HB4611ham004 103RD GENERAL ASSEMBLY

Rep. Thaddeus Jones

Filed: 4/17/2024

10300HB4611ham004 LRB103 37111 RPS 72522 a

AMENDMENT TO HOUSE BILL 4611

AMENDMENT NO. ______. Amend House Bill 4611 by replacing everything after the enacting clause with the following:

"Section 5. The Illinois Insurance Code is amended by changing Section 424 and by adding Sections 143.19.4, 143.19.5, and 143.19.6 as follows:

(215 ILCS 5/143.19.4 new)

Sec. 143.19.4. Standards applicable to certain vehicle insurance rates.

(a) This Section applies to insurance on risks in this State described in clause (b) of Class 2 and clause (e) of Class 3 of Section 4 of this Code.

(b) The following standards shall apply to the making and use of rates pertaining to the classes of insurance to which this Section applies:

(1) Rates shall not be excessive, inadequate, or unfairly discriminatory.

(2) An insurer shall use methods based on sound actuarial principles.

(3) A rate is excessive if it is likely to produce a profit that is unreasonably high for the insurance provided.

(4) A rate is not inadequate unless the rate is insufficient to sustain projected losses and expenses in the class of insurance to which it applies or the use of such rate has or, if continued, will endanger the solvency of the insurer using it, or have the effect of substantially lessening competition or the tendency to create a monopoly in any market.

(5) Unfair discrimination in insurance rates is prohibited. Unfair discrimination exists if, after allowing for practical limitations, price differentials fail to reflect equitably the differences in expected losses and expenses. If unfair discrimination is found, the Department of Insurance may require corrective action from the insurance producer to take effect in the following calendar year. The Department of Insurance may also issue a fine of $5,000 per instance of unfair discrimination.

(c) Nothing in this Section shall be construed as a requirement on the Department to review or approve rating information regularly filed with the Department or to limit or define the scope of the Department's authority to review that rating information. Upon request, an insurance company is required to provide the Department any information the Department deems relevant to a company's compliance with this Section.

(215 ILCS 5/143.19.5 new)

Sec. 143.19.5. The Automobile Insurance Affordability and Availability Task Force.

(a) The Automobile Insurance Affordability and Availability Task Force is created to study and report on the Illinois automobile insurance marketplace and regulatory environment and the impacts of current practices and regulations on the overall availability and affordability of automobile insurance. The report shall incorporate data and conclusions from other jurisdictions, but shall focus on providing analyses and recommendations specific to the Illinois marketplace. The Task Force shall, at minimum, consider the following issues and may make recommendations to address any findings based on its consideration of those issues:

(1) National trends and data on availability and affordability of automobile insurance in Illinois and other jurisdictions.

(2) Rate approval regimes in other jurisdictions, including their relative impact on affordability and availability, time and cost efficiency for regulators and taxpayers, and expected impact on residual markets.

(3) Current automobile insurance rating practices in Illinois and the impact a rate review mechanism would have on premiums in that market.

(4) Inflationary pressures on insurance affordability, including, but not limited to, the cost of vehicle parts, vehicle repair labor, and medical costs.

(5) Driving behavior patterns as well as trends relating to driving under the influence of alcohol, speeding, distracted driving, red light enforcement, and other enforcement, including, but not limited to, the analysis and recommendations identified in the 2024 Roadmap to Safety by Advocates for Highway and Auto Safety.

(6) Automobile-related tort and litigation trends, including, but not limited to, the effect of assignments of benefits.

(7) The impact prohibiting rate-making based on credit score, gender, or lack of prior insurance would have on automobile insurance premiums in Illinois.

(8) The impact that Section 143.19.6 has on the automobile insurance marketplace.

The Task Force shall compile a report on its findings and submit that report to the Governor and the General Assembly on or before January 1, 2028.

(b) The Task Force, with respect to consumer education, shall review, assess, develop, and make available to consumers educational materials based on Regulatory Resources for Consumers on Personal Lines Pricing and Underwriting and the Consumers Guide to Auto Insurance published by the National Association of Insurance Commissioners.

(c) The Task Force shall include the following individuals:

(1) The Director of Insurance or the Director's designee.

(2) The Secretary of State or the Secretary's designee.

(3) The Secretary of Transportation or the Secretary's designee.

(4) One member of the Senate, appointed by the President of the Senate.

(5) One member of the Senate, appointed by the Senate Minority Leader.

(6) One member of the House of Representatives, appointed by the Speaker of the House of Representatives.

(7) One member of the House of Representatives, appointed by the Minority Leader of the House of Representatives.

(8) One representative from a non-profit consumer organization that serves to protect the interests of Illinois consumers as it relates to the regulation of insurance, appointed by the Governor.

(9) One representative from an organization representing the interests of minority or economically disadvantaged populations, appointed by the Governor.

(10) One representative from a trade organization representing the insurance industry in Illinois, appointed by the Governor.

(11) One representative from a national trade organization representing property and casualty insurers, appointed by the Governor.

(12) One representative from a national trade organization representing mutual insurance companies, appointed by the Governor.

(13) One representative from a national trade association representing insurance compliance professionals, appointed by the Governor.

(14) One representative from a trade organization representing insurance agents, appointed by the Governor. The appointments under paragraphs (4) through (14) of this subsection shall be made no later than December 31, 2025. The Director of Insurance or the Director's designee shall serve as the Chair of the Task Force.

(d) Subject to appropriation, the Office of Risk Management and Insurance Research at the University of Illinois shall provide technical support and guidance to the Task Force on matters of insurance marketplace analysis, including conducting market studies as requested by the Task Force.

(e) Subject to appropriation, the Task Force shall engage with a third-party actuarial firm to oversee the technical analysis of the Illinois insurance market and the determinations of what impacts, if any, rate review and the prohibition of rate-making based on factors set forth in paragraph (7) of subsection (a) would have on the Illinois insurance market.

(f) A majority of the voting members of the Task Force constitutes a quorum for the transacting of business. Official action by the Task Force requires the approval of a majority of the members of the Task Force.

(g) The Task Force shall meet at least quarterly but may meet more often if needed to fulfill any of its duties.

(h) The Task Force is dissolved after it submits the report required under subsection (a), and this Section is repealed July 1, 2028.

(215 ILCS 5/143.19.6 new)

Sec. 143.19.6. Use of credit score and age in determining rates or premiums for certain vehicle insurance; prohibited.

(a) An individual's credit score shall not be considered when determining rates or premiums for insurance on risks in this State described in clause (b) of Class 2 and clause (e) of Class 3 of Section 4 of this Code.

(b) A policy of automobile insurance, including any class of motor vehicle coverage, may not be canceled by the insurer solely because the insured has reached the age of 65 years so long as the insured has a valid Illinois driver's license. An insurer shall not refuse to issue a renewal policy or increase the premium for any policy solely because an insured has reached the age of 65 years.

(c) This Section is repealed January 1, 2028.

(215 ILCS 5/424) (from Ch. 73, par. 1031)

Sec. 424. Unfair methods of competition and unfair or deceptive acts or practices defined. The following are hereby defined as unfair methods of competition and unfair and deceptive acts or practices in the business of insurance:

(1) The commission by any person of any one or more of the acts defined or prohibited by Sections 134, 143.24c, 147, 148, 149, 151, 155.22, 155.22a, 155.42, 236, 237, 364, 469, and 513b1 of this Code.

(2) Entering into any agreement to commit, or by any concerted action committing, any act of boycott, coercion or intimidation resulting in or tending to result in unreasonable restraint of, or monopoly in, the business of insurance.

(3) Making or permitting, in the case of insurance of the types enumerated in Classes 1, 2, and 3 of Section 4, any unfair discrimination between individuals or risks of the same class or of essentially the same hazard and expense element because of the race, color, religion, or national origin of such insurance risks or applicants. The application of this Article to the types of insurance enumerated in Class 1 of Section 4 shall in no way limit, reduce, or impair the protections and remedies already provided for by Sections 236 and 364 of this Code or any other provision of this Code.

(4) Engaging in any of the acts or practices defined in or prohibited by Sections 154.5 through 154.8 of this Code.

(5) Making or charging any rate for insurance against losses arising from the use or ownership of a motor vehicle which requires a higher premium of any person by reason of his physical disability, race, color, religion, gender, or national origin.

(6) Failing to meet any requirement of the Unclaimed Life Insurance Benefits Act with such frequency as to constitute a general business practice.

(Source: P.A. 102-778, eff. 7-1-22.)

Section 10. The Illinois Vehicle Code is amended by adding Section 7-612 as follows:

(625 ILCS 5/7-612 new)

Sec. 7-612. Exemption upon demonstration of financial need. Upon a verified demonstration of financial need by the owner, the Secretary may waive the reinstatement fee established in Section 7-606.

Section 99. Effective date. This Act takes effect January 1, 2025, except that Section 143.9.16 of the Illinois Insurance Code takes effect January 1, 2026.".