American Property Casualty Insurance Association: Insurers Seek to Prevent Potential Rate Increases Resulting From New Rating Law Proposal in Illinois

CHICAGO, Illinois, May 3 (TNSgov) -- The American Property Casualty Insurance Association issued the following news release on May 2, 2023:

The American Property Casualty Insurance Association (APCIA), the Illinois Insurance Association (IIA), and the National Association of Mutual Insurance Companies (NAMIC) released the following statement in response to HB2203, otherwise known as the rate regulation bill.

"The Illinois insurance industry expressed its strong opposition to the Illinois Motor Vehicle Insurance Fairness Act, (HB2203) which was heard today in Springfield. At its core, the bill will harm consumers by reducing competition, increasing litigation and likely driving-up insurance rates for Illinois drivers.

"While proponents continue to push a bill introduced in February, the facts surrounding the measure haven't changed. The unvetted "analysis" of the state's insurance market during the pandemic cited previously as justification for the bill remains as flawed today as it was then. HB 2203 was bad public policy in February, and it is bad public policy today.

"While the bill may have been intended to address rising insurance costs, it would likely have the opposite impact. Rather than working to help make roadways safer and reduce costs, the bill seeks to change the state's insurance rating law. However, changing the rating law will not change the economics or crash statistics that drive the cost of insurance in the state.

"Illinois' current insurance rating law has benefited consumers since it was implemented in the 1970s. Additionally, Illinois has one of the most competitive insurance markets in the country and that has helped to keep costs below the national average for consumers. Increasing regulations may, in reality, tap the brakes on what is currently an efficient, consumer-focused insurance marketplace.

"HB 2203 would restrict the use of rating and underwriting tools that have been proven to benefit consumers and are accurate and effective in setting fair insurance rates. By using the variety of rating factors currently in use, insurers can assess drivers' risks more accurately and price their product based on the likelihood and severity of insurance claims. The use of these tools benefits consumers and is the fairest way to set insurance rates.

"The bill claims to seek insurance accountability and fairness. Yet, if insurers are unable to utilize risk factors when determining rates, it will lead to a one-size-fits-all approach to pricing, eliminating competition in the marketplace, and ultimately driving prices up for all consumers. As prices increase for all Illinois consumers, access and affordability will steeply decline.

"Now is not the time to enact legislation that could result in increased premiums for consumers. Doing so would only create severe barriers within this time-tested insurance system that will make things more difficult and force consumers to subsidize the risk of others. Not only could this legislation have serious negative consequences for many Illinois drivers, it will adversely affect what is currently a healthy and competitive state auto insurance market. "

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Original text here: https://www.apci.org/media/news-releases/release/75790/