WeVote
Log In

Bill

Bill

HB 3771

Relating to the regulation of artificial intelligence.

2025 Regular Session Introduced by Dacia Grayber

Strengthens consumer protections by tightening public adjuster contracts: bans conflicts of interest, requires disclosures, and caps fees if insurer pays promptly.

In committee upon adjournment.
0
WeVote Research Nonpartisan
Bill Summary · HB 3771

Summary — HB 3771 (104th General Assembly, 2025–2026)

Status and procedural history
- Introduced: Feb 18, 2025 (filed with Clerk by Rep. Harry Benton).
- Read first time: Mar 26, 2025. Referred to Public Health and to Information Management and Technology at various points.
- Current status: In committee upon adjournment (June 28, 2025).
- Note: The bill title provided (“Relating to the regulation of artificial intelligence”) appears inconsistent with the bill text. The actual text amends the Public Adjusters article of the Illinois Insurance Code (215 ILCS 5/1575 and 5/1590).

Purpose and intent
- Amend the statutory requirements and prohibitions governing public adjuster contracts and conduct to strengthen consumer protections and limit conflicts of interest between public adjusters and firms that perform repair, salvage, building appraisal, board‑up, or other services related to insured losses.

Key provisions and changes
- Contract content requirements (amendment to 215 ILCS 5/1575):
- Requires written contracts containing: adjuster’s legal name (as in Department records), business address, email, phone, license number, the title “Public Adjuster Contract,” insured’s name/address/policy number (if known), loss description and location, description of services, signatures and dates/times for both parties, attestation of bonding, and full disclosure of compensation (salary, fee, commission), including any statutory cap.
- Contracts must be executed in duplicate (one original to insured, one to public adjuster) and be available for inspection by the Director.
- Public adjuster must provide the insurer or its authorized representative a copy of the contract by email within 5 business days of execution.
- Compensation provisions must not be redacted in copies provided to the Director.

  • Limits on compensation when insurer promptly pays:

    • If insurer pays or commits in writing to pay the policy limit within 5 business days of notice of loss, the public adjuster may not receive a commission based on a percentage of the total amount paid; instead the adjuster is limited to reasonable compensation based on time and expenses incurred prior to the insurer’s payment/commitment.

  • Prohibited contractual terms:

    • Contracts may not: allow collection of an adjuster’s percentage fee when insurer funds are due but unpaid, allow collection of entire fee from the first insurer check rather than proportionately, require insurer checks be issued only to the adjuster, bar pursuit of civil remedies, include hold‑harmless indemnification for the adjuster’s negligence, or grant a power of attorney enabling the adjuster to act in place of the insured.

  • Disclosure and consumer information requirements:

    • Prior to signing, adjusters must provide a separate signed and dated disclosure document explaining the claims process and the distinctions among company adjusters, independent adjusters, and public adjusters; state that hiring a public adjuster is optional; and note that a public adjuster does not represent the insurer or the Department.
    • The contract must make clear that the obligation to pay the adjuster is the insured’s, except when rights are assigned to the adjuster.

  • Prohibition on certain financial interests (notable change):

    • The bill removes existing language that permitted a public adjuster to have a direct or indirect financial interest in other parties involved in a claim if the adjuster provided a written disclosure to the insured. Under the amendment, a public adjuster may not have such direct or indirect financial interests (for example with construction firms, salvage firms, appraisal firms, board‑up companies, etc.), beyond the compensation disclosed in the public adjuster contract.

Affected parties
- Public adjusters: will face tighter restrictions on permissible contract terms, referral relationships, and compensation structures; increased disclosure and filing obligations.
- Insureds (policyholders): increased pre‑contract disclosures, clearer contract terms, stronger protections against conflicts of interest and certain problematic contract clauses.
- Insurers and claims representatives: will receive copies of public adjuster contracts and be affected by limits on fee collection practices when insurer payments are prompt.
- Third‑party vendors (contractors, salvage firms, appraisers): relationships with public adjusters would be limited if those involve direct or indirect financial interests.

Enforcement and administration
- The Director of Insurance (or Department) has inspection authority over contracts and will receive unredacted contract copies; compliance will likely be enforced under existing licensing and consumer protection provisions of the Illinois Insurance Code.

Notes and caveats
- The legislative text provided is partially truncated in places; the summary captures the principal and clearly stated provisions. The bill appears to make conforming changes to Section 1590 as well, but the full text of that section was not supplied.
- The document’s title (AI regulation) does not match the content; readers should rely on the bill text which addresses public adjuster regulation.

Compiled from official sources — confirm details with the bill’s official record.

Sign in to ask a question.