1|Page
PROPERTY & CASUALTY IL LAW QUESTIONS AND ANSWERS WITH
COMPLETE SOLUTIONS
The McCarran-Ferguson Act - ANSWER • Federal law that allows
most insurance regulation to be done at the state level.
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
,2|Page
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).
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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.
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• 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.
PROPERTY & CASUALTY IL LAW QUESTIONS AND ANSWERS WITH
COMPLETE SOLUTIONS
The McCarran-Ferguson Act - ANSWER • Federal law that allows
most insurance regulation to be done at the state level.
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
,2|Page
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).
,3|Page
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.
, 4|Page
• 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.
