HB4611ham002 103RD GENERAL ASSEMBLY

Rep. Thaddeus Jones

Filed: 4/9/2024

10300HB4611ham002 LRB103 37111 RPS 71454 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 adding Sections 143.19.4 and 417 as follows:

(215 ILCS 5/143.19.4 new)

Sec. 143.19.4. Standards applicable to vehicle insurance rates.

(a) The following standards apply to insurance on risks described in Class 2(b) and Class 3(e) of Section 4:

(1) An insurer shall use methods based on sound actuarial principles to calculate its rates.

(2) A rate may not be excessive, inadequate, or unfairly discriminatory.

(3) A rate is excessive if it is likely to produce a profit that is unreasonably high for the insurance provided. A rate in a competitive market is not considered excessive.

(4) A rate is not inadequate unless such rate is insufficient to sustain projected losses and expenses in the class of business 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 exists if, after allowing for practical limitations, price differentials fail to reflect equitably the differences in expected losses and expenses. A rate is not unfairly discriminatory because different premiums result for policyholders with like loss exposures but different expenses, or like expenses but different loss exposures, so long as the rate reflects the differences with reasonable accuracy.

(b) With respect to rating for policies described in Class 2(b) and Class 3(e) of Section 4, the use of the following factors are prohibited:

(1) Race.

(2) Color.

(3) Religion.

(4) National origin.

(5) Physical disability, as that term is defined in Section 143.24a.

(215 ILCS 5/417 new)

Sec. 417. The Automobile Insurance Affordability and Availability Task Force.

(a) The Auto Insurance Affordability and Availability Task Force is created to direct a study of Illinois' automobile insurance marketplace and regulatory environment and their impacts on overall availability and affordability of automobile insurance. The Task Force shall, at a minimum, consider the following issues and may make recommendations to address any findings:

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

(4) driving behavior patterns as well as driving under the influence of alcohol, speeding, distracted driving, red light enforcement, and enforcement trends, including, but not limited to, the analysis and recommendations identified in the 2024 Road Map to Safety by Advocates for Highway and Auto Safety; and

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

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

(c) The Director of Insurance or the Director's designee shall serve as the Chair of the Task Force.

(d) The Task Force shall include:

(1) the Secretary of State or the Secretary's designee;

(2) the Secretary of Transportation or the Secretary's designee; and

(3) one member of the Senate appointed by the President of the Senate, one member of the Senate appointed by the Senate Minority Leader, one member of the House of Representatives appointed by the Speaker of the House of Representatives, and one member of the House of Representatives appointed by the Minority Leader of the House of Representatives, all appointed on or before December 31, 2024.

(e) The Governor shall appoint the following individuals to the Task Force on or before December 31, 2024:

(1) one representative from a nonprofit consumer organization that serves to protect the interests of Illinois consumers as it relates to the regulation of insurance;

(2) one representative from an organization representing the interests of minority populations or economically disadvantaged populations, or both;

(3) one representative from a trade organization representing the insurance industry in Illinois;

(4) one representative from a national trade organization representing property and casualty insurers;

(5) one representative from a national trade organization representing mutual insurance companies;

(6) one representative from a national trade association representing insurance compliance professionals; and

(7) one representative from a trade organization representing insurance agents.

(f) 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.

(g) 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.

(h) The Task Force shall conclude its business on or before July 1, 2027. The Task Force may issue a report to the General Assembly detailing its findings.

(i) The Task Force is dissolved, and this Section is repealed, and on July 1, 2028.

Section 10. The Illinois Vehicle Code is amended by changing Section 7-606 as follows:

(625 ILCS 5/7-606) (from Ch. 95 1/2, par. 7-606)

Sec. 7-606. Uninsured motor vehicles; suspension vehicles - suspension and reinstatement. The Secretary shall suspend the vehicle registration of any motor vehicle determined by the Secretary to be in violation of Section 7-601 of this Code, including any motor vehicle operated in violation of Section 3-707, 3-708 or 3-710 of this Code by an operator other than the owner of the vehicle. Neither the fact that, subsequent to the date of verification or conviction, the owner acquired the required liability insurance policy nor the fact that the owner terminated ownership of the motor vehicle shall have any bearing upon the Secretary's decision to suspend.

The Secretary is authorized to suspend the registration of any motor vehicle registered in this State upon receiving notice of the conviction of the operator of the motor vehicle in another State of an offense which, if committed in this State, would constitute a violation of Section 7-601 of this Code.

Until it is terminated, the suspension shall remain in force after the registration is renewed or a new registration is acquired for the motor vehicle. The suspension also shall apply to any motor vehicle to which the owner transfers the registration.

In the case of a first violation, the Secretary shall terminate the suspension upon payment by the owner of a reinstatement fee of $100 and submission of proof of insurance as prescribed by the Secretary.

In the case of a second or subsequent violation by a person having ownership interest in a motor vehicle or vehicles within the preceding 4 years, or a violation of Section 3-708 of this Code, the Secretary shall terminate the suspension 4 months after its effective date upon payment by the owner of a reinstatement fee of $100 and submission of proof of insurance as prescribed by the Secretary.

Upon a verified demonstration of financial need by the owner, the Secretary may waive a reinstatement fee under this Section.

All fees collected under this Section shall be disbursed under subsection (g) of Section 2-119 of this Code.

(Source: P.A. 99-127, eff. 1-1-16.)

Section 99. Effective date. This Act takes effect upon becoming law.".