SB2698 104TH GENERAL ASSEMBLY

LRB104 15445 BAB 28601 b

104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
SB2698

Introduced 10/14/2025, by Sen. Michael E. Hastings and Meg Loughran Cappel

SYNOPSIS AS INTRODUCED:

215 ILCS 5/Art. XLVIII heading new
215 ILCS 5/1801 new
215 ILCS 5/1805 new
215 ILCS 5/1810 new
215 ILCS 5/1815 new
215 ILCS 5/1830 new
215 ILCS 5/1835 new
215 ILCS 5/1840 new
215 ILCS 5/1845 new

Amends the Illinois Insurance Code. Creates the Rates Article. Provides that the Article may be cited as the Insurance Rate Fairness and Consumer Protection Law. Sets forth provisions requiring insurers to receive prior approval for rate changes from the Department of Insurance on and after January 1, 2028. Provides that no insurer shall increase premiums by more than 10% per year for any policyholder without exceptional justification. Requires the Department to conduct market conduct examinations of insurers at least once every 3 years to ensure compliance with the Article. Establishes penalty and enforcement provisions for violations of the Article. Provides that the Department may adopt rules necessary to implement and enforce the requirements of the Article. Effective January 1, 2028.

A BILL FOR

AN ACT concerning regulation.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Illinois Insurance Code is amended by adding Article XLVIII as follows:

(215 ILCS 5/Art. XLVIII heading new)

ARTICLE XLVIII. RATES

(215 ILCS 5/1801 new)

Sec. 1801. Short title. This Article may be cited as the Insurance Rate Fairness and Consumer Protection Law.

(215 ILCS 5/1805 new)

Sec. 1805. Purpose. The purpose of this Law is to limit unjustified increases in homeowners and automobile insurance premiums, ensure transparency in rate-setting practices, and grant the Department of Insurance greater oversight authority to protect consumers.

(215 ILCS 5/1810 new)

Sec. 1810. Definitions. As used in this Law:

"Department" means the Department of Insurance.

"Director" means the Director of Insurance.

"Insurer" means an insurance company offering homeowners insurance policies or automobile insurance policies within the State.

(215 ILCS 5/1815 new)

Sec. 1815. Prior approval requirement for rate changes.

(a) This Section is operative on and after January 1, 2028.

(b) Insurers must submit a request for approval to the Department for any proposed rate increase for homeowners insurance premiums or automobile insurance premiums.

(c) The Department shall review the rate request within 60 days after submission.

(d) If the Department does not make a determination within the 60-day review period, the request shall be deemed denied until further review.

(e) Insurers shall not implement any rate increase without prior written approval from the Department.

(215 ILCS 5/1830 new)

Sec. 1830. Rate increase limitations.

(a) No insurer shall increase premiums by more than 10% per year for any policyholder without exceptional justification.

(b) Exceptional justification must include evidence of increased claims related to natural disasters, regulatory changes, or unforeseen market shifts.

(c) The Department shall have sole discretion to determine whether the exceptional justification is valid.

(215 ILCS 5/1835 new)

Sec. 1835. Regular market conduct examinations.

(a) The Department shall conduct market conduct examinations of insurers at least once every 3 years to ensure compliance with this Law.

(b) Examinations shall assess the fairness of rate-setting practices, transparency of filings, and adherence to approved rates.

(c) The Department may issue corrective actions, fines, or sanctions for violations discovered during market conduct examinations.

(215 ILCS 5/1840 new)

Sec. 1840. Penalties and enforcement.

(a) Any insurer that submits false or misleading information in a rate request pursuant to Section 1815 shall be subject to a penalty of $100,000 per offense.

(b) Any insurer that implements unapproved rate increases or fails to comply with this Law shall be subject to penalties of up to $250,000 per violation.

(c) Any insurer found in repeated noncompliance of this Law shall be penalized $1,000,000, and the Department may suspend the insurer's license to operate for up to 12 months. If an insurer's license to operate was suspended under this subsection and the insurer continues to violate the provisions of this Law, regardless of whether the violation occurs after the insurer's license has been restored, the Department may permanently revoke the insurer's license to operate.

(d) Policyholders affected by unapproved rate increases shall be entitled to reimbursement by the insurer of any overpaid premiums plus an additional penalty in an amount equal to 30% of the amount of the overpaid premiums.

(215 ILCS 5/1845 new)

Sec. 1845. Rulemaking authority. The Department may adopt rules necessary to implement and enforce the requirements of this Law.

Section 99. Effective date. This Act takes effect January 1, 2028.