HB3771 amends the Illinois Insurance Code provisions governing public adjusters. The bill tightens restrictions on public adjuster conduct by removing language that currently allows a public adjuster to have a direct or indirect financial interest in an aspect of a claim if the adjuster gives the insured written disclosure. It also makes conforming changes to the contract and standards-of-conduct sections for public adjusters.
The bill preserves and reinforces the existing framework for public adjuster contracts: written agreements, required disclosures, limits on fees and compensation, rescission rights for insureds, and prohibitions on certain contract terms such as power of attorney, hold harmless clauses, and restrictions on civil remedies. It also keeps the rules requiring adjusters to disclose compensation, referral relationships, and any interests in related firms such as construction, salvage, appraisal, or board-up companies, while clarifying that the adjuster’s loyalty must remain with the insured.
Impact
If enacted, HB3771 would narrow the circumstances under which Illinois public adjusters may have financial ties to other parties involved in a claim, effectively prohibiting such interests even with disclosure. This would amend Sections 1575 and 1590 of the Illinois Insurance Code, affecting licensing standards, contract requirements, disclosure obligations, and ethical rules for public adjusters. The practical impact would fall on public adjusters, insured property owners, and related service providers such as contractors, salvage firms, and appraisal companies.
Sentiment
No committee transcripts or recorded votes were provided, so there is no documented floor or committee sentiment in the supplied materials. Based on the bill text alone, the measure appears consumer-protective and aimed at strengthening conflict-of-interest rules for public adjusters. The overall tone of the legislation is regulatory and anti-conflict-of-interest rather than expansive or deregulatory.
Contention
The main point of contention is likely the bill’s elimination of the current disclosure-based exception that permits a public adjuster to maintain a financial interest in an aspect of a claim. Supporters would likely view this as a necessary safeguard against self-dealing and steering insureds toward affiliated vendors, while opponents may argue it is overly restrictive and limits adjusters’ ability to operate or coordinate claim-related services. Another possible issue is the bill’s effect on compensation arrangements and business relationships with contractors and other repair-related firms.