SPRINGFIELD, Ill. (WAND) — The Illinois Senate passed legislation Wednesday to help lower auto insurance rates for consumers.
This plan could ban insurance companies from increasing auto premiums by over 10% without first notifying consumers before their renewal or anniversary date.
The Illinois Department of Insurance would be responsible for ensuring auto rates are not excessive, inadequate, or unfairly discriminatory. Sponsors note they changed the original plans for this bill after negotiating with the insurance industry.
“Instead of having to inform the consumer of a 10% fee increase 60 days prior to the renewal or anniversary date, it is now 30 days in this legislation,” said Sen. Ram Villivalam (D-Chicago). “The process for what is a complete filing came from the insurance industry and requires the Department of Insurance to determine whether a filing is complete within 15 days.”
Senate Bill 714 passed the Senate on a partisan 42-14 vote with one senator voting present. It now moves to the House for further consideration.
The Illinois Insurance Association and American Property Casualty Insurance Association said this plan could ultimately harm consumers through higher auto insurance costs and fewer coverage options. They stressed that Illinois has long benefited from one of the most competitive auto insurance markets in the country.
“SB 714 threatens to upend this successful system by imposing a form of prior-approval rate regulation that has failed consumers in other states like California,” the groups stated. “SB 714 injects politics into rate decisions and slows insurers’ ability to adjust prices, up or down, based on actual claims experience.”
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Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.