Rep. Thaddeus Jones

Filed: 4/17/2024

 

 


 

 


 
10300HB4611ham004LRB103 37111 RPS 72522 a

1
AMENDMENT TO HOUSE BILL 4611

2    AMENDMENT NO. ______. Amend House Bill 4611 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Illinois Insurance Code is amended by
5changing Section 424 and by adding Sections 143.19.4,
6143.19.5, and 143.19.6 as follows:
 
7    (215 ILCS 5/143.19.4 new)
8    Sec. 143.19.4. Standards applicable to certain vehicle
9insurance rates.
10    (a) This Section applies to insurance on risks in this
11State described in clause (b) of Class 2 and clause (e) of
12Class 3 of Section 4 of this Code.
13    (b) The following standards shall apply to the making and
14use of rates pertaining to the classes of insurance to which
15this Section applies:
16        (1) Rates shall not be excessive, inadequate, or

 

 

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1    unfairly discriminatory.
2        (2) An insurer shall use methods based on sound
3    actuarial principles.
4        (3) A rate is excessive if it is likely to produce a
5    profit that is unreasonably high for the insurance
6    provided.
7        (4) A rate is not inadequate unless the rate is
8    insufficient to sustain projected losses and expenses in
9    the class of insurance to which it applies or the use of
10    such rate has or, if continued, will endanger the solvency
11    of the insurer using it, or have the effect of
12    substantially lessening competition or the tendency to
13    create a monopoly in any market.
14        (5) Unfair discrimination in insurance rates is
15    prohibited. Unfair discrimination exists if, after
16    allowing for practical limitations, price differentials
17    fail to reflect equitably the differences in expected
18    losses and expenses. If unfair discrimination is found,
19    the Department of Insurance may require corrective action
20    from the insurance producer to take effect in the
21    following calendar year. The Department of Insurance may
22    also issue a fine of $5,000 per instance of unfair
23    discrimination.
24    (c) Nothing in this Section shall be construed as a
25requirement on the Department to review or approve rating
26information regularly filed with the Department or to limit or

 

 

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1define the scope of the Department's authority to review that
2rating information. Upon request, an insurance company is
3required to provide the Department any information the
4Department deems relevant to a company's compliance with this
5Section.
 
6    (215 ILCS 5/143.19.5 new)
7    Sec. 143.19.5. The Automobile Insurance Affordability and
8Availability Task Force.
9    (a) The Automobile Insurance Affordability and
10Availability Task Force is created to study and report on the
11Illinois automobile insurance marketplace and regulatory
12environment and the impacts of current practices and
13regulations on the overall availability and affordability of
14automobile insurance. The report shall incorporate data and
15conclusions from other jurisdictions, but shall focus on
16providing analyses and recommendations specific to the
17Illinois marketplace. The Task Force shall, at minimum,
18consider the following issues and may make recommendations to
19address any findings based on its consideration of those
20issues:
21        (1) National trends and data on availability and
22    affordability of automobile insurance in Illinois and
23    other jurisdictions.
24        (2) Rate approval regimes in other jurisdictions,
25    including their relative impact on affordability and

 

 

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1    availability, time and cost efficiency for regulators and
2    taxpayers, and expected impact on residual markets.
3        (3) Current automobile insurance rating practices in
4    Illinois and the impact a rate review mechanism would have
5    on premiums in that market.
6        (4) Inflationary pressures on insurance affordability,
7    including, but not limited to, the cost of vehicle parts,
8    vehicle repair labor, and medical costs.
9        (5) Driving behavior patterns as well as trends
10    relating to driving under the influence of alcohol,
11    speeding, distracted driving, red light enforcement, and
12    other enforcement, including, but not limited to, the
13    analysis and recommendations identified in the 2024
14    Roadmap to Safety by Advocates for Highway and Auto
15    Safety.
16        (6) Automobile-related tort and litigation trends,
17    including, but not limited to, the effect of assignments
18    of benefits.
19        (7) The impact prohibiting rate-making based on credit
20    score, gender, or lack of prior insurance would have on
21    automobile insurance premiums in Illinois.
22        (8) The impact that Section 143.19.6 has on the
23    automobile insurance marketplace.
24    The Task Force shall compile a report on its findings and
25submit that report to the Governor and the General Assembly on
26or before January 1, 2028.

 

 

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1    (b) The Task Force, with respect to consumer education,
2shall review, assess, develop, and make available to consumers
3educational materials based on Regulatory Resources for
4Consumers on Personal Lines Pricing and Underwriting and the
5Consumers Guide to Auto Insurance published by the National
6Association of Insurance Commissioners.
7    (c) The Task Force shall include the following
8individuals:
9        (1) The Director of Insurance or the Director's
10    designee.
11        (2) The Secretary of State or the Secretary's
12    designee.
13        (3) The Secretary of Transportation or the Secretary's
14    designee.
15        (4) One member of the Senate, appointed by the
16    President of the Senate.
17        (5) One member of the Senate, appointed by the Senate
18    Minority Leader.
19        (6) One member of the House of Representatives,
20    appointed by the Speaker of the House of Representatives.
21        (7) One member of the House of Representatives,
22    appointed by the Minority Leader of the House of
23    Representatives.
24        (8) One representative from a non-profit consumer
25    organization that serves to protect the interests of
26    Illinois consumers as it relates to the regulation of

 

 

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1    insurance, appointed by the Governor.
2        (9) One representative from an organization
3    representing the interests of minority or economically
4    disadvantaged populations, appointed by the Governor.
5        (10) One representative from a trade organization
6    representing the insurance industry in Illinois, appointed
7    by the Governor.
8        (11) One representative from a national trade
9    organization representing property and casualty insurers,
10    appointed by the Governor.
11        (12) One representative from a national trade
12    organization representing mutual insurance companies,
13    appointed by the Governor.
14        (13) One representative from a national trade
15    association representing insurance compliance
16    professionals, appointed by the Governor.
17        (14) One representative from a trade organization
18    representing insurance agents, appointed by the Governor.
19The appointments under paragraphs (4) through (14) of this
20subsection shall be made no later than December 31, 2025. The
21Director of Insurance or the Director's designee shall serve
22as the Chair of the Task Force.
23    (d) Subject to appropriation, the Office of Risk
24Management and Insurance Research at the University of
25Illinois shall provide technical support and guidance to the
26Task Force on matters of insurance marketplace analysis,

 

 

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1including conducting market studies as requested by the Task
2Force.
3    (e) Subject to appropriation, the Task Force shall engage
4with a third-party actuarial firm to oversee the technical
5analysis of the Illinois insurance market and the
6determinations of what impacts, if any, rate review and the
7prohibition of rate-making based on factors set forth in
8paragraph (7) of subsection (a) would have on the Illinois
9insurance market.
10    (f) A majority of the voting members of the Task Force
11constitutes a quorum for the transacting of business. Official
12action by the Task Force requires the approval of a majority of
13the members of the Task Force.
14    (g) The Task Force shall meet at least quarterly but may
15meet more often if needed to fulfill any of its duties.
16    (h) The Task Force is dissolved after it submits the
17report required under subsection (a), and this Section is
18repealed July 1, 2028.
 
19    (215 ILCS 5/143.19.6 new)
20    Sec. 143.19.6. Use of credit score and age in determining
21rates or premiums for certain vehicle insurance; prohibited.
22    (a) An individual's credit score shall not be considered
23when determining rates or premiums for insurance on risks in
24this State described in clause (b) of Class 2 and clause (e) of
25Class 3 of Section 4 of this Code.

 

 

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1    (b) A policy of automobile insurance, including any class
2of motor vehicle coverage, may not be canceled by the insurer
3solely because the insured has reached the age of 65 years so
4long as the insured has a valid Illinois driver's license. An
5insurer shall not refuse to issue a renewal policy or increase
6the premium for any policy solely because an insured has
7reached the age of 65 years.
8    (c) This Section is repealed January 1, 2028.
 
9    (215 ILCS 5/424)  (from Ch. 73, par. 1031)
10    Sec. 424. Unfair methods of competition and unfair or
11deceptive acts or practices defined. The following are hereby
12defined as unfair methods of competition and unfair and
13deceptive acts or practices in the business of insurance:
14        (1) The commission by any person of any one or more of
15    the acts defined or prohibited by Sections 134, 143.24c,
16    147, 148, 149, 151, 155.22, 155.22a, 155.42, 236, 237,
17    364, 469, and 513b1 of this Code.
18        (2) Entering into any agreement to commit, or by any
19    concerted action committing, any act of boycott, coercion
20    or intimidation resulting in or tending to result in
21    unreasonable restraint of, or monopoly in, the business of
22    insurance.
23        (3) Making or permitting, in the case of insurance of
24    the types enumerated in Classes 1, 2, and 3 of Section 4,
25    any unfair discrimination between individuals or risks of

 

 

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1    the same class or of essentially the same hazard and
2    expense element because of the race, color, religion, or
3    national origin of such insurance risks or applicants. The
4    application of this Article to the types of insurance
5    enumerated in Class 1 of Section 4 shall in no way limit,
6    reduce, or impair the protections and remedies already
7    provided for by Sections 236 and 364 of this Code or any
8    other provision of this Code.
9        (4) Engaging in any of the acts or practices defined
10    in or prohibited by Sections 154.5 through 154.8 of this
11    Code.
12        (5) Making or charging any rate for insurance against
13    losses arising from the use or ownership of a motor
14    vehicle which requires a higher premium of any person by
15    reason of his physical disability, race, color, religion,
16    gender, or national origin.
17        (6) Failing to meet any requirement of the Unclaimed
18    Life Insurance Benefits Act with such frequency as to
19    constitute a general business practice.
20(Source: P.A. 102-778, eff. 7-1-22.)
 
21    Section 10. The Illinois Vehicle Code is amended by adding
22Section 7-612 as follows:
 
23    (625 ILCS 5/7-612 new)
24    Sec. 7-612. Exemption upon demonstration of financial

 

 

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1need. Upon a verified demonstration of financial need by the
2owner, the Secretary may waive the reinstatement fee
3established in Section 7-606.
 
4    Section 99. Effective date. This Act takes effect January
51, 2025, except that Section 143.9.16 of the Illinois
6Insurance Code takes effect January 1, 2026.".