Rules Governing Automobile Insurance Companies in Illinois
Basically, Illinois drivers know their own state's rules governing automobile insurance. But how many Illinois drivers know their state's rules governing automobile insurance companies? You might be surprised to learn the differences that exist in rules for the average legal Illinois driver versus automobile insurance companies operating in Illinois.
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Prelicensing Education Requirements
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Illinois insurance producers must be licensed in the state of Illinois in order to legally sell automobile insurance there. Therefore, a pre-licensing educational requirement must be met to be considered as an Illinois insurance producer. While all other types of insurance producers (such as life, accident or death) must have a minimum of 15 hours of pre-licensing education approved and on file, automobile insurance producers only have to have 7 1/2 hours of education to meet Illinois pre-licensing education requirements.
License Extension Requests
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Once an automobile insurer producer has obtained a license in Illinois, regardless of the type of insurance being sold, all producers must meet a minimum continuing educational requirement of 30 hours to be eligible for consideration of an extension of a license.
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Insurance Producer Examination
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In Illinois, after pre-licensing education requirements have been met (or even before they have been met) people desiring to become an insurance producer in the state must also take a producer exam and pass it. The exam costs $103 and is offered seven days a week. It must be paid for at the time of the reservation. In addition, the reservation must be made four days prior to the date you wish to take the exam. Failure to pass the exam the first time does not exclude the opportunity to repeat the exam later.
Licensing Rule Exceptions
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If a company is currently approved to sell automobile insurance in another state besides Illinois, they are exempt from Illinois' pre-licensing requirements as well as the Illinois license exam. However, there are two conditions that the company must meet for this to be an approved exception by Illinois. One condition that must be met is that Illinois must receive an application for a license within 90 days of the time you first cancelled the license in another state. The second condition is that the prior licensing state must provide Illinois with a Letter of Clearance, confirming that you were in good standing in that state at the time you cancelled your license with them.
Licensing Fees
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There are numerous fees associated with becoming a licensed automobile insurance producer in the state of Illinois. These can be viewed in their entirety by accessing the website link for the Department of Insurance in Illinois (see Resources). Different forms are available based on whether the producer is seeking a license, renewing one or trying to have one reinstated.
Surety Bond Requirement
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If you desire to sell auto insurance in the state of Illinois, but you do not have a contract with an insurer, you will be required to keep a minimum bond somewhere in the amount between $2,500 and $50,000. The exact amount will be determined by a percentage (5 percent) of the total amount of premiums you were able to broker during the past year.
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