SB 3505

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Full Text of SB3505
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	SB3505 - 104th General Assembly
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			Senate Amendment 001
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		Senate Amendment 001
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104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
SB3505
Introduced 2/5/2026, by Sen. Julie A. Morrison
SYNOPSIS AS INTRODUCED:
215 ILCS 5/154.6	  from Ch. 73, par. 766.6
215 ILCS 5/155	  from Ch. 73, par. 767
215 ILCS 5/397.1	  from Ch. 73, par. 1009.1
215 ILCS 5/1570
215 ILCS 5/1575
215 ILCS 5/1590
Amends the Illinois Insurance Code. Increases one of the fees allowed as part of the taxable costs in a specified action to $240,000 (instead of $60,000). Provides that it shall be unlawful for any company transacting insurance business in this State to pay a claim of an insured property owner for loss by fire or explosion to a structure located in this State where the amount recoverable for loss to the structure under a policy exceeds $100,000 (instead of $25,000), until the insurance company receives the required certificate. Sets forth provisions concerning adjustment and settlement of first party property insurance losses based on replacement cost. Requires the insurer to replace items with material of like kind and quality so as to conform to a reasonably uniform appearance, including interior and exterior covered losses, when a covered loss for real property requires the replacement of an item or items and the replacement item or items do not match adjacent items in quality, color, or size. Excludes expenses to be reimbursed to the public adjuster from the 10% cap on a public adjuster's salary, fee, commission, compensation, or consideration. Sets forth provisions concerning direction to pay letters and payments to public adjusters. Provides that the policies must be individually underwritten for personal, family, or household use. Provides that expenses to be reimbursed to the public adjuster are not limited to emergency mitigation expenses, and requires expenses to be reimbursed to the public adjuster regardless of whether the expense is covered by the applicable insurance policy. Includes the named insured's public adjuster and the named insured's attorney as designees.
LRB104 19484 BAB 32932 b
A BILL FOR
		SB3505		LRB104 19484 BAB 32932 b
1    AN ACT concerning regulation.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 5. The Illinois Insurance Code is amended by
5changing Sections 154.6, 155, 397.1, 1570, 1575, and 1590 as
6follows:
7    (215 ILCS 5/154.6)  (from Ch. 73, par. 766.6)
8    Sec. 154.6. Acts constituting improper claims practice.
9    (a) Any of the following acts by a company, if committed
10without just cause and in violation of Section 154.5,
11constitutes an improper claims practice:
12        (1) [(a)] Knowingly misrepresenting to claimants and
13    insureds relevant facts or policy provisions relating to
14    coverages at issue;
15        (2) [(b)] Failing to acknowledge with reasonable
16    promptness pertinent communications with respect to claims
17    arising under its policies;
18        (3) [(c)] Failing to adopt and implement reasonable
19    standards for the prompt investigations and settlement of
20    claims arising under its policies;
21        (4) [(d)] Not attempting in good faith to effectuate
22    prompt, fair and equitable settlement of claims submitted
23    in which liability has become reasonably clear;
		SB3505	- 2 -	LRB104 19484 BAB 32932 b
1        (5) [(e)] Compelling policyholders to institute suits to
2    recover amounts due under its policies by offering
3    substantially less than the amounts ultimately recovered
4    in suits brought by them;
5        (6) [(f)] Engaging in activity which results in a
6    disproportionate number of meritorious complaints against
7    the insurer received by the Insurance Department;
8        (7) [(g)] Engaging in activity which results in a
9    disproportionate number of lawsuits to be filed against
10    the insurer or its insureds by claimants;
11        (8) [(h)] Refusing to pay claims without conducting a
12    reasonable investigation based on all available
13    information;
14        (9) [(i)] Failing to affirm or deny coverage of claims
15    within a reasonable time after proof of loss statements
16    have been completed;
17        (10) [(j)] Attempting to settle a claim for less than
18    the amount to which a reasonable person would believe the
19    claimant was entitled, by reference to written or printed
20    advertising material accompanying or made part of an
21    application or establishing unreasonable caps or limits on
22    paint or materials when estimating vehicle repairs;
23        (11) [(k)] Attempting to settle claims on the basis of
24    an application which was altered without notice to, or
25    knowledge or consent of, the insured;
26        (12) [(l)] Making a claims payment to a policyholder or
		SB3505	- 3 -	LRB104 19484 BAB 32932 b
1    beneficiary omitting the coverage under which each payment
2    is being made;
3        (13) [(m)] Delaying the investigation or payment of
4    claims by requiring an insured, a claimant, or the
5    physicians of either to submit a preliminary claim report
6    and then requiring subsequent submission of formal proof
7    of loss forms, resulting in the duplication of
8    verification;
9        (14) [(n)] Failing in the case of the denial of a claim
10    or the offer of a compromise settlement to promptly
11    provide a reasonable and accurate explanation of the basis
12    in the insurance policy or applicable law for such denial
13    or compromise settlement;
14        (15) [(o)] Failing to provide forms necessary to present
15    claims within 15 working days of a request with such
16    explanations as are necessary to use them effectively;
17        (16) [(p)] Failing to adopt and implement reasonable
18    standards to verify that a repairer designated by the
19    insurance company to provide an estimate, perform repairs,
20    or engage in any other service in connection with an
21    insured loss on a vehicle is duly licensed under Section
22    5-301 of the Illinois Vehicle Code;
23        (17) [(q)] Failing to provide as a persistent tendency a
24    notification on any written estimate prepared by an
25    insurance company in connection with an insured loss that
26    Illinois law requires that vehicle repairers must be
		SB3505	- 4 -	LRB104 19484 BAB 32932 b
1    licensed in accordance with Section 5-301 of the Illinois
2    Vehicle Code;
3        (18) [(r)] Failing to pay the replacement vehicle use or
4    occupation tax, title, and transfer fees required by
5    Section 154.9 of this Code;
6        (19) [(s)] Engaging in any other acts which are in
7    substance equivalent to any of the foregoing.
8    (b) When the policy provides for the adjustment and 
9settlement of first-party property insurance losses based on 
10replacement cost and when a loss requires repair or 
11replacement of an item or part, any consequential physical 
12damage incurred in making such repair or replacement, not 
13otherwise excluded by the policy, shall be included in the 
14loss. The insured shall not be required to pay for betterment 
15nor any other cost except for the applicable deductible.
16    (c) When a covered loss for real property requires the 
17replacement of an item or items and the replacement item or 
18items do not match adjacent items in quality, color, or size, 
19the insurer shall replace the items with material of like kind 
20and quality so as to conform to a reasonably uniform 
21appearance. This provision applies to interior and exterior 
22covered losses.
23(Source: P.A. 102-69, eff. 7-1-22.)
24    (215 ILCS 5/155)  (from Ch. 73, par. 767)
25    Sec. 155. Attorney fees.
		SB3505	- 5 -	LRB104 19484 BAB 32932 b
1    (1) In any action by or against a company wherein there is
2in issue the liability of a company on a policy or policies of
3insurance or the amount of the loss payable thereunder, or for
4an unreasonable delay in settling a claim, and it appears to
5the court that such action or delay is vexatious and
6unreasonable, the court may allow as part of the taxable costs
7in the action reasonable attorney fees, other costs, plus an
8amount not to exceed any one of the following amounts:
9        (a) 60% of the amount which the court or jury finds
10    such party is entitled to recover against the company,
11    exclusive of all costs;
12        (b) $240,000 [$60,000]; or
13        (c) the excess of the amount which the court or jury
14    finds such party is entitled to recover, exclusive of
15    costs, over the amount, if any, which the company offered
16    to pay in settlement of the claim prior to the action.
17    (2) Where there are several policies insuring the same
18insured against the same loss whether issued by the same or by
19different companies, the court may fix the amount of the
20allowance so that the total attorney fees on account of one
21loss shall not be increased by reason of the fact that the
22insured brings separate suits on such policies.
23(Source: P.A. 93-485, eff. 1-1-04.)
24    (215 ILCS 5/397.1)  (from Ch. 73, par. 1009.1)
25    Sec. 397.1. Certificate regarding payment of taxes and
		SB3505	- 6 -	LRB104 19484 BAB 32932 b
1expenses on property sustaining loss.
2    (a) It shall be unlawful for any company transacting
3insurance business in this State to pay a claim of an insured
4property owner for loss by fire or explosion to a structure
5located in this State where the amount recoverable for loss to
6the structure under a policy exceeds $100,000 [$25,000], until
7the insurance company receives the certificate required by
8this Section. A notice, to the State's Attorney of the county
9where the structure is located, of the insurers intent to pay a
10claim shall include the name of the property owner, the
11address of the property, its legal description, the permanent
12real estate index number that identifies the property for
13purposes of taxation, and the amount of the claim to be paid.
14    (b) For purposes of this Section, the following
15definitions are applicable:
16        (1) "Insured property owner" is a person named as an
17    insured who is the owner, title-holder or mortgagee of a
18    structure, the holder of an interest secured by the
19    structure, the beneficiary of a land trust owning or
20    holding title to a structure, the lessee of a structure
21    with a contractual obligation for property taxes, or the
22    assignee of any such person.
23        (2) "Amount recoverable" is the dollar amount payable
24    under all insurance policies for loss to the structure.
25        (3) "Proceeds" is the dollar amount payable for loss
26    to the structure under an insurance policy.
		SB3505	- 7 -	LRB104 19484 BAB 32932 b
1        (4) "Delinquent property taxes" are those property
2    taxes on the property which are delinquent pursuant to
3    Section 21-15, 21-20, or 21-25 of the Property Tax Code,
4    including those delinquent taxes on property forfeited
5    under Section 21-225 of the Property Tax Code, as of the
6    date of loss.
7        In determining delinquent property taxes under this
8    Section, the amount of property taxes for which a
9    certificate of error has been issued pursuant to Section
10    14-10 or 14-20 of the Property Tax Code shall not be
11    considered delinquent.
12        (5) "Incurred demolition expense" is: a. the cost of
13    demolishing or removing a structure from property by or at
14    the expense of a unit of local government if the
15    demolition or removal occurs on a date preceding the later
16    of (i) the acceptance by the insurance company of a Proof
17    of Loss for an agreed amount of proceeds, or (ii) the date
18    of receipt by the unit of local government of a request for
19    execution of the certificate required by this Section; or
20    b. the amount estimated by the unit of local government
21    when it receives a request to execute the certificate
22    required by this Section; or c. the amount ordered to be
23    withheld by a court within 28 days after a unit of local
24    government receives a request for execution of the
25    certificate required by this Section. The unit of local
26    government must be a party to such proceeding.
		SB3505	- 8 -	LRB104 19484 BAB 32932 b
1        Incurred demolition expense shall be determined under
2    subparagraph a. whenever possible. In determining the
3    incurred demolition expense under subparagraph b., the
4    unit of local government shall make its estimate and
5    execute the certificate within 30 days after receiving a
6    request for execution. If the unit of local government
7    shall fail within 30 days to execute the certificate, as
8    required by subparagraph a., the company can proceed to
9    make payment of the claim as if the certificate had been
10    received showing no unpaid demolition costs. The request
11    for execution may be served personally, and may be proven
12    by a written receipt signed by the local official as of the
13    date the request was made or by service on the local
14    official by certified mail, return receipt requested. A
15    court order under subparagraph c. shall supersede an
16    estimate under subparagraph b.
17        (6) "Property" is the lot on which the structure is
18    located.
19        (7) "Structure" is a building.
20        (8) "Claim" is the demand by an insured for payment
21    under an insurance policy or policies.
22        (9) "Proof of Loss" is the document on which an
23    insured formally presents his claim to an insurance
24    company.
25        (10) "Certificate" is the executed form prescribed by
26    the Director of Insurance.
		SB3505	- 9 -	LRB104 19484 BAB 32932 b
1        (11) "Executed" means signed by the appropriate
2    official or unit of government.
3    (c) For any claim to which this Section is applicable, an
4insured property owner must submit one of the following to the
5insurance company:
6        (1) a certificate that with respect to the property
7    there are:
8            a. no delinquent property taxes, and
9            b. no unpaid incurred demolition expenses;
10        (2) a certificate setting forth with respect to the
11    property:
12            a. the amount of unpaid delinquent property taxes,
13            b. the amount of unpaid incurred demolition
14        expense, and
15            c. a direction by an insured property owner to the
16        insurance company to pay the unpaid delinquent
17        property taxes and unpaid incurred demolition
18        expenses.
19    (d) (1) Except as provided in paragraph (2) of this
20    subsection (d), if a certificate is submitted pursuant to
21    paragraph (2) of subsection (c) of this Section, the
22    insurance company shall pay the unpaid delinquent property
23    taxes and unpaid incurred demolition expense from the
24    proceeds payable by issuing a draft or check payable to
25    the appropriate tax collector or unit of local government.
26        Any proceeds remaining shall be paid to the insured
		SB3505	- 10 -	LRB104 19484 BAB 32932 b
1    property owner.
2        (2) In the event incurred demolition expense is
3    determined by estimation under paragraph (5) of subsection
4    (b) of this Section in cities of over 2,000,000, the
5    insurance company shall hold the amount estimated until an
6    amended certificate executed by the appropriate local
7    government official is submitted stating (i) that no
8    demolition expense will be incurred or (ii) the actual
9    unpaid incurred demolition expense. The insurance company
10    shall then issue a draft or check payable to the unit of
11    local government for the actual unpaid incurred demolition
12    expense. Any proceeds remaining shall be paid to the
13    insured property owner.
14        In determining the amount of proceeds remaining under
15    this paragraph, the insured property owner shall receive
16    interest on the amount withheld from the date the
17    certificate is executed as provided in Section 2 of the
18    Interest Act.
19    (e) If, under this Section, the proceeds payable are less
20than the amount of the unpaid delinquent property taxes and
21unpaid incurred demolition expense, unpaid property taxes
22shall be paid first.
23    (f) If incurred demolition expense withheld pursuant to
24subparagraphs b. or c. of paragraph 5 of subsection (b) of this
25Section exceeds the ultimate cost of demolition, the excess
26shall first be applied to unpaid delinquent property taxes.
		SB3505	- 11 -	LRB104 19484 BAB 32932 b
1Any amount of proceeds remaining shall be paid to the insured
2property owner.
3    (g) Nothing in this Section shall be construed as:
4        (1) making an insurance company liable for any amount
5    in excess of the proceeds payable under its insurance
6    policy unless the insurance company shall have made
7    payment to the named insured without satisfying the
8    requirements of this Section;
9        (2) making a unit of local government or tax collector
10    an insured under an insurance policy; or
11        (3) creating an obligation for an insurance company to
12    pay unpaid delinquent property taxes or unpaid incurred
13    demolition expense other than as provided in subsection
14    (d) of this Section.
15    (h) An insurance company making a payment of proceeds
16under this Section for unpaid delinquent taxes or unpaid
17incurred demolition expense shall be entitled to the full
18benefit of such payment, including subrogation rights and
19other rights of assignment.
20    (i) Unpaid property taxes and unpaid incurred demolition
21expense for a claim for loss to a structure occurring after the
22issuance of a tax deed pursuant to Section 22-40 of the
23Property Tax Code shall not include any unpaid property tax or
24unpaid demolition expense arising before the issuance of the
25tax deed.
26    (j) The county collector shall be designated as the local
		SB3505	- 12 -	LRB104 19484 BAB 32932 b
1official who shall execute the certificate required by this
2Section regarding delinquent property taxes. The village clerk
3or city clerk in incorporated areas and the official in charge
4of the county building department in unincorporated areas
5shall be designated as the local official who shall execute
6the certificate required by this Section regarding demolition
7expenses.
8    (k) A fee not to exceed $5 may be charged by a unit of
9local government for execution of the certificate required by
10this Section.
11    (l) This Section shall retroactively apply to any policy
12issued or renewed on or after January 1, 1978 for which a claim
13subject to this Section remains unpaid as of the effective
14date of this amendatory Act of 1978.
15(Source: P.A. 87-507; 88-667, eff. 9-16-94; 88-670, eff.
1612-2-94.)
17    (215 ILCS 5/1570)
18    Sec. 1570. Public adjuster fees.
19    (a) A public adjuster shall not pay a commission, service
20fee, or other valuable consideration to a person for
21investigating or settling claims in this State if that person
22is required to be licensed under this Article and is not so
23licensed.
24    (b) A person shall not accept a commission, service fee,
25or other valuable consideration for investigating or settling
		SB3505	- 13 -	LRB104 19484 BAB 32932 b
1claims in this State if that person is required to be licensed
2under this Article and is not so licensed.
3    (c) A public adjuster may pay or assign commission,
4service fees, or other valuable consideration to persons who
5do not investigate or settle claims in this State, unless the
6payment would violate State law.
7    (d) If the loss giving rise to the claim for which the
8public adjuster was retained arises from damage to property
9that is anything but a personal residence, a public adjuster
10may not charge, agree to, or accept any compensation, payment,
11commission, fee, or other valuable consideration in excess of
1210% of the amount of the insurance settlement claim paid by the
13insurer on any claim resulting from a catastrophic event,
14unless approved in writing by the Director. Application for
15exception to the 10% limit must be made in writing. The request
16must contain specific reasons as to why the consideration
17should be in excess of 10% and proof that the policyholder
18would accept the consideration. The Director must act on any
19request within 5 business days after receipt of the request.
20    For the purpose of this subsection (d), "catastrophic
21event" means an occurrence of widespread or severe damage or
22loss of property producing an overwhelming demand on State and
23local response resources and mechanisms and a severe long-term
24effect on general economic activity, and that severely affects
25State, local, and private sector capabilities to begin to
26sustain response activities resulting from any catastrophic
		SB3505	- 14 -	LRB104 19484 BAB 32932 b
1cause, including, but not limited to, fire, including arson
2(provided the fire was not caused by the willful action of an
3owner or resident of the property), flood, earthquake, wind,
4storm, explosion, or extended periods of severe inclement
5weather as determined by declaration of a State of disaster by
6the Governor. This declaration may be made on a
7county-by-county basis and shall be in effect for 90 days, but
8may be renewed for 30-day intervals thereafter.
9    (e) If the loss giving rise to the claim for which the
10public adjuster was retained arises from damage to a personal
11residence, a public adjuster may not charge, agree to, or
12accept any compensation, payment, commission, fee, or other
13valuable consideration in excess of 10% of the amount of the
14insurance settlement claim paid by the insurer on any claim.
15Expenses to be reimbursed to the public adjuster are not 
16subject to the 10% cap on a public adjuster's salary, fee, 
17commission, compensation, or consideration. The policies must 
18be individually underwritten for personal, family, or 
19household use. No other type of insurance shall be considered 
20personal insurance. As used in this subsection, "personal 
21residence" means a residence insured under homeowners and 
22non-commercial dwelling fire insurance policies.
23    (f)(1) When a claim is settled where the insured is 
24represented by a public adjuster, upon the request of the 
25insured, the insurer shall follow the direction of the 
26insured, subject to the interests of any loss payee or 
		SB3505	- 15 -	LRB104 19484 BAB 32932 b
1mortgagee, as to who shall be named on the insurer's check or 
2checks by following the instructions in a direction to pay 
3letter signed by the insured and filed with the insurer. The 
4insurer shall not accept the direction to pay letter unless 
5the letter is signed by the first named insured with regard to 
6commercial claims and by all named insureds with regard to 
7noncommercial claims.
8    (2) Upon the written direction of the insured, the insurer 
9shall make its check payable to both the public adjuster and 
10the insured, or to the public adjuster named as a payee, but 
11not in excess of the amount of the public adjuster's fee, as 
12indicated in the written compensation agreement signed by the 
13insured party to be charged and filed with the insurer. The 
14balance of the proceeds shall be made payable to the insured or 
15any loss payee or mortgagee, or both, whichever is 
16appropriate. If an insured does not submit a direction to pay 
17letter to the insurer, then the insurer shall not make any 
18check payable to the public adjuster.
19    (3) Any payment made to a public adjuster shall be only for 
20those elements of the claim for which the public adjuster 
21represents the insured.
22    (4) A direction to pay letter shall be valid for any 
23payment made pursuant to a claim unless revoked by the 
24insured. A direction to pay letter shall be revocable by any 
25named insured at any time prior to the insurer issuing a check. 
26If an insured revokes a direction to pay letter, then the 
		SB3505	- 16 -	LRB104 19484 BAB 32932 b
1revocation shall be in writing and signed by the insured. The 
2insured shall submit the revocation to the insurer and provide 
3the public adjuster with a copy.
4    (5) A public adjuster shall not condition doing business 
5with an insured on the insured signing a direction to pay 
6letter that directs the insurer to name the public adjuster on 
7the check.
8(Source: P.A. 103-216, eff. 1-1-24.)
9    (215 ILCS 5/1575)
10    Sec. 1575. Contract between public adjuster and insured.
11    (a) Public adjusters shall ensure that all contracts for
12their services are in writing and contain the following terms:
13        (1) legible full name of the adjuster signing the
14    contract, as specified in Department records;
15        (2) permanent home state business address, email
16    address, and phone number;
17        (3) license number;
18        (4) title of "Public Adjuster Contract";
19        (5) the insured's full name, street address, insurance
20    company name, and policy number, if known or upon
21    notification;
22        (6) a description of the loss and its location;
23        (7) description of services to be provided to the
24    insured;
25        (8) signatures of the public adjuster and the insured;
		SB3505	- 17 -	LRB104 19484 BAB 32932 b
1        (9) date and time the contract was signed by the
2    public adjuster and date and time the contract was signed
3    by the insured;
4        (10) attestation language stating that the public
5    adjuster is fully bonded pursuant to State law; and
6        (11) full salary, fee, commission, compensation, or
7    other considerations the public adjuster is to receive for
8    services, including any applicable cap under Section 1570.
9    (b) The contract may specify that the public adjuster
10shall be named as a co-payee on an insurer's payment of a
11claim.
12        (1) If the compensation is based on a share of the
13    insurance settlement, the exact percentage shall be
14    specified.
15        (2) Initial expenses to be reimbursed to the public
16    adjuster from the proceeds of the claim payment shall be
17    specified by type, with dollar estimates set forth in the
18    contract and with any additional expenses first approved
19    by the insured. Expenses to be reimbursed to the public 
20    adjuster are not limited to emergency mitigation expenses. 
21    Expenses shall be reimbursed to the public adjuster 
22    regardless of whether the expense is covered by the 
23    applicable insurance policy.
24        (3) Compensation provisions in a public adjuster
25    contract shall not be redacted in any copy of the contract
26    provided to the Director.
		SB3505	- 18 -	LRB104 19484 BAB 32932 b
1    (c) If the insurer, not later than 5 business days after
2the date on which the loss is reported to the insurer, either
3pays or commits in writing to pay to the insured the policy
4limit of the insurance policy, the public adjuster shall:
5        (1) not receive a commission consisting of a
6    percentage of the total amount paid by an insurer to
7    resolve a claim;
8        (2) inform the insured that loss recovery amount might
9    not be increased by insurer; and
10        (3) be entitled only to reasonable compensation from
11    the insured for services provided by the public adjuster
12    on behalf of the insured, based on the time spent on a
13    claim and expenses incurred by the public adjuster, until
14    the claim is paid or the insured receives a written
15    commitment to pay from the insurer.
16    (d) A public adjuster shall provide the insured a written
17disclosure concerning any direct or indirect financial
18interest that the public adjuster has with any other party who
19is involved in any aspect of the claim, other than the salary,
20fee, commission, or other consideration established in the
21written contract with the insured, including, but not limited
22to, any ownership of or any compensation expected to be
23received from, any construction firm, salvage firm, building
24appraisal firm, board-up company, or any other firm that
25provides estimates for work, or that performs any work, in
26conjunction with damages caused by the insured loss on which
		SB3505	- 19 -	LRB104 19484 BAB 32932 b
1the public adjuster is engaged. The word "firm" shall include
2any corporation, partnership, association, joint-stock
3company, or person.
4    (e) A public adjuster contract may not contain any
5contract term that:
6        (1) allows the public adjuster's percentage fee to be
7    collected when money is due from an insurance company, but
8    not paid, or that allows a public adjuster to collect the
9    entire fee from the first check issued by an insurance
10    company, rather than as a percentage of each check issued
11    by an insurance company;
12        (2) requires the insured to authorize an insurance
13    company to issue a check only in the name of the public
14    adjuster;
15        (3) precludes a public adjuster or an insured from
16    pursuing civil remedies;
17        (4) includes any hold harmless agreement that provides
18    indemnification to the public adjuster by the insured for
19    liability resulting from the public adjuster's negligence;
20    or
21        (5) provides power of attorney by which the public
22    adjuster can act in the place and instead of the insured.
23    (f) The following provisions apply to a contract between a
24public adjuster and an insured:
25        (1) Prior to the signing of the contract, the public
26    adjuster shall provide the insured with a separate signed
		SB3505	- 20 -	LRB104 19484 BAB 32932 b
1    and dated disclosure document regarding the claim process
2    that states:
3    "Property insurance policies obligate the insured to
4    present a claim to his or her insurance company for
5    consideration. There are 3 types of adjusters that could
6    be involved in that process. The definitions of the 3
7    types are as follows:
8            (A) "Company adjuster" means the insurance
9        adjusters who are employees of an insurance company.
10        They represent the interest of the insurance company
11        and are paid by the insurance company. They will not
12        charge you a fee.
13            (B) "Independent adjuster" means the insurance
14        adjusters who are hired on a contract basis by an
15        insurance company to represent the insurance company's
16        interest in the settlement of the claim. They are paid
17        by your insurance company. They will not charge you a
18        fee.
19            (C) "Public adjuster" means the insurance
20        adjusters who do not work for any insurance company.
21        They represent the insured to assist in the
22        preparation, presentation and settlement of the claim.
23        The insured hires them by signing a contract agreeing
24        to pay them a fee or commission based on a percentage
25        of the settlement, or other method of compensation.".
26        (2) The insured is not required to hire a public
		SB3505	- 21 -	LRB104 19484 BAB 32932 b
1    adjuster to help the insured meet his or her obligations
2    under the policy, but has the right to do so.
3        (3) The public adjuster is not a representative or
4    employee of the insurer or the Department of Insurance.
5        (4) The salary, fee, commission, or other
6    consideration is the obligation of the insured, not the
7    insurer, except when rights have been assigned to the
8    public adjuster by the insured.
9    (g) The contracts shall be executed in duplicate to
10provide an original contract to the public adjuster, and an
11original contract to the insured. The public adjuster's
12original contract shall be available at all times for
13inspection without notice by the Director.
14    (h) The public adjuster shall provide the insurer or its
15authorized representative for receiving notice of loss or
16damage with an exact copy of the contract with the insured by
17email no later than 5 business days after execution of the
18contract, authorizing the public adjuster to represent the
19insured's interest.
20    (i) The public adjuster shall give the insured written
21notice of the insured's rights as a consumer under the law of
22this State.
23    (j) A public adjuster shall not provide services, other
24than emergency services, until a written contract with the
25insured has been executed, on a form filed with and approved by
26the Director, and an exact copy of the contract has been
		SB3505	- 22 -	LRB104 19484 BAB 32932 b
1provided to the insurer in accordance with subsection (h). At
2the option of the insured, any such contract shall be voidable
3for 5 business days after the contract is received by the
4insurer. The insured may void the contract by notifying the
5public adjuster in writing by (i) registered or certified
6mail, return receipt requested, to the address shown on the
7contract, (ii) personally serving the notice on the public
8adjuster, or (iii) sending an email to the email address shown
9on the contract.
10    (k) If the insured exercises the right to rescind the
11contract, anything of value given by the insured under the
12contract will be returned to the insured within 15 business
13days following the receipt by the public adjuster of the
14cancellation notice.
15    (l) All contracts entered into that are in violation of
16this Section are void and invalid.
17(Source: P.A. 103-216, eff. 1-1-24.)
18    (215 ILCS 5/1590)
19    Sec. 1590. Standards of conduct of public adjuster.
20    (a) A public adjuster is obligated, under his or her
21license, to serve with objectivity and complete loyalty for
22the interests of his client alone, and to render to the insured
23such information, counsel, and service, as within the
24knowledge, understanding, and opinion in good faith of the
25licensee, as will best serve the insured's insurance claim
		SB3505	- 23 -	LRB104 19484 BAB 32932 b
1needs and interest.
2    (b) A public adjuster may not propose or attempt to
3propose to any person that the public adjuster represent that
4person while a loss-producing occurrence is continuing, nor
5while the fire department or its representatives are engaged
6at the damaged premises, nor between the hours of 7:00 p.m. and
78:00 a.m.
8    (c) A public adjuster shall not permit an unlicensed
9employee or representative of the public adjuster to conduct
10business for which a license is required under this Article.
11    (d) A public adjuster shall not have a direct or indirect
12financial interest in any aspect of the claim, other than the
13salary, fee, commission, or other consideration established in
14the written contract with the insured, unless full written
15disclosure has been made to the insured as set forth in
16subsection (d) of Section 1575.
17    (e) A public adjuster shall not acquire any interest in
18the salvage of property subject to the contract with the
19insured unless the public adjuster obtains written permission
20from the insured after settlement of the claim with the
21insurer as set forth in subsection (d) of Section 1575 of this
22Article.
23    (f) The public adjuster shall abstain from referring or
24directing the insured to get needed repairs or services in
25connection with a loss from any person, unless disclosed to
26the insured:
		SB3505	- 24 -	LRB104 19484 BAB 32932 b
1        (1) with whom the public adjuster has a direct or
2    indirect financial interest; or
3        (2) from whom the public adjuster may receive direct
4    or indirect compensation for the referral.
5    (g) The public adjuster shall disclose to an insured if he
6or she has any interest or will be compensated by any
7construction firm, salvage firm, building appraisal firm,
8board-up company, or any other firm that performs any work in
9conjunction with damages caused by the insured loss. The word
10"firm" shall include any corporation, partnership,
11association, joint-stock company or individual as set forth in
12Section 1575 of this Article.
13    (h) Any compensation or anything of value in connection
14with an insured's specific loss that will be received by a
15public adjuster shall be disclosed by the public adjuster to
16the insured in writing including the source and amount of any
17such compensation.
18    (i) In all cases where the loss giving rise to the claim
19for which the public adjuster was retained arise from damage
20to a personal residence, the insurance proceeds shall be
21delivered to the named insured or his or her designee, 
22including the named insured's public adjuster and the named 
23insured's attorney. Where proceeds paid by an insurance
24company are paid jointly to the insured and the public
25adjuster, the insured shall release such portion of the
26proceeds that are due the public adjuster within 30 calendar
		SB3505	- 25 -	LRB104 19484 BAB 32932 b
1days after the insured's receipt of the insurance company's
2check, money order, draft, or release of funds. If the
3proceeds are not so released to the public adjuster within 30
4calendar days, the insured shall provide the public adjuster
5with a written explanation of the reason for the delay.
6    (j) Public adjusters shall adhere to the following general
7ethical requirements:
8        (1) a public adjuster shall not undertake the
9    adjustment of any claim if the public adjuster is not
10    competent and knowledgeable as to the terms and conditions
11    of the insurance coverage, or which otherwise exceeds the
12    public adjuster's current expertise;
13        (2) a public adjuster shall not knowingly make any
14    oral or written material misrepresentations or statements
15    which are false or maliciously critical and intended to
16    injure any person engaged in the business of insurance to
17    any insured client or potential insured client;
18        (3) no public adjuster, while so licensed by the
19    Department, may represent or act as a company adjuster or
20    independent adjuster on the same claim;
21        (4) the contract shall not be construed to prevent an
22    insured from pursuing any civil remedy after the
23    5-business day revocation or cancellation period;
24        (5) a public adjuster shall not enter into a contract
25    or accept a power of attorney that vests in the public
26    adjuster the effective authority to choose the persons who
		SB3505	- 26 -	LRB104 19484 BAB 32932 b
1    shall perform repair work;
2        (6) a public adjuster shall ensure that all contracts
3    for the public adjuster's services are in writing and set
4    forth all terms and conditions of the engagement; and
5        (7) a public adjuster shall not advance money or any
6    valuable consideration, except emergency services to an
7    insured pending adjustment of a claim.
8    (k) A public adjuster may not agree to any loss settlement
9without the insured's knowledge and consent and shall, upon
10the insured's request, provide the insured with a document
11setting forth the scope, amount, and value of the damages
12prior to request by the insured for authority to settle the
13loss.
14    (l) A public adjuster shall not provide legal advice or
15representation to the insured or engage in the unauthorized
16practice of law.
17    (m) A public adjuster shall not represent that he or she is
18a representative of an insurance company, a fire department,
19or the State of Illinois, that he or she is a fire
20investigator, that his or her services are required for the
21insured to submit a claim to the insured's insurance company,
22or that he or she may provide legal advice or representation to
23the insured. A public adjuster may represent that he or she has
24been licensed by the State of Illinois.
25(Source: P.A. 103-216, eff. 1-1-24.)