The Illinois House has voted down a contentious insurance regulation bill that would have expanded the state’s power to review and modify filed rates, mandate longer notice periods for premium hikes, and tighten control over how insurers use loss data.
House Bill 3799, backed by Gov. JB Pritzker but opposed by insurers, fell short with 56 votes in favor and 37 against – four votes shy of the 60 needed for passage. Six lawmakers voted present.
A Senate amendment to the bill would have required insurers to alert both policyholders and the Department of Insurance at least 60 days before increasing fire and extended coverage rates by more than 10%.
It also detailed how regulators could determine whether a rate was excessive, inadequate, or unfair, while adding new hearing and notification rules.
Another section mandated that carriers use Illinois-specific loss-experience data when setting rates if reliable data existed. If not, they could use national or regional figures.
The amendment further required the department to give insurers 60 days’ notice before objecting to a rate, with those objections subject to administrative review.
For larger insurers – those writing $100 mn or more in annual premiums – the bill added obligations for climate risk disclosure and participation in related data calls.
State Sen. Michael Hastings, who sponsored the measure in the Senate, said the bill was about fairness.
If your property insurance is going up 30%, I don’t think you should find out right when your renewal notices come in the mail.
State Sen. Michael Hastings
“Companies know those increases are coming. Consumers deserve more warning,” Hastings said.
The proposal was part of a broader push by Gov. Pritzker, following State Farm’s 27.2% home insurance rate filing earlier in the year. Pritzker criticized the insurer for “using flawed catastrophe data” and passing off out-of-state costs to Illinois policyholders.
Industry groups celebrated the bill’s defeat. The American Property Casualty Insurance Association said the measure would have created a “de facto prior-approval system” unlike any other in the country, effectively putting the government in control of pricing.
Illinois’ insurance market is among the most competitive in the nation, with more than 200 carriers and auto rates well below the national average.
“Research shows that states with prior-approval systems typically see premiums about 20% higher than those in open-rating markets like Illinois,” an APCIA spokesperson said.
The House’s rejection keeps Illinois as one of the few major U.S. states without a prior-approval system for property and casualty insurance – a stance regulators and insurers alike say preserves flexibility, though the political fight over rates is far from over.
