103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
HB2203

 

Introduced 2/8/2023, by Rep. Will Guzzardi

 

SYNOPSIS AS INTRODUCED:
 
215 ILCS 5/143.19.4 new

    Amends the Illinois Insurance Code. Provides that the amendatory Act may be referred to as the Motor Vehicle Insurance Fairness Act. Provides that no insurer or insurance company group shall refuse to issue or renew a private passenger motor vehicle liability policy based in whole or in part on specified prohibited underwriting or rating factors. Sets forth factors that are prohibited with respect to automobile liability insurance underwriting and rating. Provides that every insurer or insurance company group selling automobile liability insurance in the State shall demonstrate that its marketing, underwriting, rating, claims handling, fraud investigations, and any algorithm or model used for those business practices do not disparately impact any group of customers based on race, color, national or ethnic origin, religion, sex, sexual orientation, disability, gender identity, or gender expression. Provides that no rate shall be approved or remain in effect that is excessive, inadequate, unfairly discriminatory, or otherwise in violation of the provisions. Provides that every insurer that desires to change any rate shall file a complete rate application with the Director of Insurance. Provides that all information provided to the Director under the provisions shall be available for public inspection. Provides that any person may initiate or intervene in any proceeding permitted or established under the provisions and challenge any action of the Director under the provisions. Provides that the Department of Insurance shall adopt rules. Provides that all insurers subject to the provisions shall be assessed a fee of 0.05% of their total earned premium from the prior calendar year, and that the fee shall be payable to the Department no later than July 1 of each calendar year and shall be used by the Department to implement the provisions.


LRB103 25405 BMS 51752 b

 

 

A BILL FOR

 

HB2203LRB103 25405 BMS 51752 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 1. This Act may be referred to as the Motor Vehicle
5Insurance Fairness Act.
 
6    Section 5. The Illinois Insurance Code is amended by
7adding Section 143.19.4 as follows:
 
8    (215 ILCS 5/143.19.4 new)
9    Sec. 143.19.4. Motor vehicle insurance fairness.
10    (a) Definition. As used in this Section, "proceeding"
11includes the filing of any rate, rule, or form and any
12rulemaking conducted pursuant to this Section.
13    (b) Prohibitions; refusal to insure.
14        (1) No insurer or insurance company group shall refuse
15    to issue or renew a private passenger motor vehicle
16    liability policy, bond, or any other insurance based on
17    the ownership or operation of a motor vehicle based in
18    whole or in part on any of the prohibited underwriting and
19    rating factors set forth in subsection (c), or use those
20    factors to determine the terms of coverage or placement in
21    a particular affiliate within an insurance company group.
22        (2) Classification plans, rating plans, rating tier

 

 

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1    placement factors, scoring models, rules, rates, premiums,
2    or any other method of establishing the premium to be paid
3    by an automobile insurance policyholder or covered driver,
4    and the modification thereof, based in whole or in part on
5    any of the prohibited underwriting and rating factors in
6    subsection (c) are unfairly discriminatory.
7    (c) Prohibited factors. With respect to automobile
8liability insurance underwriting and rating, the use of the
9following factors shall be prohibited:
10        (1) sex or gender;
11        (2) marital status;
12        (3) race;
13        (4) creed;
14        (5) national origin;
15        (6) religion;
16        (7) age;
17        (8) employment or occupation;
18        (9) education level attained;
19        (10) home ownership;
20        (11) consumer credit information or other credit-based
21    score;
22        (12) the absence of prior insurance;
23        (13) the amount or provider of prior insurance
24    coverage;
25        (14) any measure of a consumer's price elasticity of
26    demand; and

 

 

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1        (15) the level of income or wealth.
2    (d) Prohibited business practices. Every insurer or
3insurance company group selling automobile liability insurance
4in Illinois shall demonstrate that its marketing,
5underwriting, rating, claims handling, fraud investigations,
6and any algorithm or model used for those business practices
7do not disparately impact any group of customers based on
8race, color, national or ethnic origin, religion, sex, sexual
9orientation, disability, gender identity, or gender
10expression.
11    (e) Prior approval of rates.
12        (1) No rate shall be approved or remain in effect that
13    is excessive, inadequate, unfairly discriminatory, or
14    otherwise in violation of this Section. In considering
15    whether a rate is excessive, inadequate, or unfairly
16    discriminatory, no consideration shall be given to the
17    degree of competition and the Director shall consider
18    whether the rate mathematically reflects the insurance
19    company's investment income.
20        (2) Every insurer that desires to change any rate
21    shall file a complete rate application with the Director.
22    A complete rate application shall include all data
23    necessary to justify the proposed rate and such other
24    information as the Director may require. The applicant
25    shall have the burden of proving that the requested rate
26    change is justified and meets the requirements of this

 

 

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1    Section.
2        (3) The Director shall notify the public of any
3    application by an insurer for a rate change. The
4    application shall be deemed approved 60 days after public
5    notice unless:
6            (A) the Director disapproves the application;
7            (B) a consumer or the consumer's representative
8        requests a hearing within 45 days after the public
9        notice and the Director grants the hearing, or the
10        Director determines not to grant the hearing and
11        issues written findings in support of that decision;
12        or
13            (C) the Director, on the Director's own motion,
14        determines to hold a hearing. If the proposed rate
15        adjustment exceeds 7% of the then-applicable rate for
16        personal lines insurance or 15% for commercial lines
17        insurance, then the Director must hold a hearing upon
18        a timely request. If the application is incomplete or
19        otherwise subject to disapproval, then the Director
20        may extend the application review process by up to 60
21        days with the agreement of the applicant.
22    (f) Right of the public to inspect rates. All information
23provided to the Director pursuant to this Section shall be
24available for public inspection.
25    (g) Right of the public to participate.
26        (1) Any person may initiate or intervene in any

 

 

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1    proceeding permitted or established pursuant to this
2    Section and challenge any action of the Director under
3    this Section.
4        (2) The Director or a court shall award reasonable
5    advocacy and witness fees and expenses to any person who
6    demonstrates that the person represents the interests of
7    consumers and that the person made a substantial
8    contribution to the adoption of any order, regulation, or
9    decision by the Director or a court. Where such advocacy
10    occurs in response to a rate application, the award shall
11    be paid by the applicant.
12    (h) Rules.
13        (1) The Department shall, no later than 90 days after
14    the effective date of this amendatory Act of the 103rd
15    General Assembly, adopt rules that guide the filing and
16    approval of rates, rules, and forms pursuant to this
17    Section. The Director shall develop formulas for
18    evaluating rates and any rules or forms that impact rates
19    that will be used to determine whether to approve or
20    disapprove any filing.
21        (2) Until the rules described in paragraph (1) have
22    taken effect, no insurer or insurance advisory
23    organization may file for a change in any rate, rule, or
24    form that would result in a rate increase. If, before the
25    adoption of the rules described in paragraph (1), an
26    insurer asserts that it would not be able to earn a

 

 

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1    reasonable rate of return without an increase, then it may
2    request a hearing. If it is determined after a hearing
3    that a rate increase is needed to earn a reasonable rate of
4    return, then the insurer shall be allowed to make a change
5    that affords it the minimum increase required to earn a
6    reasonable rate of return.
7        (3) The Department shall, no later than 180 days after
8    the effective date of this amendatory Act of the 103rd
9    General Assembly, establish rules that implement the
10    testing of insurer business practices for compliance with
11    this Section.
12    (i) No taxpayer cost. All insurers subject to the
13provisions of this Section shall be assessed a fee of 0.05% of
14their total earned premium from the prior calendar year. The
15fee shall be payable to the Department no later than July 1 of
16each calendar year and shall be used by the Department to
17implement the provisions of this Section.