Public Act 095-0213
 
HB1555 Enrolled LRB095 08568 KBJ 28751 b

    AN ACT concerning insurance.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The Illinois Insurance Code is amended by
changing Sections 512.52, 512.53, 512.55, 512.57, 512.58,
512.59, 512.60, 512.61, and 512.64 as follows:
 
    (215 ILCS 5/512.52)  (from Ch. 73, par. 1065.59-52)
    Sec. 512.52. Definitions. As used in this Article unless
the context clearly otherwise requires:
    (a)   "Adjusting insurance claims" means representing an
insured with an insurer for compensation, and while
representing that insured either negotiating values, damages,
or depreciation, or applying the loss circumstances to
insurance policy provisions.
    (b) "Public Insurance Adjuster" means a person engaged in
the business of adjusting insurance claims who is licensed
pursuant to this Article.
    (c) "Registered Firm" means a person registered with the
Director under Section 512.57.
    (d) "Compensation" shall include, but need not be limited
to, the following:
    1. any assignment of insurance proceeds or a percentage
thereof;
    2. any agreement to make repairs for the amount of the
insurance proceeds payable;
    3. assertion of any lien against insurance proceeds
payable.
    (e) "Person" embraces both natural persons and business
entities of whatever type.
(Source: P.A. 84-335; 84-832.)
 
    (215 ILCS 5/512.53)  (from Ch. 73, par. 1065.59-53)
    Sec. 512.53. License Required. (a) No person may engage in
the business of adjusting insurance claims, nor advertise,
solicit or hold himself out to be in the business of adjusting
insurance claims, solicit or hold himself out to be a Public
Insurance Adjuster, nor attempt to obtain a contract for Public
Adjusting services, unless licensed or registered in
accordance with the provisions of this Article, except that the
provisions of this paragraph do not apply to a person admitted
to the practice of law in this State, to a licensed agent
adjusting loss or damage under a policy within his control or
to a marine surveyor or average adjuster.
    (b) In addition to any other penalty set forth in this
Article, any person violating paragraph (a) of this Section
shall be guilty of a Class A misdemeanor, and any person
misappropriating or converting any monies collected as a Public
Insurance Adjuster, whether licensed or not, shall be guilty of
a Class 4 felony.
    (c) All contracts entered into by any person violating
subsection (a) of this Section are void and invalid.
(Source: P.A. 83-1362.)
 
    (215 ILCS 5/512.55)  (from Ch. 73, par. 1065.59-55)
    Sec. 512.55. Public Insurance Adjuster license. (a) The
Director shall issue a Public Insurance Adjuster license to an
applicant who has:
    (1) met the requirements of Section 512.54; and
    (2) paid the fee as set forth in Section 512.63; and
    (3) filed with the Director a bond as prescribed in Section
512.56.
    (b) Every Public Insurance Adjuster license shall remain in
effect for one year from the date of its issuance.
    (c) Each Public Insurance Adjuster license shall contain
the name, business address, resident address and personal
identification number of the Public Insurance Adjuster, the
date of issue, general conditions relative to expiration or
termination and any other information the Director considers
proper.
    (d) The holder of a Public Insurance Adjuster license shall
notify the Director, in writing, of a change of either business
or residence address within 30 days of such change.
    (e) Each Public Insurance Adjuster license shall remain in
effect as long as the holder of the license maintains in force
and effect the bond required by Section 512.56 and pays the
annual fee required by Section 512.63 by the date due as
prescribed by the Director, unless the license is revoked or
suspended pursuant to Section 512.61.
    The Department may refuse to issue or may suspend the
license of any person who fails to file a return, or to pay the
tax, penalty or interest shown in a filed return, or to pay any
final assessment of tax, penalty or interest, as required by
any tax Act administered by the Illinois Department of Revenue,
until such time as the requirements of any such tax Act are
satisfied.
(Source: P.A. 84-221; 84-832.)
 
    (215 ILCS 5/512.57)  (from Ch. 73, par. 1065.59-57)
    Sec. 512.57. Registered Firms. (a) No person shall may
engage in the business of adjusting insurance claims employ one
or more Public Insurance Adjustors in their professional
capacity, other than for the purpose of using their
professional services to negotiate or adjust such person's own
losses and insurance claims, unless such person is licensed
pursuant to this Article and registered with the Director under
subsection (b) of this Section.
    No Public Insurance Adjuster may form or participate in any
association, partnership or other business entity with any
other Public Insurance Adjustor for the purpose of engaging in
the business of adjusting insurance claims, unless such
business entity is registered with the Director under
subsection (b) of this Section.
    (b) To become a Registered Firm, a person must submit to
the Director an application, on a form specified by the
Director, and the fee required by Section 512.63. The Director
may require any documents reasonably necessary to verify the
information contained in the application.
    (c) Each Registered Firm must notify the Director, in
writing, of any change in its business or residence address
within 30 days of such change.
    (d) Each Registered Firm must notify the Director of each
Public Insurance Adjuster who is a member, officer, director or
employee of the Registered Firm, and report any changes in such
status of any such Public Insurance Adjuster to the Director
within 30 days thereof.
    (e) Each Registered Firm shall appoint one or more Public
Insurance Adjusters who is an officer, director or member of
the Firm to be responsible for the compliance of the Registered
Firm with the laws of this State and the rules and regulations
of the Director. The Registered Firm shall be responsible for
the actions of its officers, directors, members and employees.
    (f) Each Registered Firm which, for any of the causes
listed in Section 512.61, terminates its relationship with a
Public Insurance Adjuster who is an officer, director, employee
or member of the Registered Firm shall notify the Director, in
writing, within 30 days of such termination of the specific
reasons for such termination. The Registered Firm shall provide
the Director with information, documents, records or
statements pertaining to the termination. Any materials
provided may be used by the Director in any action taken
pursuant to Section 512.62. There shall be no liability on the
part of, nor any cause of action against, the Director or the
Registered Firm, or any authorized representative of either,
for any statement made or materials provided pursuant to this
paragraph.
    (g) The Director shall terminate any registration which
does not comply with the requirements of this Article.
    (h) A registered firm may only be comprised of licensed
Public Insurance Adjusters. All shareholders, officers, and
directors of registered firms must be licensed pursuant to this
Act. Any Public Insurance Adjuster who has a license that has
been revoked, suspended, or not renewed, whether voluntarily or
not, must withdraw from a registered firm within 30 days and
give written notice of his or her resignation to the licensed
firm within 30 days.
(Source: P.A. 84-832.)
 
    (215 ILCS 5/512.58)  (from Ch. 73, par. 1065.59-58)
    Sec. 512.58. Rate Schedules and Contract Forms. (a) A
Public Insurance Adjuster shall not provide services until a
written contract with the insured has been executed, on a form
filed with and approved by the Director. At the option of the
insured, any such contract which is executed within 5 business
days after conclusion of the loss-producing occurrence shall be
voidable for 10 days after execution. The insured may void the
contract by notifying the Public Insurance Adjuster in writing
by (i) registered or certified mail, return receipt requested,
to the address shown on the contract; or (ii) personally
serving the notice on the Public Insurance Adjuster.
    (b) The written contract required by paragraph (a) shall
constitute the entire agreement between the Public Insurance
Adjuster and the insured. A copy of the contract shall be given
to the insured when the contract is executed. Such contract
forms may not include any hold harmless agreement which
provides indemnification to the Public Insurance Adjuster by
the insured for liability resulting from the Public Insurance
Adjuster's negligence, nor any power-of-attorney by which the
Public Insurance Adjuster can act in the place and instead of
the insured.
(Source: P.A. 83-1362.)
 
    (215 ILCS 5/512.59)  (from Ch. 73, par. 1065.59-59)
    Sec. 512.59. Performance standards applicable to all
Public Insurance Adjusters.
    (a) A Public Insurance Adjuster shall may not represent
that he is a representative of an insurance company, a fire
department, or the State of Illinois, or that he is a fire
investigator, or that his services are required for the insured
to submit a claim to the insured's insurance company, or that
he may provide legal advice or representation to the insured. A
Public Insurance Adjuster may represent that he has been
licensed by the State of Illinois.
    (b) A Public Insurance Adjuster shall may not agree to any
loss settlement without the insured's knowledge and consent and
shall provide the insured with a document setting forth the
scope, amount, and value of the damages prior to requesting the
insured for authority to settling any loss.
    (c) If the Public Insurance Adjuster refers the insured to
a contractor, the Public Insurance Adjuster warrants that all
work will be performed in a workmanlike manner and conform to
all statutes, ordinances and codes. Should the work not be
completed in a workmanlike manner, the Public Insurance
Adjuster shall be responsible for any and all costs and expense
required to complete or repair the work in a workmanlike
manner.
    (d) In all cases where the loss giving rise to the claim
for which the Public Insurance Adjuster was retained arise from
damage to a personal residence, the insurance proceeds shall be
delivered in person to the named insured or his or her
designee. Where proceeds paid by an insurance company are paid
jointly to the insured and the Public Insurance Adjuster, the
insured Public Insurance Adjuster shall release such portion of
the proceeds which are due the Public Insurance Adjuster
insured within 30 calendar days after the insured's Public
Insurance Adjuster's receipt of the insurance company's check,
money order, draft, or release of funds. If the proceeds are
not so released to the insured within 30 calendar days, the
insured Public Insurance Adjuster shall provide the Public
Insurance Adjuster insured and the Illinois Department of
Insurance with a written explanation of the reason for the
delay.
    (e) A Public Insurance Adjuster may not propose or attempt
to propose to any person that the Public Insurance Adjuster
represent that person while a loss-producing occurrence is
continuing nor while the fire department or its representatives
are engaged at the damaged premises nor between the hours of
7:00 p.m. and 8:00 a.m..
    (f) A Public Insurance Adjuster shall may not advance money
or any valuable consideration, except emergency services or the
commencement of repairs, to an insured pending adjustment of a
claim.
    (g) A Public Insurance Adjuster shall may not provide legal
advice or representation to the insured, or engage in the
unauthorized practice of law.
(Source: P.A. 84-335.)
 
    (215 ILCS 5/512.60)  (from Ch. 73, par. 1065.59-60)
    Sec. 512.60. Maintenance of records. (a) All Public
Insurance Adjusters shall maintain a complete record of each of
their transactions as a Public Insurance Adjuster. The records
required by this Section shall include:
    (1) name of the insured;
    (2) date, location and amount of loss;
    (3) copy of the contract between the Public Insurance
Adjuster and insured;
    (4) name of the insurer, amount, expiration date and number
of each policy carried with respect to the loss;
    (5) itemized statement of the insured's recoveries;
    (6) name of the Public Insurance Adjuster who executed the
contract; and
    (7) name of the attorney representing the insured, if
applicable, and the name of the representative of the insurance
company; and .
    (8) copy of the statement provided to the insured
explaining the amount and value of the damages to the insured
premises, the amount of insurance proceeds recovered from the
insured, and the amount and values of all expenses incurred to
adjust the claim and the amount and value of the Public
Insurance Adjuster's fees and charges.
    (b) Records shall be maintained for at least three years
after the termination of the transaction with an insured and
shall be open to examination by the Director at any time.
    (c) A Public Insurance Adjuster shall not divulge
information regarding any insured without written consent from
the insured, except that the Public Insurance Adjuster may
divulge such information to an insurance company or its
representative which insures the insured, to the Department of
Insurance, or upon a court order or an Internal Revenue Service
subpoena.
    (d) Where a Public Insurance Adjuster is engaged or
employed by a Registered Firm, the records required by this
Section may be maintained by such Registered Firm on behalf of
the Public Insurance Adjuster.
(Source: P.A. 84-335.)
 
    (215 ILCS 5/512.61)  (from Ch. 73, par. 1065.59-61)
    Sec. 512.61. License suspension, revocation or denial. (a)
Any license issued under this Article may, after notice to the
licensee and hearing as provided by Section 402, be suspended
or revoked, and any application for a license may be denied, if
the Director finds that the holder of or applicant for a
license has:
    (1) willfully violated any provision of this Code or any
rule or regulation promulgated by the Director; or
    (2) intentionally made a material misstatement in an
application for a license as a Public Insurance Adjuster; or
    (3) obtained or attempted to obtain a license as a Public
Insurance Adjuster through misrepresentation or fraud; or
    (4) misappropriated, converted to his own use or improperly
withheld money due others; or
    (5) intentionally misrepresented the terms of any
insurance policy; or
    (6) used fraudulent, coercive or dishonest practices, or
demonstrated incompetence, untrustworthiness or financial
irresponsibility in the transaction of business as a Public
Insurance Adjuster; or
    (7) been convicted of any a felony or misdemeanor involving
dishonesty or fraud, unless the individual demonstrates to the
Director sufficient rehabilitation to warrant the public
trust; or
    (8) knowingly transacted the business of a Public Insurance
Adjuster in conjunction with an individual who was not licensed
at the time; or
    (9) failed to appear without reasonable cause or excuse in
response to a subpoena lawfully issued by the Director; or
    (10) a license as a Public Insurance Adjuster suspended or
revoked or an application denied in any other state, district,
territory or province on a ground similar to one of the grounds
stated in this Section; or
    (11) failed to comply with or violated any of the standards
set forth in Section 512.59; or
    (12) failed to maintain the records required by Section
512.60; or
    (13) engaged in the unauthorized practice of law.
    (b) Revocation, suspension, or the denial Denial of an
application pursuant to this Section shall be by written notice
served upon the applicant by certified or registered mail sent
to the address specified in the application. The applicant may
request a hearing in writing within 30 days from the date of
mailing as provided in Section 402. The hearing shall be held
pursuant to Section 2402 of Title 50 of the Code.
    (c) Upon notification of the issuance of an order
suspending or revoking a Public Insurance Adjuster's license,
the licensee or other person having possession or custody of
such license shall promptly deliver it to the Director in
person or by mail. The Director shall publish the name of each
Public Insurance Adjuster whose license is suspended or
revoked, after such suspension or revocation becomes final, in
a manner designed to notify interested insurance companies and
other persons.
    (d) Any individual whose Public Insurance Adjuster's
license is revoked or whose application is denied pursuant to
this Section shall be ineligible to apply for a Public
Insurance Adjuster's license for 5 2 years. A suspension
pursuant to this Section may be for any period of time up to 5 2
years.
(Source: P.A. 84-335; 84-832.)
 
    (215 ILCS 5/512.64)  (from Ch. 73, par. 1065.59-64)
    Sec. 512.64. Injunctive Relief. Any person who acts as or
holds himself out to be either engaged in the business of
adjusting insurance claims or a Public Insurance Adjuster
without holding a valid and current Public Insurance Adjuster's
license to do so is hereby declared to be inimical to the
public welfare and to constitute a public nuisance. The
Director may report such practice to the Attorney General of
the State of Illinois, whose duty it is to apply forthwith by
complaint on relation of the Director in the name of the people
of the State of Illinois, as plaintiff, for injunctive relief
in the circuit court of the county where such practice occurred
to enjoin such person from engaging in such practice; and, upon
the filing of a verified petition in such court, the court, if
satisfied by affidavit or otherwise that such person has been
engaged in such practice without a valid and current license to
do so, may enter a temporary restraining order without notice
or bond, enjoining the defendant from such further practice. A
copy of the verified complaint shall be served upon the
defendant and the proceedings shall thereafter be conducted as
in other civil cases. If it is established that the defendant
has been or is engaged in such unlawful practice, the court may
enter an order or judgment perpetually enjoining the defendant
from further such practice. In all proceedings hereunder the
court, in its discretion, may apportion the costs among the
parties interested in the action, including cost of filing the
complaint, service of process, witness fees and expenses, court
reporter charges and reasonable attorney fees. In case of
violation of any injunctive order entered under the provisions
of this Section, the court may try and punish the offender for
contempt of court. Such injunction proceedings shall be in
addition to, and not in lieu of, all penalties and other
remedies.
(Source: P.A. 84-548.)