All Roll Calls
Yes: 193 • No: 0
IllinoisSB1289104th General Assembly (2025–2026)SenateWALLET
INS-SURPLUS LINE HOME STATE
Sponsored By: Michael E. Hastings (Democratic)
Became Law
assignmentsinsurance
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Bill Overview
Analyzed Economic Effects
11 provisions identified: 5 benefits, 3 costs, 3 mixed.
Clear warnings and proof before delivery
Every surplus line contract and premium endorsement must be sent to the Surplus Line Association for recording, with key details like the insured, risk, premiums, and insurer. Producers cannot deliver a contract unless it shows it was recorded. The first page must state in bold 12‑point type that the company is not authorized in Illinois and is not covered by the Illinois Insurance Guaranty Fund (or that a domestic surplus line insurer issued it and it is not covered). Contracts must allow legal papers to be served on the Director, who can promptly forward them.
What surplus-line insurance cannot cover
Producers cannot use unauthorized insurers to meet Illinois proof‑of‑insurance rules. They cannot use them for workers’ compensation. For personal lines that the residual market covers, they can use unauthorized insurers only if you ask for higher limits than the residual market offers. Also, the surplus line law does not apply to railroads and aircraft in interstate or foreign commerce, or to ocean and wet marine risks like vessels, hulls, cargoes, marine builder’s risks, marine protection and indemnity, and war or strike risks.
Easier surplus-line placements for big buyers
If you are an exempt commercial purchaser, the producer can skip the usual search of authorized insurers after telling you about limits and getting your written request. To qualify as exempt, you must use a qualified risk manager, have paid over $100,000 in nationwide P&C premiums last year, and meet one size test (for example, $20,000,000+ net worth, $50,000,000+ revenue, 500+ employees or 1,000+ in the group, $30,000,000+ budget for nonprofits/public entities, or a city of 50,000+). The dollar amounts in these size tests adjust every five years on January 1 by CPI‑U (starting 2015). If a nonaffiliated Illinois-licensed producer refers a commercial risk, the surplus line producer can also skip the search; this does not apply to personal lines. For program business and master policies, the required diligent effort may be done once a year for the whole program or master policy.
Stronger checks on surplus-line insurers
Producers may place business with an unauthorized insurer only if the insurer can write that line in its home jurisdiction, has at least $15,000,000 in policyholders’ surplus, and meets solvency and management standards. If those standards are not met, the producer must warn the insured in writing before placement. Alien insurers must meet the same standards or be on the NAIC Quarterly Listing; the Director makes that list available. The Director can also order the Association not to record and producers to stop using an insurer if continued underwriting is hazardous to policyholders.
Surplus-line premium taxes and reports
Producers owe 3% tax on premiums for policies effective before July 1, 2003, and 3.5% for policies effective on or after that date. File reports and pay tax by February 1 and August 1 on gross taxable premiums minus returned premiums. File a separate report by February 1 on fire insurance subject to the Fire Investigation Act and pay the fire marshal tax. If you underpay, you owe late fees, interest, and penalties. The Director can sue to collect unpaid amounts.
Penalties and good-faith safe harbor
If you violate the Code, the Director can suspend or revoke your surplus line license and fine you up to $2,000 per cause. If you documented a good‑faith home‑state choice and paid taxes to that state, you must submit the contract and pay Illinois taxes and fees, but no penalties, interest, or late fees apply.
Home-state rules for surplus lines
Your home state is where your business has its main place of business or, for a person, where you live. If 100% of the risk is outside that state, the home state is where the largest share of taxable premium is allocated. For multiple insureds on one contract, special rules apply for affiliated groups and for non‑affiliated members who each pay 100% of their own premium. Illinois applies the home‑state approach to policies effective, renewed, or extended on or after July 21, 2011 (and to multi‑year policies on the first anniversary on or after that date). Before that date, the rule depends on whether the risk is located in Illinois.
Only limited Code rules apply
Surplus line insurance is not subject to most of the Illinois Insurance Code. Only specific listed sections and parts of Article XXXI still apply where not inconsistent. This narrows day‑to‑day regulation while keeping key oversight in place.
State joins national producer database
Illinois participates in the NAIC national insurance producer database for surplus line licensing and renewals. The law requires participation no later than July 21, 2012. This makes licensing and renewals more uniform and easier to manage.
Taxes and fees billed to insureds
If you buy surplus line insurance, you can be billed the surplus line tax and the Surplus Line Association’s recording fees. These charges may be added to your premium or billed to you.
Licenses and records for surplus-line sellers
You must hold a surplus line producer license to place surplus line coverage in Illinois. The license costs $400 each year. You must keep a separate account and full copies of surplus line contracts for 7 years from the policy effective date. The Director and the Surplus Line Association can inspect these records at any time.
Sponsors & Cosponsors
Sponsor
Michael E. Hastings
Democratic • Senate
Cosponsors
Anthony DeLuca
Democratic • House
Cristina Castro
Democratic • Senate
Dave Syverson
Republican • Senate
Jeff Keicher
Republican • House
Laura Fine
Democratic • Senate
Paul Faraci
Democratic • Senate
Seth Lewis
Republican • Senate
Roll Call Votes
House vote • 5/21/2025
Third Reading - Short Debate - Passed
Yes: 110 • No: 0
House vote • 4/29/2025
Do Pass / Short Debate Insurance Committee;
Yes: 15 • No: 0
Senate vote • 4/9/2025
Third Reading - Passed;
Yes: 56 • No: 0
Senate vote • 2/19/2025
Do Pass Insurance;
Yes: 12 • No: 0
Actions Timeline
Public Act . . . . . . . . . 104-0091
8/1/2025SenateEffective Date January 1, 2026
8/1/2025SenateGovernor Approved
8/1/2025SenateSent to the Governor
6/18/2025SenatePassed Both Houses
5/21/2025SenateThird Reading - Short Debate - Passed 110-000-000
5/21/2025HousePlaced on Calendar Order of 3rd Reading - Short Debate
5/13/2025HouseSecond Reading - Short Debate
5/13/2025HousePlaced on Calendar 2nd Reading - Short Debate
4/30/2025HouseDo Pass / Short Debate Insurance Committee; 015-000-000
4/29/2025HouseAdded Alternate Chief Co-Sponsor Rep. Jeff Keicher
4/24/2025HouseAssigned to Insurance Committee
4/17/2025HouseReferred to Rules Committee
4/9/2025HouseFirst Reading
4/9/2025HouseChief House Sponsor Rep. Anthony DeLuca
4/9/2025HouseArrived in House
4/9/2025HouseThird Reading - Passed; 056-000-000
4/9/2025SenatePlaced on Calendar Order of 3rd Reading
4/9/2025SenatePlaced on Calendar Order of 3rd Reading **
4/4/2025SenatePlaced on Calendar Order of 3rd Reading March 4, 2025
2/27/2025SenateSecond Reading
2/27/2025SenateAdded as Co-Sponsor Sen. Paul Faraci
2/26/2025SenateAdded as Co-Sponsor Sen. Seth Lewis
2/19/2025SenatePlaced on Calendar Order of 2nd Reading February 20, 2025
2/19/2025SenateDo Pass Insurance; 012-000-000
2/19/2025Senate
Bill Text
Engrossed
Enrolled
Introduced