Illinois Compiled Statutes
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215 ILCS 5/500-80
(215 ILCS 5/500-80)
(Section scheduled to be repealed on January 1, 2027)
(a) An insurer or insurance producer may not pay a commission, service fee,
brokerage, or other valuable consideration to a person for selling, soliciting,
insurance in this State if that person is required to be licensed under this
Article and is not so
licensed at the time of selling, soliciting, or negotiating the insurance.
(b) A person may not accept a commission, service fee, brokerage, or other
consideration for selling, soliciting, or negotiating insurance in this State
if that person is
required to be licensed under this Article and is not so licensed.
(c) Renewal or other deferred commissions may be paid to a person for
soliciting, or negotiating
insurance in this State if the person was required to be licensed under
this Article at the time of
the sale, solicitation, or negotiation and was so licensed at that time.
(d) An insurer or insurance producer may pay or assign commissions, service
brokerages, or other valuable consideration to an insurance agency or to
persons who do not sell,
solicit, or negotiate insurance in this State, unless the payment would violate
Section 151 of this
(e) 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 comply with all of the following:
(1) 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. A copy of the written disclosure must be maintained by the producer or business entity that collects the compensation or fee for a period of 7 years.
(2) If the combined compensation or fee exceeds 10%
of a directly attributable premium amount of a corresponding contract or policy, the disclosure must also include the signature of the consumer or contracting party acknowledging the compensation or fee.
(3) If an insurance policy or contract is cancelled
for any reason within 90 days following the inception date, the producer or business entity shall refund to the consumer a prorated portion of the fee or compensation within 30 days after the producer or business entity receives proper documentation that the corresponding insurance policy or contract has been cancelled. At no time shall a producer or business entity charge the consumer a fee or compensation for cancellation of any insurance policy or contract.
(4) If the policy file contains documentation that
the producer performed a service corresponding to the applicable coverage or policy and the written disclosure stated that the fees were fully earned, then those fees shall be fully earned at inception of the disclosure's execution.
(Source: P.A. 92-386, eff. 1-1-02; 92-587, eff. 6-26-02