Pritzker Advocates for Homeowners’ Insurance Oversight After Bill Fails
Illinois Governor JB Pritzker has renewed his call for legislation aimed at increasing oversight of homeowners’ insurance rates following a recent setback in the Illinois House. The proposal, which would require insurance companies to provide justifications for significant rate hikes, failed to pass despite gaining support in the Democratic-controlled Senate. Pritzker emphasized that the absence of regulatory authority leaves homeowners vulnerable to sudden premium increases, such as the over 27% hike announced by State Farm this summer.
During an event in Chicago, Pritzker stated, “We’re one of very few states that doesn’t have any limits on what an insurance company can charge.” He argued that such steep increases should be subject to review by state regulators to ensure fairness. The governor expressed concern that without proper scrutiny, homeowners might be facing unjustified rate increases. “We don’t know if homeowners are being gouged, and that’s what it feels like,” he added.
The bill in question, which would have empowered the Illinois Department of Insurance to review and challenge excessive rate increases, passed in the Senate with a 41-15 vote but fell short in the House with a 56-37 tally, just four votes shy of approval. The defeat marked a rare setback for Pritzker in a legislature typically favorable to his administration.
Several House Democrats, including Thaddeus Jones, chair of the House Insurance Committee, either did not support the bill or voted against it. Jones argued that the legislation failed to address rising auto insurance rates, which he deemed a priority for consumer protection. “To hell with what the industry says, we want to protect the consumers,” he stated during the debate.
The proposed legislation included a requirement for insurers to notify both policyholders and the state at least 60 days before implementing premium increases exceeding 10%. This provision was designed to give homeowners adequate time to explore more affordable alternatives. House Majority Leader Robyn Gabel highlighted the emotional toll of unexpected rate hikes, noting that such increases could threaten homeowners’ ability to maintain their properties.
State Farm, the largest homeowners’ insurer in Illinois, opposed the legislation, arguing it would create a less competitive market and could ultimately drive up costs. Spokesperson Gina Morss-Fischer criticized the governor’s push for increased regulatory power, stating, “Instead of tackling the root of the problem — inflation and more weather-related losses — Governor Pritzker wants to give his appointed insurance commissioner more power.”
The insurance giant has cited significant losses from weather-related claims as a rationale for its rate increases, including a reported $1.26 in claims paid for every $1 in premiums collected last year. In addition, the company faced claims totaling over $4.2 billion from California homeowners impacted by wildfires.
In a further complication, Illinois Attorney General Kwame Raoul filed a lawsuit against State Farm last month, alleging non-compliance with a regulatory examination of its homeowners’ insurance business. Despite this, Morss-Fischer asserted that the company has provided sufficient actuarial support for its rate increases.
Republican lawmakers also voiced concerns about the bill, suggesting it represented overregulation of the insurance industry. Rep. Jeff Keicher, a State Farm agent, argued that the legislation would disrupt the industry without addressing underlying cost issues.
Following the bill’s defeat, Senate President Don Harmon expressed disappointment but remained hopeful that the House would revisit the issue in the spring. “A lot of moving pieces at the very end,” he remarked, reflecting on the legislative process.
As discussions continue, the future of homeowners’ insurance oversight in Illinois remains uncertain, with advocates for consumer protection urging renewed attention to the issue.
