Illinois Senate passes bill to regulate auto insurance rates
(The Center Square) – The Illinois Senate has approved legislation to regulate auto insurance rates, but a former Illinois Department of Insurance director says the proposal will result in higher premiums.
After adding a second amendment to Senate Bill 714 on Wednesday, state Sen. Ram Villivalam, D-Chicago, said his legislation prohibits auto insurance rates from being excessive or discriminatory.
The Illinois Secretary of State’s office expressed support for the bill at a Senate Insurance Committee hearing on Tuesday.
Amy Williams, senior legal advisor at the secretary’s office, said more than 630,000 Illinoisans per year are driving without auto insurance required by law.
“Drivers in Illinois are facing hardships due to increasing automobile insurance rates, and they want oversight to ensure that their rates are not excessive or unfairly discriminatory,” Williams said.
Secretary of State Alexi Giannoulias launched a campaign last summer to prevent insurers from setting rates based on age, credit score or zip code and to allow more state oversight.
“We’re going to treat this like a political campaign,” Giannoulias said at the time.
Jennifer Hammer spoke on behalf of the National Association of Mutual Insurance Companies and said SB 714 increases the regulatory authority of the Illinois Department of Insurance.
“What we’ve seen is that when you increase the regulatory authority of a state department, you actually see an increase in premiums to those consumers,” Hammer said.
Hammer is a former director of the Illinois Department of Insurance.
Speaking on behalf of the American Property Casualty Insurance Association, lobbyist Eric Madiar said Illinois auto insurance rates are 18% below the national average.
“In this sense, it’s been good to be below average. We’re not going to head in that direction any longer. We’re going to have higher costs, less affordability,” Madiar said.
Madiar said a rigid regulatory system will not result in lower costs.
The measure passed out of committee and was debated on the Senate floor Wednesday afternoon.
State Sen. Steve McClure, R-Springfield, said Illinois currently has the sixth-cheapest auto insurance rates in the country.
“Why would we want to do anything to spoil that?” McClure asked.
Villivalam said his bill would make the process a little better for Illinois residents.
The measure passed by a vote of 42-14 and now goes to the Illinois House.
Sunny
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