The legislation combines two previously separate proposals into a single measure. It would grant the Illinois Department of Insurance authority to review and approve rates for both types of coverage. Lawmakers approved the combined bill March 19 following continued negotiations among legislative leaders and the governor’s office.
Background on Rate Oversight Proposal
Gov. JB Pritzker first called for increased oversight of homeowners insurance rates in 2025 after State Farm announced an average rate increase of 27.2% in Illinois. The company cited losses from weather-related disasters as the reason for the increase.
Pritzker questioned that explanation and raised concerns that losses from other states may have influenced Illinois rate decisions. He also pointed to the state’s regulatory framework, noting that Illinois does not currently regulate insurance premiums or prohibit rates that are excessive, inadequate, or unfairly discriminatory.
At the same time, Secretary of State Alexi Giannoulias advocated for changes in the automobile insurance market. He raised concerns about insurers using factors such as credit ratings when setting premiums, arguing that such factors may not reflect driving behavior.
Earlier versions of both proposals did not advance through the General Assembly in 2025. A homeowners insurance bill passed the Senate during the fall veto session but did not pass the House before adjournment.
Key Provisions of the Bill
Senate Bill 1486, as amended in the House, introduces several regulatory changes affecting both homeowners and automobile insurance.
The bill would prohibit insurers from charging rates that are excessive, inadequate, or unfairly discriminatory. It would also require insurers to provide at least 60 days’ notice before implementing premium increases of 10% or more, beginning July 1, 2027.
In addition, the legislation establishes a framework for the Department of Insurance to review and approve rate filings after that date. Insurers would still be able to implement new rates immediately upon filing. However, the department would have the authority to review those rates.
If the department determines that a rate is excessive, inadequate, or unfairly discriminatory, it would notify the insurer. The insurer could then request an administrative hearing. Following that process, the department would have the authority to reject the rate filing and require insurers to issue rebates for any excessive premiums collected.
The bill also addresses rate-setting practices by requiring insurers to use credible, state-specific data when available and statistically reliable. This provision is intended to limit cost-shifting practices across different markets.
Legislative Perspectives
Rep. Thaddeus Jones, D-Calumet City, who sponsored the bill in the House, said the legislation responds to concerns about rising insurance costs.
“This legislation is important to home and car owners of Illinois who are struggling with increasing insurance rates,” Jones said during floor debate.
Rep. Jeff Keicher, R-Sycamore, who works as an insurance agent, said the revised bill reflects improvements from earlier versions. However, he said it does not address the underlying factors contributing to higher premiums.
Keicher cited the increasing frequency of catastrophic weather events and the role of contractors and litigation in driving claims costs. He noted that some actors exploit storm damage situations, leading to additional claims and expenses for insurers.
Several lawmakers with ties to the insurance industry abstained from voting on the measure. The bill ultimately passed the House by a vote of 66-40.
Industry Response
Insurance industry groups opposed the legislation following its passage in the House. The Illinois Insurance Association, the American Property Casualty Insurance Association, and the National Association of Mutual Insurance Companies issued a joint statement describing the measure as a significant regulatory change.
The organizations stated that the bill represents a broad overhaul of Illinois insurance regulation. They also said they believe the changes could increase policyholders' costs.
The statement referenced broader economic pressures, including rising property taxes, fuel, grocery, and utility costs. It said the legislation could contribute to affordability challenges for households in the state.
Next Steps
The bill now moves to the Illinois Senate for consideration. Lawmakers have not indicated a timeline for when the Senate may take up the measure.
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