Illinois auto and home insurance rate review bill could pick up steam following State Farm’s homeowners hike
Auto insurance could be included in legislation that Illinois Gov. JB Pritzker has called for after State Farm hiked homeowners insurance by 27.2% earlier this month.
“Today, I’m directing the Illinois Department of Insurance to take all available regulatory action to enforce the law and ensure a level playing field for Illinois homeowners,” Pritzker wrote in a social media post. “I am also calling on the General Assembly to enact a legislative solution during veto session that prevents insurance companies from taking advantage of consumers through severe and unnecessary rate hikes like those proposed by State Farm.”
Illinois is the only state without an insurance rate review process.
Rep. Bob Morgan told the Chicago Tribune that consumers are “told” what their auto and homeowners insurance rates are going to be.
“You don’t have the ability as a state to really help protect consumers,” Morgan said in the article.
The Chicago Tribune says it’s likely that an amended bill filed in January by Sen. Michael Hastings is the “starting point for any debate on the issue.” The legislation would establish a rate review process for auto and homeowner insurance. The newspaper says it will likely be discussed by lawmakers when they reconvene in Springfield in October for the two-week veto session.
The bill, SB0268, says its purpose is to limit unjustified increases in homeowners and automobile insurance premiums, ensure transparency in rate-setting practices, and grant the Department of Insurance greater oversight authority to protect consumers.
Insurance companies would be required to submit a request for approval to the DOI for any proposed rate increase to homeowner and automobile insurance premiums, the bill says.
The request will be reviewed within 60 days after submission, the bill says. It says the request will be deemed denied if no determination is made.
Any rate increase exceeding 10% in a 12-month period would require the insurer to publish a public notice including justification for the increase. A 30-day public comment period would follow, allowing consumers to submit comments or objections to the proposed rate increase.
The bill would also ban premium increases by more than 15% per year for any policyholder without exceptional justification. Exceptional justification would include natural disasters, regulatory changes, or unforeseen market shifts.
Illinois Public Interest Research Group (PIRG) released a statement following the State Farm increase as well, saying that it’s time for the General Assembly to act.
“At a minimum, Illinois should empower the state Department to reject or modify excessive rate hikes, a basic consumer protection that residents in almost every other state enjoy,” the release says.
Illinois PIRG has supported numerous other legislative attempts to create an insurance rate review process within the state.
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