(215 ILCS 5/500-130)
(Section scheduled to be repealed on January 1, 2017)
Sec. 500-130. Bond required of insurance producers.
(a) An insurance producer who places insurance either directly or indirectly with an insurer with which the insurance producer does not have an agent contact must maintain in force while licensed a bond in favor of the people of the State of Illinois executed by an authorized surety company and payable to any party injured under the terms of the bond. The bond shall be continuous in form and in the amount of $2,500 or 5% of the premiums brokered in the previous calendar year, whichever is greater, but not to exceed $50,000 total aggregate liability. The bond shall be conditioned upon full accounting and due payment to the person or company entitled thereto, of funds coming into the insurance producer's possession as an incident to insurance transactions under the license or surplus line insurance transactions under the license as a surplus line producer.
(b) Authorized insurance producers of a business entity may meet the requirements of this Section with a bond in the name of the business entity, continuous in form, and in the amounts set forth in subsection (a) of this Section. 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. The association must have been in existence for 5 years, have common membership, and been formed for a purpose other than obtaining a bond.
(c) The surety may cancel the bond and be released from further liability thereunder upon 30 days' written notice in advance to the principal. The cancellation does not affect any liability incurred or accrued under the bond before the termination of the 30-day period.
(d) The producer's license may be revoked if the producer acts without a bond that is required under this Section.
(e) If a party injured under the terms of the bond requests the producer to provide the name of the surety and the bond number, the producer must provide the information within 3 working days after receiving the request.
(f) An association may meet the requirements of this Section for all of its members with a bond in the name of the association that is continuous in form and in the amounts set forth in subsection (a) of this Section.
(Source: P.A. 92-386, eff. 1-1-02.)
Last modified: February 18, 2015