(215 ILCS 5/Art. XLIV heading)
(215 ILCS 5/1400)
Sec. 1400. Title. This Article may be cited as the Financial Institutions Insurance Sales Law.
(Source: P.A. 90-41, eff. 10-1-97.)
(215 ILCS 5/1401)
Sec. 1401. Purpose. The purpose of this Article is to increase the availability of insurance products to the citizens of this State by expanding those businesses authorized to sell insurance products to include financial institutions, and to protect the interests of the citizens of this State by regulating their authority to do so. This Article does not apply to activities or services conducted in this State by or for a financial institution that do not require licensure as an insurance producer, temporary insurance producer, limited insurance representative, or registered firm.
(Source: P.A. 90-41, eff. 10-1-97.)
(215 ILCS 5/1402)
Sec. 1402. Definitions. For the purposes of this Article:
"Financial institution" means:
To the extent that any entity other than a financial institution conducts insurance activities in this State on behalf of or on the premises of the financial institution, such entity shall be subject to this Article for the purposes of those activities.
"Insurance" means all lines of insurance defined and regulated as insurance under this Code, but for the purposes of this Article, "insurance" shall not include the following lines of insurance, provided that this paragraph shall not be deemed to preclude or otherwise limit regulation of the following lines of insurance pursuant to and to the extent otherwise provided by any other insurance law of this State:
(Source: P.A. 90-41, eff. 10-1-97.)
(215 ILCS 5/1403)
Sec. 1403. Licensure requirements for financial institutions.
(a) A financial institution transacting insurance business in this State shall register with the Director pursuant to the Illinois Insurance Code and shall be subject to the laws, rules, and penalties of the Illinois Insurance Code.
(b) The solicitation and sale of insurance by a financial institution shall be conducted only by individuals who have been issued and maintain an insurance producer's license pursuant to the Illinois Insurance Code and shall be subject to the laws, rules, and penalties of the Illinois Insurance Code.
(c) For the purposes of this Section, a "financial institution" means the subsidiary of a financial institution when the financial institution is transacting insurance business in this State only through the subsidiary. For the purposes of Section 499.1 of the Illinois Insurance Code, a financial institution shall be deemed to be a corporation.
(d) Nothing in Section 500-100 of this Code shall be construed to require a limited lines producer license or any other form or class of producer's license for financial institutions, or their employees, if the financial institution has purchased or sponsored a group credit life, credit accident and health, credit casualty, credit property, or other group credit insurance policy or program under which the financial institution enrolls or performs other administrative services, or both, to enable individuals to purchase insurance coverage under the group credit insurance policy sold by a licensed producer in compliance with Section 155.56. A financial institution that performs enrollment or other administrative services, or both, with respect to its group credit insurance policies or programs shall be deemed to be in compliance with paragraph (2) of subsection (b) of Section 500-20 of this Code.
(Source: P.A. 100-349, eff. 8-25-17.)
(215 ILCS 5/1404)
Sec. 1404. Subsidiaries or divisions. A financial institution shall not qualify for registration as a registered firm under Section 499.1 of this Code unless: (1) it establishes a separate subsidiary that acts as the registered firm or (2) it is otherwise permitted by law to sell insurance directly through the financial institution, and it establishes a separate division within the financial institution to conduct the business of the registered firm. The subsidiary or division acting as a registered firm shall maintain records for insurance transactions that are separate and distinct from the records of the financial institution.
(Source: P.A. 90-41, eff. 10-1-97.)
(215 ILCS 5/1405)
Sec. 1405. Extensions of credit. A financial institution shall not delay or impede the completion of a loan transaction or other transactions involving the extension of credit for the purpose of influencing a customer's selection of any insurance product.
(Source: P.A. 90-41, eff. 10-1-97.)
(215 ILCS 5/1406)
Sec. 1406. Insurance and financial institution products.
(a) No financial institution may offer banking products or services, or fix or vary the consideration of the offer, on a condition or requirement that the customer obtain insurance from the financial institution or any affiliate of the financial institution.
(b) A financial institution that offers banking products or services in conformity with the provisions of Section 106 of the Bank Holding Company Act Amendments of 1970 (12 U.S.C. 1972) shall be deemed to be in compliance with the provisions of subsection (a) of this Section.
(c) No financial institution shall require that a customer or prospective customer of the financial institution purchase an insurance product from any particular registered firm or insurance producer as a condition for the lending of money or extension of credit, the establishment or maintenance of a checking, savings, or other deposit account, or the establishment or maintenance of a trust account.
(Source: P.A. 90-41, eff. 10-1-97.)
(215 ILCS 5/1407)
Sec. 1407. Rebating and discounting.
(a) No financial institution may offer a rebate on an insurance product in violation of Section 151 of this Code.
(b) No financial institution may offer a discount on a loan or extension of credit for the purpose of inducing the customer to purchase insurance required in connection with the loan or extension of credit.
(Source: P.A. 90-41, eff. 10-1-97.)
(215 ILCS 5/1408)
Sec. 1408. Discrimination prohibited. No financial institution may:
(1) require as a condition of providing any product or service or renewal of any contract for providing a product or service to any customer, that the customer acquire, finance, or negotiate any policy or contract of insurance through a particular insurer, insurance producer, or registered firm;
(2) in connection with a loan or extension of credit that requires a borrower to obtain insurance, reject an insurance policy solely because the policy has been issued or underwritten by any person who is not associated with the financial institution;
(3) impose any discriminatory requirement on any insurance producer who is not associated with the financial institution that is not imposed on any insurance producer who is associated with the financial institution; or
(4) if the financial institution is a registered firm, require any debtor, insurer, or insurance producer to pay a separate charge in connection with the handling of insurance that is required under a contract, unless: (i) the financial institution is the registered firm providing the insurance, (ii) if the financial institution is not the registered firm providing the insurance, the charge would be uniformly applied if the financial institution was the registered firm providing the insurance, or (iii) the charge is otherwise permitted by this Code or other applicable State or federal law.
(Source: P.A. 90-41, eff. 10-1-97.)
(215 ILCS 5/1409)
Sec. 1409. Disclosure. A financial institution shall clearly and conspicuously disclose in any written advertisement or promotional or informational material regarding an insurance product that the insurance offered, recommended, sponsored, or sold:
(1) is not a deposit;
(2) is not insured by the Federal Deposit Insurance Corporation, or in the case of a credit union, by the National Credit Union Share Insurance Fund;
(3) is not guaranteed by the financial institution or an affiliated insured depository institution; and
(4) where appropriate, involves investment risk, including potential loss of principal.
(Source: P.A. 90-41, eff. 10-1-97.)
(215 ILCS 5/1410)
Sec. 1410. Misleading advertising. No financial institution or registered firm may employ any advertisement that would mislead or otherwise cause a reasonable person to believe mistakenly that the State of Illinois or the federal government is responsible for the insurance sales activities of the financial institution or stands behind the financial institution's credit, or that the financial institution, the State of Illinois, or the federal government guarantees any returns on insurance products or is a source of payment of any insurance obligation of or sold by the financial institution.
(Source: P.A. 90-41, eff. 10-1-97.)
(215 ILCS 5/1411)
Sec. 1411. Commissions and compensation. No financial institution shall pay, directly or indirectly, any commission, service fee, brokerage, or other valuable consideration to any person for services as an insurance producer, temporary insurance producer, or limited insurance representative, or for such services by the person's members, officers, directors or employees, unless the person, and any member, officer, director, or employee performing the service, held a valid license regarding the class of insurance as to which the service was rendered, or unless the person was a properly registered firm at the time the service was performed. No person, other than a person properly licensed or registered in accordance with Article XXXI of this Code at the time the person performs services as an insurance producer, temporary insurance producer, or limited insurance representative, shall accept any commission, service fee, brokerage, or other valuable consideration for such services. This Section shall not prevent payment or receipt of:
(1) renewal or other deferred commissions to or by any person entitled thereto under this Section;
(2) fees to or by a financial institution or any other person for services that do not require licensure as an insurance producer, temporary insurance producer, limited insurance representative, or registered firm; or
(3) consideration paid to a financial institution by a registered firm, insurance producer, insurance company, or any other person pursuant to any lease agreement.
(Source: P.A. 90-41, eff. 10-1-97.)
(215 ILCS 5/1412)
Sec. 1412. Solicitations to loan applicants.
(a) A financial institution that requires a customer to obtain insurance in connection with a loan or extension of credit and that offers that insurance either directly or through an affiliate shall clearly disclose to the customer in writing at the time of written application or at closing if no written application is obtained in a form substantially similar to the following:
(b) This Section shall not apply when a financial institution is contacting a customer in the course of direct or mass marketing to a group of persons in a manner that bears no relation to the customer's loan application or credit decision.
(Source: P.A. 90-41, eff. 10-1-97.)
(215 ILCS 5/1413)
Sec. 1413. Separate physical location and sales force when insurance is solicited or sold in connection with a loan.
(a) An employee of a financial institution may not solicit or sell insurance at the same desk where a loan transaction is conducted when the insurance is solicited or sold in connection with the same loan.
(b) A loan officer of a financial institution who is involved in the application, solicitation, or closing of a loan transaction may not solicit or sell insurance in connection with the same loan, but such loan officer may refer the loan customer to another insurance producer who is not involved in the application, solicitation, or closing of the same loan transaction.
(c) Subsections (a) and (b) of this Section shall not apply to a financial institution, other than a credit union, or a branch location of a financial institution, other than a credit union, that has less than $100,000,000 in deposits.
(d) Subsections (a) and (b) of this Section shall not apply to a credit union or a branch location of a credit union that has less than $30,000,000 in deposits.
(Source: P.A. 90-41, eff. 10-1-97.)
(215 ILCS 5/1414)
Sec. 1414. Signage. Signs concerning the availability of insurance products offered by the financial institution or by any registered firm shall be clearly displayed in the same area where applications for loans or other extensions of credit are being taken or closed and shall include the disclosure set forth in subsection (a) of Section 1412.
(Source: P.A. 90-41, eff. 10-1-97.)
(215 ILCS 5/1415)
Sec. 1415. Confidential customer information.
(a) A financial institution that is a registered firm may not release a customer's insurance information to any person other than an officer, director, employee, agent, or affiliate of the financial institution without the written consent of the customer. For the purposes of this Section, "insurance information" means information concerning the premiums, terms and conditions of insurance coverage, insurance claims, and the insurance history of a customer contained in the financial institution's records.
(b) Subsection (a) of this Section shall not apply to:
(c) A financial institution shall not require premium information when requiring evidence of insurance in connection with a loan or extension of credit and shall not use such premium information for the purpose of soliciting insurance without the written consent of the customer.
(d) A financial institution may not use health information obtained from a customer's insurance records for any purpose other than for its activities as a registered firm pursuant to this Code.
(Source: P.A. 90-41, eff. 10-1-97.)
(215 ILCS 5/1416)
Sec. 1416. Prohibited defenses. A violation of any provision of this Article shall not be used as a defense by any person in any action by a financial institution to recover the amount owing on any loan or extension of credit.
(Source: P.A. 90-41, eff. 10-1-97.)