Illinois Third-Party Administrator (TPA) Bond

Illinois requires licensed TPAs to post a bond to safeguard funds in fiduciary accounts such as ATF and CASA. Bond amounts are calculated as 5% of managed funds, with a $50,000 minimum and $1 million cap. Premiums usually range 1–5% of the bond amount. Apply online with Lance Surety for quick approval, auto-renewal reminders, and flexible options for applicants with bad credit.

A third-party administrator bond is required under requirements for administrators to protect consumers and carriers from TPA misconduct. The bond ensures proper handling of funds in fiduciary accounts like the Administrator Trust Fund (ATF) and Claims Administration Services Account (CASA), as outlined in 215 ILCS 5/511.112. It guarantees the administrator complies with Illinois insurance law. Learn more about surety bond basics here.

The Illinois TPA bond amount equals 5% of ATF/CASA funds handled, with a $50,000 minimum and $1,000,000 cap. Premiums are usually 1–5% of that amount depending on credit and underwriting. For example, a $50,000 bond may cost $500–$2,500 annually, while a $500,000 bond could run $5,000–$25,000. Lance Surety helps secure competitive rates while meeting state requirements under Illinois surety bonds.

Applying is simple and fast. Start with the online application and provide financial details. The bond form must be filed electronically with the Illinois Department of Insurance via NIPR using the bond form. Steps:

• Complete the online application and upload financials.
• Underwriting review—decisions often issued the same day.
• Pay the premium and receive the executed bond.
• File with the Illinois Department of Insurance through NIPR.

Lance Surety provides automatic reminders, making renewals straightforward to keep your license active without interruption.

Yes. Lance Surety offers flexible underwriting for applicants with challenged credit histories. Even if you have past financial issues, specialty programs allow approvals at fair rates. The process is transparent, and our team helps strengthen applications with proper documentation. This makes bonds accessible for a wide range of TPA businesses seeking compliance.

Is a bond required to keep my TPA license active in Illinois?

Yes. Under requirements for administrators, a bond is mandatory to maintain licensure. If a bond lapses, the license auto-terminates.

How is the Illinois TPA bond amount calculated?

The amount is set at 5% of ATF and CASA funds administered, with a statutory $50,000 minimum and $1,000,000 maximum under 215 ILCS 5/511.104. This ensures sufficient financial protection.

Can the surety cancel the bond mid-term?

Yes, but only with written notice. Illinois requires a 30-day advance cancellation notice to the Department of Insurance. This allows time to replace coverage, as a license cannot remain active without a valid bond. See other licences for more context on compliance.

Illinois Department of Insurance. (n.d.). Requirements for administrators.
https://idoi.illinois.gov/content/dam/soi/en/web/insurance/sites/insurance/producers/documents/sec511.pdf

Illinois Department of Insurance. (n.d.). Third-party administrator bond form.
https://idoi.illinois.gov/content/dam/soi/en/web/insurance/sites/insurance/producers/documents/third-party-adm-bond.pdf

Illinois Department of Insurance. (n.d.). Other licenses FAQ.
https://idoi.illinois.gov/producers/licensescertificationsfaqs/all-other-licenses.html

Illinois General Assembly. (n.d.). 215 ILCS 5/511.104.
https://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=1249&ChapterID=22

Illinois General Assembly. (n.d.). 215 ILCS 5/511.112.
https://www.ilga.gov/legislation/ilcs/ilcs4.asp?DocName=021500050HArt.+XXXI+1%2F4&ActID=1249&ChapterID=22

Lance Surety. (n.d.). Illinois surety bonds.
https://www.lancesuretybonds.com/bonds-by-state/illinois

Lance Surety. (n.d.). Online application. 
https://www.lancesuretybonds.com/surety-bond-quote

Lance Surety. (n.d.). What is a surety bond?
https://www.lancesuretybonds.com/learn/what-is-a-surety-bond

Lance Surety. (n.d.). Surety bonds questions. 
https://www.lancesuretybonds.com/learn/faqs