Illinois General Assembly - Full Text of Public Act 097-0527
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Public Act 097-0527





Public Act 097-0527
SB1607 EnrolledLRB097 08415 RPM 48542 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 224 and 424 and by adding Section 155.43 as
    (215 ILCS 5/155.43 new)
    Sec. 155.43. Misrepresentation of Senior-Specific
    (a) No insurance producer shall use a senior-specific
certification or professional designation that indicates or
implies in such a way as to mislead a purchaser or prospective
purchaser that the insurance producer has a special
certification or training in advising or servicing seniors in
connection with the solicitation, sale, or purchase of a life
insurance or annuity product or in the provision of advice as
to the value of or the advisability of purchasing or selling a
life insurance or annuity product, either directly or
indirectly through publications, writings, or by issuing or
promulgating analyses or reports related to a life insurance or
annuity product.
    (b) "Use of senior-specific certifications or professional
designations" includes, but is not limited to, all of the
        (1) Use of a certification or professional designation
    by an insurance producer who has not actually earned or is
    otherwise ineligible to use such certification or
        (2) Use of a nonexistent or self-conferred
    certification or professional designation.
        (3) Use of a certification or professional designation
    that indicates or implies a level of occupational
    qualifications obtained through education, training, or
    experience that the insurance producer using the
    certification or designation does not have.
        (4) Use of a certification or professional designation
    that was obtained from a certifying or designating
    organization that:
            (i) is primarily engaged in the business of
        instruction in sales or marketing;
            (ii) does not have reasonable standards or
        procedures for assuring the competency of its
        certificate holders or designees;
            (iii) does not have reasonable standards or
        procedures for monitoring and disciplining its
        certificate holders or designees for improper or
        unethical conduct; or
            (iv) does not have reasonable continuing education
        requirements for its certificate holders or designees
        in order to maintain the certificate or designation.
    (c) There is a rebuttable presumption that a certifying or
designating organization is not disqualified under this
Section if the certification or designation issued from the
organization does not primarily apply to sales or marketing and
if the organization or the certification or designation in
question has been accredited by any of the following entities:
        (i) the American National Standards Institute;
        (ii) the National Commission for Certifying Agencies;
        (iii) any organization included on the list
    "Accrediting Agencies Recognized for Title IV Purposes"
    prepared by the United States Department of Education.
    (d) In determining whether a combination of words or an
acronym standing for a combination of words constitutes a
certification or professional designation indicating or
implying that a person has a special certification or training
in advising or servicing seniors, the Department of Insurance
shall consider all of the following:
        (1) Use of one or more words, such as "senior",
    "retirement", "elder", or like words combined with one or
    more words, such as "certified", "registered",
    "chartered", "advisor", "specialist", "consultant",
    "planner", or like words in the name of the certification
    or professional designation.
        (2) The manner in which the words listed in paragraph
    (1) of subsection (b) are combined.
    (e) For purposes of this Section, a job title within an
organization that is licensed or registered by a State or
federal financial services regulatory agency is not a
certification or professional designation, unless it is used in
a manner that would confuse or mislead a reasonable consumer,
if the job title indicates seniority or standing within the
organization or specifies an individual's area of
specialization within the organization. For purposes of this
subsection (e), "financial services regulatory agency"
includes, but is not limited to, an agency that regulates
insurers, insurance producers, broker-dealers, investment
advisers, or investment companies.
    (215 ILCS 5/224)  (from Ch. 73, par. 836)
    Sec. 224. Standard provisions for life policies.
    (1) After the first day of July, 1937, no policy of life
insurance other than industrial, group or annuities and pure
endowments with or without return of premiums or of premiums
and interest, may be issued or delivered in this State, unless
such policy contains in substance the following provisions:
        (a) A provision that all premiums after the first shall
    be payable in advance either at the home office of the
    company or to an agent of the company, upon delivery of a
    receipt signed by one or more of the officers who shall be
    designated in the policy, when such receipt is requested by
    the policyholder.
        (b) A provision that the insured is entitled to a grace
    period either of 30 days or of one month within which the
    payment of any premium after the first may be made, subject
    at the option of the company to an interest charge not in
    excess of 6% per annum for the number of days of grace
    elapsing before the payment of the premium, during which
    period of grace the policy shall continue in force, but in
    case the policy becomes a claim during the grace period
    before the overdue premium is paid, or the deferred
    premiums of the current policy year, if any, are paid, the
    amount of such premium or premiums with interest thereon
    may be deducted in any settlement under the policy.
        (c) A provision that the policy, together with the
    application therefor, a copy of which shall be endorsed
    upon or attached to the policy and made a part thereof,
    shall constitute the entire contract between the parties
    and that after it has been in force during the lifetime of
    the insured a specified time, not later than 2 years from
    its date, it shall be incontestable except for nonpayment
    of premiums and except at the option of the company, with
    respect to provisions relative to benefits in the event of
    total and permanent disability, and provisions which grant
    additional insurance specifically against death by
    accident and except for violations of the conditions of the
    policy relating to naval or military service in time of war
    or for violation of an express condition, if any, relating
    to aviation, (except riding as a fare-paying passenger of a
    commercial air line flying on regularly scheduled routes
    between definitely established airports) in which case the
    liability of the company shall be fixed at a definitely
    determined amount not less than the full reserve for the
    policy and any dividend additions; provided that the
    application therefor need not be attached to or made a part
    of any policy containing a clause making the policy
    incontestable from date of issue.
        (d) A provision that if it is found at any time before
    final settlement under the policy that the age of the
    insured (or the age of the beneficiary, if considered in
    determining the premium) has been misstated, the amount
    payable under the policy shall be such as the premium would
    have purchased at the correct age or ages, according to the
    company's published rate at date of issue.
        (e) A provision that the policy shall participate
    annually in the surplus of the company beginning not later
    than the end of the third policy year; and any policy
    containing provision for annual participation beginning at
    the end of the first policy year, may also provide that
    each dividend be paid subject to the payment of the
    premiums for the next ensuing year; and the insured under
    any annual dividend policy shall have the right each year
    to have the dividend arising from such participation either
    paid in cash, or applied in reduction of premiums, or
    applied to the purchase of paid-up additional insurance, or
    be left to accumulate to the credit of the policy, with
    interest at such rate as may be determined from time to
    time by the company, but not less than a guaranteed minimum
    rate specified in the policy, and payable at the maturity
    of the policy, but withdrawable on any anniversary date,
    subject to such further provisions as the policy may
    provide regarding the application of dividends toward the
    payment of any premiums unpaid at the end of the grace
    period; and if the insured fails to notify the company in
    writing of his election within the period of grace allowed
    for the payment of premium, the policy shall further
    provide which of such options are effective.
        (f) A provision that after the policy has been in force
    3 full years the company at any time, while the policy is
    in force, will advance, on proper assignment or pledge of
    the policy and on the sole security thereof, at a specified
    maximum fixed or adjusted rate of interest in accordance
    with Section 229.5, a sum equal to, or at the option of the
    insured less than the amount required by Section 229.3
    under the conditions specified thereby and with
    notification as required by Section 229.5; and that the
    company will deduct from such loan value any indebtedness
    not already deducted in determining such value and any
    unpaid balance of the premium for the current policy year,
    and may collect interest in advance on the loan to the end
    of the current policy year; and any policy may also provide
    that if the interest on the loan is not paid when due it
    shall be added to the existing loan and shall bear interest
    at the same rate. No condition other than as provided
    herein or in Sections 229.3 and 229.5 shall be exacted as a
    prerequisite to any such loan. This clause shall not apply
    to term insurance.
        (g) A provision for nonforfeiture benefits and cash
    surrender values in accordance with the requirements of
    paragraph (1) of Section 229.1 or, Section 229.2.
        (h) A table showing in figures the loan values and the
    options available under the policy each year, upon default
    in premium payments, during at least the first 20 years of
    the policy; the policy to contain a provision that the
    company will furnish upon request an extension of such
    table beyond the years shown in the policy.
        (i) A provision that in event of default in premium
    payments the value of the policy is applied to the purchase
    of other insurance as provided in this Section, and if such
    insurance is in force and the original policy is not
    surrendered to the company and cancelled, the policy may be
    reinstated within 3 years from such default, upon evidence
    of insurability satisfactory to the company and payment of
    arrears of premiums and the payment or reinstatement of any
    other indebtedness to the company upon the policy, with
    interest on the premiums at a rate not exceeding 6% per
    annum payable annually and with interest on the
    indebtedness at a rate not exceeding the rate prescribed by
    Section 229.5.
        (j) A provision that when a policy is a claim by the
    death of the insured settlement shall be made upon receipt
    of due proof of death and not later than 2 months after the
    receipt of such proof. The policy may require that due
    proof of the death of the insured shall consist of a
    certified copy of the death certificate of the insured, or
    other lawful evidence providing equivalent information,
    and proof of the claimant's interest in the proceeds.
        (k) If the policy provides for payment of its proceeds
    in installments, a table showing the amount and period of
    such installments shall be included in the policy.
        (l) Interest shall accrue on the proceeds payable
    because of the death of the insured, from date of death, at
    the rate of 10% annually 9% on the total amount payable or
    the face amount if payments are to be made in installments
    until the total payment or first installment is paid,
    unless payment is made within 31 fifteen (15) days from the
    latest of the following to occur:
            (1) the date that due proof of death is received by
        the company;
            (2) the date that the company receives sufficient
        information to determine its liability, the extent of
        the liability, and the appropriate payee legally
        entitled to the proceeds; or
            (3) the date that legal impediments to payment of
        proceeds that depend on the action of parties other
        than the company are resolved and sufficient evidence
        of the same is provided to the company; legal
        impediments to payment include, but are not limited to,
        (A) the establishment of guardianships and
        conservatorships, (B) the appointment and
        qualification of trustees, executors, and
        administrators, and (C) the submission of information
        required to satisfy State and federal reporting
    date of receipt by the company of due proof of loss. This
    provision need not appear in the policy, however, the
    company shall notify the beneficiary at the time of claim
    of this provision. The payment of interest shall apply to
    all policies now in force, as well as those written after
    the effective date of this amendment.
        (m) Title on the face and on the back of the policy
    briefly describing its form.
        (n) A provision, or a notice attached to the policy, to
    the effect that during a period of ten days from the date
    the policy is delivered to the policy owner, it may be
    surrendered to the insurer together with a written request
    for cancellation of the policy and in such event, the
    insurer will refund any premium paid therefor, including
    any policy fees or other charges. The Director may by rule
    exempt specific types of policies from the requirements of
    this subsection.
    (2) In the case of the replacement of life insurance, as
defined in the rule promulgated by the Director, the replacing
insurer shall either (1) delay the issuance of its policy for
not less than 20 days from the date it has transmitted a policy
summary to the existing insurer, or (2) provide in a form
titled "Notice Regarding Replacement of Life Insurance", as
well as in its policy, or in a separate notice delivered with
the policy, that the insured has the right to an unconditional
refund of all premiums paid, and that such right may be
exercised within a period of 20 days commencing from the date
of delivery of such policy. Where option (2) is exercised, the
replacing insurer shall also transmit a policy summary to the
existing insurer within 3 working days after the date the
replacement policy is issued.
    (3) Any of the foregoing provisions or portions thereof not
applicable to single premium or nonparticipating or term
policies shall to that extent not be incorporated therein. This
Section shall not apply to policies of reinsurance nor to
policies issued or granted pursuant to the nonforfeiture
provisions prescribed in subparagraph (g) of paragraph (1) of
this Section.
(Source: P.A. 92-139, eff. 7-24-01.)
    (215 ILCS 5/424)  (from Ch. 73, par. 1031)
    Sec. 424. Unfair methods of competition and unfair or
deceptive acts or practices defined. The following are hereby
defined as unfair methods of competition and unfair and
deceptive acts or practices in the business of insurance:
    (1) The commission by any person of any one or more of the
acts defined or prohibited by Sections 134, 143.24c, 147, 148,
149, 151, 155.22, 155.22a, 155.42, 236, 237, 364, and 469 of
this Code.
    (2) Entering into any agreement to commit, or by any
concerted action committing, any act of boycott, coercion or
intimidation resulting in or tending to result in unreasonable
restraint of, or monopoly in, the business of insurance.
    (3) Making or permitting, in the case of insurance of the
types enumerated in Classes 1, 2, and 3 of Section 4, any
unfair discrimination between individuals or risks of the same
class or of essentially the same hazard and expense element
because of the race, color, religion, or national origin of
such insurance risks or applicants. The application of this
Article to the types of insurance enumerated in Class 1 of
Section 4 shall in no way limit, reduce, or impair the
protections and remedies already provided for by Sections 236
and 364 of this Code or any other provision of this Code.
    (4) Engaging in any of the acts or practices defined in or
prohibited by Sections 154.5 through 154.8 of this Code.
    (5) Making or charging any rate for insurance against
losses arising from the use or ownership of a motor vehicle
which requires a higher premium of any person by reason of his
physical handicap, race, color, religion, or national origin.
(Source: P.A. 92-399, eff. 8-16-01; 92-651, eff. 7-11-02;
92-669, eff. 1-1-03.)
    Section 99. Effective date. This Act takes effect upon
becoming law.

Effective Date: 8/23/2011