(The Center Square) – Two days after Secretary of State Alexi Giannoulias announced a bid for Chicago mayor, he joined Gov. J.B. Pritzker at the signing of two insurance-related bills Tuesday morning, after he said his support wasn’t political.
The bills allow the Illinois Department of Insurance to regulate and review insurance companies over proposed policy rate hikes for homeowner and auto insurance.
Pritzker said the bills are not out of the ordinary and are needed to provide fairness and affordability to residents.
“This new law prohibits companies from charging premiums that are deemed excessive or with terms that are inadequate or unfairly discriminatory,” Pritzker said. “Most importantly, Illinois regulators now have the tools to enforce those common-sense principles with the power to object to rate increases so consumers won't be left holding the bag.”
IDOI Director Ann Gillespie explained what authority the bills will provide.
“We know too that there are legitimate reasons for insurance rates to rise,” Gillespie said. “The department will have the authority to deny rates that are not actuarily sound. And the department will have the authority to determine whether rates are unfairly discriminatory and to take action if they are, including rebates.”
While officials argue the laws will provide affordability, industry groups have said the laws will have an inverse effect.
The Illinois Insurance Association, American Property Casualty Insurance Association, and National Association of Mutual Insurance Companies released a statement after Tuesday’s signing.
“This shift will make it harder for insurers to respond in real time to market conditions and adjust rates up or down based on actual claims experience,” the statement said.
Pritzker contended that isn’t the case.
“There aren't any additional costs to be frank. We're not – nobody's getting closed down. Nobody's saying that they can't raise rates if there is a need,” Pritzker said. “They're already producing the information that's required if they truly need to raise rates because they can't cover those costs with the premiums that they charge.”
Giannoulias said the cost of auto insurance rates being raised without oversight while insurance is mandatory for drivers is unfair,and 48 other states similarly regulate insurers.
“The cost of mandatory auto insurance has become absolutely unsustainable, forcing impossible choices between paying for coverage and paying for life's basic necessities,” Giannoulias said.
Giannoulias previously told The Center Square he was "offended" by a remark made by Rep. Jeff Keicher, R-Sycamore, that the bills were being used as political fodder before the bill passed the House.
"We shouldn’t be saddling the Illinois resident who has auto insurance, has automobiles, so that somebody else can pursue an additional political office,” Keicher said in May.
Both laws take effect July 1.
Jim Talamonti contributed to this story.
