Illinois has introduced new laws to regulate personal auto and homeowners insurance rates. The laws, signed by Gov. JB Pritzker, will require insurers to justify their rates with actuarial data and give the Illinois Department of Insurance the authority to reject rates that are deemed excessive or unfair.

Changes to Insurance Regulation

Before these laws, Illinois was the only state that could not review or challenge homeowner and auto insurance rates. Insurers submitted rate information, but Illinois didn’t have rules against “excessive, inadequate, or unfairly discriminatory” rates. The new laws will bring Illinois in line with other states, which base their property and casualty rating laws on a three-part rule.

The laws don’t cap premiums or guarantee lower insurance bills. Insurers can still begin charging a new rate after filing it with the state. However, regulators will be able to review that rate, order the insurer to stop using it, and potentially require rebates for affected customers.

Industry Response

Opponents of the new laws, including the Illinois Insurance Association, the American Property Casualty Insurance Association, and the National Association of Mutual Insurance Companies, argue that the laws will lead to higher home and auto insurance costs and fewer coverage options. They claim that the laws do not address the factors driving premiums higher, such as severe weather, inflation, and higher repair and replacement costs.

The National Association of Mutual Insurance Companies estimates that the regulatory changes could cause Illinois homeowners insurance premiums to increase by approximately 20%. However, it is unclear how the new laws will ultimately affect insurance rates in the state.

Original reporting: KTBS 3 (Shreveport) — read the source article.