State leaders seek more transparency from insurance companies
[July 31, 2025]
By Ben Szalinski
Insurance companies operating in Illinois have a transparency problem
with state regulators and consumers, four top state officials alleged
Wednesday.
Illinois leaders remain frustrated by State Farm’s rate hikes on
Illinois homeowners and threatened more state regulation over premium
increases in a letter to the editor published Wednesday in the Chicago
Tribune. At the same time, Secretary of State Alexi Giannoulias launched
a campaign to push lawmakers to restrict the factors that auto insurance
companies can use to set premiums.
“The horrible, hard truth is that car insurance companies charge you
more for auto insurance based on your credit rating, the neighborhood
you live in and your age,” Giannoulias said at a news conference
Wednesday on Chicago’s South Side. “And it really doesn’t matter that
you’re a safe driver.”
The secretary of state said driving records should be the “primary
factor” companies use to set rates, and the current system is “rigged”
against drivers because it uses factors “having nothing to do with your
driving record.” He said he wants lawmakers to pass legislation banning
non-driving factors from being considered in a formula that sets a
person’s car insurance rates.
Giannoulias cited instances where a driver with a good credit score and
a conviction for driving under the influence pays less for insurance
than a driver with a clean record but low credit score. He added data
shows ZIP codes with a high minority population pay 10 times more than a
non-minority area, while people who are 70 years old pay 12% more than
60-year-olds.
“Reforming the system will make insurance more affordable for safe
drivers, otherwise the risk is that fewer Illinoisians will be able to
afford car insurance, and the number of uninsured drivers will increase
as fewer opt to pay additional costs,” he said. “This will make our
roads less safe.”
Drivers in Illinois are required to have insurance.
New campaign launched
Giannoulias’ office is launching a campaign that will include a website
where Illinois consumers can submit stories of alleged unfair rates and
discrimination by auto insurance companies. His office will also host a
series of town hall meetings around the state to gather input from
residents on changes they want lawmakers to make.
“Our end goal is to introduce and to pass legislation in the General
Assembly that will ensure fairness and transparency in insurance
ratemaking for Illinoisians,” he said.
Lawmakers have introduced legislation to ban non-driving factors from
insurance equations for several years, but the bills have gotten little
traction in Springfield. Rep. Rita Mayfield, D-Waukegan, a member of the
House Insurance Committee, accused her fellow committee members of being
“very pro-industry.”
“They are not individuals that care; they are not individuals that have
that driving push for change. They like things the way they are,” she
said.
However, the committee’s chair, Rep. Thaddeus Jones, D-Calumet City, has
introduced the bill Giannoulias wants lawmakers to pass.
Giannoulias said an aggressive lobbying campaign by the insurance
industry using “scare tactics” has caused lawmakers to avoid the issue.
In a joint statement, the Illinois Insurance Association, American
Property Casualty Insurance Association and National Association of
Mutual Insurance Companies said Illinois’ currently policies allow rates
in the state to remain lower than in other states and insurance
companies do not consider race, income, religion or ethnicity.
[to top of second column]
|
Secretary of State Alexi Giannoulias speaks at an event in
Springfield in May 2025. (Capitol News Illinois photo by Jerry
Nowicki)
“Allowing insurers to continue using a wide set of objective criteria to
determine risk and set rates will ensure this market can continue to
flourish,” the group said. “We oppose efforts to limit the actuarial
process that has driven companies out of other large states and led to
increased premiums for the majority of policy holders.”
State Farm accused of hiding information
As Giannoulias called on lawmakers to put new regulations on car
insurance companies, Gov. JB Pritzker, House Speaker Chris Welch,
D-Hillside, and Senate President Don Harmon, D-Oak Park, published a
letter in the Tribune further criticizing State Farm for increasing home
insurance costs in Illinois.
The trio said the company has not been transparent with the state about
the reason for the increase. The Bloomington-based company began raising
premiums this month for Illinois homeowners by 27.2%, citing growing
losses the company is taking from severe weather claims. But Pritzker
and the General Assembly’s leaders aren’t buying it.
“State Farm’s huge rate hike raises suspicion because it is inconsistent
with what we know,” the leaders wrote. “When insurance companies
suddenly want to increase customer premiums $750 and blame it on their
loss ratio, we simply ask them: Prove it.”
State Farm has not done that, they wrote. They said the company has not
provided the Illinois Department of Insurance with data showing losses
it is suffering, and they believe the company may be using data from
other states to justify the rate increases – a claim State Farm has
previously denied.
State Farm is “disappointed” by the governor’s and legislative leaders’
comments and said they use “extensive data” to make decisions.
“We have been transparent in our conversations with regulators and
elected officials concerning the rate filing,” the statement said. “We
offered to provide any additional information related to this increase
and did so upon request. State Farm has worked openly and honestly with
all parties in this process and looks forward to continuing to have
conversations with state leaders.”
More regulation considered
The leaders said Illinois should be like other states and lawmakers
should give the department authority to review rate increases to
determine whether they are fair or necessary.
“Momentum was already building for Illinois to change this policy and
join the rest of the nation even before State Farm’s rate hike,” the
leaders wrote. “The company’s actions now have pushed this commonsense
consumer protection into the spotlight for the General Assembly’s fall
session.”
The latest push for insurance regulation could make an already-packed
fall session busier for lawmakers. The General Assembly reconvenes in
October with major reforms and funding changes for public transportation
and possible responses to federal spending changes already on the
docket.
Capitol News Illinois is
a nonprofit, nonpartisan news service that distributes state government
coverage to hundreds of news outlets statewide. It is funded primarily
by the Illinois Press Foundation and the Robert R. McCormick Foundation. |
