Illinois Insurance Producer Bond Guide
If you are working as an insurance producer in Illinois, you'll need to purchase a surety bond. Read on to learn all about the bonding process.
Bond Overview
- Purpose: To ensure producers comply with state code and pay all dues owed from insurance transactions
- Who Needs It: All licensed insurance producers in Illinois
- Regulating Body: The Illinois Department of Insurance
- Required Amount: $2,500, or 5% of the total annual premiums with a $50k max
- Premium Rate: $100 for up to $10k in coverage
How much does an Illinois insurance producer bond cost?
Illinois insurance producer bonds are required by the Illinois Department of Insurance in an amount of $2,500 or 5% of the total premiums brokered in the past year, whichever is greater. The required bond amount is not to exceed $50,000.
SuretyBonds.com instantly issues bonds up to $10,000 for just $100 with no underwriting required. Simply click Buy Now to visit our secure bond checkout where you can buy your bond directly from our site. If the bond amount exceeds $10,000, the cost of the bond will be subject to underwriting review. In just a few minutes you can be on your way to being bonded as an Illinois insurance producer.
Why do I need this bond?
Illinois insurance producer bonds ensure that principals (insurance producers) comply with Section 500-30 of the Illinois Insurance Code. The Department requires the bond to protect customers if an insurance producer provides misleading information or commits fraud.
This bond also requires producers to pay all dues to any person or company entitled to funds from insurance transactions.
What’s the fine print?
The insurance producer’s Federal Employer Identification Number (FEIN/IRS Tax ID) or social security number (SSN) must be listed on the bond form. This bond is continuous until canceled. If the bond is to be canceled, the surety company must provide the obligee with at least 30 days’ notice. The state requires that the original physical bond remain at the physical place of business.
How to become an insurance producer in Illinois
To become a licensed insurance producer, applicants must be a minimum of 18 years of age and adhere to the following requirements:
1. Complete the pre-licensing education hour requirements
Complete the pre-licensing requirement of 20 hours per line of authority from a certified provider. For insurance providers in the state of Illinois, it is required that all applicants complete the pre-licensing requirement of 20 hours per line of authority. This is to ensure applicants are educated and well-informed on their area of expertise. Below are the required hours for each class.
- Life: 20 Hours*
- Accident/Health: 20 Hours*
- Fire (Property): 20 Hours*
- Casualty: 20 Hours*
- Personal Lines: 20 Hours*
*7.5 of the 20 hours must be completed in a classroom setting.
The state requires those who enroll in the Premium Live Online Package to Pre-Study 12.5 hours per line of authority and to answer attendance verification polling questions for the entire live online class to earn credit.
Once you have completed your pre-licensing requirements, applicants must take the insurance examination. Prior to the exam, the insurance provider applicant must take a copy of the proof of completion of the pre-licensing course to the test center. If this documentation is not provided, he or she will not be allowed to sit for the exam.
2. Take and pass the insurance licensing exam
For applicants to have their application approved by the state of Illinois, it is required that they take the insurance producer written examination. According to Illinois Insurance Code Sec. 500-25, the examination shall test the knowledge of the individual concerning the lines of authority for which the application is made, the duties and responsibilities of an insurance producer, and the insurance laws and rules of Illinois.
Certificate of Completion Requirements
Candidates will be required to show proof of pre-licensing completion at the test center before they will be allowed to sit for the exam. Pre-licensing education certificates are valid for one year from the date of completion.
Applicants cannot take the exam without a reservation. Pearson Vue is the exam provider, and you can make an online reservation. To enroll, simply create an account and follow the step-by-step instructions to make your exam reservation. FAQs related to licensing can be found here.
A fee in the amount of $102 is required for an individual exam, and it includes the states administration fee of $50. However, you can schedule back-to-back exams and pay $102. Those taking the exam will need to pay the fees when registering. The Illinois Insurance Licensing Candidate Handbook has information about how to pay for the exams and how you can obtain practice tests covering the different types of insurance.
Exam Provider: Pearson VUE
To obtain a Licensing Information Bulletin, visit the Pearson VUE website at http://www.pearsonvue.com.
To schedule an exam, contact Pearson VUE online or call 800-274-0402.
- The exam is scored 0-100.
A score of 70 or higher is required to pass. - The exam is divided into a general section and a state section. If one section is passed and the other is failed, the failed section will need to be retaken within 90 days.
Individuals should allow five days after taking the Illinois state exam before applying for the state license. According to IDOI, starting July 19, 2021, candidates can register to take the Illinois Insurance licensing examinations remotely, using Pearson VUE's online proctoring service, OnVUE. Please visit the website for further information and scheduling.
When you pass the licensing examination, you will be given your pass sheet, along with an instruction sheet by the test administrator. Carefully read the instruction sheet and retain it for your records. If you fail the exam, Pearson VUE will provide the results and the procedures to arrange for another exam.
3. Purchase an Illinois insurance producer bond
According to Illinois Legislature Sec. 500-130, all applications for public adjusters licenses must purchase and maintain an Illinois insurance producer bond. Once purchased, both parties must complete the surety bond form and attach it to the application as proof of insurance. In order to complete the form, applicants must be able to provide the following:
- The name of the principal/licensee as it appears on the application
- The principal’s address as it appears on the application for license
- The surety company’s name and company number
- The bond number
- Original signature of the principal and the surety company’s officer or attorney-in-fact
4. Apply online via the National Insurance Producer Registry
Once the above steps are complete and all documents are compiled, applicants can register for licensure after waiting five days after passing the exam. To apply, visit the National Insurance Producer Registry (NIPR) website. It is important to note that the application will use the last day of your birth month as your expiration date, and the fee paid for licensure through NIPR will be prorated for the birth month expiration date.
The cost of the license for an Illinois resident is $90 for two years, which must be paid upon submission of the application. After you complete and submit the fees required, you’ll receive an email confirming that the transaction was successful and the application was submitted.
Applicants can visit the step-by-step checklist for more details.
5. Participate in continuous education
It is required by the state of Illinois that insurance providers continue their education after receiving licensure to ensure they are up-to-date with protocol and changes in practice/legislature. Illinois insurance providers can visit the Illinois Insurance Continuing Education State Requirements page provided by Kaplan Financial Education.
Have questions? Give us a call at 1 (800) 308-4358 or fill out our online form! Our surety experts are here to answer any questions you might have and to walk you through our clear-cut bonding process.
