Illinois Governor J.B. Pritzker this week signed legislation that gives the state’s insurance department authority to object rates it deems are excessive, inadequate, or unfairly discriminatory.
HB 4273 and SB 714 allow the Illinois Department of Insurance to review homeowners and auto insurance rates. If the insurance department determines via actuarial review that a filing is excessive, inadequate or unfairly discriminatory, the department would have 60 days to notify the insurer from the date of the filing.
Insurance groups said the legislation may lead to higher home and auto insurance costs for consumers and fewer options for coverage.
“Proponents of these measures claim the laws will protect consumers from rising insurance costs, but in reality, they do nothing to address the factors driving premiums higher, including more severe weather, inflationary pressures, higher repair and replacement costs and legal system abuse,” the Illinois Insurance Association, APCIA and NAMIC said in a statement.
Pritzker and Illinois Secretary of State Alexi Giannoulias have pushed lawmakers for years to give the insurance department more authority to reel in rate increases. The matter escalated last year when State Farm implemented a 27% rate increase for Illinois homeowners.
State Farm said the rate increases reflected increased catastrophe losses in Illinois, driven by hail damage. Top lawmakers used the moment to call for consumer protections against what they claim are runaway profits.
“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,” Giannoulias said.
The bills go into effect on July 1, 2027.
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