ILLINOIS STATE LAW PROPERTY II 2026 FINAL
EXAM PREPARATION WORKBOOK AND NOTES
A+
◉ Illinois Department of Insurance. Answer: Overseen by governor-
appointed "director" who has the power to:
• Make reasonable rules and regulations to enforce insurance laws.
• Conduct reasonable investigations to determine violations of state
insurance requirements.
• Issue immediate cease-and-desist orders to halt illegal insurance
practices.
• Issue subpoenas in order to obtain insurance documents.
• Require individuals to testify under oath about insurance matters.
• Issue, deny, suspend or revoke insurance licenses for individuals
and businesses
◉ DOI Director. Answer: • Failure to comply with director orders can
result in $2,000 to $20,000 in additional fines.
• Guilty party can be forced to pay for independent investigations.
• Cease-and-desist orders generally include the right to a hearing
within 30 days.
• Investigated parties must receive copies of reports before the
public.
,◉ Who Needs a License?. Answer: Producer license generally
required when doing any of the following for compensation:
• Selling insurance.
• Encouraging someone to buy insurance.
• Negotiating terms of insurance.
• Giving insurance advice.
• Acting without a license is Class A misdemeanor ($2,500 and 1
year in jail).
◉ Unlicensed Persons. Answer: • An insurer or producer cannot
compensate an unlicensed person for selling or negotiating
insurance:
• Possible exception for a formerly licensed person who is receiving
deferred compensation and was licensed at time of transaction.
◉ Who Doesn't Need a License?. Answer: An attorney giving legal
advice about insurance laws or an insurance contract.
• An accountant giving insurance-related advice as part of his or her
job duties.
• A public adjuster giving insurance-related opinions or advice as
part of his or her job duties.
,• Officers, directors or employees of insurance businesses who don't
receive any type of sales commission and whose jobs are
managerial, executive, administrative or clerical in nature and aren't
related directly to sales.
• Certain people who have insurance-specific careers but don't
receive any type of sales compensation (such as insurance
employees who evaluate insurance applications, investigate claims
or process insurance-related paperwork).
• Group benefit administrators who aren't compensated by an
insurance business.
• Salaried, full-time risk managers who neither sell insurance nor
receive insurance-related compensation.
◉ License Qualifications. Answer: • 18 or older.
• Pre-license education.
• State exam.
• Licensing fee.
• Good moral character.
• Might not be eligible if :
• Committed felony.
• Fail to pay child support.
• Had a license revoked in another state.
, ◉ What's on a License?. Answer: • Producer's name.
• License number.
• Date of issuance.
• Date of expiration.
• Address.
• Line of authority (Life, health, property, casualty, etc.).
◉ Lines of Authority. Answer: • Each line generally requires 20
hours of prelicense education and a state exam.
• Life.
• Accident and health.
• Property (Fire).
• Casualty.
◉ Other Lines of Authority. Answer: • Slightly different
requirements might exist for the following less common lines of
authority:
• Personal lines.
• Motor vehicle.
• Variable contracts.
• Limited lines.
EXAM PREPARATION WORKBOOK AND NOTES
A+
◉ Illinois Department of Insurance. Answer: Overseen by governor-
appointed "director" who has the power to:
• Make reasonable rules and regulations to enforce insurance laws.
• Conduct reasonable investigations to determine violations of state
insurance requirements.
• Issue immediate cease-and-desist orders to halt illegal insurance
practices.
• Issue subpoenas in order to obtain insurance documents.
• Require individuals to testify under oath about insurance matters.
• Issue, deny, suspend or revoke insurance licenses for individuals
and businesses
◉ DOI Director. Answer: • Failure to comply with director orders can
result in $2,000 to $20,000 in additional fines.
• Guilty party can be forced to pay for independent investigations.
• Cease-and-desist orders generally include the right to a hearing
within 30 days.
• Investigated parties must receive copies of reports before the
public.
,◉ Who Needs a License?. Answer: Producer license generally
required when doing any of the following for compensation:
• Selling insurance.
• Encouraging someone to buy insurance.
• Negotiating terms of insurance.
• Giving insurance advice.
• Acting without a license is Class A misdemeanor ($2,500 and 1
year in jail).
◉ Unlicensed Persons. Answer: • An insurer or producer cannot
compensate an unlicensed person for selling or negotiating
insurance:
• Possible exception for a formerly licensed person who is receiving
deferred compensation and was licensed at time of transaction.
◉ Who Doesn't Need a License?. Answer: An attorney giving legal
advice about insurance laws or an insurance contract.
• An accountant giving insurance-related advice as part of his or her
job duties.
• A public adjuster giving insurance-related opinions or advice as
part of his or her job duties.
,• Officers, directors or employees of insurance businesses who don't
receive any type of sales commission and whose jobs are
managerial, executive, administrative or clerical in nature and aren't
related directly to sales.
• Certain people who have insurance-specific careers but don't
receive any type of sales compensation (such as insurance
employees who evaluate insurance applications, investigate claims
or process insurance-related paperwork).
• Group benefit administrators who aren't compensated by an
insurance business.
• Salaried, full-time risk managers who neither sell insurance nor
receive insurance-related compensation.
◉ License Qualifications. Answer: • 18 or older.
• Pre-license education.
• State exam.
• Licensing fee.
• Good moral character.
• Might not be eligible if :
• Committed felony.
• Fail to pay child support.
• Had a license revoked in another state.
, ◉ What's on a License?. Answer: • Producer's name.
• License number.
• Date of issuance.
• Date of expiration.
• Address.
• Line of authority (Life, health, property, casualty, etc.).
◉ Lines of Authority. Answer: • Each line generally requires 20
hours of prelicense education and a state exam.
• Life.
• Accident and health.
• Property (Fire).
• Casualty.
◉ Other Lines of Authority. Answer: • Slightly different
requirements might exist for the following less common lines of
authority:
• Personal lines.
• Motor vehicle.
• Variable contracts.
• Limited lines.
