State of Illinois
90th General Assembly

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      215 ILCS 5/141.02         from Ch. 73, par. 753.02
          Amends the Illinois Insurance Code.  Adds a caption to  a
      Section  concerning  the  termination of contracts between an
      independent agent and an insurance company.
 1        AN ACT to amend the Illinois Insurance Code  by  changing
 2    Section 141.02.
 3        Be  it  enacted  by  the People of the State of Illinois,
 4    represented in the General Assembly:
 5        Section 5.  The Illinois Insurance  Code  is  amended  by
 6    changing Section 141.02 as follows:
 7        (215 ILCS 5/141.02) (from Ch. 73, par. 753.02)
 8        Sec. 141.02.  Independent agents; company contracts.
 9        (1)  Definitions.    For  purposes  of  this  Section  an
10    independent   insurance   agent   is   any   licensed   agent
11    representing  an  insurance   company   on   an   independent
12    contractor  basis  and  not  as an employee.  This term shall
13    include only those agents not obligated by contract to  place
14    insurance  accounts  with  any  insurance company or group of
15    companies.  This Section shall only apply to contracts  which
16    have  been  effective  for  more  than  one  year  between an
17    independent insurance agent and  any  company  authorized  in
18    this  State  for the purpose of transacting the kind or kinds
19    of business enumerated in Class 2 or Class 3 of Section 4  of
20    this Code, except accident and health insurance.
21        (2)  Rehabilitation.   In an effort to avoid termination,
22    the company and agent may endeavor to reach mutual  agreement
23    on  a  written  plan  for rehabilitation for a period of time
24    agreed by them.  Any written plan agreed upon shall  identify
25    the  problem  areas  and specify what the agent must do in an
26    effort to avoid termination.
27        (3)  Notice  of  Termination.   Contracts   between   the
28    independent  insurance  agent  and  any  company shall not be
29    terminated by the company except by signed  mutual  agreement
30    at  the  time  of  written  termination  notice or unless the
31    company provides 180 days written notice to  the  independent
                            -2-                LRB9001580JSgc
 1    insurance  agent  prior to the effective date of termination.
 2    The effective date of termination shall be 180 days from  the
 3    date  of mailing of the termination notice.  The company must
 4    maintain proof of mailing of the  termination   notice  on  a
 5    recognized U.S. Post Office form.
 6        (4)  Renewals  following  termination. A.  During the 180
 7    days  notice  or  other  mutually  agreed  time  period   the
 8    independent  insurance  agent shall not write or bind any new
 9    business  on  behalf  of  the  terminating  company   without
10    specific written approval.
11        B.  The  terminating company shall, following the date of
12    termination, renew all policies written  by  the  independent
13    insurance  agent  for  one policy term or for a period of one
14    year if the policy period is longer than one year unless:
15        (a)  the policies do not meet the insurer's  underwriting
16    standards; or
17        (b)  the independent insurance agent notifies the insurer
18    in  writing  that  the  policy  has  been placed with another
19    insurer.
20        C.  If a renewal policy does not  meet  the  underwriting
21    requirements,   the   terminating   insurer   must  give  the
22    independent insurance agent 60 days notice of  its  intention
23    not to renew.
24        D.  The  rate of commission and renewal terms shall be in
25    accordance  with  those  in  effect  immediately   prior   to
26    termination.    The  commission must be paid only through the
27    first  renewal  subsequent  to  the  effective  date  of  the
28    termination.
29        (5)  Paragraphs (1) through (4) of this Section shall not
30    apply to terminations  for  abandonment,  insolvency  of  the
31    terminating  company,  gross and willful misconduct, refusal,
32    suspension, revocation or termination of the agent's  license
33    by  the  Director  of  Insurance,  sale or material change of
34    ownership of agency,  fraud,  material  misrepresentation  or
                            -3-                LRB9001580JSgc
 1    failure  to  pay  such  independent insurance agent's account
 2    less the independent insurance  agent's  commission  and  any
 3    disputed  items  within  30  days after written demand by the
 4    company.
 5    (Source: P.A. 85-334.)

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