Insurers speak out against after new rating law proposal
Insurers speak out against after new rating law proposal | Insurance Business America
Legal Insights
Insurers speak out against after new rating law proposal
Industry leaders warn of potential rate increases
Legal Insights
By
Miko Pagaduan
Insurance industry leaders in Illinois are speaking out against a new rating law proposal that they claim could lead to higher rates for drivers. The American Property Casualty Insurance Association (APCIA), the Illinois Insurance Association (IIA), and the National Association of Mutual Insurance Companies (NAMIC) have jointly released a statement opposing HB2203, also known as the rate regulation bill.
The bill seeks to change the state’s insurance rating law in an effort to address rising insurance costs. However, the insurance industry argues that the change would be counterproductive and could actually result in higher rates for consumers.
According to the joint statement, the current insurance rating law in Illinois has benefited consumers since it was implemented in the 1970s. The state also has one of the most competitive insurance markets in the country, which has helped to keep costs below the national average for consumers. The industry believes that increasing regulations could hinder the current efficient, consumer-focused insurance marketplace.
The industry leaders also argue that HB2203 would restrict the use of rating and underwriting tools that have been proven to benefit consumers and accurately and effectively set fair insurance rates. By using a variety of rating factors, insurers can assess drivers’ risks more accurately and price their products based on the likelihood and severity of insurance claims. The use of these tools benefits consumers and is the fairest way to set insurance rates.
The leader have contested that if insurers are unable to utilize risk factors when determining rates, it will lead to a one-size-fits-all approach to pricing, eliminating competition in the marketplace, and ultimately driving prices up for all consumers. As prices increase for all Illinois consumers, access and affordability will steeply decline.
The insurance industry is urging lawmakers to reconsider the bill and work with them to find solutions that will benefit consumers without driving up rates. They believe that now is not the time to enact legislation that could result in increased premiums for consumers, as it would only create severe barriers within the time-tested insurance system and force consumers to subsidize the risk of others.
It remains to be seen whether the industry’s concerns will be taken into consideration in the ongoing debate over HB2203. However, the joint statement from APCIA, IIA, and NAMIC highlights the potential consequences of the bill and the importance of careful consideration when it comes to changing the state’s insurance rating law.
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