CIAB Threatens Suit On Illinois Agents Fees

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By Mark E. Ruquet

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NU Online News Service, June 4, 12:50 p.m.EDT?The Council of Insurance Agents & Brokers isthreatening to sue the state of Illinois if it adopts a provisionin its recently passed budget that would force non-resident agentsto pay more for licensing fees than resident agents.

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In a statement, the Washington, D.C.-based insurance brokerassociation asked Illinois Gov. Rod R. Blagojevich to veto theincreased licensing fee on agents because it creates a disparity inlicensing fees. Under the new fee schedule, resident agents wouldpay $180 and non-residents $250.

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"Erecting protectionist walls between Illinois and the rest ofthe United States is no way to balance a budget," said Ken Crerar,president of CIAB. "We urge the governor to use his line-item vetoauthority to strike this ill-conceived revenue-raiser from thestate budget and continue Illinois' tradition of equal treatment ofall who are engaged in commerce within the state."

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CIAB said if the governor does not veto the increase, theassociation would "look into the possibility of challenging thedisparity in the courts."

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The Professional Independent Insurance Agents of Illinois saidunder the original budget proposal the two year license fee wouldhave increased from $150 to $300. The Springfield, Ill.-basedassociation said it lobbied to have these and other fees reduced todecrease the impact on the industry.

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PIIAI said the budget also increases temporary insuranceproducer fees for two years from $25 to $50; limited line licensefrom $25 to $50; surplus lines license from $200 to $400 a year;and increases the surplus lines tax from 3 percent to 3.5percent.

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The $52 billion Illinois budget, passed last Saturday, does notincrease sales or income tax on residents, but does make budgetcuts while increasing taxes and fees throughout the state. Thebudget increases spending on education, but eliminates 6,000 stateemployees and merges some agencies to cut costs.

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According to Abby Ottenhoff, a spokesperson for the governor'soffice, the budget is currently under review and will not be signeduntil the review is completed.

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Bill McAndrew, acting public information officer with theIllinois Department of Insurance, said the department is aware ofCIAB's position on the matter, but has no comment at this time.

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