102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
HB5471
 
Introduced , by Rep. Dagmara Avelar
 
SYNOPSIS AS INTRODUCED:



215 ILCS 5/1510
215 ILCS 5/1575
215 ILCS 5/Art. XXXI.75 rep.

 Amends the Illinois Insurance Code. In provisions concerning a contract between public adjuster and insured, provides that: a public adjuster shall ensure that the contract contains the email address of the public adjuster; a public adjuster may also provide an exact copy of the contract to the insurer's authorized representative for receiving notice of loss or damage in specified circumstances; a public adjuster may provide emergency services before a written contract with the insured has been executed; a public adjuster shall not provide services until a written contract with the insured has been executed and an exact copy of the contract has been provided to the insurer; at the option of an insured, any contract between a public adjuster and the insured shall be voidable for 5 business days after the copy of the contract has been received by the insurer, except as provided in the Fire Damage Representation Agreement Act; the insured may void the contract by notifying the public adjuster in writing by sending an email to the email address shown on the contract. been received by the insurer, except as provided in the Fire Damage Representation Agreement Act. Defines "adjusting insurance claims" and "compensation". Changes a definition of "public adjuster". Removes a definition of "adjusting a claim for loss or damage covered by an insurance contract". Repeals the Public Insurance Adjusters and Registered Firms Article of the Illinois Insurance Code. Effective immediately.



LRB102 24372 BMS 33606 b


 
 
A BILL FOR
 


HB5471LRB102 24372 BMS 33606 b



1 AN ACT concerning regulation.


2 Be it enacted by the People of the State of Illinois,

3represented in the General Assembly:



4 Section 5. The Illinois Insurance Code is amended by 
5changing Sections 1510 and 1575 as follows:

6 (215 ILCS 5/1510)

7 Sec. 1510. Definitions. In this Article:
8 "Adjusting a claim for loss or damage covered by an 
9insurance contract" means negotiating values, damages, or 
10depreciation or applying the loss circumstances to insurance 
11policy provisions. 
12 "Adjusting insurance claims" means representing an insured 
13with an insurer for compensation, and while representing that 
14insured either negotiating values, damages, or depreciation, 
15or applying the loss circumstances to insurance policy 
16provisions. 
17 "Business entity" means a corporation, association, 
18partnership, limited liability company, limited liability 
19partnership, or other legal entity. 
20 "Compensation" includes, but is not limited to, the 
21following:
22  (1) any assignment of insurance proceeds or a 
23 percentage of the insurance proceeds;
 
 
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1  (2) any agreement to make repairs for the amount of 
2 the insurance proceeds payable; or
3  (3) assertion of any lien against insurance proceeds 
4 payable. 
5 "Department" means the Department of Insurance. 
6 "Director" means the Director of Insurance. 
7 "Fingerprints" means an impression of the lines on the 
8finger taken for the purpose of identification. The impression 
9may be electronic or in ink converted to electronic format.
10 "Home state" means the District of Columbia and any state 
11or territory of the United States where the public adjuster's 
12principal place of residence or principal place of business is 
13located. If neither the state in which the public adjuster 
14maintains the principal place of residence nor the state in 
15which the public adjuster maintains the principal place of 
16business has a substantially similar law governing public 
17adjusters, the public adjuster may declare another state in 
18which it becomes licensed and acts as a public adjuster to be 
19the home state. 
20 "Individual" means a natural person. 
21 "Person" means an individual or a business entity. 
22 "Public adjuster" means any person who, for compensation 
23or any other thing of value on behalf of the insured:
24  (i) acts, or aids, or represents the insured solely in 
25 relation to first party claims arising under insurance 
26 contracts that insure the real or personal property of the 
 
 
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1 insured, on behalf of an insured in adjusting an insurance 
2 a claim for loss or damage covered by an insurance 
3 contract; 
4  (ii) advertises for employment as a public adjuster of 
5 insurance claims or solicits business or represents 
6 himself or herself to the public as a public adjuster of 
7 first party insurance claims for losses or damages arising 
8 out of policies of insurance that insure real or personal 
9 property; or 
10  (iii) directly or indirectly solicits business, 
11 investigates or adjusts losses, or advises an insured 
12 about first party claims for losses or damages arising out 
13 of policies of insurance that insure real or personal 
14 property for another person engaged in the business of 
15 adjusting losses or damages covered by an insurance policy 
16 for the insured. 
17 "Uniform individual application" means the current version 
18of the National Association of Directors (NAIC) Uniform 
19Individual Application for resident and nonresident 
20individuals. 
21 "Uniform business entity application" means the current 
22version of the National Association of Insurance Commissioners 
23(NAIC) Uniform Business Entity Application for resident and 
24nonresident business entities. 

25 "Webinar" means an online educational presentation during 
26which a live and participating instructor and participating 
 
 
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1viewers, whose attendance is periodically verified throughout 
2the presentation, actively engage in discussion and in the 
3submission and answering of questions. 
4(Source: P.A. 102-135, eff. 7-23-21.)

5 (215 ILCS 5/1575)

6 Sec. 1575. Contract between public adjuster and insured.
7 (a) Public adjusters shall ensure that all contracts for 
8their services are in writing and contain the following terms:
9  (1) legible full name of the adjuster signing the 
10 contract, as specified in Department records;
11  (2) permanent home state business address, email 
12 address, and phone number;
13  (3) license number;
14  (4) title of "Public Adjuster Contract";
15  (5) the insured's full name, street address, insurance 
16 company name, and policy number, if known or upon 
17 notification;
18  (6) a description of the loss and its location, if 
19 applicable;
20  (7) description of services to be provided to the 
21 insured;
22  (8) signatures of the public adjuster and the insured;
23  (9) date and time the contract was signed by the 
24 public adjuster and date and time the contract was signed 
25 by the insured;
 
 
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1  (10) attestation language stating that the public 
2 adjuster is fully bonded pursuant to State law; and
3  (11) full salary, fee, commission, compensation, or 
4 other considerations the public adjuster is to receive for 
5 services.
6 (b) The contract may specify that the public adjuster 
7shall be named as a co-payee on an insurer's payment of a 
8claim.
9  (1) If the compensation is based on a share of the 
10 insurance settlement, the exact percentage shall be 
11 specified.
12  (2) Initial expenses to be reimbursed to the public 
13 adjuster from the proceeds of the claim payment shall be 
14 specified by type, with dollar estimates set forth in the 
15 contract and with any additional expenses first approved 
16 by the insured.
17  (3) Compensation provisions in a public adjuster 
18 contract shall not be redacted in any copy of the contract 
19 provided to the Director.
20 (c) If the insurer, not later than 5 business days after 
21the date on which the loss is reported to the insurer, either 
22pays or commits in writing to pay to the insured the policy 
23limit of the insurance policy, the public adjuster shall:
24  (1) not receive a commission consisting of a 
25 percentage of the total amount paid by an insurer to 
26 resolve a claim;
 
 
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1  (2) inform the insured that loss recovery amount might 
2 not be increased by insurer; and
3  (3) be entitled only to reasonable compensation from 
4 the insured for services provided by the public adjuster 
5 on behalf of the insured, based on the time spent on a 
6 claim and expenses incurred by the public adjuster, until 
7 the claim is paid or the insured receives a written 
8 commitment to pay from the insurer.
9 (d) A public adjuster shall provide the insured a written 
10disclosure concerning any direct or indirect financial 
11interest that the public adjuster has with any other party who 
12is involved in any aspect of the claim, other than the salary, 
13fee, commission, or other consideration established in the 
14written contract with the insured, including, but not limited 
15to, any ownership of or any compensation expected to be 
16received from, any construction firm, salvage firm, building 
17appraisal firm, board-up company, or any other firm that 
18provides estimates for work, or that performs any work, in 
19conjunction with damages caused by the insured loss on which 
20the public adjuster is engaged. The word "firm" shall include 
21any corporation, partnership, association, joint-stock 
22company, or person.
23 (e) A public adjuster contract may not contain any 
24contract term that:
25  (1) allows the public adjuster's percentage fee to be 
26 collected when money is due from an insurance company, but 
 
 
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1 not paid, or that allows a public adjuster to collect the 
2 entire fee from the first check issued by an insurance 
3 company, rather than as a percentage of each check issued 
4 by an insurance company;
5  (2) requires the insured to authorize an insurance 
6 company to issue a check only in the name of the public 
7 adjuster;
8  (3) precludes a public adjuster or an insured from 
9 pursuing civil remedies;
10  (4) includes any hold harmless agreement that provides 
11 indemnification to the public adjuster by the insured for 
12 liability resulting from the public adjuster's negligence; 
13 or
14  (5) provides power of attorney by which the public 
15 adjuster can act in the place and instead of the insured. 
16 (f) The following provisions apply to a contract between a 
17public adjuster and an insured:
18  (1) Prior to the signing of the contract, the public 
19 adjuster shall provide the insured with a separate signed 
20 and dated disclosure document regarding the claim process 
21 that states:
22 "Property insurance policies obligate the insured to 
23 present a claim to his or her insurance company for 
24 consideration. There are 3 types of adjusters that could 
25 be involved in that process. The definitions of the 3 
26 types are as follows:
 
 
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1   (A) "Company adjuster" means the insurance 
2 adjusters who are employees of an insurance company. 
3 They represent the interest of the insurance company 
4 and are paid by the insurance company. They will not 
5 charge you a fee.
6   (B) "Independent adjuster" means the insurance 
7 adjusters who are hired on a contract basis by an 
8 insurance company to represent the insurance company's 
9 interest in the settlement of the claim. They are paid 
10 by your insurance company. They will not charge you a 
11 fee.
12   (C) "Public adjuster" means the insurance 
13 adjusters who do not work for any insurance company. 
14 They represent work for the insured to assist in the 
15 preparation, presentation, and settlement of the 
16 claim. The insured hires them by signing a contract 
17 agreeing to pay them a fee or commission based on a 
18 percentage of the settlement, or other method of 
19 compensation.".
20  (2) The insured is not required to hire a public 
21 adjuster to help the insured meet his or her obligations 
22 under the policy, but has the right to do so.
23  (3) The public adjuster is not a representative or 
24 employee of the insurer.
25  (4) The salary, fee, commission, or other 
26 consideration is the obligation of the insured, not the 
 
 
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1 insurer, except when rights have been assigned to the 
2 public adjuster by the insured.
3 (g) The contracts shall be executed in duplicate to 
4provide an original contract to the public adjuster, and an 
5original contract to the insured. The public adjuster's 
6original contract shall be available at all times for 
7inspection without notice by the Director.
8 (h) The public adjuster shall provide the insurer, or its 
9authorized representative for receiving notice of loss or 
10damage, with an exact copy of the contract with by the insured 
11by email after execution of the contract, authorizing the 
12public adjuster to represent the insured's interest.
13 (i) The public adjuster shall give the insured written 
14notice of the insured's rights as a consumer under the law of 
15this State.
16 (j) A public adjuster shall not provide services, other 
17than emergency services, until a written contract with the 
18insured has been executed, on a form filed with and approved by 
19the Director, and an exact copy of the contract has been 
20provided to the insurer, or its authorized representative for 
21receiving notice of loss or damage. Except as provided in the 
22Fire Damage Representation Agreement Act, at At the option of 
23the insured, any such contract shall be voidable for 5 
24business days after the copy has been received by the insurer 
25execution. The insured may void the contract by notifying the 
26public adjuster in writing by (i) registered or certified 
 
 
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1mail, return receipt requested, to the address shown on the 
2contract, or (ii) personally serving the notice on the public 
3adjuster, or (iii) sending an email to the email address shown 
4on the contract.
5 (k) If the insured exercises the right to rescind the 
6contract, anything of value given by the insured under the 
7contract will be returned to the insured within 15 business 
8days following the receipt by the public adjuster of the 
9cancellation notice.

10(Source: P.A. 96-1332, eff. 1-1-11; 97-333, eff. 8-12-11.)

11 (215 ILCS 5/Art. XXXI.75 rep.)
12 Section 10. The Illinois Insurance Code is amended by 
13repealing Article XXXI 3/4.


14 Section 99. Effective date. This Act takes effect upon 
15becoming law.