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Secretary of State supports bill that will restrict insurance practices

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Insurance | Legal
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An Illinois bill that would create a review process for auto insurance rate increases found support from the state’s Secretary of State but pushback from Republicans during a House Insurance Committee hearing Monday, according to an article by The Center Square

Secretary of State Alexi Giannoulias said he supports HB4611 because it prohibits any practices from insurers that disparately impact customers, the article said. This includes practices based on race, color, national or ethnic identity, religion, sex, sexual orientation, disability, gender identity, or gender expression. 

The article said Giannoulias believes only a policyholder’s driving record should be considered by insurance companies. 

“I’m sure you will hear from the other side today, who will predict that this legislation will lead to rate hikes and job losses, but I implore all of you to look at the numbers and facts,” Giannoulias said, according to the article. “I do feel it is important for us to step up and fight for those who don’t always have a voice fighting for them. We aren’t asking insurance companies to give Illinoisans special treatment, only fair treatment.”

HB4611, introduced by Rep. Will Guzzardi (D-District 39), is a companion to SB3213, introduced by Sen. Javier Cervantes (D-District 1). Similar bills were introduced last year but failed to leave committee.

State Rep. Jeff Keicher (R-District 70) argued that the bill is redundant of laws already protecting consumers from discriminatory business practices. 

Giannoulias replied that the Illinois Insurance Code allows for discrimination that is based on “sound actuarial principles.” 

Uncertainty in pricing “has a tendency” to make costs higher, Lynne McChristian, director of the Office of Risk Management and Insurance Research at the University of Illinois School Gies College of Business, said during the meeting. 

While it appears a majority of Monday’s discussion focused on the restrictions the bill would place on insurance practices, the bill also has received support from consumer groups because of the rate review process it would create. 

Any rate changes would require an application to be filed with the Director of Insurance and all information should be available for public inspection. It also would allow the public to challenge any rate change request. 

Illinois PIRG, a consumer advocacy group, reports insurance rates for top insurers in the state have risen by $2.4 billion since 2022. The group also reports the state, which headquarters State Farm and Allstate, is one of two states without a review process for insurance rate increases. 

“Last year, the General Assembly took an important step by empowering Illinois regulators to reject excessive health insurance rate hikes, and we appreciate Gov. Pritzker’s continued focus on consumer protection,” Cervantes said in a PIRG press release. “After two years of billions dollar rate hikes, it’s time to also tackle excessive car insurance rates, and the discriminatory practices that disproportionately impact communities like those I represent.”

Throughout the nation, car insurance — which has increased 29% since 2018 — is expected to hike another 12.6% this year, according to a Value Penguin and Lending Tree study. It will be the most significant increase for car insurance since 2018, with 2023 seeing the second-largest increase at 11.2%.

McChristian said during the Illinois hearing that auto insurance prices are increasing because repair costs and used car values have increased. He echoes sentiments that insurers have continually repeated in recent years. Yet, advocacy groups, such as PIRG, have argued that insurers exaggerate their needs and overburden consumers. 

A consumer advocacy group in California, Consumer Watchdog, says an insurance review process in their state has saved consumers from $3 billion in auto insurance hikes since 2002


Photo courtesy of Gladder/iStock

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