Illinois has set new rules for how auto insurers file rates - and handed the state a countdown clock it can't pause.
Senate Bill 714, sponsored by Sen. Ram Villivalam alongside co-sponsors including Sen. Doris Turner, Sen. Christopher Belt and Rep. Thaddeus Jones, adds a new article to the state's insurance code. Its stated purpose is to keep auto rates from being "excessive, inadequate, or unfairly discriminatory."
The law spells out what those terms mean. A rate is inadequate if it "endangers the solvency of the insurer." It's unfairly discriminatory if price differences don't reflect differences in expected losses and expenses. And it's considered reasonable if it's "an actuarially sound estimate of the expected value of all future costs associated with an individual risk transfer."
The centerpiece is timing. Once an insurer files new auto rates, the Department of Insurance has 40 days to object. If it thinks a filing crosses the line, it must say so inside that window. If it stays quiet, the filing is "deemed compliant." The statute leaves no wiggle room, calling the 40-day period "neither waivable nor subject to extension."
Insurers still get to push back. A carrier that receives a notice can ask for a hearing within 30 days, and the filing stays in effect until a final order comes down. If the Department misses its own hearing or decision deadlines, the objection is dismissed and the rates stand. Where the Department does find a rate falls short, its final order can set a date after which the filing no longer applies and spell out any rebates owed to affected consumers. The Director's objection is also subject to judicial review.
There are guardrails on process, too. If a filing is incomplete, the Department must flag the missing items within 15 days. And carriers must use "credible State-specific loss experience" where it's available and reliable, supplementing with countrywide or regional data only to meet actuarial standards.
The law also sets renewal-notice requirements. Insurers can't raise a renewal premium by more than 10% on covered lines without giving the policyholder at least 30 days' notice, and deductible or coverage changes need at least 60 days.
Nearly all of it starts July 1, 2027, when the Act takes effect.
