1.2 The Exam, Licensing Requirements, the $50,000 Bond or Letter of Credit, CE, and Discipline

The Examination (215 ILCS 5/1530 and the Pearson VUE Handbook)

An individual applying for a public adjuster license must pass a written examination unless exempt under Section 1535. By statute the exam tests the candidate's knowledge of the duties and responsibilities of a public adjuster and the insurance laws and regulations of Illinois. The Director may contract with an outside testing service; Illinois uses Pearson VUE.

The Official Content Outline Weights

Retakes and No-Shows

Under Section 1530(b), a candidate who fails to appear or fails the exam must reapply and pay all required fees before being rescheduled. A candidate who fails on the first attempt must wait 7 days to reschedule, and a candidate who fails on a second or later attempt must wait 30 days. Pearson adds that re-exam reservations cannot be made at the test center and must wait 24 hours after the failed attempt.

Who Is Exempt from the Exam (215 ILCS 5/1535)

1. An applicant previously licensed as a public adjuster in another state based on a public adjuster exam, if currently licensed there or applying within 12 months of cancellation, and the prior state or the NAIC producer database shows good standing.
2. A public adjuster licensed in another state by exam who moves to Illinois and applies for a resident license within 90 days of establishing legal residence.
3. A former Illinois public adjuster who applies within 12 months of cancellation and was in good standing.

Applying for the License

Application (215 ILCS 5/1520). The applicant uses the uniform application or another form prescribed by the Director and declares under penalty of perjury, and under penalty of refusal, suspension, or revocation, that the statements are true and complete. Fingerprints are submitted to the Illinois State Police and the FBI for state and national criminal history checks, and the applicant pays the fees. Part 3118.45 requires fingerprints on file before an original license or a renewal is issued.

IDOI process. After passing, the candidate applies through the National Insurance Producer Registry (NIPR) and pays the $250 license fee by electronic funds transfer. Pearson tells candidates to wait five days after passing before applying. The applicant must upload to the NIPR warehouse, at the time of application, evidence of the $50,000 bond or letter of credit and the public adjuster contract that will be used. Missing attachments cause rejection, and fees are not refunded. Fingerprints are taken by an Illinois-approved live scan vendor, and no license issues until IDOI receives the Illinois State Police and FBI results.

Resident license findings (215 ILCS 5/1525). Before issuing a license the Director must find that the applicant:

• is eligible to designate Illinois as the home state (or is a nonresident not eligible under Section 1540);
• is sufficiently rehabilitated from any act that is a ground for denial, with convictions evaluated under Section 1550;
• is trustworthy, reliable, competent, and of good reputation;
• is financially responsible and has provided the proof required by Section 1560; and
• maintains an office in the home state with public access by reasonable appointment or regular business hours.

An individual must also be at least 18 and have passed the public adjuster exam.

Nonresident license (215 ILCS 5/1540). A nonresident receives an Illinois license if currently licensed as a resident public adjuster in good standing in the home state, provides proof of financial responsibility under Section 1560, submits the application, and the home state licenses Illinois residents on the same basis. The nonresident license terminates if the home-state license terminates, unless the adjuster becomes a resident licensee in a new reciprocal home state; notice of the change is due within 30 days.

Convictions (215 ILCS 5/1550). IDOI may not ask about or consider juvenile adjudications, arrests not followed by charges or convictions, convictions overturned on appeal, or sealed or expunged records. For a felony or a misdemeanor involving dishonesty or fraud, the Director must weigh mitigating factors, such as the offense's relevance to the job, time elapsed, and evidence of rehabilitation, and must explain any denial in writing.

Financial Responsibility: Bond or Letter of Credit (215 ILCS 5/1560)

Before a license is issued and for the duration of the license, the adjuster must maintain one of the following:

The issuer must notify the Director when the bond or letter of credit terminates, and the Director may ask for the evidence of financial responsibility at any time. Authority to act as a public adjuster automatically terminates if the evidence of financial responsibility terminates or becomes impaired (Section 1560(d)). The contract must also attest that the adjuster is fully bonded under Illinois law (Section 1575(a)(10)).

A surety bond is not liability insurance for the adjuster. It is a three-party guarantee (principal, obligee, surety) that protects consumers; a surety that pays a claim will normally seek reimbursement from the adjuster under its indemnity agreement.

Continuing Education and Renewal

Maintaining the license (215 ILCS 5/1545). A license stays in effect unless revoked, terminated, or suspended, as long as renewal requirements are met by the due date. The licensee must report a change of address, legal name, or application information within 30 days. A licensee who lets the license lapse may be relicensed within 12 months of the renewal due date without retaking the exam, but pays a penalty of double the unpaid renewal fee. Military service or a long-term medical disability can support a waiver request.

Reporting actions (215 ILCS 5/1595). A public adjuster must report any administrative action taken in another jurisdiction or by another Illinois agency within 30 days of final disposition, and any criminal prosecution within 30 days of the initial pretrial hearing date, with copies of the relevant documents.

License Denial, Discipline, and Penalties (215 ILCS 5/1555)

The Director may place on probation, suspend, revoke, deny, or refuse to issue or renew a license, levy a civil penalty, or combine these actions for causes including:

• incorrect, misleading, incomplete, or materially untrue application information, or obtaining a license by misrepresentation or fraud;
• violating insurance laws, regulations, subpoenas, or orders of the Director or another state's regulator;
• improperly withholding, misappropriating, or converting money or property received in the insurance business;
• intentionally misrepresenting the terms of an actual or proposed insurance contract;
• a felony or a misdemeanor involving dishonesty or fraud, unless rehabilitation is shown;
• unfair trade practices or insurance fraud; fraudulent, coercive, or dishonest practices; incompetence, untrustworthiness, or financial irresponsibility;
• a license denied, suspended, or revoked elsewhere; forgery; cheating on a licensing exam;
• knowingly doing business with someone who must be licensed but is not;
• failing to comply with child support orders or State income tax obligations;
• violating the Section 1590 standards of conduct or failing to keep Section 1585 records.

Procedure. The Director must explain the reason in writing. The applicant or licensee may demand a hearing within 30 days after the notice is mailed; the hearing is held not fewer than 20 nor more than 30 days after the hearing notice is mailed, under 50 Ill. Adm. Code 2402.

Penalties. After a hearing, a person may be fined up to $10,000 for each cause for denial, suspension, or revocation, but the total may not exceed $100,000. A business entity license may be disciplined if a partner, officer, or manager knew or should have known of an individual licensee's violation and neither reported it nor corrected it. A person whose license is revoked or whose application is denied is ineligible to apply for 5 years, and a suspension may last up to 5 years. The Director keeps enforcement authority even if the license is surrendered or lapses.