The Secretary of State is backing a bill that would clamp down on insurance practices

The Secretary of State is backing a bill that would clamp down on insurance practices

Ann An Illinois bill that would create a review process to increase auto insurance rates found support from the state’s secretary of state but pushback from Republicans during a House Insurance Committee hearing Monday, according to an article from The Center Square.

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

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

“I’m sure you’ll hear from the other side today predicting that this legislation will lead to higher rates and job losses, but I implore all of you to look at the numbers and the facts,” Giannoulias said, according to an article. “I feel it’s important for us to step up and fight for those who don’t always have a voice fighting for them. We are not asking insurance companies to give Illinois residents special treatment, just fair treatment.

HB4611, introduced by Congressman Will Guzzardi (D-District 39), is a companion to SB3213, represented by Senator Javier Cervantes (D-District 1). Similar bills were introduced last year but failed to make it out of committee.

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

Giannoulias responded that the Illinois insurance code allows for discrimination that is based on “sound actuarial principles.”

Uncertainty in pricing “tends” to raise costs, Lynn McChristian, director of the Office of Risk Management and Insurance Research at the University of Illinois Gies College of Business, said at the meeting.

While most of the discussion on Monday appeared to focus on the restrictions the bill would impose on insurance practices, the bill also received support from consumer groups because of the rate review process it would create.

Any changes in rates will require an application to be made to the Director of Insurance and all information must be available for public inspection. It would also allow the public to challenge any request to change course.

Illinois PIRG, a consumer advocacy group, reports that insurance rates for the state’s top insurers will rise by $2.4 billion by 2022. The group also reports that the state, which is home to 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 authorizing Illinois regulators to reject excessive health insurance rate hikes, and we appreciate Governor Pritzker’s continued focus on consumer protection,” Cervantes said in a PIRG press release. “After two years of billion-dollar rate hikes, it’s time to also address the exorbitant auto insurance rates and discriminatory practices that disproportionately affect communities like the ones I represent.”

Nationwide, auto insurance — which has increased 29% since 2018 — is expected to grow another 12.6% this year, according to Research on Value Penguin and Lending Tree. This will be the biggest increase for car insurance since 2018, with 2023 seeing the second biggest increase of 11.2%.

McChristian said at the hearing in Illinois that auto insurance rates are increasing because the cost of repairs and the value of used cars have increased. It echoes sentiments that insurers have repeatedly echoed in recent years. Still, advocacy groups like PIRG say insurers are exaggerating their needs and overburdening consumers.

A California consumer advocacy group, Consumer Watchdog, says their state’s insurance review process has saved consumers of $3 billion car insurance jumps since 2002.

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Photo courtesy of Gladder/iStock

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