215 ILCS 5/123.1

(215 ILCS 5/123.1) (from Ch. 73, par. 735.1)

Sec. 123.1. Service of process upon unauthorized insurers for false advertising.

(1) (a) The purpose of this Act is to subject to the jurisdiction of the Director of Insurance of this State and to the jurisdiction of the courts of this State insurers not authorized to transact business in this State which place in or send into this State any false advertising designed to induce residents of this State to purchase insurance from insurers not authorized to transact business in this State. The Legislature declares it is in the interest of the citizens of this State who purchase insurance from insurers which solicit insurance business in this State in the manner set forth in the preceding sentence that such insurers be subject to the provisions of this Act. In furtherance of such state interest, the Legislature herein provides a method of substituted service of process upon such insurers and declares that in so doing, it exercises its power to protect its residents and also exercises powers and privileges available to the State by virtue of Public Law 15, 79th Congress of the United States, Chapter 20, 1st Session, S. 340, which declares that the business of insurance and every person engaged therein shall be subject to the laws of the several states; the authority provided herein to be in addition to any existing powers of this State.

(b) The provisions of this Section shall be liberally construed.

(2) No unauthorized foreign or alien insurer of the kind described in subsection (1) shall make, issue, circulate or cause to be made, issued or circulated, to residents of this State any estimate, illustration, circular, pamphlet, or letter, or cause to be made in any newspaper, magazine or other publication or over any radio or television station, any announcement or statement to such residents misrepresenting its financial condition or the terms of any contracts issued or to be issued or the benefits or advantages promised thereby, or the dividends or share of the surplus to be received thereon in violation of Article XXVI, and whenever the Director shall have reason to believe that any such insurer is engaging in such unlawful advertising, it shall be his duty to give notice of such fact by certified or registered mail to such insurer and to the insurance supervisory official of the domiciliary state of such insurer. For the purpose of this Section the domiciliary state of an alien insurer shall be deemed to be the state of entry or the state of the principal office in the United States.

(3) If after thirty days following the giving of the notice mentioned in subsection (2) such insurer has failed to cease making, issuing, or circulating such false misrepresentations or causing the same to be made, issued or circulated in this State, and if the Director has reason to believe that a proceeding by him in respect to such matters would be to the interest of the public, and that such insurer is issuing or delivering contracts of insurance to residents of this State or collecting premiums on such contracts or doing any of the acts enumerated in subsection (4), he shall take action against such insurer under Article XXVI.

(4) (a) Any of the following acts in this State, effected by mail or otherwise, by any such unauthorized foreign or alien insurer:

(i) the issuance or delivery of contracts or insurance to residents of this State; or

(ii) the solicitation of applications for such contracts; or

(iii) the collection of premiums, membership fees, assessments or other considerations for such contracts; or

(iv) any other transaction of insurance business;

is equivalent to and shall constitute an appointment by such insurer of the Director and his successor or successors in office, to be its true and lawful attorney, upon whom may be served all statements of charges, notices and lawful process in any proceeding instituted in respect to the misrepresentations set forth in subsection (2) hereof under the provisions of Article XXVI, or in any action, suit or proceeding for the recovery of any penalty therein provided, and any such act shall be signification of its agreement that such service of statement of charges, notices or process is of the same legal force and validity as personal service of such statement of charges, notices or process in this State, upon such insurer.

(b) Service of a statement of charges and notices under Article XXVI shall be made by any deputy or employee of the Department of Insurance delivering to and leaving with the Director or some person in apparent charge of his office, two copies thereof. Service of process issued by any court in any action, suit or proceeding to collect any penalty under Article XXVI provided, shall be made by delivering and leaving with the Director, or some person in apparent charge of his office, two copies thereof. The Director shall forthwith cause to be mailed by certified or registered mail one of the copies of such statement of charges, notices or process to the defendant at its last known principal place of business, and shall keep a record of all statements of charges, notices and process so served. Such service of statement of charges, notices or process shall be sufficient provided they shall have been so mailed and the defendant's receipt or receipt issued by the post office with which the letter is certified or registered, showing the name of the sender of the letter and the name and address of the person to whom the letter is addressed, and the affidavit of the person mailing such letter showing a compliance herewith are filed with the Director in the case of any statement of charges or notices, or with the clerk of the court in which such action is pending in the case of any process, on or before the date the defendant is required to appear or within such further time as may be allowed.

(c) Service of statement of charges, notices and process in any such proceeding, action or suit shall in addition to the manner provided in paragraph (b) of this subsection be valid if served upon any person within this State who on behalf of such insurer is

(i) soliciting insurance; or

(ii) making, issuing or delivering any policies or contracts of insurance; or

(iii) collecting or receiving in this State any premium, membership fee, assessment or other consideration for insurance; or

(iv) in any manner aiding or assisting in doing any of the things enumerated in clauses (i), (ii) or (iii) of this paragraph;

and a copy of such statement of charges, notices or process is sent within ten days thereafter by certified or registered mail by or on behalf of the Director to the defendant at the last known principal place of business of the defendant, and the defendant's receipt, or the receipt issued by the post office with which the letter is certified or registered, showing the name of the sender of the letter, the name and address of the person to whom the letter is addressed, and the affidavit of the person mailing the same showing a compliance herewith, are filed with the Director in the case of any statement of charges or notices, or with the clerk of the court in which such action is pending in the case of any process, on or before the date the defendant is required to appear or within such further time as the court may allow.

(d) No cease or desist order or judgment by default under this section shall be entered until the expiration of thirty days from the date of the filing of the affidavit of compliance.

(e) Service of process and notice under the provisions of this section shall be in addition to all other methods of service provided by law, and nothing in this section shall limit or prohibit the right to serve any statement of charges, notices or process upon any insurer in any other manner now or hereafter permitted by law.

(5) When used in this Act, "residents" shall mean and include person, partnership or corporation, domestic, alien or foreign.

(Source: P.A. 83-598.)