Illinois governor signs bills that require auto rate review process

Illinois Gov. JB Pritzker signed two bills Tuesday that he says will make the state’s auto and homeowners insurance markets more transparent, equitable, and accountable to consumers. 

SB 714 and HB 4273 give the Illinois Department of Insurance the ability to reject rates it finds “excessive, inadequate, or unfairly discriminatory.” The state, home of Allstate and State Farm, is the last to adopt a rate review process. 

“For too long, Illinois working families have been forced to pay higher insurance bills without receiving a clear explanation of why their rates went up,” said Pritzker in a press release. “That changes today. These commonsense reforms will bring greater transparency and accountability to the insurance industry while preserving the competitive market that has served Illinois consumers. At a time when families are feeling squeezed by rising costs, we are taking action to ensure Illinoisans receive a fair deal when protecting their homes and cars.”

Secretary of State Alexi Giannoulias, who advocated for the bills, said Illinois drivers have been forced to accept steep insurance rate increases with “virtually” no oversight or recourse. 

“Today, we level the playing field for consumers,” Giannoulias said. “This victory belongs to the thousands of Illinoisans [who] spoke out, shared their stories, and demanded a fairer system. This law puts consumers first by giving Illinois the authority to challenge excessive rate hikes — increasing transparency in the insurance marketplace and ensuring drivers are no longer left paying the price.”

The governor called on the General Assembly to write insurance-focused legislation last year, following State Farm’s 27.2% increase on homeowner premiums.  

Insurance companies are allowed to implement rates immediately under both bills, but the insurance department can deem the rates don’t meet 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 fire and extended coverage insurance policies 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 Department of Insurance Director Ann Gillespie said the department stands ready to implement the bills. 

“Thanks to Gov. Pritzker’s continuing leadership and commitment to increase protections for Illinoisans, no longer will Illinois residents be the only insureds in the country not protected against unfair rating practices by insurers,” Gillespie says in the release. 

If passed, the bills would become effective for insurance rates filed on or after July 1, 2027.

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Photo of Illinois Gov. JB Pritzker courtesy of Pritzker’s office.