An Illinois bill giving the state Department of Insurance authority to review and approve homeowners and auto insurance rates is moving through the General Assembly, setting up a sharper fight over pricing oversight in one of the few states with little direct premium regulation.
The measure began as two separate bills, then lawmakers merged them into a single proposal. The House passed the combined bill on March 19.
It now heads to the Senate before any move to Governor JB Pritzker’s desk.
Pritzker first pushed for rate review on homeowners insurance last summer after State Farm, based in Bloomington, said it would raise Illinois homeowners rates by an average 27.2%. The insurer pointed to losses tied to weather disasters in the state.
Pritzker challenged that explanation. He and legislative leaders suggested the company might have shifted losses from disasters in other states onto Illinois policyholders.
He also used the dispute to draw attention to Illinois’ unusual position. Unlike most states, Illinois does not control insurance premiums and has no law banning excessive, inadequate, or unfairly discriminatory rates.
A separate push came from Secretary of State Alexi Giannoulias, who has been pressing for changes in the auto insurance market.
His argument is simple enough. Insurers, he says, use rating factors such as credit scores that have little or nothing to do with how a person drives.
Neither proposal cleared the General Assembly in 2025. A homeowners insurance bill passed the Senate during the fall veto session in October, then failed on the House floor just before adjournment. Close, then dead.
The bill approved in the House last week came out of continued talks among lawmakers and the governor’s office, though the insurance industry still opposes the final version.
Senate Bill 1486, as amended in the House, would bar insurers from charging excessive, inadequate, or unfairly discriminatory rates for homeowners and auto coverage.
Starting July 1, 2027, insurers would also need to give consumers at least 60 days’ notice before increasing premiums by 10% or more.
The bill would also set up a formal review and approval process for new rate filings after July 1, 2027.
Insurers would still be allowed to file new rates and begin collecting premiums right away under those filings. The state, though, would get authority to examine them afterward.
If regulators find a rate excessive, inadequate, or unfairly discriminatory, the department would notify the insurer. The company could then ask for an administrative hearing.
If the department still finds the rates improper after that hearing, it could reject the filing. It could also order the insurer to return excessive premiums already collected from customers.
Representative Thaddeus Jones, a Democrat from Calumet City and the chief House sponsor, said the legislation matters for Illinois homeowners and drivers already struggling with rising insurance bills.
The bill also goes after cost-shifting. It would require insurers to use credible, Illinois-specific data when setting rates whenever that data is available and statistically reliable.
Critics in the industry pushed back. Representative Jeff Keicher, a Republican from Sycamore who works as an insurance agent, said the latest version is better than earlier drafts.
Still, he argued it does not deal with what he sees as the real forces behind higher premiums, more frequent catastrophic weather and the spread of storm chasers who profit from those disasters while driving up claims costs.
He also said lawsuits filed on weak grounds continue to add expense across the system. Keicher and several other lawmakers working in insurance abstained from the vote.
The House passed the bill 66-40. It now moves to the Senate, though it remains unclear how quickly senators will take it up.
After the House vote, the Illinois Insurance Association, the American Property Casualty Insurance Association, and the National Association of Mutual Insurance Companies issued a joint statement calling the bill one of the broadest and most damaging insurance regulatory overhauls in state history.
The groups said Illinois families already face rising costs for property taxes, fuel, groceries, and utilities. In their view, lawmakers should focus on affordability, not advance legislation they say would make both homeowners and auto insurance more expensive for nearly every household in the state.
