Fidelity Checklist - Illinois Division of Insurance

Contact Person:	Illinois Division of Insurance	320 West Washington Street
Keith Fanning	Review Requirements Checklist	Springfield, IL 62767-0001
217-782-1792
keith.fanning@illinois.gov		Effective as of 9/1/03

Line(s) of	Filing
Business	Code(s)
Fidelity	23.0000

REVIEW REQUIREMENTS	REFERENCE	DESCRIPTION OF REVIEW STANDARDS REQUIREMENTS
Illinois Insurance Code Link	Illinois Compiled Statutes Online
Illinois Administrative Code Link	Administrative Regulations Online
Product Coding Matrix	Product Coding Matrix
		NOTE: These brief summaries do not include all requirements of all laws, regulations, bulletins, or requirements, so review actual law, regulation, bulletin, or requirement for details to ensure that forms are fully compliant before filing with the Division of Insurance.
GENERAL REQUIREMENTS FOR ALL FILINGS
LINE OF AUTHORITY
Must have proper Class and Clause authority to conduct this line of business in Illinois.	215 ILCS 5/4	To write Fidelity coverage in Illinois, companies must be licensed to write: Class 2, Clause (g)
GENERAL REQUIREMENTS FOR FORM FILINGS
FILING SUBMISSION
Fidelity and surety contracts are not required to be filed in Illinois. However, such forms must still comply with all applicable laws and regulations, including those listed on this checklist.	215 ILCS 5/143(2)	Insurers are not required to file fidelity and surety contracts in Illinois. However, such forms must still comply with all applicable laws and regulations, including those listed on this checklist. Insurer compliance with such requirements will be monitored through consumer inquiries, market conduct examinations, etc.
FORMS¾POLICY PROVISIONS
CANCELLATION & NONRENEWAL
May not refuse to issue a policy on sole basis of previous refusal, cancellation or nonrenewal by any insurer.	215 ILCS 5/143.10	No company shall refuse to issue a policy on the sole basis that the insured or applicant for such policy was previously refused issuance or renewal of a policy by an insurer, or such insured's policy was cancelled on a prior date by any insurer.
May not refuse to issue certain policies solely due to hate crimes.	215 ILCS 5/143.24c Title 26 U.S.C. Sections 170(b)(1)(A)(i), (ii), and (vi).	Insurers may not refuse to issue a policy solely on the basis that one or more claims have been made against any policy during the preceding 60 months, for a loss that is the result of a hate crime, if the insured provides evidence to the insurer that the act causing the loss is identified as a hate crime on a police report. Applies to policies issued to an individual, a religious organization described in Section 170(b)(1)(A)(i) of Title 26 of the United States Code, or an educational organization described in Section 170(b)(1)(A)(ii) of Title 26 of the United States Code, or any other nonprofit organization described in Section 170(b)(1)(A)(vi) of Title 26 of the United States Code that is organized and operated for religious, charitable, or educational purposes.
Rating or underwriting decisions based solely on domestic violence.	215 ILCS 5/155.22b	No insurer that issues a property and casualty policy may use the fact that an applicant or insured incurred bodily injury as a result of a battery committed against him/her by a spouse or person in the same household as a sole reason for a rating or underwriting decision.
Permissible Reasons for Cancellation
May not cancel because agent's contract with insurer was terminated.	215 ILCS 5/141.01	Insurers may not cancel any policy on the ground that the company's contract with the agent through whom the policy was obtained has been terminated.
May not cancel a policy on sole basis of previous refusal, cancellation or nonrenewal by any insurer.	215 ILCS 5/143.10	Insurers may not cancel a policy on the sole basis that the insured or applicant for such policy was previously refused issuance or renewal of a policy by an insurer, or such insured's policy was cancelled on a prior date by any insurer.
May not cancel certain policies solely due to hate crimes.	215 ILCS 5/143.24c Title 26 U.S.C. Sections 170(b)(1)(A)(i), (ii), and (vi).	Insurers may not cancel a policy solely on the basis that one or more claims have been made against any policy during the preceding 60 months, for a loss that is the result of a hate crime, if the insured provides evidence to the insurer that the act causing the loss is identified as a hate crime on a police report. Applies to policies issued to an individual, a religious organization described in Section 170(b)(1)(A)(i) of Title 26 of the United States Code, or an educational organization described in Section 170(b)(1)(A)(ii) of Title 26 of the United States Code, or any other nonprofit organization described in Section 170(b)(1)(A)(vi) of Title 26 of the United States Code that is organized and operated for religious, charitable, or educational purposes.
Rating or underwriting decisions based solely on domestic violence.	215 ILCS 5/155.22b	No insurer that issues a property and casualty policy may use the fact that an applicant or insured incurred bodily injury as a result of a battery committed against him/her by a spouse or person in the same household as a sole reason for a rating or underwriting decision.
Permissible Reasons for Non-renewal
May not refuse to renew because agent's contract with insurer was terminated.	215 ILCS 5/141.01	Insurers may not refuse to renew any policy on the ground that the company's contract with the agent through whom the policy was obtained has been terminated.
May not refuse to renew a policy on sole basis of previous refusal, cancellation or nonrenewal by any insurer.	215 ILCS 5/143.10	Insurers may not refuse to renew a policy on the sole basis that the insured or applicant for such policy was previously refused issuance or renewal of a policy by an insurer, or such insured's policy was cancelled on a prior date by any insurer.
May not refuse to renew certain policies solely due to hate crimes.	215 ILCS 5/143.24c Title 26 U.S.C. Sections 170(b)(1)(A)(i), (ii), and (vi).	Insurers may not refuse to renew a policy solely on the basis that one or more claims have been made against any policy during the preceding 60 months, for a loss that is the result of a hate crime, if the insured provides evidence to the insurer that the act causing the loss is identified as a hate crime on a police report. Applies to policies issued to an individual, a religious organization described in Section 170(b)(1)(A)(i) of Title 26 of the United States Code, or an educational organization described in Section 170(b)(1)(A)(ii) of Title 26 of the United States Code, or any other nonprofit organization described in Section 170(b)(1)(A)(vi) of Title 26 of the United States Code that is organized and operated for religious, charitable, or educational purposes.
Rating or underwriting decisions based solely on domestic violence.	215 ILCS 5/155.22b	No insurer that issues a property and casualty policy may use the fact that an applicant or insured incurred bodily injury as a result of a battery committed against him/her by a spouse or person in the same household as a sole reason for a rating or underwriting decision.
CONSUMER INFORMATION
Written notice of company's complaint Division and Division of Insurance Public Service Division.	215 ILCS 5/143c 50 IL Adm. Code 931	No policy may be delivered unless the policyholder or certificate holder is provided written notice of the address of the complaint Division of the insurance company, and the address of the Public Service Division of the Division of Insurance or its successor. Rule 931 provides more specific guidance that: a) such notice shall accompany any newly issued policy or binder; b) "written notice" shall be satisfied by: any printed notice delivered with a policy or certificate; any adhering label attached to a policy or certificate; any computerized notice issued concurrently with a computer issued policy or certificate; or any other form of individual written notice substantially similar to the above. The address to be used for the Division of Insurance should be: Illinois Division of Insurance, Consumer Division or Public Services Section, Springfield, IL 62767. The address to be used for the company shall be an office that can service all types of complaints. If one office cannot service all types of complaints, then the additional addresses of each appropriate service office must be given. In addition to providing the required addresses, the notification should set forth the minimum amount of information included in the following suggested wording: "This notice is to advise you that should any complaints arise regarding this insurance, you may contact the following."
DISCRIMINATION
May not cancel certain policies, or refuse to issue or renew certain policies solely due to hate crimes.	215 ILCS 5/143.24c Title 26 U.S.C. Sections 170(b)(1)(A)(i), (ii), and (vi).	Insurers may not cancel a policy, or refuse to issue or renew a policy solely on the basis that one or more claims have been made against any policy during the preceding 60 months, for a loss that is the result of a hate crime, if the insured provides evidence to the insurer that the act causing the loss is identified as a hate crime on a police report. Applies to policies issued to an individual, a religious organization described in Section 170(b)(1)(A)(i) of Title 26 of the United States Code, or an educational organization described in Section 170(b)(1)(A)(ii) of Title 26 of the United States Code, or any other nonprofit organization described in Section 170(b)(1)(A)(vi) of Title 26 of the United States Code that is organized and operated for religious, charitable, or educational purposes.
Redlining -- When geographic location of risk may be grounds for refusing to insure.	215 ILCS 5/155.22	Insurer may not refuse to provide insurance solely on the basis of the specific geographic location of the risk unless such refusal is for a business purpose which is not a mere pretext for unfair discrimination.
Rating, claims handling, and underwriting decisions based solely on domestic violence.	215 ILCS 5/155.22b	No insurer may that issues a property and casualty policy may use the fact that an applicant or insured incurred bodily injury as a result of a battery committed against him/her by a spouse or person in the same household as a sole reason for a rating, underwriting, or claims handling decision.
Intentional acts exclusion -- exception for innocent co-insured.	215 ILCS 5/155.22b	If a policy excludes property damage coverage for intentional acts, the insurers may not deny payment to an innocent co-insured who did not cooperate in or contribute to the creation of the loss if the loss arose out of a pattern of criminal domestic violence and the perpetrator of the loss is criminally prosecuted for the act causing the loss.
Unfair methods of competition or unfair or deceptive acts or practices defined.	215 ILCS 5/424(3)	It is an unfair method of competition or unfair and deceptive act or practice if a company makes or permits any unfair discrimination between individuals or risks of the same class or of essentially the same hazard and expense element because of the race, color, religion, or national origin of such insurance risks or applicants.
Procedure as to unfair methods of competition or unfair or deceptive acts or practices not defined.	215 ILCS 5/429	Outlines the procedures the Director follows when he has reason to believe that a company is engaging in unfair methods of competition or unfair or deceptive acts or practices.
Domestic Abuse
Rating, claims handling, and underwriting decisions based solely on domestic violence.	215 ILCS 5/155.22b	No insurer may that issues a property and casualty policy may use the fact that an applicant or insured incurred bodily injury as a result of a battery committed against him/her by a spouse or person in the same household as a sole reason for a rating, underwriting, or claims handling decision.
Intentional acts exclusion -- exception for innocent co-insured.	215 ILCS 5/155.22b	If a policy excludes property damage coverage for intentional acts, the insurers may not deny payment to an innocent co-insured who did not cooperate in or contribute to the creation of the loss if the loss arose out of a pattern of criminal domestic violence and the perpetrator of the loss is criminally prosecuted for the act causing the loss.
EXCLUSIONS & LIMITATIONS
Mold
Filing procedures and requirements for exclusions and limitations related to mold.	Company Bulletin 2002-07	Please refer to Company Bulletin 2002-07 for specific information and guidance.
Terrorism
Terrorism Risk Insurance Program Reauthorization Act of 2007 and Filing Procedures and Requirements for Terrorism-Related Forms, Rules and Rates	Company Bulletin 2008-01	Please refer to Company Bulletin 2008-01 for specific information and guidance.
GROUP POLICIES
Group fidelity and surety policies are not specifically allowed by statute.	50 IL Adm Code 906 215 ILCS 5/388a-388g 215 ILCS 5/393a-393g 215 ILCS 5/400.1 IL Adm. Code 2302 215 ILCS 5/900-906	Per Regulation 906, there are no enabling statutes in IL which authorize the writing of group fire, casualty, inland marine, or surety insurance. The effect is to require that all fire, casualty, inland marine, or surety insureds of the same class shall be treated alike. This regulation is not applicable where the Illinois Insurance Code specifically authorizes the grouping of risks. Therefore, fidelity and surety coverage may not be written on a group basis in Illinois. Per the referenced statutes and rules, the only lines of business that may be written on a group basis in Illinois are: a) group vehicle; b) group professional liability; c) group inland marine; d) group legal.
NOTICE REQUIREMENTS
Written notice of company's complaint Division and Division of Insurance Public Service Division.	215 ILCS 5/143c 50 IL Adm. Code 931	No policy may be delivered unless the policyholder or certificate holder is provided written notice of the address of the complaint Division of the insurance company, and the address of the Public Service Division of the Division of Insurance or its successor. Rule 931 provides more specific guidance that: a) such notice shall accompany any newly issued policy or binder; b) "written notice" shall be satisfied by: any printed notice delivered with a policy or certificate; any adhering label attached to a policy or certificate; any computerized notice issued concurrently with a computer issued policy or certificate; or any other form of individual written notice substantially similar to the above. The address to be used for the Division of Insurance should be: Illinois Division of Insurance, Consumer Division or Public Services Section, Springfield, IL 62767. The address to be used for the company shall be an office that can service all types of complaints. If one office cannot service all types of complaints, then the additional addresses of each appropriate service office must be given. In addition to providing the required addresses, the notification should set forth the minimum amount of information included in the following suggested wording: "This notice is to advise you that should any complaints arise regarding this insurance, you may contact the following."
REBATES
Payments or acceptance of rebates prohibited. Rebates -- penalties	215 ILCS 5/151 215 ILCS 5/152	No insurer, agent or broker shall offer, give, etc., any rebate of premium, agent's commission, profits, dividends, or any special advantage in date of policy or age of issue, or any other valuable consideration or inducement, upon issuance or renewal, which is not specified in the policy contract of insurance. However, insurers may pay a bonus to policyholders or abate their premiums, in whole or in part, out of surplus accumulated from nonparticipating insurance. Insurers may also offer a child passenger restraint system, or a discount from the purchase price of a child passenger restraining system to policyholders, when the purpose of such system is the safety of a child and compliance with the "Child Passenger Protection Act." No insured or applicant shall directly or indirectly receive or accept any rebate of premium or agent's or broker's commission, or any favor or advantage, or any valuable consideration or inducement, other than such as is specified in the policy. Any company or person violating any provision of Section 151 shall be guilty of a Class B misdemeanor.
VOIDANCE
Requirements to rescind a policy for misrepresentation or false warranty.	215 ILCS 5/154	A policy may not be rescinded, defeated or avoided unless the misrepresentation is stated in the policy, endorsement or rider attached thereto, or in the written application therefore, and was made with the actual intent to deceive, or materially affected either the acceptance of the risk or the hazard assumed by the company.
OTHER
Negative response roll-ons are prohibited.	215 ILCS 5/429	Form changes that are optional may not be applied "automatically unless the insured rejects." Insureds must be offered the option and must respond affirmatively for the change to apply. To apply the option automatically unless rejected is to engage in an unfair or deceptive act or practice in violation of Section 429.
RATE, RULE, RATING PLAN, CLASSIFICATION, AND TERRITORY FILING REQUIREMENTS
Fidelity and surety rates and rules are not required to be filed in Illinois. However, Form RF-3 is required to be filed for all fidelity and surety rate level changes, within 10 days of the stated effective date.	50 IL Adm. Code 754 Form RF-3 Summary Sheet	Fidelity and surety rates and rules are not required to be filed in Illinois. However, even though the rates and rules themselves are not required to be filed, insurers must still file two copies of Form RF-3 Summary Sheet for all fidelity and surety rate level changes. The form must indicate whether the information is "exact" or "estimated." A company must maintain documentary data for rate level changes so that it will be available for review by the Division's Property & Casualty Evaluation Section. RF-3s must be received by the Division's Property & Casualty Evaluation Section no later than 10 days after the stated effective date of the rate level change. Insurers are prohibited from continuing to use the new rate level if the Form RF-3 has not been received by the Division within 10 days of the effective date.
INDIVIDUAL RISK RATING
Insurers do not have to file RF3s for individual risks. However, insurers must maintain documentary information for review by the Division.	50 IL Adm. Code 754	A company is not required to file RF-3s for individual Illinois risks which cannot be rated in the normal course of business rating because of special or unusual characteristics and must be rated on the basis of underwriting judgment. Company must maintain documentary information regarding such individual risk rates for review by the Division's Property & Casualty Evaluation Section.
OTHER
Rating decisions based solely on domestic violence.	215 ILCS 5/155.22b	No insurer may that issues a property and casualty policy may use the fact that an applicant or insured incurred bodily injury as a result of a battery committed against him/her by a spouse or person in the same household as a sole reason for a rating decision.
Unfair methods of competition or unfair or deceptive acts or practices defined.	215 ILCS 5/424(3)	It is an unfair method of competition or unfair and deceptive act or practice if a company makes or permits any unfair discrimination between individuals or risks of the same class or of essentially the same hazard and expense element because of the race, color, religion, or national origin of such insurance risks or applicants.
Procedure as to unfair methods of competition or unfair or deceptive acts or practices not defined.	215 ILCS 5/429	Outlines the procedures the Director follows when he has reason to believe that a company is engaging in unfair methods of competition or unfair or deceptive acts or practices.