Life Insurance: License and Registration
License fees
$ 180.00 - Resident Producer License (biennial - once every two years) $ 360.00 - Reinstating a Lapsed License/Late Renewals (double renewal fee) $ 250.00 Nonresident Producer (biennial) $ 150.00 Business Entity Renewal (biennial) $ 50.00 Temporary License for Producer Application (90 days) $ 50.00 Temporary Producer License fee (180 days)
Maintaining a License: Continuing Education
- 24 total CE hours of approved course study of which at least three credit hours must be in ETHICS, earned either by taking a classroom course OR live webinar (self-study is not allowed for ethics). - For each biennial license renewal (every two years). - No single continuing education course may be certified for more than 12 hours. - Producers should complete a CE coursework 30 days prior to renewal date. - Failure to comply by the renewal due date results in automatic license termination **CE course programs can be all or part self-study (requires successful completion of an [open book] exam while programs offering all 12 hours of completion in a classroom have no exam requirement)**
The Director may not grant or renew any license if he has reason to believe:
- that during either of the preceding two years the total amount of controlled business premium collected was greater than the premium amount collected for all other insurance business, - in the 12 months immediately following the issuance of the license, the total amount of controlled business premium collected was greater than the premium amount collected for all other insurance business. KEY >> An insurance producer must sell more insurance on others than he or she does of controlled business.
When can you apply for a new license after it is revoked
3 years, and the person may not be employed or contracted, or engage in any insurance-related capacity during the period of imposed suspension/revocation or denial.
Business entities
A business entity acting as an insurance producer must obtain a producer license. An application must be filed and the appropriate fee must be paid ($150 biennially). The entity must designate a licensed producer to be responsible for compliance with Illinois insurance laws and rules. There must always be a licensed producer available as the contact and compliance person designated for the entity
Surety bond
A surety (the insurance company who issued the bond to the producer) may cancel the bond with 30 days' notice to the principal (purchaser of the bond). An injured party can request that the producer provide the surety name and bond number, and the producer must comply within three working days of receiving such a request.
Other exceptions to producer licenses
An insurance company is not required to obtain a producer license, nor are the insurer's officers, directors, employees, subsidiaries, or affiliates (as long as these parties do not receive any commission on policies written or sold in this state). This includes administrative, executive, managerial, or clerical employees KEY CONCEPT> If a person is not receiving compensation directly from the sale, solicitation, or negotiation of an insurance product, then he or she is not required to obtain a producer license.
License Suspension, Revocation, Or denial
Director can place any license on suspension, revoke it, or refuse to issue (deny) a license, for any one or more of the following reasons: 1) Provide incorrect, misleading, incomplete, or materially untrue information in the producer license application. 2) Violate any insurance law, rule, subpoena, or order of the Director of any state. 3) Knowingly accept any business from or pay a commission to anyone who does not have a license. 4) Intentionally misrepresent the terms of an actual or proposed insurance contract or application. 5) Have admitted or been found to have committed any insurance unfair trade practice or fraud. 6) Forge a name to an application for insurance or to a document related to an insurance transaction. 7) Have had license revoked/suspended in any other jurisdiction, and the same result would occur in Illinois. 8) Try to get a license through misrepresentation or fraud. 9) Improperly use notes or reference material to cheat on a state licensing examination. 10) Have been convicted of a felony. 11) Misappropriate, improperly hold, or convert business funds for personal use. 12) Use fraudulent, coercive, or dishonest practices, or demonstrate incompetence, untrustworthiness, or financial irresponsibility in the conduct of business in this state or elsewhere 13) Fail to comply with an administrative or court order imposing a child support obligation. 14) Fail to pay state income tax, penalties, or interest or to comply with a court order directing payment of state income tax, or fail to file a tax return or to pay any tax due to the Illinois Department of Revenue. 15) Fail to make satisfactory repayment to the Illinois Student Assistance Commission for a delinquent or defaulted student loan 16) Fail to comply with any provision of the Viatical Settlements Act of 2009.
Maintaining a License: Reinstatement of lapsed license
If a producer license lapses (is not renewed on time), the producer has up until 12 months after lapse to comply and complete the 24-hour CE requirement and will have to pay a double license fee ($360.00).
Insurance Producers
If you sell, solicit, or negotiate in Illinois for any class of insurance, then you must be licensed in the appropriate line or lines of producer authority as required by law. License fee is $180 every two years.
Maintaining a License: Change of address
Licensees must inform the Director of a change of residential address within 30 days after the change
Controlled business
Means insurance produced or to be produced by or through the licensed persons UPON: - His own life, person, property, or risks, or those of his spouse, - The life, person, property, or risks of his employer or his own business.
Exemptions to licensing
No person may, for a fee, engage in the business of offering any advice, counsel, opinion, or service with respect to the benefits, advantages, or disadvantages under any policy of insurance that could be issued in Illinois, with the following exceptions: - An attorney - licensed insurance producer - Public adjusters - Trust officers - actuary or a certified public accountant
Bond Requirements
Such activity is considered to be "brokering business." Failure to maintain a bond when required will result in revocation or denial of license. When required, the bond shall be in these amounts: l.) for $2,500 (which is the bond penalty or face amount), or 2.) 5% of brokered premium received in previous year, whichever is greater (not to exceed $50,000 (total aggregate liability). Authorized insurance producers of a business entity may meet the requirements of this Section with a bond in the name of the business entity. Insurance producers may meet the requirements of this Section with a bond in the name of an association. An individual producer remains responsible for assuring that a producer bond is in effect and is for the correct amount.
Obtaining a License
The producer licensing a candidate shall meet five requirements: - Successful state examination (Part I and Part II). - Be at least 18 years old. - Has not committed any act that is grounds for denial, revocation, or suspension. - Successfully completed the appropriate prelicensing course(s). - Paid the appropriate fee ($180 for biennial license).
Temporary License for Producer Application (90-Day Temp License)
This rule allows a person to obtain a short-term 90-day temp license while preparing to pass the state exam. With this temp license, the producer may sell, solicit, etc. complete applications and receive commissions. CANNOT be renewed. If during any six-month period more than 50% of a company's temporary licensees fail to obtain their producer license prior to the end of the 90-day period, the Director may cancel the right of the company to hire producers with the temporary license
Temporary Licensing extensions
allowed under these circumstances: - To a surviving spouse or court-appointed representative of an insurance producer who dies or becomes mentally or physically disabled so that enough time can be allowed for the sale of the insurance business owned by the producer or for the recovery of the producer or to provide for the training and licensing of new personnel to operate the disabled producer's business. Temp licenses automatically terminate upon the transfer of owners - To a member or employee of a business entity licensed as an insurance producer upon the death or disability of an individual designated in the business entity application - The designee of a licensed insurance producer who enters active duty with the armed forces of the US military may also obtain this temporary 180-day license.
Selling insurance without al icense
class A misdemeanor
Selling insruance without a license and misappropriate or converts any money
guilty of a class 4 felony (1+ years in jail)
Temporary Insurance Producers: Temporary Licensing
may be issued up to 180 days and renewed for an additional 180 days (discretion of the Director) without an examination in these cases (allowed only to service existing clients but may not be used to sell or solicit new clients).
Non Resident Producers License
qualifications are: - currently licensed and in good standing with their home state - Submit the proper paperwork and pay the license fee ($250 biennially). - illinois grants this license if the other state accepts illinois producers int he same manner - The Director can verify out-of-state producer status using the National Producer Database - If a licensee moves from one state to another, must notify Illinois within 30 days of the move - Other nonresident licenses available include Surplus Lines Brokers and Limited Lines. - The Director requires nonresidents to file an affidavit allowing the director to receive service of legal process
Once the Director takes action to suspend, deny, or revoke a license or application
the affected person is contacted in writing, and the applicant or licensee may make a written demand upon the Director within 30 days after the date of mailing for a hearing. The actual hearing date will be no less than 20 or more than 30 days from the mailing of the notice of the hearing from the Director to the producer.
Civil Penalties for wrongdoers
up to $10,000 with a max of $100,000