Illinois Lawmakers Revive bid to Rein in Insurance Rates

Illinois lawmakers are gearing up to take another swing at one of the most closely watched insurance overhauls in years, reviving a bill that would give state regulators new authority to curb homeowners premium hikes.

The push comes after Bloomington, Illinois-based State Farm raised Illinois homeowners rates an average of 27.2 percent last year, citing mounting weather-related losses. Capitol News Illinois reported that Gov. JB Pritzker seized on the increase to call for tighter oversight, arguing insurers shouldn’t be able to shift the cost of disasters in places like California and Florida onto Illinois property owners. In December, Allstate announced that it plans an average 8.8 percent hike in Illinois homeowners insurance premiums starting Feb. 24, affecting over 209,000 policyholders, as previously reported in The Real Deal.

A measure granting the Illinois Department of Insurance authority to review and reject excessive rate increases cleared the Senate during the fall veto session, but fell four votes short in the House. Many assumed it was dead, but chief House sponsor Rep. Robyn Gabel refiled a motion to concur, according to the publication, teeing up a potential second vote as the General Assembly returns to Springfield for the 2026 session.

Industry groups say they’re bracing for round two. Kevin Martin, executive director of the Illinois Insurance Association, told the outlet that insurers have heard the bill could be called as early as next week.

At the heart of the fight is Illinois’ status as a “use-and-file” state, allowing insurers to implement new rates immediately and submit them to regulators afterward. Supporters of the bill note Illinois is the only state that lacks a law explicitly barring “excessive, inadequate or unfairly discriminatory” premiums and does not require prior approval of rate changes, according to the publication.

The proposal would keep the use-and-file framework, but empower regulators to review rates after they take effect and order refunds if they’re found to violate state standards. It would also require 60 days’ notice for hikes of 10 percent or more and mandate the use of Illinois-specific loss data to prevent so-called cost-shifting.

Insurers argue the measure goes too far, particularly because it sets no time limit on how far back regulators could look when reviewing rates, according to the outlet. They also reject the allegation that out-of-state losses are baked into Illinois premiums.

— Eric Weilbacher