PLIllinoismedium
An Illinois producer arranges premium financing for a high-risk auto policy. Which of the following is required of premium finance companies under 215 ILCS 5/Article XXIX?
AThey may charge any interest rate the producer recommends
They must be licensed in Illinois and disclose finance charges and cancellation rights in the agreement
CThey are exempt from IDOI oversight
DThey may cancel a policy without giving the insured written notice
Why this is the answer
Sections 513a1 through 513a18 license and regulate premium finance companies in Illinois. They must hold an IDOI license, file forms, disclose APR-equivalent finance charges, and follow specific notice-of-cancellation procedures (typically a 10-day notice of intent to cancel before exercising the power of attorney). Producers should not steer clients to unlicensed financers and must disclose any compensation they receive from a finance company.
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