Bill Text: IL HB4875 | 2019-2020 | 101st General Assembly | Introduced

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Bill Title: Amends the Illinois Insurance Code. Provides that a public adjuster shall provide a written contract between the public adjuster and an insured to the insured's designated property and casualty insurer within one business day after the contract is signed. Provides that the insurer has 5 business days to review the contract. Provides that the written contract between a public adjuster and an insured is deemed executed once the insurer receives the contract and it is on the contract form filed with and approved by the Director of Insurance. Provides that a public adjuster shall not provide services until the 5-business-day period after the insurer has received the contract has elapsed or the public adjuster is notified by the insured to proceed. Removes a provision that provides that a public adjuster shall not provide services until a written contract with the insured is executed, on a form filed with and approved by the Director. Repeals the Public Insurance Adjusters and Registered Firms Article of the Illinois Insurance Code. Effective immediately.

Spectrum: Bipartisan Bill

Status: (Introduced - Dead) 2020-06-23 - Rule 19(b) / Re-referred to Rules Committee [HB4875 Detail]

Download: Illinois-2019-HB4875-Introduced.html

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101ST GENERAL ASSEMBLY State of Illinois 2019 and 2020 HB4875 Introduced , by Rep. Thaddeus Jones SYNOPSIS AS INTRODUCED:
215 ILCS 5/1575
215 ILCS 5/Art. XXXI.75 rep.
Amends the Illinois Insurance Code. Provides that a public adjuster shall provide a written contract between the public adjuster and an insured to the insured's designated property and casualty insurer within one business day after the contract is signed. Provides that the insurer has 5 business days to review the contract. Provides that the written contract between a public adjuster and an insured is deemed executed once the insurer receives the contract and it is on the contract form filed with and approved by the Director of Insurance. Provides that a public adjuster shall not provide services until the 5-business-day period after the insurer has received the contract has elapsed or the public adjuster is notified by the insured to proceed. Removes a provision that provides that a public adjuster shall not provide services until a written contract with the insured is executed, on a form filed with and approved by the Director. Repeals the Public Insurance Adjusters and Registered Firms Article of the Illinois Insurance Code. Effective immediately.
LRB101 18652 BMS 68107 b
A BILL FOR
HB4875 LRB101 18652 BMS 68107 b
AN ACT concerning regulation.
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 Section 1575 as follows:
(215 ILCS 5/1575)
Sec. 1575. Contract between public adjuster and insured.
(a) Public adjusters shall ensure that all contracts for
their services are in writing and contain the following terms:
(1) legible full name of the adjuster signing the
contract, as specified in Department records;
(2) permanent home state business address and phone
number;
(3) license number;
(4) title of "Public Adjuster Contract";
(5) the insured's full name, street address, insurance
company name, and policy number, if known or upon
notification;
(6) a description of the loss and its location, if
applicable;
(7) description of services to be provided to the
insured;
(8) signatures of the public adjuster and the insured;

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(9) date and time the contract was signed by the public
adjuster and date and time the contract was signed by the
insured;
(10) attestation language stating that the public
adjuster is fully bonded pursuant to State law; and
(11) full salary, fee, commission, compensation, or
other considerations the public adjuster is to receive for
services.
(b) The contract may specify that the public adjuster shall
be named as a co-payee on an insurer's payment of a claim.
(1) If the compensation is based on a share of the
insurance settlement, the exact percentage shall be
specified.
(2) Initial expenses to be reimbursed to the public
adjuster from the proceeds of the claim payment shall be
specified by type, with dollar estimates set forth in the
contract and with any additional expenses first approved by
the insured.
(3) Compensation provisions in a public adjuster
contract shall not be redacted in any copy of the contract
provided to the Director.
(c) If the insurer, not later than 5 business days after
the date on which the loss is reported to the insurer, either
pays or commits in writing to pay to the insured the policy
limit of the insurance policy, the public adjuster shall:
(1) not receive a commission consisting of a percentage

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of the total amount paid by an insurer to resolve a claim;
(2) inform the insured that loss recovery amount might
not be increased by insurer; and
(3) be entitled only to reasonable compensation from
the insured for services provided by the public adjuster on
behalf of the insured, based on the time spent on a claim
and expenses incurred by the public adjuster, until the
claim is paid or the insured receives a written commitment
to pay from the insurer.
(d) A public adjuster shall provide the insured a written
disclosure concerning any direct or indirect financial
interest that the public adjuster has with any other party who
is involved in any aspect of the claim, other than the salary,
fee, commission, or other consideration established in the
written contract with the insured, including, but not limited
to, any ownership of or any compensation expected to be
received from, any construction firm, salvage firm, building
appraisal firm, board-up company, or any other firm that
provides estimates for work, or that performs any work, in
conjunction with damages caused by the insured loss on which
the public adjuster is engaged. The word "firm" shall include
any corporation, partnership, association, joint-stock
company, or person.
(e) A public adjuster contract may not contain any contract
term that:
(1) allows the public adjuster's percentage fee to be

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collected when money is due from an insurance company, but
not paid, or that allows a public adjuster to collect the
entire fee from the first check issued by an insurance
company, rather than as a percentage of each check issued
by an insurance company;
(2) requires the insured to authorize an insurance
company to issue a check only in the name of the public
adjuster;
(3) precludes a public adjuster or an insured from
pursuing civil remedies;
(4) includes any hold harmless agreement that provides
indemnification to the public adjuster by the insured for
liability resulting from the public adjuster's negligence;
or
(5) provides power of attorney by which the public
adjuster can act in the place and instead of the insured.
(f) The following provisions apply to a contract between a
public adjuster and an insured:
(1) Prior to the signing of the contract, the public
adjuster shall provide the insured with a separate signed
and dated disclosure document regarding the claim process
that states:
"Property insurance policies obligate the insured to
present a claim to his or her insurance company for
consideration. There are 3 types of adjusters that could be
involved in that process. The definitions of the 3 types

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are as follows:
(A) "Company adjuster" means the insurance
adjusters who are employees of an insurance company.
They represent the interest of the insurance company
and are paid by the insurance company. They will not
charge you a fee.
(B) "Independent adjuster" means the insurance
adjusters who are hired on a contract basis by an
insurance company to represent the insurance company's
interest in the settlement of the claim. They are paid
by your insurance company. They will not charge you a
fee.
(C) "Public adjuster" means the insurance
adjusters who do not work for any insurance company.
They work for the insured to assist in the preparation,
presentation and settlement of the claim. The insured
hires them by signing a contract agreeing to pay them a
fee or commission based on a percentage of the
settlement, or other method of compensation.".
(2) The insured is not required to hire a public
adjuster to help the insured meet his or her obligations
under the policy, but has the right to do so.
(3) The public adjuster is not a representative or
employee of the insurer.
(4) The salary, fee, commission, or other
consideration is the obligation of the insured, not the

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insurer, except when rights have been assigned to the
public adjuster by the insured.
(g) The contracts shall be executed in duplicate to provide
an original contract to the public adjuster, and an original
contract to the insured. The public adjuster's original
contract shall be available at all times for inspection without
notice by the Director.
(h) The public adjuster shall provide the insurer with an
exact copy of the contract by the insured, authorizing the
public adjuster to represent the insured's interest.
(i) The public adjuster shall give the insured written
notice of the insured's rights as a consumer under the law of
this State.
(j) The public adjuster shall provide the written contract
to the insured's designated property and casualty insurer as
defined in Section 35A-5 within one business day after the
contract is signed. The insurer has 5 business days to review
the contract. A written contract with the insured is deemed
executed once the insurer receives the contract and it is on a
contract form filed with and approved by the Director. A public
adjuster shall not provide services until the 5-business-day
period after the insurer has received the contract has elapsed
or the public adjuster is notified by the insured to proceed. A
public adjuster shall not provide services until a written
contract with the insured has been executed, on a form filed
with and approved by the Director. At the option of the

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insured, any such contract shall be voidable for 5 business
days after execution. The insured may void the contract by
notifying the public adjuster in writing by (i) registered or
certified mail, return receipt requested, to the address shown
on the contract or (ii) personally serving the notice on the
public adjuster.
(k) If the insured exercises the right to rescind the
contract, anything of value given by the insured under the
contract will be returned to the insured within 15 business
days following the receipt by the public adjuster of the
cancellation notice.
(Source: P.A. 96-1332, eff. 1-1-11; 97-333, eff. 8-12-11.)
(215 ILCS 5/Art. XXXI.75 rep.)
Section 10. The Illinois Insurance Code is amended by
repealing Article XXXI.75.
Section 99. Effective date. This Act takes effect upon
becoming law.