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Illinois bill on auto insurance rate-setting rules draws industry's ire

The Motor Vehicle Insurance Fairness Act would prohibit certain underwriting and rating actions deemed discriminatory.

In a joint statement, the National Association of Mutual Insurance Companies, American Property Casualty Insurance Association, and the Illinois Insurance Association reported that “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.” (Photo of Springfield, Illinois by Henryk Sadura/Shutterstock ) In a joint statement, the National Association of Mutual Insurance Companies, American Property Casualty Insurance Association, and the Illinois Insurance Association reported that “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.” (Photo of Springfield, Illinois by Henryk Sadura/Shutterstock )

The Illinois legislature is considering a proposal that would restrict auto insurance underwriting and rating practices that use nondriving factors, such as credit scores, and increase the Illinois Department of Insurance’s ability to reject or modify rate increases.

Dubbed the Motor Vehicle Insurance Fairness Act, the bill would prohibit insurance companies from refusing to issue or renew a personal auto policy based on prohibited factors, including sex or gender, marital status, race, creed, national origin, religion, age, occupation, education level, home ownership, credit reports or scores, the absences of prior insurance or “any measure of a consumer’s price elasticity of demand,” according to the bill’s text.

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Steve Hallo

Steve Hallo

Steve Hallo is managing editor of PropertyCasualty360.com. He can be reached at [email protected].  

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