Bill to regulate homeowners’ insurance rates fails on final day of veto
session
[November 04, 2025]
By Peter Hancock
SPRINGFIELD — The Illinois House rejected a bill Thursday that would
have given the state Department of Insurance authority to regulate
homeowners’ insurance rates.
Gov. JB Pritzker had called for the legislation in July after State Farm
Insurance announced it was raising rates for property and casualty
insurance in Illinois an average 27.2%.
The company attributed that hike to losses it sustained from
weather-related disasters in Illinois. But Pritzker and legislative
leaders suggested the company was shifting the cost of disasters in
other states onto the backs of Illinois consumers.
“As states across the country face even more extreme weather than we do,
we need to make sure Illinois homeowners are not paying for losses that
companies experience in other states,” Pritzker said in an op-ed column
published in the Chicago Tribune July 30 that was cosigned by House
Speaker Emanuel “Chris” Welch and Senate President Don Harmon.
While State Farm insisted the Illinois rate hikes were the direct result
of losses the company incurred in Illinois, Pritzker and Insurance
Director Ann Gillespie accused the company of refusing to provide any
evidence to support that claim.
At the same time, they used the controversy to highlight the fact that
Illinois is the only state in the nation without a law prohibiting
excessive, inadequate or discriminatory insurance premiums, and the only
state without the authority to review insurance rates for either
homeowners’ or auto insurance.
“I think that’s an important protection for consumers,” Gillespie said
in an Oct. 14 interview with Capitol News Illinois. “It also helps to
pretend against any risk of cost shifting, because if we’re the only one
not regulating it, we make a nice target for any potential cost
shifting.”
Gillespie said she did not have direct evidence that State Farm or any
other insurance company was shifting the cost of losses in other states
to Illinois customers. But she did say, “I see things that raise
questions, and without the ability to review rates, we cannot dig in, we
cannot compel transparency to be able to answer those questions.”
The proposal was contained in a pair of Senate amendments to an
unrelated insurance bill that had passed the House in April. It would
have required that insurance companies give customers 60 days’ advance
notice of any premium increase greater than 10%.
The bill also would have required companies to use Illinois-specific
data on insurance losses to justify rate increases for Illinois
customers. And it would have prohibited companies from charging
“excessive, inadequate, or unfairly discriminatory” premiums for
homeowners’ insurance.
Although the bill would not have required insurance companies to get
prior approval from the department for any changes in premiums, it would
have given the department authority to review rate changes after they
were put into effect. It also would have established a judicial review
process for companies to appeal any finding that its rates were
unreasonable.
[to top of second column]
|
Senate President Don Harmon talks to state Sen. Michael Hastings on
the floor of the Illinois Senate on Thursday, Oct. 30, 2025.
(Capitol News Illinois photo by Jerry Nowicki)
But if those appeals were rejected, the bill would have authorized the
department to order companies to refund excessive premiums back to their
customers.
Opposition on the floor
Rep. Jeff Keicher, R-Sycamore, argued those provisions amounted to a
radical shift in Illinois’ regulatory environment, which ultimately
would have led to higher premiums for consumers.
“This bill will turn the industry on its head, cause uncertainty in a
framework that’s never been tried before, and every single one of your
constituents who has a homeowner’s policy will pay extra because of the
uncertainty that It creates,” Keicher said. “It’s the uncertainty of the
rate environment that we are worried about here.”
The amendments passed through the Senate on Thursday afternoon on a vote
of 41-15. But a subsequent vote in the House to concur with those
amendments fell four votes short of the 60 needed for passage. Six House
Democrats were recorded as voting “present.”
Bills are rarely defeated on the floor of either chamber because leaders
are usually careful not to call bills for a vote unless they are
confident there are enough votes to pass them. And on those occasions
when a vote appears to be coming up short, the bill’s sponsor will
typically make a motion just before the final tally is recorded to delay
final consideration of the bill so it can remain alive and negotiations
can continue.
Sen. Michael Hastings, D-Frankfort, the chief sponsor of the insurance
bill, said he plans to reintroduce the bill in the 2026 session. He
attributed its defeat in the veto session to last-minute lobbying by the
insurance industry.
“The insurance industry, you want to talk about one of the strongest
lobbying arms at the Capitol,” he said in an interview Monday.
“Ninety-nine percent of that piece of legislation was agreed upon.”
Kevin Martin, executive director of the Illinois Insurance Association,
applauded lawmakers for not passing the bill, saying it created “an
extreme prior-approval system unlike anywhere else in the country,” and
that it would have driven up costs for Illinois consumers.
“This bill would have jeopardized Illinois’ competitive insurance market
and had the potential to drive up premium costs for Illinois families by
20%,” Martin said in a statement.
Pritzker’s office did not immediately respond to a request for comment.
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. |
