State RegulationsIL specificDifficulty 2/5
The Director of Insurance suspects that an Illinois producer has been committing insurance fraud. What examination or investigative authority may the Director exercise over the producer?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
215 ILCS 5/500-110 authorizes the Director of Insurance to conduct examinations and investigations of producers in connection with suspected violations of the insurance laws. The Director's examination power therefore extends beyond insurers to licensees themselves, and a producer under investigation must cooperate with the Illinois Department of Insurance.
Why the other options are wrong
- A) The Director's examination authority expressly covers producers under 215 ILCS 5/500-110, not just insurers.
- B) No gubernatorial order is needed; the Director may investigate producers directly under 215 ILCS 5/500-110.
- D) The Director examines the licensee's insurance business records and affairs; the authority is not limited to personal tax returns.
Memory hook
Producers get examined too — the Director's investigation power reaches the agent's files.