Illinois Governor J.B. Pritzker signed legislation giving the state’s insurance department new authority to object to home and auto insurance rates it finds excessive, inadequate or unfairly discriminatory.
The measures, HB 4273 and SB 714, allow the Illinois Department of Insurance to review homeowners and auto insurance rate filings. If an actuarial review finds a filing excessive, inadequate or unfairly discriminatory, the department must notify the insurer within 60 days from the filing date.
The new authority marks a policy shift for Illinois, where state officials have pushed for years to give regulators more power over personal lines pricing. Pritzker and Illinois Secretary of State Alexi Giannoulias backed the effort as rate pressure became a larger consumer issue.
The debate intensified last year after State Farm implemented a 27 % rate increase for Illinois homeowners. State Farm said the increase reflected higher catastrophe losses in the state, driven by hail damage. Top lawmakers used the rate action to press for consumer protections against what they described as runaway profits.
Insurance trade groups opposed the legislation. The Illinois Insurance Association, APCIA and NAMIC said the laws won’t address the factors driving premiums higher, including more severe weather, inflation, higher repair and replacement costs and legal system abuse.
The groups said the measures risk higher home and auto insurance costs for consumers and fewer coverage choices. Their argument centers on pricing pressure: if regulators block actuarially needed increases, carriers might restrict appetite, reduce writings or seek other ways to manage loss exposure.
Giannoulias said the law puts consumers first by giving Illinois authority to challenge excessive rate hikes. He said the measures increase transparency in the insurance market and prevent drivers from carrying the full cost of unchecked pricing actions.
The bills take effect July 1, 2027. For insurers, the compliance clock now points to filing documentation, actuarial support and clearer rate explanations.
Insurance Department Director Ann Gillespie agreed there often are legitimate reasons for rate increases. But she said the new laws will help make sure that rate increases in the future are justified by reliable data.
While no state legislation can fully eliminate these impacts to insurance premiums, these bills today hold insurance companies accountable for addressing their cost increases by requiring rates to reflect Illinois-specific losses and considerations
Ann Gillespie
House Bill 4273, the homeowners insurance bill, requires companies to give their customers 60 days’ notice before raising premiums more than 10%.
It also requires them to use credible state-specific claims data to develop their rates when it is available, but companies will be able to supplement that data with national, regional or out-of-state data if needed to meet actuarial standards of credibility.
Companies will still be able to charge new rates once they are filed with the Insurance Department. But the new law gives the department authority to review those rates and order rebates of any excess premiums collected if the rates are found to be excessive or unfairly discriminatory.
Senate Bill 714, the auto insurance bill, requires companies to give customers 30 days’ notice before raising premiums more than 10%. It also gives the department authority to review rates and order rebates if the rates are found to be excessive or unfairly discriminatory.
Giannoulias pushed for that bill, criticizing companies for basing rates on factors unrelated to a person’s driving record, such as their credit score or ZIP code. But while those practices are not specifically prohibited in the final legislation, the new law does ban rates that are “unfairly discriminatory.”
“For far too many Illinois families, the cost of mandatory auto insurance has become absolutely unsustainable, forcing impossible choices between paying for coverage and paying for life’s basic necessities,” Giannoulias said at the bill signing ceremony. “That’s not just a financial burden. It puts more uninsured drivers on the road and makes our roads and communities less safe.”
Insurance industry organizations, however, remain opposed to the new laws.
