Statutes > Illinois Statutes > CHAPTER 215 INSURANCE > 215 ILCS 5/ Illinois Insurance Code. > Article XLV - Public Adjusters

Article XLV - Public Adjusters


 
    (215 ILCS 5/Art. XLV heading)
ARTICLE XLV. PUBLIC ADJUSTERS

(Source: P.A. 96‑1332, eff. 1‑1‑11.)

    (215 ILCS 5/1501)
    Sec. 1501. Short title. This Article may be cited as the Public Adjusters Law.
(Source: P.A. 96‑1332, eff. 1‑1‑11.)

    (215 ILCS 5/1505)
    Sec. 1505. Purpose and scope. This Article governs the qualifications and procedures for the licensing of public adjusters. It specifies the duties of and restrictions on public adjusters, which include limiting their licensure to assisting insureds in first party claims.
(Source: P.A. 96‑1332, eff. 1‑1‑11.)

    (215 ILCS 5/1510)
    Sec. 1510. Definitions. In this Article:
    "Adjusting a claim for loss or damage covered by an insurance contract" means negotiating values, damages, or depreciation or applying the loss circumstances to insurance policy provisions.
    "Business entity" means a corporation, association, partnership, limited liability company, limited liability partnership, or other legal entity.
    "Department" means the Department of Insurance.
    "Director" means the Director of Insurance.
    "Fingerprints" means an impression of the lines on the finger taken for the purpose of identification. The impression may be electronic or in ink converted to electronic format.
    "Home state" means the District of Columbia and any state or territory of the United States where the public adjuster's principal place of residence or principal place of business is located. If neither the state in which the public adjuster maintains the principal place of residence nor the state in which the public adjuster maintains the principal place of business has a substantially similar law governing public adjusters, the public adjuster may declare another state in which it becomes licensed and acts as a public adjuster to be the home state.
    "Individual" means a natural person.
    "Person" means an individual or a business entity.
    "Public adjuster" means any person who, for compensation or any other thing of value on behalf of the insured:
        (i) acts or aids, solely in relation to first party
    claims arising under insurance contracts that insure the real or personal property of the insured, on behalf of an insured in adjusting a claim for loss or damage covered by an insurance contract;
        (ii) advertises for employment as a public adjuster
    of insurance claims or solicits business or represents himself or herself to the public as a public adjuster of first party insurance claims for losses or damages arising out of policies of insurance that insure real or personal property; or
        (iii) directly or indirectly solicits business,
    investigates or adjusts losses, or advises an insured about first party claims for losses or damages arising out of policies of insurance that insure real or personal property for another person engaged in the business of adjusting losses or damages covered by an insurance policy for the insured.
    "Uniform individual application" means the current version of the National Association of Directors (NAIC) Uniform Individual Application for resident and nonresident individuals.
    "Uniform business entity application" means the current version of the National Association of Insurance Commissioners (NAIC) Uniform Business Entity Application for resident and nonresident business entities.
(Source: P.A. 96‑1332, eff. 1‑1‑11.)

    (215 ILCS 5/1515)
    Sec. 1515. License required.
    (a) A person shall not act, advertise, solicit, or hold himself out as a public adjuster or to be in the business of adjusting insurance claims in this State, nor attempt to obtain a contract for public adjusting services, unless the person is licensed as a public adjuster in accordance with this Article.
    (b) A person licensed as a public adjuster shall not misrepresent to a claimant that he or she is an adjuster representing an insurer in any capacity, including acting as an employee of the insurer or acting as an independent adjuster unless so appointed by an insurer in writing to act on the insurer's behalf for that specific claim or purpose. A licensed public adjuster is prohibited from charging that specific claimant a fee when appointed by the insurer and the appointment is accepted by the public adjuster.
    (c) A business entity acting as a public adjuster is required to obtain a public adjuster license. Application shall be made using the Uniform Business Entity Application. Before approving the application, the Director shall find that:
        (1) the business entity has paid the required fees
    to be registered as a business entity in this State; and
        (2) all officers, shareholders, and persons with
    ownership interests in the business entity are licensed public adjusters responsible for the business entity's compliance with the insurance laws, rules, and regulations of this State.
    (d) Notwithstanding subsections (a) through (c) of this Section, a license as a public adjuster shall not be required of the following:
        (1) an attorney admitted to practice in this State,
    when acting in his or her professional capacity as an attorney;
        (2) a person who negotiates or settles claims arising
    under a life or health insurance policy or an annuity contract;
        (3) a person employed only for the purpose of
    obtaining facts surrounding a loss or furnishing technical assistance to a licensed public adjuster, including photographers, estimators, private investigators, engineers, and handwriting experts;
        (4) a licensed health care provider, or employee of a
    licensed health care provider, who prepares or files a health claim form on behalf of a patient; or
        (5) a person who settles subrogation claims between
    insurers.
(Source: P.A. 96‑1332, eff. 1‑1‑11.)

    (215 ILCS 5/1520)
    Sec. 1520. Application for license.
    (a) A person applying for a public adjuster license shall make application to the Director on the appropriate uniform application or other application prescribed by the Director.
    (b) The applicant shall declare under penalty of perjury and 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.
    (c) In order to make a determination of license eligibility, the Director is authorized to require fingerprints of applicants and submit such fingerprints and the fee required to perform the criminal history record checks to the Illinois State Police and the Federal Bureau of Investigation (FBI) for State and national criminal history record checks.
    (d) The Director may adopt rules to establish procedures necessary to carry out the requirements of subsection (c) of this Section.
    (e) The Director is authorized to submit electronic
    fingerprint records and necessary identifying information to the NAIC, its affiliates, or subsidiaries for permanent retention in a centralized repository. The purpose of such a centralized repository is to provide Directors with access to fingerprint records in order to perform criminal history record checks.
    (f) Until such time as the Director can obtain and receive national criminal history records, the applicant shall obtain a copy of his or her fingerprints and complete criminal history record from the FBI Criminal Justice Information Services Division and the Illinois State Police and provide such information to the Department of Insurance.
(Source: P.A. 96‑1332, eff. 1‑1‑11.)

    (215 ILCS 5/1525)
    Sec. 1525. Resident license.
    (a) Before issuing a public adjuster license to an applicant under this Section, the Director shall find that the applicant:
        (1) is eligible to designate this State as his or her
    home state or is a nonresident who is not eligible for a license under Section 1540;
        (2) has not committed any act that is a ground for
    denial, suspension, or revocation of a license as set forth in Section 1555;
        (3) is trustworthy, reliable, competent, and of good
    reputation, evidence of which may be determined by the Director;
        (4) is financially responsible to exercise the
    license and has provided proof of financial responsibility as required in Section 1560 of this Article; and
        (5) maintains an office in the home state of
    residence with public access by reasonable appointment or regular business hours. This includes a designated office within a home state of residence.
    (b) In addition to satisfying the requirements of
    subsection (a) of this Section, an individual shall:
        (1) be at least 18 years of age;
        (2) have successfully passed the public adjuster
    examination;
        (3) designate a licensed individual public adjuster
    responsible for the business entity's compliance with the insurance laws, rules, and regulations of this State; and
        (4) designate only licensed individual public
    adjusters to exercise the business entity's license.
    (c) The Director may require any documents reasonably
    necessary to verify the information contained in the application.
(Source: P.A. 96‑1332, eff. 1‑1‑11.)

    (215 ILCS 5/1530)
    Sec. 1530. Examination.
    (a) An individual applying for a public adjuster license under this Article must pass a written examination unless he or she is exempt pursuant to Section 1535 of this Article. The examination shall test the knowledge of the individual concerning the duties and responsibilities of a public adjuster and the insurance laws and regulations of this State. Examinations required by this Section shall be developed and conducted under rules and regulations prescribed by the Director.
    (b) The Director may make arrangements, including contracting with an outside testing service, for administering examinations and collecting the nonrefundable fee. Each individual applying for an examination shall remit a nonrefundable fee as prescribed by the Director. An individual who fails to appear for the examination as scheduled or fails to pass the examination shall reapply for an examination and remit all required fees and forms before being rescheduled for another examination. An individual who fails to pass the examination must wait 90 days prior to rescheduling an examination.
(Source: P.A. 96‑1332, eff. 1‑1‑11.)

    (215 ILCS 5/1535)
    Sec. 1535. Exemptions from examination.
    (a) An individual who applies for a public adjuster license in this State who was previously licensed as a public adjuster in another state based on a public adjuster examination shall not be required to complete any prelicensing education. This exemption is only available if (i) the person is currently licensed in that state or if the application is received within 12 months of the cancellation of the applicant's previous license; and (ii) if the prior state issues a certification that, at the time of cancellation, the applicant was in good standing in that state or the state's producer database records or records maintained by the NAIC, its affiliates, or subsidiaries, indicate that the public adjuster is or was licensed in good standing.
    (b) A person licensed as a public adjuster in another state based on a public adjuster examination who moves to this State shall submit an application within 90 days of establishing legal residence to become a resident licensee pursuant to Section 1525 of this Article. No prelicensing examination shall be required of that person to obtain a public adjuster license.
    (c) An individual who applies for a public adjuster license in this State who was previously licensed as a public adjuster in this State shall not be required to complete any prelicensing examination. This exemption is only available if the application is received within 12 months of the cancellation of the applicant's previous license in this State and if, at the time of cancellation, the applicant was in good standing in this State.
(Source: P.A. 96‑1332, eff. 1‑1‑11.)

    (215 ILCS 5/1540)
    Sec. 1540. Nonresident license reciprocity.
    (a) Unless denied licensure pursuant to Section 1555 of this Article, a nonresident person shall receive a nonresident public adjuster license if:
        (1) the person is currently licensed as a resident
    public adjuster and in good standing in his or her home state;
        (2) the person has submitted the proper request for
    licensure and has provided proof of financial responsibility as required in Section 1560 of this Article;
        (3) the person has submitted or transmitted to the
    Director the appropriate completed application for licensure; and
        (4) the person's home state awards nonresident public
    adjuster licenses to residents of this State on the same basis.
    (b) The Director may verify the public adjuster's
    licensing status through the producer database maintained by the NAIC, its affiliates, or subsidiaries.
    (c) As a condition to continuation of a public adjuster
    license issued under this Section, the licensee shall maintain a resident public adjuster license in his or her home state. The nonresident public adjuster license issued under this Section shall terminate and be surrendered immediately to the Director if the home state public adjuster license terminates for any reason, unless the public adjuster has been issued a license as a resident public adjuster in his or her new home state. Notification to the state or states where the nonresident license is issued must be made as soon as possible, yet no later that 30 days of change in new state resident license. The licensee shall include his or her new and old address on the notification. A new state resident license is required for nonresident licenses to remain valid. The new state resident license must have reciprocity with the licensing nonresident state or states for the nonresident license not to terminate.
(Source: P.A. 96‑1332, eff. 1‑1‑11.)

    (215 ILCS 5/1545)
    Sec. 1545. License.
    (a) Unless denied licensure under this Article, persons who have met the requirements of this Article shall be issued a public adjuster license.
    (b) A public adjuster license shall remain in effect unless revoked, terminated, or suspended as long as the requirements for license renewal are met by the due date.
    (c) The licensee shall inform the Director by any means acceptable to the Director of a change of address, change of legal name, or change of information submitted on the application within 30 days of the change.
    (d) A licensed public adjuster shall be subject to Article XXVI of this Code.
    (e) A public adjuster who allows his or her license to lapse may, within 12 months from the due date of the renewal, be issued a new public adjuster license without necessity of passing a written examination. However, a penalty in the amount of double the unpaid renewal fee shall be required for the issue of the new public adjuster license.
    (f) A licensed public adjuster that is unable to comply with license renewal procedures due to military service or a long‑term medical disability may request a waiver of the procedures in subsection (e) of this Section. The public adjuster may also request a waiver of any examination requirement, fine, or other sanction imposed for failure to comply with renewal procedures.
    (g) The license shall contain the licensee's name, city and state of business address, personal identification number, the date of issuance, the expiration date, and any other information the Director deems necessary.
    (h) In order to assist in the performance of the Director's duties, the Director may contract with non‑governmental entities, including the NAIC or any affiliates or subsidiaries that the NAIC oversees, to perform any ministerial functions, including the collection of fees and data, related to licensing that the Director may deem appropriate.
(Source: P.A. 96‑1332, eff. 1‑1‑11.)

    (215 ILCS 5/1555)
    Sec. 1555. License denial, nonrenewal, or revocation.
    (a) The Director may place on probation, suspend, revoke, deny, or refuse to issue or renew a public adjuster's license or may levy a civil penalty or any combination of actions, for any one or more of the following causes:
        (1) providing incorrect, misleading, incomplete, or
    materially untrue information in the license application;
        (2) violating any insurance laws, or violating any
    regulation, subpoena, or order of the Director or of another state's Director;
        (3) obtaining or attempting to obtain a license
    through misrepresentation or fraud;
        (4) improperly withholding, misappropriating, or
    converting any monies or properties received in the course of doing insurance business;
        (5) intentionally misrepresenting the terms of an
    actual or proposed insurance contract or application for insurance;
        (6) having been convicted of a felony or misdemeanor
    involving dishonesty or fraud, unless the individual demonstrates to the Director sufficient rehabilitation to warrant the public trust;
        (7) having admitted or been found to have committed
    any insurance unfair trade practice or insurance fraud;
        (8) using fraudulent, coercive, or dishonest
    practices; or demonstrating incompetence, untrustworthiness, or financial irresponsibility in the conduct of business in this State or elsewhere;
        (9) having an insurance license or public adjuster
    license or its equivalent, denied, suspended, or revoked in any other state, province, district, or territory;
        (10) forging another's name to an application for
    insurance or to any document related to an insurance transaction;
        (11) cheating, including improperly using notes or
    any other reference material, to complete an examination for an insurance license or public adjuster license;
        (12) knowingly accepting insurance business from or
    transacting business with an individual who is not licensed but who is required to be licensed by the Director;
        (13) failing to comply with an administrative or
    court order imposing a child support obligation;
        (14) failing to pay State income tax or comply with
    any administrative or court order directing payment of State income tax;
        (15) failing to comply with or having violated any of
    the standards set forth in Section 1590 of this Law; or
        (16) failing to maintain the records required by
    Section 1585 of this Law.
    (b) If the action by the Director is to nonrenew,
    suspend, or revoke a license or to deny an application for a license, the Director shall notify the applicant or licensee and advise, in writing, the applicant or licensee of the reason for the suspension, revocation, denial, or nonrenewal of the applicant's or licensee's license. The applicant or licensee may make written demand upon the Director within 30 days after the date of mailing for a hearing before the Director to determine the reasonableness of the Director's action. The hearing must be held within not fewer than 20 days nor more than 30 days after the mailing of the notice of hearing and shall be held pursuant to 50 Ill. Adm. Code 2402.
    (c) The license of a business entity may be suspended,
    revoked, or refused if the Director finds, after hearing, that an individual licensee's violation was known or should have been known by one or more of the partners, officers, or managers acting on behalf of the business entity and the violation was neither reported to the Director, nor corrective action taken.
    (d) In addition to or in lieu of any applicable denial,
    suspension or revocation of a license, a person may, after hearing, be subject to a civil penalty. In addition to or instead of any applicable denial, suspension, or revocation of a license, a person may, after hearing, be subject to a civil penalty of up to $10,000 for each cause for denial, suspension, or revocation, however, the civil penalty may total no more than $100,000.
    (e) The Director shall retain the authority to enforce
    the provisions of and impose any penalty or remedy authorized by this Article against any person who is under investigation for or charged with a violation of this Article even if the person's license or registration has been surrendered or has lapsed by operation of law.
    (f) Any individual whose public adjuster's license is revoked or whose application is denied pursuant to this Section shall be ineligible to apply for a public adjuster's license for 5 years. A suspension pursuant to this Section may be for any period of time up to 5 years.
(Source: P.A. 96‑1332, eff. 1‑1‑11.)

    (215 ILCS 5/1560)
    Sec. 1560. Bond or letter of credit.
    (a) Prior to the issuance of a license as a public adjuster and for the duration of the license, the applicant shall secure evidence of financial responsibility in a format prescribed by the Director through a surety bond or irrevocable letter of credit, subject to all of the following requirements:
        (1) A surety bond executed and issued by an insurer
    authorized to issue surety bonds in this State, which bond:
            (A) shall be in the minimum amount of $20,000;
            (B) shall be in favor of this State and shall
        specifically authorize recovery by the Director on behalf of any person in this State who sustained damages as the result of erroneous acts, failure to act, conviction of fraud, or conviction of unfair practices in his or her capacity as a public adjuster; and
            (C) shall not be terminated unless at least 30
        days' prior written notice will have been filed with the Director and given to the licensee; and
        (2) An irrevocable letter of credit issued by a
    qualified financial institution, which letter of credit:
            (A) shall be in the minimum amount of $20,000;
            (B) shall be to an account to the Director and
        subject to lawful levy of execution on behalf of any person to whom the public adjuster has been found to be legally liable as the result of erroneous acts, failure to act, fraudulent acts, or unfair practices in his or her capacity as a public adjuster; and
            (C) shall not be terminated unless at least 30
        days' prior written notice will have been filed with the and given to the licensee.
    (b) The issuer of the evidence of financial
    responsibility shall notify the Director upon termination of the bond or letter of credit, unless otherwise directed by the Director.
    (c) The Director may ask for the evidence of financial
    responsibility at any time he or she deems relevant.
    (d) The authority to act as a public adjuster shall
    automatically terminate if the evidence of financial responsibility terminates or becomes impaired.
(Source: P.A. 96‑1332, eff. 1‑1‑11.)

    (215 ILCS 5/1563)
    Sec. 1563. Fees.
    (a) The fees required by this Article are as follows:
        (1) Public adjuster license fee of $250, payable once
    every 2 years.
        (2) Business entity license fee of $250, payable once
    every 2 years.
        (3) Application fee of $50 for processing each
    request to take the written examination for a public adjuster license.
(Source: P.A. 96‑1332, eff. 1‑1‑11.)

    (215 ILCS 5/1565)
    Sec. 1565. Continuing education.
    (a) An individual who holds a public adjuster license and who is not exempt under subsection (b) of this Section shall satisfactorily complete a minimum of 24 hours of continuing education courses, including 3 hours of classroom ethics instruction, reported on a biennial basis in conjunction with the license renewal cycle.
    The Director may not approve a course of study unless the
    course provides for classroom, seminar, or self‑study instruction methods. A course given in a combination instruction method of classroom or seminar and self‑study shall be deemed to be a self‑study course unless the classroom or seminar certified hours meets or exceeds two‑thirds of the total hours certified for the course. The self‑study material used in the combination course must be directly related to and complement the classroom portion of the course in order to be considered for credit. An instruction method other than classroom or seminar shall be considered as self‑study methodology. Self‑study credit hours require the successful completion of an examination covering the self‑study material. The examination may not be self‑evaluated. However, if the self‑study material is completed through the use of an approved computerized interactive format whereby the computer validates the successful completion of the self‑study material, no additional examination is required. The self‑study credit hours contained in a certified course shall be considered classroom hours when at least two‑thirds of the hours are given as classroom or seminar instruction.
    The public adjuster must complete the course in advance
    of the renewal date to allow the education provider time to report the credit to the Department.
    (b) This Section shall not apply to:
        (1) licensees not licensed for one full year prior to
    the end of the applicable continuing education biennium; or
        (2) licensees holding nonresident public adjuster
    licenses who have met the continuing education requirements of their home state and whose home state gives credit to residents of this State on the same basis.
    (c) Only continuing education courses approved by the
    Director shall be used to satisfy the continuing education requirement of subsection (a) of this Section.
(Source: P.A. 96‑1332, eff. 1‑1‑11.)