(225 ILCS 427/55)
(Section scheduled to be repealed on January 1, 2020)
Sec. 55. Fidelity insurance; segregation of accounts.
(a) The supervising community association manager or the community association management firm with which he or she is employed shall not have access to and disburse community association funds unless each of the following conditions occur:
(1) There is fidelity insurance in place to insure
against loss for theft of community association funds.
(2) The fidelity insurance is not less than all
moneys under the control of the supervising community association manager or the employing community association management firm for the association.
(3) The fidelity insurance covers the community
association manager, supervising community association manager, and all partners, officers, and employees of the community association management firm during the term of the insurance coverage, which shall be at least for the same term as the service agreement between the community association management firm or supervising community association manager as well as the community association officers, directors, and employees.
(4) The insurance company issuing the fidelity
insurance may not cancel or refuse to renew the bond without giving at least 10 days' prior written notice.
(5) Unless an agreement between the community
association and the supervising community association manager or the community association management firm provides to the contrary, a community association may secure and pay for the fidelity insurance required by this Section. The supervising community association manager or the community association management firm must be named as additional insured parties on the community association policy.
(b) A community association management firm that provides community association management services for more than one community association shall maintain separate, segregated accounts for each community association or, with the consent of the community association, combine the accounts of one or more community associations, but in that event, separately account for the funds of each community association. The funds shall not, in any event, be commingled with the supervising community association manager's or community association management firm's funds. The maintenance of such accounts shall be custodial, and such accounts shall be in the name of the respective community association or community association manager or Community Association Management Agency as the agent for the association.
(c) The supervising community association manager or community association management firm shall obtain the appropriate general liability and errors and omissions insurance, as determined by the Department, to cover any losses or claims against the supervising community association manager or the community association management firm.
(d) The Department shall have authority to promulgate additional rules regarding insurance, fidelity insurance and all accounts maintained and to be maintained by a supervising community association manager or community association management firm.
(Source: P.A. 98-365, eff. 1-1-14.)
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Last modified: February 18, 2015