Illinois Compiled Statutes - Full Text

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Illinois Compiled Statutes - Full Text

Illinois Compiled Statutes (ILCS)

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225 ILCS 427/55

    (225 ILCS 427/55)
    (Section scheduled to be repealed on January 1, 2027)
    Sec. 55. Fidelity insurance; segregation of accounts.
    (a) The designated community association manager or the community association management firm that employs the designated community association manager shall not have access to and disburse community association funds unless each of the following conditions occur:
        (1) There is fidelity insurance in place to insure
    
against loss or theft of community association funds.
        (2) The fidelity insurance is in the maximum amount
    
of coverage available to protect funds in the custody or control of the designated community association manager or community association management firm providing service to the association.
        (3) During the term and coverage period of the
    
insurance, the fidelity insurance shall cover:
            (A) the designated community association manager;
            (B) the community association management firm;
            (C) all community association managers;
            (D) all partners, officers, and employees of the
        
community association management firm; and
            (E) the community association officers,
        
directors, and employees.
        (4) The insurance company issuing the fidelity
    
insurance may not cancel or refuse to renew the bond without giving at least 10 days' prior written notice.
        (5) Unless an agreement between the community
    
association and the designated community association manager or the community association management firm provides to the contrary, a community association may secure and pay for the fidelity insurance required by this Section. The designated community association manager, all other licensees, and the community association management firm must be named as additional insured parties on the community association policy. If the fidelity insurance is not secured and paid for by the association, the community association manager or the community association management firm that secures and pays for the insurance shall provide a current certificate of fidelity insurance to the community association for which it provides community association management services within 10 days of a request for such certificate by the community association for its records.
    (b) A community association management firm that provides community association management services for more than one community association shall maintain separate, segregated accounts for each community association. The funds shall not, in any event, be commingled with the funds of the community association manager, the community association management firm, or any other community association. The maintenance of such accounts shall be custodial, and such accounts shall be in the name of the respective community association.
    (c) The designated community association manager or community association management firm shall obtain the appropriate general liability and errors and omissions insurance, as determined by the Department, to cover any losses or claims against a community association manager, the designated community association manager, or the community association management firm. The community association manager or the community association management firm shall provide a current certificate of general liability and errors and omissions insurance to the community association for which it provides community association management services within 10 days of a request for such certificate by the community association for its records.
    (d) The Department shall have authority to promulgate additional rules regarding insurance, fidelity insurance and all accounts maintained and to be maintained by a community association manager, designated community association manager, or community association management firm.
(Source: P.A. 102-20, eff. 1-1-22; 102-970, eff. 5-27-22.)