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Flashcards in Life and Health Laws Deck (89)
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Insurance director is

appointed by the Governor and has the power and duty to enforce and execute the insurance laws of Illinois


The director has the power to

Make reasonable rules and regulations as necessary
Conduct investigations to determine if any person has violated any insurance law
Conduct examinations, investigations, and hearings as necessary to administer insurance law
Subpoena and examine witnesses under oath during examinations, investigations, and hearings
Institute any action or legal proceeding to enforce insurance laws f the Director's actions
Issue licenses for insurance producers, and Certificates of Authority for insurance companies, permitting them to transact business in Illinois
Issue and serve a Ceases and Desist order on any person or company whose actions are illegal, threaten solvency, or that endanger its policyholders, or make any state law


Hearings must be within_______ for cease and desist

The director must issue notice that a hearing is to be held within 20-30 days of notification date.


The director does not have the power to

adjust claims, act as a judge in a lawsuit involving claims, advise any insured or any legal action to be taken against an insurer, or make any state law


If after a hearing, any statements in the notice are found to be true

The director may make orders to correct, eliminate, or remedy the illegal or improver conduct, conditions, or grounds.


A person violating a Cease and Desist order or Circuit Court order must

pay a $100 a day fine up to a total of $5,000.


The license or certificate of authority

of a producer or insurer may also be revoked


Any person violating a Cease and Desist Order pertaining to an unfair trade practice may be

fined up to 1,000 per violation


Examinations are used

to determine the financial business practices, performances, and operations of any company, applicant for, or licensee


The Director may examine

The insurance business transacted in Illinois by any authorized company
Anyone forming, promoting, soliciting shares of, or making capital contributions to a company
Anyone under contract to manage or control a company as a general agent, managing agent, or attorney in fact
A registered or licenses individual firm, or administrator or an applicant for such registration or license.
Anyone adjusting losses or financing premiums


The director may

appoint other examiners to investigate on his behalf


Examinees must provide

free access to all books, record, documents, and papers relating to the company's business and operations.


The examinee must pay

all expenses incurred to help with an examination


Anyone refusing to cooperate may be fined up to



Reporting and hearing: The director must disclose an examination report

to the examinee before making the report public


The examinee must be given

10 days to request a hearing from the Director


If a hearing is granted, the director must give

the examinee at least 10 days notice



90 days after the report on the hearing is filled, the Director must issue a written order based upon the report


Anyone violating a written report

may be fined up to $5,000. If the order is issued as a result of an examination, the violator may be fined up to $10,000.
If a licensed producer, the violator may be fined up to $20,000 and subjected to license revocation or suspension


Anyone acting as an insurance producer must

be licensed in the class of insurance for which he/she claims to be licensed


Classes include

fire and inland marine(property)
motor vehicle
personal lines


A person may not offer paid advice about a policy's benefits unless the person is one of the following

a licensed producer, limited representative, or temporary producer
an attorney
A bank trust officer, actuary, or CPA performing professional duties incidental to his or her position
a licensed public adjuster


any person acting as a producer w/o a licenses is guilty of

class A misdemeanor


misappropriation of collected funds is

class 4 felony


Limited lines producer license requirements

18 years or older, competent, trustworthy, and of good business reputation


Limited lines producer license are for the following classes

Baggage, trip cancellation, or limited travel accident and health sold in connection with transportation on a common carrier
Industrial life or industrial accident health insurance
Legal expense insurance
Mutual farm
HMO enrollments of public aid or Medicare recipients
Limited health care plans issued by an organization with a Certificate of Authority under the Limited Health service Organization act
Credit life or credit accident and health
Limited lines producers are exempt from bonding and pre-licensing requirements
Limited lines producers must be appointed by the companies they represent, but may represent more than one company


Limited line licenses remain

in effect perpetually as long as fees are paid.


A person who is not a legal resident of Illinois may be

licensed to act as a nonresident producer without taking a written exam if he/she meets all other licensing requirements and if his/her home state:
Allows reciprocal licensing of Illinois residents on the same basis
Certifies that he/she holds a current, valid license in good standing in that state
Certifies that he/she has passed a similar exam or that it does not require an exam


Business entities must obtain

a producer license in order to transact any insurance business in Illinois.
It must also appoint at lest 1 licensed producer responsible for its compliance with Illinois insurance law


In order to permit the continuation of business following the death or disability of a licensed producer,

The director may issue a temporary producer license to:
The surviving spouse or court-appointed representative of a deceased or disabled producer
A member of employee of a business entity licensed as a producer, when the entity's designated producer dies or becomes disabled
The designee of a producer entering active duty in the U.S. armed forces