State RegulationsIL specificDifficulty 1/5
Under 215 ILCS 5/500-130, which circumstance requires an Illinois producer to maintain a surety bond?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
215 ILCS 5/500-130 requires the bond from a producer who places insurance business with an insurer without an agency contract — that is, brokered business where no insurer contract governs the producer's conduct. The bond protects the public when the producer handles such placements outside an insurer's contractual supervision; producers working under agency contracts do not trigger this provision.
Why the other options are wrong
- A) Late renewal implicates the fee penalty under 215 ILCS 5/500-135, not the bonding duty of 215 ILCS 5/500-130.
- C) Serving as an officer of a business entity licensee does not itself create bonding exposure under 215 ILCS 5/500-130.
- D) Collecting premiums under an agency contract is governed by the insurer relationship; the bond attaches to placements made without an agency contract.
Memory hook
No agency contract? Bond up.