The Illinois Senate passed legislation Wednesday aimed at lowering auto insurance costs for consumers. Senate Bill 714 would restrict insurers from raising auto insurance premiums by more than 10% without notifying policyholders before renewal or an anniversary date.
The Illinois Department of Insurance would oversee whether auto rates are excessive, inadequate, or unfairly discriminatory. Sponsors said they revised the original bill after talks with the insurance industry.
Sen. Ram Villivalam, D-Chicago, said the notice period changed during negotiations. Instead of requiring insurers to notify consumers 60 days before a renewal or anniversary date, the current version requires 30 days.
Villivalam also said the insurance industry helped shape the process for complete filings. Under the bill, the Department of Insurance must decide within 15 days whether a filing is complete.
The Senate approved SB 714 in a 42-14 vote, with one senator voting present. The measure now moves to the House for further consideration.
The Illinois Insurance Association and the American Property Casualty Insurance Association oppose the proposal. The groups said the bill could lead to higher auto insurance costs and fewer coverage options.
They argued Illinois has long had one of the country’s most competitive auto insurance markets. In their view, SB 714 would disrupt that system by adding prior-approval rate regulation.
The groups compared the proposal to regulatory approaches used in states such as California. They said the bill would bring politics into rate decisions and slow insurers’ ability to adjust prices based on claims experience.
Insurers also warned that delayed rate changes could affect pricing in both directions. Their argument is that companies need room to adjust rates when claims costs rise or fall.
