insurance company, but
3    not paid, or that allows a public adjuster to collect the
4    entire fee from the first check issued by an insurance
5    company, rather than as a percentage of each check issued
6    by an insurance company;
7        (2) requires the insured to authorize an insurance
8    company to issue a check only in the name of the public
9    adjuster;
10        (3) precludes a public adjuster or an insured from
11    pursuing civil remedies;
12        (4) includes any hold harmless agreement that provides
13    indemnification to the public adjuster by the insured for
14    liability resulting from the public adjuster's negligence;
15    or
16        (5) provides power of attorney by which the public
17    adjuster can act in the place and instead of the insured.
18    (f) The following provisions apply to a contract between a
19public adjuster and an insured:
20        (1) Prior to the signing of the contract, the public
21    adjuster shall provide the insured with a separate signed
22    and dated disclosure document regarding the claim process
23    that states:
24    "Property insurance policies obligate the insured to
25    present a claim to his or her insurance company for
26    consideration. There are 3 types of adjusters that could



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1    be involved in that process. The definitions of the 3
2    types are as follows:
3            (A) "Company adjuster" means the insurance
4        adjusters who are employees of an insurance company.
5        They represent the interest of the insurance company
6        and are paid by the insurance company. They will not
7        charge you a fee.
8            (B) "Independent adjuster" means the insurance
9        adjusters who are hired on a contract basis by an
10        insurance company to represent the insurance company's
11        interest in the settlement of the claim. They are paid
12        by your insurance company. They will not charge you a
13        fee.
14            (C) "Public adjuster" means the insurance
15        adjusters who do not work for any insurance company.
16        They represent work for the insured to assist in the
17        preparation, presentation, and settlement of the
18        claim. The insured hires them by signing a contract
19        agreeing to pay them a fee or commission based on a
20        percentage of the settlement, or other method of
21        compensation.".
22        (2) The insured is not required to hire a public
23    adjuster to help the insured meet his or her obligations
24    under the policy, but has the right to do so.
25        (3) The public adjuster is not a representative or
26    employee of the insurer.



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1        (4) The salary, fee, commission, or other
2    consideration is the obligation of the insured, not the
3    insurer, except when rights have been assigned to the
4    public adjuster by the insured.
5    (g) The contracts shall be executed in duplicate to
6provide an original contract to the public adjuster, and an
7original contract to the insured. The public adjuster's
8original contract shall be available at all times for
9inspection without notice by the Director.
10    (h) The public adjuster shall provide the insurer, or its
11authorized representative for receiving notice of loss or
12damage, with an exact copy of the contract with by the insured
13by email after execution of the contract, authorizing the
14public adjuster to represent the insured's interest.
15    (i) The public adjuster shall give the insured written
16notice of the insured's rights as a consumer under the law of
17this State.
18    (j) A public adjuster shall not provide services, other
19than emergency services, until a written contract with the
20insured has been executed, on a form filed with and approved by
21the Director, and an exact copy of the contract has been
22provided to the insurer, or its authorized representative for
23receiving notice of loss or damage. Except as provided in the
24Fire Damage Representation Agreement Act, at At the option of
25the insured, any such contract shall be voidable for 5
26business days after the copy has been received by the insurer



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1execution. The insured may void the contract by notifying the
2public adjuster in writing by (i) registered or certified
3mail, return receipt requested, to the address shown on the
4contract, or (ii) personally serving the notice on the public
5adjuster, or (iii) sending an email to the email address shown
6on the contract.
7    (k) If the insured exercises the right to rescind the
8contract, anything of value given by the insured under the
9contract will be returned to the insured within 15 business
10days following the receipt by the public adjuster of the
11cancellation notice.
12(Source: P.A. 96-1332, eff. 1-1-11; 97-333, eff. 8-12-11.)
13    (215 ILCS 5/Art. XXXI.75 rep.)
14    Section 10. The Illinois Insurance Code is amended by
15repealing Article XXXI 3/4.
16    Section 99. Effective date. This Act takes effect upon
17becoming law.".