HB2766 104TH GENERAL ASSEMBLY

LRB104 08210 BAB 18260 b

104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
HB2766

Introduced 2/6/2025, by Rep. Jeff Keicher

SYNOPSIS AS INTRODUCED:

215 ILCS 5/151

from Ch. 73, par. 763

Amends the Illinois Insurance Code. Provides that nothing in provisions prohibiting the payment or acceptance of rebates shall prevent the offer or provision by insurers or producers, by or through employees, affiliates, or third-party representatives, of value-added products or services at no or reduced cost when such products or services are not specified in the policy of insurance, so long as the product or service relates to the insurance coverage and is primarily designed to satisfy specified criteria. Sets forth provisions concerning the requirements for insurers or producers offering non-cash gifts, items, or services or conducting raffles or drawings. Provides that an insurer, producer, or representative of an insurer or producer may not offer or provide insurance as an inducement to the purchase of another policy or otherwise use the words "free", "no cost", or words of similar import in an advertisement.

A BILL FOR

AN ACT concerning regulation.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Illinois Insurance Code is amended by changing Section 151 as follows:

(215 ILCS 5/151) (from Ch. 73, par. 763)

Sec. 151. Payment or acceptance of rebates prohibited.

(a) (1) No company doing business in this State and no insurance agent or broker shall offer, promise, allow, give, set off or pay, directly or indirectly, any rebate of or part of the premium payable on the policy, or on any policy or agent's commission thereon or earnings, profits, dividends or other benefits founded, arising, accruing or to accrue thereon or therefrom, or any special advantage in date of policy or age of issue, or any paid employment or contract for services of any kind or any other valuable consideration or inducement to or for insurance on any risk in this State, now or hereafter to be written, or for or upon any renewal of any such insurance, which is not specified in the policy contract of insurance, or offer, promise, give, option, sell, purchase any stocks, bonds, securities or property or any dividends or profits accruing or to accrue thereon, or other thing of value whatsoever as inducement to insurance or in connection therewith, or any renewal thereof which is not specified in the policy. Nothing in this Section shall prevent a company from paying a bonus to policyholders or otherwise abating their premiums in whole or in part out of surplus accumulated from nonparticipating insurance nor prevent a company which transacts industrial life insurance on a weekly payment plan from returning to policyholders who have made premium payments for a period of at least one year directly to the company at its home or district offices the percentage of premium which the company would otherwise have paid for the weekly collection of such premium nor shall this Section be construed to prevent the taking of a bona fide obligation, with interest at six per centum per annum, in payment of any premium.

(1)(A) Nothing in this Section shall prevent the offer or provision by insurers or producers, by or through employees, affiliates, or third-party representatives, of value-added products or services at no or reduced cost when such products or services are not specified in the policy of insurance, so long as the product or service relates to the insurance coverage and is primarily designed to satisfy one or more of the following criteria:

(i) providing loss mitigation or loss control;

(ii) reducing claim costs or claim settlement costs;

(iii) providing education about liability risks or risk of loss to persons or property;

(iv) monitoring or assessing risk, identifying sources of risk, or developing strategies for eliminating or reducing risk;

(v) enhancing health;

(vi) enhancing financial wellness through items such as education or financial planning services;

(vii) providing post-loss services;

(viii) incentivizing behavioral changes to improve the health or reduce the risk of death or disability of a policyholder, potential policyholder, certificate holder, potential certificate holder, insured, potential insured, or applicant; or

(ix) assisting in the administration of the employee or retiree benefit insurance coverage.

(B) The cost to the insurer or producer offering the product or service to any given customer must be reasonable in comparison to that customer's premiums or insurance coverage for the policy class.

(C) If the insurer or producer is providing the product or service offered, the insurer or producer must ensure that the customer is provided with contact information to assist the customer with questions regarding the product or service.

(D) The Director may adopt rules when implementing the permitted practices set forth in this Section to ensure consumer protection. Such rules, consistent with applicable law, may address, among other issues, consumer data protections and privacy, consumer disclosure, and unfair discrimination.

(E) The availability of the value-added product or service must be based on documented objective criteria and offered in a manner that is not unfairly discriminatory. The documented criteria must be maintained by the insurer or producer and produced upon request by the Department.

(F) If an insurer or producer does not have sufficient evidence, but has a good faith belief that the product or service meets the criteria in subparagraph (A) of paragraph (1) of this subsection, the insurer or producer may provide the product or service in a manner that is not unfairly discriminatory as part of a pilot or testing program for no more than one year. An insurer or producer must notify the Department of such a pilot or testing program offered to consumers in this State prior to its start and may proceed with the program unless the Department objects within 21 days after notice. This paragraph (F) applies solely to policies of life insurance.

(2) Nothing in this Section shall prevent a company from offering a child passenger restraint system or a discount from the purchase price of a child passenger restraint system to policyholders, when the purpose of such restraint system is the safety of a child and compliance with the "Child Passenger Protection Act", approved June 27, 1983, as amended.

(3) Nothing in this Section shall prevent an insurer or a producer from offering or giving non-cash gifts, items, or services, including meals to or charitable donations on behalf of a customer, to commercial or institutional customers in connection with the marketing, sale, purchase, or retention of contracts of insurance, as long as the cost is reasonable in comparison to the premium or proposed premium and the cost of the gift or service is not included in any amounts charged to another person or entity. The offer must be made in a manner that is not unfairly discriminatory. The customer may not be required to purchase, continue to purchase or renew a policy in exchange for the gift, item, or service.

(4) Nothing in this Section shall prevent an insurer or a producer from conducting raffles or drawings to the extent permitted by State law, as long as there is no financial cost to entrants to participate, the drawing or raffle does not obligate participants to purchase insurance, the prizes are not valued in excess of a reasonable amount determined by the Director, and the drawing or raffle is open to the public. The raffle or drawing must be offered in a manner that is not unfairly discriminatory. The customer may not be required to purchase, continue to purchase, or renew a policy in exchange for the gift, item, or service.

(b) An insurer, producer, or representative of an insurer or producer may not offer or provide insurance as an inducement to the purchase of another policy or otherwise use the words "free", "no cost", or words of similar import in an advertisement.

(c) (2) No insured person or party or applicant for insurance shall directly or indirectly receive or accept, or agree to receive or accept any rebate of premium or of any part thereof or all or any part of any agent's or broker's commission thereon, or any favor or advantage, or share in any benefit to accrue under any policy of insurance, or any valuable consideration or inducement, other than such as is specified in the policy.

(Source: P.A. 83-1320.)