Illinois gov. to sign bills that create auto and home insurance rate review
Illinois Gov. JB Pritzker says he plans to sign two bills that will make the property and casualty insurance market more transparent and equitable for consumers.
“Too many families have dealt with unexplained, unfair insurance price hikes on their homes and cars, so this legislation helps protect consumers while maintaining the core principles the Illinois business community is built on,” Pritzker says in a press release.
The governor called on the general assembly to create legislation focused on insurance last year, following a State Farm increase of 27.2% on homeowner premiums.
Illinois is one of two states without an insurance rate review process.
Both SB 714 and HB 4273 would give the Illinois Department of Insurance the ability to reject rates it finds “excessive, inadequate, or unfairly discriminatory.”
Insurance companies could implement rates immediately under both bills but the insurance department can deem the rates don’t meet the regulatory criteria. The department would be required to notify the insurer within 60 days under HB 4273 or 40 days under SB 714.
Following notification, an insurer could request a hearing.
Both bills also ban insurance companies from imposing a renewal premium increase of more than 10% for policies of fire and extended coverage insurance that are subject to cancellation requirements, unless the insurer mails or delivers by electronic means a notice at least 60 days before under HB 4273 or 30 days before under SB 714.
Illinois PIRG said in a press release that the bills create a crucial new standard for home and auto insurance. The organization has advocated for a review system in the state for years.
“We applaud the passage of these measures to protect home and auto insurance customers,” said Abe Scarr, Illinois PIRG director, in the release. “When these bills are signed into law, it will finally be illegal to charge excessive home and auto insurance rates in Illinois. Residents of every other state enjoy these basic consumer protections, which are long overdue in Illinois.”
Scarr says that Illinois PIRG and its partners will continue to advocate for stronger policies that further empower the Department of Insurance to reject or modify excessive rate hikes and to address the growing risks from extreme weather that will continue to drive up homeowners insurance premiums.
The National Association of Mutual Insurance Companies (NAMIC) said the bills expand government control over insurance rates and will likely give Illinois consumers fewer options and higher prices.
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Photo of Illinois Gov. JB Pritzker courtesy of Pritzker’s office.