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Illinois Compiled Statutes
Information maintained by the Legislative Reference Bureau Updating the database of the Illinois Compiled Statutes (ILCS) is an ongoing process. Recent laws may not yet be included in the ILCS database, but they are found on this site as Public Acts soon after they become law. For information concerning the relationship between statutes and Public Acts, refer to the Guide. Because the statute database is maintained primarily for legislative drafting purposes, statutory changes are sometimes included in the statute database before they take effect. If the source note at the end of a Section of the statutes includes a Public Act that has not yet taken effect, the version of the law that is currently in effect may have already been removed from the database and you should refer to that Public Act to see the changes made to the current law.
() 215 ILCS 5/508.1
(215 ILCS 5/508.1) (from Ch. 73, par. 1065.55-1)
Sec. 508.1.
(Repealed).
(Source: P.A. 85-334. Repealed by P.A. 92-386, eff. 1-1-02.)
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215 ILCS 5/508.2
(215 ILCS 5/508.2) (from Ch. 73, par. 1065.55-2)
Sec. 508.2.
(Repealed).
(Source: P.A. 91-234, eff. 1-1-00. Repealed by P.A. 92-386, eff. 1-1-02.)
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215 ILCS 5/509.1
(215 ILCS 5/509.1) (from Ch. 73, par. 1065.56-1)
Sec. 509.1.
(Repealed).
(Source: P.A. 91-234, eff. 1-1-00. Repealed by P.A. 92-386, eff. 1-1-02.)
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215 ILCS 5/510.2
(215 ILCS 5/510.2) (from Ch. 73, par. 1065.57-2)
Sec. 510.2.
(Repealed).
(Source: P.A. 91-234, eff. 1-1-00. Repealed by P.A. 92-386, eff. 1-1-02.)
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215 ILCS 5/511.1
(215 ILCS 5/511.1) (from Ch. 73, par. 1065.58-1)
Sec. 511.1.
(Repealed).
(Source: P.A. 84-548. Repealed by P.A. 92-386, eff. 1-1-02.)
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215 ILCS 5/Art. XXXI.25
(215 ILCS 5/Art. XXXI.25 heading)
ARTICLE XXXI 1/4.
THIRD PARTY ADMINISTRATORS
(Article scheduled to be repealed on January 1, 2027)
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215 ILCS 5/511.100
(215 ILCS 5/511.100) (from Ch. 73, par. 1065.58-100)
(Section scheduled to be repealed on January 1, 2027)
Sec. 511.100.
Purpose.
The purpose of this Article is to recognize and
provide reasonable public supervision and licensing of persons who provide
administrative services in connection with insurance or alternatives to
insurance.
(Source: P.A. 84-887 .)
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215 ILCS 5/511.101
(215 ILCS 5/511.101) (from Ch. 73, par. 1065.58-101)
(Section scheduled to be repealed on January 1, 2027)
Sec. 511.101. Definitions. For the purpose of this Article:
(a) "Administrator" means any person who on behalf of a plan sponsor or
insurer receives or collects charges, contributions or premiums for, or
adjusts or settles claims on residents of this State in connection with
any type of life or accident or health benefit provided through or as an
alternative to insurance within the scope of Class 1(a), 1(b) or 2(a) of
Section 4 of this Code, other than any of the following:
(1) A corporation, association, trust or partnership | | which is administering a plan (i) on behalf of the employees of such corporation, association, trust or partnership or (ii) for the employees of one or more subsidiaries or affiliated corporations or affiliated associations, trusts or partnerships;
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(2) A union administering a plan for its members;
(3) A plan sponsor administering its own plan;
(4) An insurer or dental service plan to the extent
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(5) A producer licensed in this State whose insurance
| | activities are limited to the scope of such license;
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(6) A trust and its trustees and employees acting
| | pursuant to its trust agreement established in conformity with 29 U.S.C. 186;
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(7) A person who adjusts or settles claims in the
| | normal course of such person's practice or employment as an attorney-at-law, and who does not collect contributions or premiums in connection with life or accident or health coverage;
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(8) A person who administers only self-insured
| | workers' compensation plans, or single employer self insured life or accident or health benefit plans;
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(9) A credit card issuing company which advances for
| | and collects premiums or charges from its credit card holders who have authorized such collection, if such company does not adjust or settle claims;
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(10) A creditor on behalf of its debtors with respect
| | to insurance covering a debt between the creditor and its debtors.
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(b) "Covered Individual" means any individual eligible for life or accident
or health benefits under a plan.
(c) "Contributions" means any money charged a covered individual, plan
sponsor or other entity to fund the self-insured portion of any plan in
accordance with written provisions of the plan or contracts of insurance.
Contributions shall include administrative fees charged to a covered
individual. Administrative fee means any compensation paid by a covered
individual for services performed by the administrator.
(d) "Premiums" means any money charged a covered individual, plan sponsor
or other entity to provide life or accident or health insurance under a
plan. The term premium shall include amounts paid by or charged to a covered
individual plan sponsor or other entity for stop loss or excess insurance.
(e) "Charges" means any compensation paid by a plan sponsor or insurer
for services performed by the administrator.
(f) "Administrator Trust Fund", hereinafter referred to as "ATF", means
a special fiduciary account established and maintained by an administrator
pursuant to Section 511.112 in which contributions and premiums are deposited.
(g) "Claims Administration Services Account", hereinafter referred to
as "CASA", means a special fiduciary account established and maintained
by an administrator pursuant to Section 511.112 of this Code from which
claims and claims adjustment expenses are disbursed.
(h) "Plan Sponsor" means any person other than an insurer, who establishes
or maintains a plan covering residents of this State, including but not
limited to plans established or maintained by 2 or more employers or
jointly by one or more employers and one or more employee organizations,
the association, committee, joint board of trustees, or other similar group
of representatives of the parties who establish or maintain the plan.
Provided, however, that "Plan Sponsor" shall not include:
(1) The employer in the case of a plan established or
| | maintained by a single employer; or
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(2) The employee organization in the case of a plan
| | established or maintained by an employee organization.
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No plan sponsor covered in whole by provisions of the Employee Retirement
Income Security Act of 1974 (ERISA) shall be covered by any of the
provisions of this Act to the extent that such provisions are inconsistent
with or in conflict with any provisions of ERISA as now or hereafter amended.
(i) "Financial Institution" means any federal or state chartered bank
or savings and loan institution which is insured by the Federal Deposit
Insurance Corporation (FDIC) or the Federal Savings and Loan Insurance
Corporation (FSLIC).
(j) "Plan" means any plan, fund or program established or maintained by
a plan sponsor or insurer to the extent that such plan, fund or program
was established or is maintained to provide through insurance or alternatives
to insurance any type of life or accident or health benefit within the scope
of Class 1(a), 1(b) or 2(a) of Section 4 of the Illinois Insurance Code.
(k) "Insurer" means any person who transacts insurance or health care
service business authorized under the laws of this State.
(l) "Quasi-resident" means a nonresident licensee who produces 50% or
more of his contributions and premium volume during a calendar year from
residents of this State.
(Source: P.A. 101-108, eff. 1-1-20 .)
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215 ILCS 5/511.102
(215 ILCS 5/511.102) (from Ch. 73, par. 1065.58-102)
(Section scheduled to be repealed on January 1, 2027)
Sec. 511.102.
License required.
(a) No person may act as or hold
himself out to be an administrator after July 1, 1986 unless duly licensed
in accordance with this Article. An administrator doing business in this
State on July 1, 1986 shall apply for a license within 90 days thereafter.
(b) In addition to any other penalty set forth in this Article, any person
violating subsection (a) above is guilty of a Class A misdemeanor.
(Source: P.A. 84-887 .)
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215 ILCS 5/511.103
(215 ILCS 5/511.103) (from Ch. 73, par. 1065.58-103)
(Section scheduled to be repealed on January 1, 2027)
Sec. 511.103.
Application.
The applicant for a license shall file
with the Director an application upon a form prescribed by the Director,
which shall include or have attached the following:
(1) The names, addresses and official positions of | | the individuals who are responsible for the conduct of the affairs of the administrator, including but not limited to all members of the board of directors, board of trustees, executive committee, or other governing board or committee, the principal officers in the case of a corporation or the partners in the case of a partnership; and
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(2) A non-refundable filing fee of $200 which shall
| | become the initial administrator license fee should the Director issue an administrator license.
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(Source: P.A. 93-32, eff. 7-1-03 .)
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215 ILCS 5/511.104
(215 ILCS 5/511.104) (from Ch. 73, par. 1065.58-104)
(Section scheduled to be repealed on January 1, 2027)
Sec. 511.104.
Bond requirements for administrators.
(a) Every applicant
for an administrator's license shall file with the application and shall
thereafter maintain in force while so licensed, a fidelity bond in favor
of the people of the State of Illinois executed by a surety company and
payable to any party injured under the terms of the bond. The bond shall
be continuous in form and in one of the following amounts:
(1) For an administrator which maintains an ATF but | | does not maintain a CASA, the greater of $50,000 or 5% of contributions and premiums projected to be received or collected in the ATF for the forthcoming plan year from Illinois residents, but not to exceed $1,000,000;
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(2) For an administrator which maintains a CASA but
| | does not maintain an ATF, the greater of $50,000 or 5% of the claims and claim expenses projected to be held in the CASA for the forthcoming year to pay claims and claim expenses for Illinois residents, but not to exceed $1,000,000;
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(3) For an administrator which maintains both an ATF
| | and a CASA, the greater of the amounts in subparagraphs (1) or (2) above, but not to exceed $1,000,000.
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Such bond is required of an administrator who maintains or should maintain
funds in a fiduciary capacity as set forth in Section 511.112 of this Code
unless the administrator is contracted with the insurer as an
administrator and if the plan is fully insured by the insurer on whose
behalf the funds are held.
(b) Such bond shall remain in force and effect until the surety is
released from liability by the Director or until the bond is cancelled by
the surety. The surety may cancel the bond and be released from further
liability thereunder upon 30 days' written notice in advance to the
Director. Such cancellation shall not affect any liability incurred or
accrued thereunder before the termination of the 30-day period. Upon
receipt of any notice of cancellation, the Director shall immediately notify
the licensee.
(c) The license required by Section 511.102 shall automatically
terminate if the bond required by this Section is not in force. Within 30
days thereafter, the administrator shall return the license to the Director
for cancellation.
(Source: P.A. 84-1431 .)
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215 ILCS 5/511.105
(215 ILCS 5/511.105) (from Ch. 73, par. 1065.58-105)
(Section scheduled to be repealed on January 1, 2027)
Sec. 511.105.
License.
(a) The Director shall cause a license to be
issued to each applicant that has demonstrated to the Director's satisfaction
compliance with the requirements of this Article.
(b) Each administrator license shall remain in effect as long as the holder
of the license maintains in force and effect the bond required by Section
511.104 and pays the annual fee of $200 prior to the anniversary
date of
the license, unless the license is revoked or suspended pursuant to Section
511.107.
(c) Each license shall contain the name, business address and
identification number of the licensee, the date the license was issued and
any other information the Director considers proper.
(Source: P.A. 93-32, eff. 7-1-03 .)
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215 ILCS 5/511.106
(215 ILCS 5/511.106) (from Ch. 73, par. 1065.58-106)
(Section scheduled to be repealed on January 1, 2027)
Sec. 511.106.
Administrator requirements.
(a) Each administrator shall
identify to the Director any ownership interest or affiliation of any kind
with any plan sponsor or insurer responsible directly or through reinsurance
for providing benefits to any plan for which it provides services as an administrator.
(b) An administrator shall provide services as an administrator pursuant
to a written agreement. The written agreement shall be between the administrator
and the plan sponsor or insurer and shall be retained as part of the official
records of the administrator for the duration of said agreement and for
5 years thereafter.
(c) An administrator shall maintain in its principal office for the duration
of the written agreement with any plan sponsor or insurer and for 5 years
thereafter adequate books and records of all transactions involving a plan
sponsor or insurer and covered individuals or beneficiaries. Such books and
records shall be maintained in accordance with generally accepted standards
of business recordkeeping. An administrator is not required to maintain
copies of books and records if such originals are returned to the plan sponsor
or insurer prior to the end of such 5 year period. The administrator shall
maintain evidence of the return of the originals for the balance of the 5 year period.
(d) The administrator shall file with the Director the names and addresses
of the insurers and plan sponsors with whom the administrator has written
agreements. If an insurer or plan sponsor does not assume or bear the risk,
the administrator must disclose the name and address of the ultimate risk
bearer. This filing requirement shall apply to the initial application
for an administrator's license and the renewal of such license.
(e) An administrator shall use only advertising pertaining to the plan which
has been approved in advance by the plan sponsor or insurer.
(f) Upon receipt of instructions from the plan sponsor or insurer, an
administrator shall deliver promptly to covered individuals or beneficiaries
all policies, certificate booklets, termination notices or other written communications.
(g) An administrator shall not receive compensation from a plan sponsor
or insurer which is contingent upon the loss ratio of the plan. This subsection
shall not, however, prevent the administrator from engaging in cost containment
activities with a plan sponsor or insurer.
(h) An administrator shall not receive from any plan sponsor, insurer,
covered individual or beneficiary under a plan any compensation or other
payments except as expressly set forth in the written agreement between
the administrator and the plan sponsor or insurer.
(i) Upon request of the Director, an administrator shall make available
for examination, either in the City of Springfield or at the licensee's
principal place of business, all basic organizational documents including
but not limited to articles of incorporation, articles of association, partnership
agreement, trade name certificate, trust agreement, shareholder agreement
and other applicable documents and all amendments thereto, bylaws, rules
and regulations or similar documents regulating the conduct of its internal affairs.
(Source: P.A. 84-887 .)
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215 ILCS 5/511.107
(215 ILCS 5/511.107) (from Ch. 73, par. 1065.58-107)
(Section scheduled to be repealed on January 1, 2027)
Sec. 511.107.
License suspension, revocation or denial.
(a) Any license
issued under this Article may be suspended or revoked, after notice to the
licensee and an opportunity for hearing, and any application for a license
may be denied, after notice and an opportunity for hearing, if the Director
finds that the licensee or applicant:
(1) has wilfully violated any applicable provisions | | of the Illinois Insurance Code or applicable Part of Title 50 of the Illinois Administrative Code; or
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(2) has intentionally made a material misstatement in
| | its application for a license; or
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(3) has obtained or attempted to obtain a license
| | through misrepresentation or fraud; or
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(4) has misappropriated or converted to its own use,
| | or improperly withheld, money required to be held in a fiduciary capacity; or
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(5) has, in the transaction of business under its
| | license, used fraudulent, coercive or dishonest practices, or has demonstrated incompetence, untrustworthiness or financial irresponsibility; or is not of good personal and business reputation; or
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(6) has been, within the past 3 years, convicted of a
| | felony, unless the individual demonstrates to the Director sufficient rehabilitation to warrant the public trust; or
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(7) has failed to appear without reasonable cause or
| | excuse in response to a subpoena, examination warrant or any other order lawfully issued by the Director; or
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(8) is using such methods or practices in the conduct
| | of its business so as to render its further transaction of business in this State hazardous or injurious to covered individuals or the public; or
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(9) is affiliated with and is under the same general
| | management as another administrator which transacts business in this State without being licensed under this Article; or
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(10) has had its license suspended or revoked or its
| | application denied in any other state, district, territory or province on grounds similar to those stated in this Section; or
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(11) has failed to report under Section 511.108 a
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(b) Denial of an application or suspension or revocation of a license,
pursuant to this Section shall be by written order sent to the applicant
or licensee by certified or registered mail at the address specified in
the records of the Department. The written order shall state the grounds,
charges or conduct on which denial, suspension or revocation is based.
The applicant or licensee may in writing request a hearing within 30 days
from the date of mailing. Upon receipt of a written request, the Director
shall issue an order setting (i) a specific time for the hearing, which
may not be less than 20 nor more than 30 days after receipt of the request
and (ii) a specific place for the hearing, which may be in either the City
of Springfield or in the county in Illinois where the applicant's or licensee's
principal place of business is located. If no written request is received
by the Director, such order shall be final upon the expiration of said 30 days.
(c) Upon revocation of a license, the licensee or other person having
possession or custody of such license shall deliver it to the Director
in person or by mail within 30 days of such revocation.
(d) Any administrator whose license is revoked or whose application is
denied pursuant to this Section shall be ineligible to reapply for any license
for 2 years. A suspension pursuant to this Section may be for a period
of up to 2 years.
(Source: P.A. 84-887 .)
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215 ILCS 5/511.108
(215 ILCS 5/511.108) (from Ch. 73, par. 1065.58-108)
(Section scheduled to be repealed on January 1, 2027)
Sec. 511.108. Felony convictions. Any administrator and any individual
listed on the application as required by Section 511.103, who is convicted
of a felony shall report such conviction to the Director within 30 days
of the entry date of the judgment. Within that 30-day
period, the administrator
shall also provide the Director with a copy of the judgment, the probation
or commitment order and any other relevant documents.
(Source: P.A. 96-328, eff. 8-11-09 .)
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215 ILCS 5/511.109 (215 ILCS 5/511.109) (from Ch. 73, par. 1065.58-109) (Text of Section before amendment by P.A. 103-897 ) (Section scheduled to be repealed on January 1, 2027) Sec. 511.109. Examination. (a) The Director or his designee may examine
any applicant for or holder of an administrator's license. (b) Any administrator being examined shall provide to the Director or
his designee convenient and free access, at all reasonable hours at their
offices, to all books, records, documents and other papers relating to such
administrator's business affairs. (c) The Director or his designee may administer oaths and thereafter examine
any individual about the business of the administrator. (d) The examiners designated by the Director pursuant to this Section
may make reports to the Director. Any report alleging substantive violations
of this Article, any applicable provisions of the Illinois Insurance Code,
or any applicable Part of Title 50 of the Illinois Administrative Code shall
be in writing and be based upon facts obtained by the examiners. The report
shall be verified by the examiners. (e) If a report is made, the Director shall either deliver a duplicate
thereof to the administrator being examined or send such duplicate by certified
or registered mail to the administrator's address specified in the records
of the Department. The Director shall afford the administrator an opportunity
to request a hearing to object to the report. The administrator may request
a hearing within 30 days after receipt of the duplicate of the examination
report by giving the Director written notice of such request together with
written objections to the report. Any hearing shall be conducted in accordance
with Sections 402 and 403 of this Code. The right to hearing is waived
if the delivery of the report is refused or the report is otherwise
undeliverable or the administrator does not timely request a hearing.
After the hearing or upon expiration of the time period during which an
administrator may request a hearing, if the examination reveals that the
administrator is operating in violation of any applicable provision of the
Illinois Insurance Code, any applicable Part of Title 50 of the Illinois
Administrative Code or prior order, the Director, in the written order, may
require the administrator to take any action the Director considers
necessary or appropriate in accordance with the report or examination
hearing. If the Director issues an order, it shall be issued within 90
days after the report is filed, or if there is a hearing, within 90 days
after the conclusion of the hearing. The order is subject to review under
the Administrative Review Law. (Source: P.A. 84-887 .) (Text of Section after amendment by P.A. 103-897 ) (Section scheduled to be repealed on January 1, 2027) Sec. 511.109. Examination. (a) The Director or the Director's designee may examine any applicant for or holder of an administrator's license in accordance with Sections 132 through 132.7. If the Director or the examiners find that the administrator has violated this Article or any other insurance-related laws, rules, or regulations under the Director's jurisdiction because of the manner in which the administrator has conducted business on behalf of an insurer or plan sponsor, then, unless the insurer or plan sponsor is included in the examination and has been afforded the same opportunity to request or participate in a hearing on the examination report, the examination report shall not allege a violation by the insurer or plan sponsor and the Director's order based on the report shall not impose any requirements, prohibitions, or penalties on the insurer or plan sponsor. Nothing in this Section shall prevent the Director from using any information obtained during the examination of an administrator to examine, investigate, or take other appropriate regulatory or legal action with respect to an insurer or plan sponsor. (Source: P.A. 103-897, eff. 1-1-25.) |
215 ILCS 5/511.110
(215 ILCS 5/511.110) (from Ch. 73, par. 1065.58-110)
(Section scheduled to be repealed on January 1, 2027)
Sec. 511.110.
Administrative fine.
(a) If the Director finds that one
or more grounds exist for the revocation or suspension of a license issued
under this Article, the Director may, in lieu of or in addition to such
suspension or revocation, impose a fine upon the administrator.
(b) With respect to any knowing and wilful violation of a lawful order
of the Director, any applicable portion of the Illinois Insurance Code or
Part of Title 50 of the Illinois Administrative Code, or a provision of
this Article, the Director may impose a fine upon the administrator in an
amount not to exceed $10,000 for each such violation. In no
event shall
such fine exceed an aggregate amount of $50,000 for all knowing
and wilful
violations arising out of the same action.
(Source: P.A. 93-32, eff. 7-1-03 .)
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215 ILCS 5/511.111
(215 ILCS 5/511.111) (from Ch. 73, par. 1065.58-111)
(Section scheduled to be repealed on January 1, 2027)
Sec. 511.111. Insurance Producer Administration Fund. All fees and fines
paid to and collected by the Director under this Article shall be paid promptly
after receipt thereof, together with a detailed statement of such fees,
into a special fund in the State Treasury to be known as the Insurance Producer
Administration Fund. The monies deposited into the Insurance Producer
Administration Fund shall be used only for payment of the expenses of the
Department and shall be appropriated as otherwise provided by law for the
payment of such expenses. Moneys in the Insurance Producer Administration Fund may be transferred to the Professions Indirect Cost Fund, as authorized under Section 2105-300 of the Department of Professional Regulation Law of the Civil Administrative Code of Illinois.
(Source: P.A. 98-463, eff. 8-16-13 .)
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215 ILCS 5/511.112
(215 ILCS 5/511.112) (from Ch. 73, par. 1065.58-112)
(Section scheduled to be repealed on January 1, 2027)
Sec. 511.112.
Fiduciary accounts and duties.
(a) Administrators shall
hold in a fiduciary capacity all contributions and premiums received or
collected on behalf of a plan sponsor or insurer. Such funds shall not be
used as general operating funds of the administrator. All contributions
and premiums received or collected by the administrator from residents of
this State, which the Administrator holds more than 15 days or deposits
into an account which is not under the control of the plan sponsor or insurer,
shall be placed in a special fiduciary account, which account shall
be designated an "Administrator
Trust Fund Account" ("ATF"). All resident and quasi-resident licensees
required to maintain an ATF pursuant to this Section shall maintain such
ATF with one or more financial institutions located within the State of
Illinois and subject to jurisdiction of the Illinois courts. Funds
belonging to 2 or more plans may be
held in the same ATF, provided the administrator's records clearly indicate
the funds belonging to each plan. Checks drawn on the ATF shall indicate
on their face that they are drawn on the ATF of the administrator.
(b) The administrator may make the following disbursements from the ATF:
(1) contributions and premiums due insurers or other | | persons providing life, accident and health coverage for a plan;
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(2) return contributions and premiums to a plan or
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(3) commissions or administrative fees due to the
| | administrator when earned pursuant to written agreement; and
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(4) transfers into the CASA of the administrator.
(c) For each plan where an ATF is required, the balance in the ATF shall
at all times be the amount deposited plus accrued interest, if any, less
authorized disbursements. If the balance at the financial institution with
respect to the ATF is less than the amount deposited plus accrued interest,
if any, less authorized disbursements, the administrator shall be deemed
to have misappropriated fiduciary funds and to have acted in a financially
irresponsible manner.
(d) If the ATF is interest bearing or income producing, the full nature
of the account must first be disclosed to the plan sponsors or insurers
on whose behalf the funds are or will be held. The administrator
must secure written consent and authorization from the plan sponsors or
insurers for the investment of the money and disposition of the interest
or earnings. No investment shall be made which assumes any risk other than
the risk that the obligor shall not pay the principal when due.
The use of specialized techniques or strategies which incur additional
risks to generate higher returns or to extend maturities is not permitted.
Such techniques would include, but not be limited to, the following: Use
of financial futures or options, buying on margins and pledging of ATF balances.
(e) Administrators may place ATF funds in interest bearing or income
producing investments and retain the interest or income thereon, providing
the administrator obtains the prior written authorization of the plan
sponsors or insurers on whose behalf the funds are to be held. In addition
to savings and checking accounts, an administrator may invest in the following:
(1) direct obligations of the United States of
| | America or U.S. Government agency securities with maturities of not more than one year;
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(2) certificates of deposit, with a maturity of not
| | more than one year, issued by financial institutions which are insured by the Federal Deposit Insurance Corporation (FDIC) or Federal Savings and Loan Insurance Corporation (FSLIC), so long as any such deposit does not exceed the maximum level of insurance protection provided to certificates of deposits held by such institutions;
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(3) repurchase agreements with financial institutions
| | or government securities dealers recognized as primary dealers by the Federal Reserve System provided:
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(A) the value of the repurchase agreement is
| | collateralized with assets which are allowable investments for ATF funds; and
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(B) the collateral has a market value at the time
| | the repurchase agreement is entered into at least equal to the value of the repurchase agreement; and
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(C) the repurchase agreement does not exceed 30
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(4) commercial paper, provided the commercial paper
| | is rated at least P-1 by Moody's Investors Service, Inc. or at least A-1 by Standard & Poor's Corporation;
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(5) money market funds, provided the money market
| | fund invests exclusively in assets which are allowable investments pursuant to (1) through (4) above for ATF funds;
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(6) each investment transaction must be made in the
| | name of the administrator's ATF. The administrator must maintain evidence of any such investments. Each investment transaction must flow through the administrator's ATF.
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(f) The administrator shall hold in a fiduciary capacity all moneys which
the administrator receives to pay claims and claim adjustment expenses.
All resident and quasi-resident licensees shall
place all such money for claims and claim adjustment
expenses for residents of this State, whether received from a plan sponsor
or insurer or from the ATF of the administrator, in a special fiduciary
account in a financial institution located in this State. The account shall
be designated a "Claims Administration Service Account" ("CASA"). Funds
belonging to 2 or more plans may be held in the same CASA, provided the
administrator's records clearly indicate the funds belonging to each plan.
Checks drawn on the CASA shall indicate on their face that they are drawn
on the CASA of the administrator.
(g) No deposit shall be made into a CASA and no disbursement shall be
made from a CASA except for claims and claims adjustment expenses. For
each plan where a CASA is required, the balance in the CASA shall at all
times be the amount deposited less claims and claims adjustment expenses paid.
If the CASA balance is less than such amount, the administrator shall be
deemed to have misappropriated fiduciary funds and to have acted in a
financially irresponsible manner.
(h)(1) Administrators shall maintain detailed books and records which
reflect all transactions involving the receipt and disbursement of:
(i) contributions and premiums received on behalf of
| | a plan sponsor or insurer; and
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(ii) claims and claim adjustment expenses received
| | and paid on behalf of a plan sponsor or insurer.
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(2) The detailed preparation, journalizing and posting of such books and
records must be maintained on a timely basis and all journal entries for
receipts and disbursements shall be supported by evidential matter, which
must be referenced in the journal entry so that it may be traced for
verification. Administrators shall prepare and maintain monthly financial
institution account reconciliations of any ATF and CASA established by the
administrator. The minimum detail required shall be as follows:
(i) The sources, amounts and dates of any moneys
| | received and deposited by the administrator.
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(ii) The date and person to whom a disbursement is
| | made. If the amount disbursed does not agree with the amount billed or authorized, the administrator shall prepare a written record as to the reason.
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(iii) A description of the disbursement in such
| | detail to identify the source document substantiating the purpose of the disbursement.
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(i) Failure to maintain accurately and timely the books and records required
above shall be deemed untrustworthy, hazardous or injurious to participants
in the plan or the public and financially irresponsible.
(j) This Section shall not apply to nonresident administrators who are
subject to substantially similar requirements in their state of domicile.
(Source: P.A. 84-1431 .)
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215 ILCS 5/511.113
(215 ILCS 5/511.113) (from Ch. 73, par. 1065.58-113)
(Section scheduled to be repealed on January 1, 2027)
Sec. 511.113.
Unauthorized Activities.
Nothing in this Article shall
be construed to permit any person or entity to receive, or collect charges,
contributions or premiums for, or adjust or settle claims in connection with
any type of life or accident or health benefit unless such person or entity
is authorized through the insurance laws of a state or the ERISA of 1974, 29
USC par. 1001 et seq. as amended, to provide such benefits.
(Source: P.A. 84-887 .)
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215 ILCS 5/511.114
(215 ILCS 5/511.114)
(Section scheduled to be repealed on January 1, 2027)
Sec. 511.114.
Drug formulary; notice.
All administrators must comply
with
Section 155.37 of this Code.
(Source: P.A. 92-440, eff. 8-17-01 .)
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215 ILCS 5/511.118
(215 ILCS 5/511.118)
(Section scheduled to be repealed on January 1, 2027)
Sec. 511.118.
Managed Care Reform and Patient Rights Act.
All
administrators are
subject to the provisions of Sections 55 and 85 of the Managed Care
Reform and Patient Rights Act.
(Source: P.A. 91-617, eff. 1-1-00 .)
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215 ILCS 5/Art. XXXI.5
(215 ILCS 5/Art. XXXI.5 heading)
ARTICLE XXXI 1/2.
THIRD PARTY PRESCRIPTION PROGRAMS
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215 ILCS 5/512-1
(215 ILCS 5/512-1) (from Ch. 73, par. 1065.59-1)
Sec. 512-1.
Short Title.
This Article shall be known and may be cited
as the "Third Party Prescription Program Act".
(Source: P.A. 82-1005.)
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215 ILCS 5/512-2
(215 ILCS 5/512-2) (from Ch. 73, par. 1065.59-2)
Sec. 512-2.
Purpose.
It is hereby determined and declared that the
purpose of this Article is to regulate certain practices engaged in by third-party
prescription
program administrators.
(Source: P.A. 82-1005.)
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215 ILCS 5/512-3 (215 ILCS 5/512-3) (from Ch. 73, par. 1065.59-3) (Text of Section before amendment by P.A. 103-897 ) Sec. 512-3. Definitions. For the purposes of this Article, unless the
context otherwise requires, the terms defined in this Article have the meanings
ascribed
to them herein: (a) "Third party prescription program" or "program" means any system of
providing for the reimbursement of pharmaceutical services and prescription
drug products offered or operated in this State under a contractual arrangement
or agreement between a provider of such services and another party who is
not the consumer of those services and products. Such programs may include, but need not be limited to, employee benefit
plans whereby a consumer receives prescription drugs or other pharmaceutical
services and those services are paid for by
an agent of the employer or others. (b) "Third party program administrator" or "administrator" means any person,
partnership or corporation who issues or causes to be issued any payment
or reimbursement to a provider for services rendered pursuant to a third
party prescription program, but does not include the Director of Healthcare and Family Services or any agent authorized by
the Director to reimburse a provider of services rendered pursuant to a
program of which the Department of Healthcare and Family Services is the third party. (Source: P.A. 95-331, eff. 8-21-07.) (Text of Section after amendment by P.A. 103-897 ) Sec. 512-3. Definitions. For the purposes of this Article, unless the context otherwise requires, the terms defined in this Article have the meanings ascribed to them herein: "Health care payer" means an insurance company, health maintenance organization, limited health service organization, health services plan corporation, or dental service plan corporation authorized to do business in this State. "Third party prescription program" or "program" means any system of providing for the reimbursement of pharmaceutical services and prescription drug products offered or operated in this State under a contractual arrangement or agreement between a provider of such services and another party who is not the consumer of those services and products. Such programs may include, but need not be limited to, employee benefit plans whereby a consumer receives prescription drugs or other pharmaceutical services and those services are paid for by an agent of the employer or others. "Third party program administrator" or "administrator" means any person, partnership or corporation who issues or causes to be issued any payment or reimbursement to a provider for services rendered pursuant to a third party prescription program, but does not include the Director of Healthcare and Family Services or any agent authorized by the Director to reimburse a provider of services rendered pursuant to a program of which the Department of Healthcare and Family Services is the third party. (Source: P.A. 103-897, eff. 1-1-25.) |
215 ILCS 5/512-4
(215 ILCS 5/512-4) (from Ch. 73, par. 1065.59-4)
Sec. 512-4.
Registration.
All third party prescription programs and
administrators doing business in the State shall register with the Director
of Insurance. The Director shall promulgate regulations establishing criteria
for registration in accordance with the terms of this Article. The Director
may by rule establish an annual registration fee for each third party administrator.
(Source: P.A. 82-1005.)
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215 ILCS 5/512-5 (215 ILCS 5/512-5) (from Ch. 73, par. 1065.59-5) (Text of Section before amendment by P.A. 103-897 ) Sec. 512-5. Fiduciary and Bonding Requirements. A third party prescription program administrator shall (1) establish and
maintain a fiduciary account, separate and apart from any and all other
accounts, for the receipt and disbursement of funds for reimbursement of
providers of services under the program, or (2) post,
or cause to be posted, a bond of indemnity in an amount equal to not less
than 10% of the total estimated annual reimbursements under the program. The establishment of such fiduciary accounts and bonds shall be consistent
with applicable State law.
If a bond of indemnity is posted, it shall be held by the Director of Insurance
for the benefit and indemnification of the providers of services under the
third party prescription program. An administrator who operates more than one third party prescription program
may establish and maintain a separate fiduciary account or bond of indemnity
for each such program, or may operate and maintain a consolidated fiduciary
account or bond of indemnity for all such programs. The requirements of this Section do not apply to any third party prescription
program administered by or on behalf of any insurance company, Health Care
Service Plan Corporation or Pharmaceutical Service Plan Corporation authorized
to do business in the State of Illinois. (Source: P.A. 82-1005.) (Text of Section after amendment by P.A. 103-897 ) Sec. 512-5. Fiduciary and Bonding Requirements. A third party prescription program administrator shall (1) establish and maintain a fiduciary account, separate and apart from any and all other accounts, for the receipt and disbursement of funds for reimbursement of providers of services under the program, or (2) post, or cause to be posted, a bond of indemnity in an amount equal to not less than 10% of the total estimated annual reimbursements under the program. The establishment of such fiduciary accounts and bonds shall be consistent with applicable State law. If a bond of indemnity is posted, it shall be held by the Director of Insurance for the benefit and indemnification of the providers of services under the third party prescription program. An administrator who operates more than one third party prescription program may establish and maintain a separate fiduciary account or bond of indemnity for each such program, or may operate and maintain a consolidated fiduciary account or bond of indemnity for all such programs. The requirements of this Section do not apply to any third party prescription program administered by or on behalf of any health care payer. (Source: P.A. 103-897, eff. 1-1-25.) |
215 ILCS 5/512-6
(215 ILCS 5/512-6) (from Ch. 73, par. 1065.59-6)
Sec. 512-6.
Notice.
Notice of any change in the terms of a third party prescription program,
including but not limited to drugs covered, reimbursement rates, co-payments,
and dosage quantity, shall be given to each enrolled pharmacy at least 30
days prior to the time it becomes effective.
(Source: P.A. 82-1005.)
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215 ILCS 5/512-7
(215 ILCS 5/512-7) (from Ch. 73, par. 1065.59-7)
Sec. 512-7. Contractual provisions.
(a) Any agreement or contract entered into in this State between the
administrator of a program and a pharmacy shall include a statement of the
method and amount of reimbursement to the pharmacy for services rendered to
persons enrolled in the program, the frequency of payment by the program
administrator to the pharmacy for those services, and a method for the
adjudication of complaints and the settlement of disputes between the
contracting parties.
(b)(1) A program shall provide an annual period of at | | least 30 days during which any pharmacy licensed under the Pharmacy Practice Act may elect to participate in the program under the program terms for at least one year.
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(2) If compliance with the requirements of this
| | subsection (b) would impair any provision of a contract between a program and any other person, and if the contract provision was in existence before January 1, 1990, then immediately after the expiration of those contract provisions the program shall comply with the requirements of this subsection (b).
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(3) This subsection (b) does not apply if:
(A) the program administrator is a licensed
| | health maintenance organization that owns or controls a pharmacy and that enters into an agreement or contract with that pharmacy in accordance with subsection (a); or
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(B) the program administrator is a licensed
| | health maintenance organization that is owned or controlled by another entity that also owns or controls a pharmacy, and the administrator enters into an agreement or contract with that pharmacy in accordance with subsection (a).
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(4) This subsection (b) shall be inoperative
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(c) The program administrator shall cause to be issued an identification
card to each person enrolled in the program. The identification card
shall include:
(1) the name of the individual enrolled in the
| |
(2) an expiration date if required under the
| | contractual arrangement or agreement between a provider of pharmaceutical services and prescription drug products and the third party prescription program administrator.
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(Source: P.A. 95-689, eff. 10-29-07.)
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215 ILCS 5/512-8
(215 ILCS 5/512-8) (from Ch. 73, par. 1065.59-8)
Sec. 512-8.
Cancellation procedures.
(a) The administrator of a program
shall notify all pharmacies enrolled in the program of any cancellation
of the coverage of benefits of any group enrolled in the program at least
30 days prior to the effective date of such cancellation.
However, if the administrator of a program is not notified at least 45
days prior to the effective date of such cancellation, the administrator
shall notify all pharmacies enrolled in the program of the cancellation
as soon as practicable after having received notice.
(b) When a program is terminated, all persons enrolled therein shall be
so notified, and the employer shall make every reasonable effort to gain
possession of any plan identification cards in such persons' possession.
(c) Any person who intentionally uses a program identification card to
obtain services from a pharmacy after having received notice of the cancellation
of his benefits shall be guilty of a Class C misdemeanor. Persons shall
be liable to the program administrator for all monies paid by the program
administrator for any services received pursuant to any improper use of
the identification card.
(Source: P.A. 82-1005.)
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215 ILCS 5/512-9
(215 ILCS 5/512-9) (from Ch. 73, par. 1065.59-9)
Sec. 512-9.
Denial of Payment.
(a) No administrator shall deny payment
to any pharmacy for covered pharmaceutical services or prescription drug
products rendered as a result of the misuse, fraudulent or illegal use of
an identification card unless such identification card had expired, been
noticeably altered, or the pharmacy was notified of the cancellation of
such card. In lieu of notifying pharmacies which have a common ownership,
the administrator may notify a party designated by the pharmacy to receive
such notice, in which case, notification shall not become effective until
5 calendar days after the designee receives notification.
(b) No program administrator may withhold any payment to any pharmacy
for covered pharmaceutical services or prescription drug products beyond
the time period specified in the payment schedule provisions of the agreement,
except for individual claims for payment which have been returned to the pharmacy
as incomplete or illegible. Such returned claims shall be paid if resubmitted
by the pharmacy to the program administrator with the appropriate corrections made.
(Source: P.A. 82-1005.)
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215 ILCS 5/512-10
(215 ILCS 5/512-10) (from Ch. 73, par. 1065.59-10)
Sec. 512-10.
Failure to Register.
Any third party prescription program
or administrator which operates without a certificate of registration or
fails to register with the Director and pay the fee prescribed by this Article
shall be construed to be an unauthorized insurer as defined in Article VII
of this Code and shall be subject to all penalties contained therein.
The provisions of the Article shall apply to all new programs established
on or after January 1, 1983. Existing programs shall comply with the provisions
of this Article on the anniversary date of the programs that occurs on or
after January 1, 1983.
(Source: P.A. 82-1005.)
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215 ILCS 5/512-11 (215 ILCS 5/512-11) (This Section may contain text from a Public Act with a delayed effective date ) Sec. 512-11. Examination. The Director or the Director's designee may examine any applicant for or holder of an administrator's registration in accordance with Sections 132 through 132.7 of this Code. If the Director or the examiners find that the administrator has violated this Article or any other insurance-related laws or regulations under the Director's jurisdiction because of the manner in which the administrator has conducted business on behalf of a separately incorporated health care payer, then, unless the health care payer is included in the examination and has been afforded the same opportunity to request or participate in a hearing on the examination report, the examination report shall not allege a violation by the health care payer and the Director's order based on the report shall not impose any requirements, prohibitions, or penalties on the health care payer. Nothing in this Section shall prevent the Director from using any information obtained during the examination of an administrator to examine, investigate, or take other appropriate regulatory or legal action with respect to a health care payer. (Source: P.A. 103-897, eff. 1-1-25.) |
215 ILCS 5/Art. XXXI.75
(215 ILCS 5/Art. XXXI.75 heading)
ARTICLE XXXI 3/4
PUBLIC INSURANCE ADJUSTERS
AND REGISTERED FIRMS
(Repealed) (Source: Repealed by P.A. 102-135, eff. 7-23-21.)
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215 ILCS 5/Art. XXXIIA
(215 ILCS 5/Art. XXXIIA heading)
ARTICLE XXXIIA.
PREMIUM FINANCE REGULATION
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215 ILCS 5/513a1
(215 ILCS 5/513a1) (from Ch. 73, par. 1065.60a1)
Sec. 513a1.
Scope of Article.
(a) Except as provided in subsection (b), this Article applies to all
persons engaged in the business of financing insurance premiums, entering
into premium finance agreements, or otherwise acquiring premium finance
agreements, and insurance companies and insurance producers as defined in
this Code, except in connection with premiums on the kinds of business
described as Class 1(a) or Class 1(b) of Section 4.
(b) Except for the provisions of Section 513a11 that apply to all
premium financing agreements in which the right to cancel one or more
policies of insurance on behalf of the named has been assigned to the
lender, this Article does not apply to the following entities:
(1) Credit unions, as defined in the Illinois Credit | |
(2) Banks, as defined in the Illinois Banking Act.
(3) Savings and loan associations, as defined in the
| | Illinois Savings and Loan Act of 1985.
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(4) Persons operating under the provisions of Section
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(5) Persons operating under the Consumer Installment
| | Loan Act or the Consumer Finance Act.
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(6) Persons that acquire premium finance agreements
| | from insurance companies and entities described in paragraphs (1) through (5).
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(Source: P.A. 87-811.)
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215 ILCS 5/513a2
(215 ILCS 5/513a2) (from Ch. 73, par. 1065.60a2)
Sec. 513a2.
Definitions.
(a) "Accepted agreement" means a premium finance
agreement deemed to be accepted by a premium finance company when a binder
number or policy number is provided for each policy premium listed on the
premium finance agreement and premium payment book or when the first
premium payment notice has been sent to the named insured.
(b) "Financing insurance premiums" means
to be engaged in the practice of:
(1) advancing monies directly or indirectly to an | | insurer pursuant to the terms of an acquired premium finance agreement; or
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(2) allowing 10% or more of a producer's or
| | registered firm's premium accounts receivable to be more than 90 days past due.
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(c) "Premium finance agreement" means a
promissory note, loan contract, or agreement by which an insured or
prospective insured promises to pay to another person an amount advanced or
to be advanced thereunder to an insurer in payment of premiums on an
insurance contract together with a service charge and which contains an
assignment of or is otherwise secured by the unearned premium payable by
the insurer upon cancellation of the insurance contract; provided, however,
that a premium finance agreement shall not include an installment sale
contract, lease agreement, security agreement, or mortgage covering
personal or real property that includes a charge for insurance or pursuant
to which the vendor, lessor, lienholder, or mortgagee is authorized to pay
or advance the premium for insurance with respect to that property.
(d) "Premium finance company" means any person
engaged in the business of financing insurance premiums, of entering into
premium finance agreements with insureds, or of acquiring premium finance
agreements.
(Source: P.A. 90-655, eff. 7-30-98.)
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215 ILCS 5/513a3
(215 ILCS 5/513a3) (from Ch. 73, par. 1065.60a3)
Sec. 513a3.
License required.
(a) No person may act as a premium finance company or hold himself out
to be engaged in the business of financing insurance premiums, either
directly or indirectly, without first having obtained a license as a
premium finance company from the Director.
(b) An insurance producer shall be deemed to be engaged in the
business of financing insurance premiums if 10% or more of the producer's total
premium accounts receivable are more than 90 days past due.
(c) In addition to any other penalty set forth in this Article, any
person violating subsection (a) of this Section may, after hearing as set
forth in Article XXIV of this Code, be required to pay a civil penalty of
not more than $2,000 for each offense.
(d) In addition to any other penalty set forth in this Article, any
person violating subsection (a) of this Section is guilty of a Class A
misdemeanor. Any individual violating subsection (a) of this Section, and
misappropriating or converting any monies collected in conjunction with the
violation, is guilty of a Class 4 felony.
(Source: P.A. 93-32, eff. 7-1-03.)
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215 ILCS 5/513a4
(215 ILCS 5/513a4) (from Ch. 73, par. 1065.60a4)
Sec. 513a4.
Application and license.
(a) Each application for a premium finance license shall be made on a
form specified by the Director and shall be signed by the applicant
declaring under penalty of refusal, suspension, or revocation of the
license that the statements made in the application are true, correct, and
complete to the best of the applicant's knowledge and belief. The Director
shall cause to be issued a license to each applicant that has demonstrated
to the Director that the applicant:
(1) is competent and trustworthy and of a good | |
(2) has a minimum net worth of $50,000; and
(3) has paid the fees required by this Article.
(b) Each applicant at the time of request for a license or renewal of
a license shall:
(1) certify that no charge for financing premiums
| | shall exceed the rates permitted by this Article;
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(2) certify that the premium finance agreement or
| | other forms being used are in compliance with the requirements of this Article;
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(3) certify that he or she has a minimum net worth of
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(4) attach with the application a non-refundable
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(c) An applicant who has met the requirements of subsection (a) and
subsection (b) shall be issued a premium finance license.
(d) Each premium finance license shall remain in effect as long as the
holder of the license annually continues to meet the requirements of
subsections (a) and (b) by the due date unless the license is revoked or
suspended by the Director.
(e) The individual holder of a premium finance license shall inform the
Director in writing of a change in residence address within 30 days of the
change, and a corporation, partnership, or association holder of a premium
finance license shall inform the Director in writing of a change in
business address within 30 days of the change.
(f) Every partnership or corporation holding a license as a premium
finance company shall appoint one or more partners or officers to be
responsible for the firm's compliance with the Illinois Insurance Code and
applicable rules and regulations. Any change in the appointed person or
persons shall be reported to the Director in writing within 30 days of the
change.
(Source: P.A. 93-32, eff. 7-1-03.)
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