HB5471 EngrossedLRB102 24372 BMS 33606 b

1    AN ACT concerning regulation.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
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
17    "Business entity" means a corporation, association,
18partnership, limited liability company, limited liability
19partnership, or other legal entity.
20    "Compensation" includes, but is not limited to, the
22        (1) any assignment of insurance proceeds or a
23    percentage of the insurance proceeds;



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1        (2) any agreement to make repairs for the amount of
2    the insurance proceeds payable; or
3        (3) assertion of any lien against insurance proceeds
4    payable.
5    "Department" means the Department of Insurance.
6    "Director" means the Director of Insurance.
7    "Fingerprints" means an impression of the lines on the
8finger taken for the purpose of identification. The impression
9may be electronic or in ink converted to electronic format.
10    "Home state" means the District of Columbia and any state
11or territory of the United States where the public adjuster's
12principal place of residence or principal place of business is
13located. If neither the state in which the public adjuster
14maintains the principal place of residence nor the state in
15which the public adjuster maintains the principal place of
16business has a substantially similar law governing public
17adjusters, the public adjuster may declare another state in
18which it becomes licensed and acts as a public adjuster to be
19the home state.
20    "Individual" means a natural person.
21    "Person" means an individual or a business entity.
22    "Public adjuster" means any person who, for compensation
23or any other thing of value on behalf of the insured:
24        (i) acts, or aids, or represents the insured solely in
25    relation to first party claims arising under insurance
26    contracts that insure the real or personal property of the



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1    insured, on behalf of an insured in adjusting an insurance
2    a claim for loss or damage covered by an insurance
3    contract;
4        (ii) advertises for employment as a public adjuster of
5    insurance claims or solicits business or represents
6    himself or herself to the public as a public adjuster of
7    first party insurance claims for losses or damages arising
8    out of policies of insurance that insure real or personal
9    property; or
10        (iii) directly or indirectly solicits business,
11    investigates or adjusts losses, or advises an insured
12    about first party claims for losses or damages arising out
13    of policies of insurance that insure real or personal
14    property for another person engaged in the business of
15    adjusting losses or damages covered by an insurance policy
16    for the insured.
17    "Uniform individual application" means the current version
18of the National Association of Directors (NAIC) Uniform
19Individual Application for resident and nonresident
21    "Uniform business entity application" means the current
22version of the National Association of Insurance Commissioners
23(NAIC) Uniform Business Entity Application for resident and
24nonresident business entities.
25    "Webinar" means an online educational presentation during
26which a live and participating instructor and participating



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1viewers, whose attendance is periodically verified throughout
2the presentation, actively engage in discussion and in the
3submission and answering of questions.
4(Source: P.A. 102-135, eff. 7-23-21.)
5    (215 ILCS 5/1575)
6    Sec. 1575. Contract between public adjuster and insured.
7    (a) Public adjusters shall ensure that all contracts for
8their services are in writing and contain the following terms:
9        (1) legible full name of the adjuster signing the
10    contract, as specified in Department records;
11        (2) permanent home state business address, email
12    address, and phone number;
13        (3) license number;
14        (4) title of "Public Adjuster Contract";
15        (5) the insured's full name, street address, insurance
16    company name, and policy number, if known or upon
17    notification;
18        (6) a description of the loss and its location, if
19    applicable;
20        (7) description of services to be provided to the
21    insured;
22        (8) signatures of the public adjuster and the insured;
23        (9) date and time the contract was signed by the
24    public adjuster and date and time the contract was signed
25    by the insured;



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



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



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



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



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



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