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

CHICAGO, Illinois, Feb. 27 -- The American Property Casualty Insurance Association issued the following news release on Feb. 26, 2024:

The American Property Casualty Insurance Association (APCIA), the Illinois Insurance Association (IIA), and National Association of Mutual Insurance Companies (NAMIC) released the following statement in response to HB4611 and HB4767, which were heard today by the Illinois House Insurance Committee.

"The Illinois insurance industry today expressed its strong opposition to both HB 4611 and 4767.

"These bills, while intended to address rising insurance costs, would have the opposite impact and likely harm consumers by reducing competition, and increasing costs for Illinois drivers.

"Insurance rates are first and foremost a function of claims and their costs. Rather than working to help make roadways safer and reduce costs, these bills seek to change the state's insurance rating law and prohibit the use of factors that are highly predictive of the risk of a future loss.

"Prohibiting highly accurate rating factors, as HB 4767 does, disconnects price from the risk of future loss, which necessarily means high risk drivers will pay less and lower risk drivers will pay more than they otherwise would pay. Additionally, changing the rating law and factors used will not change the economics or crash statistics that are the primary drivers of the cost of insurance in the state.

"In fact, increasing regulations would undermine the state's consumer-focused insurance marketplace, which has benefited consumers and for many decades helped to keep costs below the national average for consumers.

"To ensure fairness in insurance pricing, every consumer should pay a rate that accurately reflects the cost of providing insurance to that customer and similarly situated consumers. Insurance pricing is fair when the rate paid accurately reflects the likelihood that future losses will occur and the likely cost of those losses.

"When the insurance industry sets rates or makes underwriting decisions based on objective data and risk factors that accurately predict loss, lower-risk customers are not overcharged for insurance, all customers pay a rate that matches their risk of loss.

"Enacting this legislation now could result in increased premiums for consumers when many can least afford it."

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About:

The American Property Casualty Insurance Association (APCIA) is the primary national trade association for home, auto, and business insurers. APCIA promotes and protects the viability of private competition for the benefit of consumers and insurers, with a legacy dating back 150 years. APCIA members represent all sizes, structures, and regions--protecting families, communities, and businesses in the U.S. and across the globe.

The Illinois Insurance Association is a state trade association for property casualty insurance companies of all sizes operating in this state. The IIA strives to preserve a positive, competitive legislation and regulatory climate that responsibly serves the needs of Illinois consumers.

The National Association of Mutual Insurance Companies consists of nearly 1,500 member companies. NAMIC membership reflects many of the country's largest national insurers as well as regional and local mutual insurance companies on main streets across America. NAMIC members write $391 billion in annual premiums and account for 68 percent of homeowners, 56 percent of the automobile, and 31 percent of the business insurance markets.

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The American Property Casualty Insurance Association (APCIA) is the primary national trade association for home, auto, and business insurers. APCIA promotes and protects the viability of private competition for the benefit of consumers and insurers, with a legacy dating back 150 years. APCIA members represent all sizes, structures, and regions--protecting families, communities, and businesses in the U.S. and across the globe.

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Original text here: https://www.apci.org/media/news-releases/release/79083/