It appears that the “Additional Insurance and Third Party Payment Addendum” discloses to the customer that your institution is receiving commissions from the insurance company and other third parties as a result of the sale of insurance.

If that is the case, then the loan officers will likely be viewed as selling the insurance, triggering the requirement to be licensed as brokers under the Illinois Insurance Code. 215 ILCS 5/500-80(a). The Department of Insurance has published a bulletin explaining how licensing requirements apply to sales of credit and other types of group insurance. CB 2009-04 (May 28, 2009).

On the other hand, if your institution is not receiving any commissions from an insurance company or other party, then providing customers with the “Additional Insurance and Third Party Payment Addendum” would be inaccurate and misleading. In addition, as stated in the CB 2009-04 Department of Insurance Bulletin, an employee who merely enrolls consumers in credit insurance policies without receiving any compensation would not have to obtain an insurance broker’s license (citing 215 ILCS 5/500-20(b)(2)).