Industry advocates: More state regulation will drive insurance rates
higher
[August 21, 2025]
By Jim Talamonti | The Center Square
(The Center Square) – Insurance industry leaders are advising Illinois
lawmakers that state regulation of rates will lead to higher costs and
fewer options for consumers.
The Illinois Senate Insurance Committee held a virtual subject matter
hearing on homeowners and property insurance rates Wednesday.
Former Illinois Director of Insurance Nat Shapo said Illinois has sound
regulation and lower rates than the national average.
“It’s not an unregulated market. Competition regulates the market.
Consumers can protect themselves by comparison shopping. They do it for
everything they buy in a competitive market,” Shapo explained.
Shapo said rates are higher because people have filed more loss claims.
Robert Gordon, senior vice president of the American Property Casualty
Insurance Association, said Illinois has been a success story with
below-average insurance rates, strong competition and market stability.
“Property losses are escalating in Illinois, like every other state,
because of building inflation and climate change. Illinois homeowners
insurers, though, lost money over the decade and particularly high
property insurance losses in the last two years,” Gordon said.
Gordon said three things have caused increased homeowner losses:
Macroeconomic issues, including 40-year high inflation and more severe
inflation for building materials and labor, climate issues which include
people moving into more expensive buildings in areas prone to severe
weather, and costs from state government, including coverage mandates
and legal system abuse.
Illinois Secretary of State Alexi Giannoulias and several state
lawmakers have proposed banning insurance companies from using age,
credit scores or zip codes from to determine auto premiums.
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Senator Dave Syverson, R-Rockford
BlueRoomStream
State Sen. Julie Morrison, D-Lake Forest, asked former University of
Illinois Office of Risk Management and Insurance Research director
Lynne McChristian if people with poor credit scores file more
claims.
“That’s what the data shows. Typically, people with low credit
scores are more likely to file claims. The balance on that is to say
that about 70%, close to 72% of Americans have good credit, so those
people get the benefit of that when an insurance score is
developed,” McChristian said.
State Sen. Laura Fine, D-Glenview, suggested more government
involvement.
“So much of this is clear as mud. We don’t have enough transparency.
When we see the rates going up so much, people need to understand
and they need to know that the state is looking out for them,” Fine
said.
State Sen. Dave Syverson, R-Cherry Valley, said homeowners insurers
in Illinois have been losing more money on their capitals or
percentage than they are in California.
“The difference is, insurers have faith in the regulatory system in
Illinois. They know, historically, it’s been working. Even though
they have been suffering enormous losses over the last decade in
Illinois, they believe in the regulatory system, and so they’re
staying in the market. You’re not seeing the pullback like you are
in the states that are regulating their market,” Syverson explained.
Syverson said Illinois has lots of options with over 1,000 insurers.
He suggested it might be helpful to inform consumers and make it
easier for them to compare rates.
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