State RegulationsIL specificDifficulty 1/5
Under 215 ILCS 5/500-20 of the Illinois Insurance Code, which statement about acting as an insurance producer in Illinois is correct?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
215 ILCS 5/500-20 makes it unlawful to sell, solicit, or negotiate insurance in Illinois without holding the required producer license. Compensation rules in 215 ILCS 5/500-80 reinforce the point by barring payment of commissions for unlicensed insurance activity, so the license must be in place before the activity begins.
Why the other options are wrong
- B) Nonresidents may be licensed under 215 ILCS 5/500-40 on the basis of reciprocity, so residency is not a licensing condition.
- C) The licensing requirement of 215 ILCS 5/500-20 applies across the lines of insurance, not just to life coverage.
- D) Supervision by a licensed producer does not cure the licensing requirement; selling, soliciting, or negotiating without a license remains unlawful.
Memory hook
License first, then sell — Illinois makes unlicensed selling unlawful on both ends.