Industry Leaders Warn of Potential Rate Hikes
Insurance industry leaders in Illinois are speaking out against a new rating bill that they say 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 such as the tariff regulation bill.
The bill seeks to change the state’s insurance classification 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 keep costs below the national average for consumers. The industry believes that increased regulations could hinder the current efficient and consumer-focused insurance market.
Industry leaders also argue that HB2203 would restrict the use of rating and underwriting tools that have been shown to benefit consumers and set fair insurance rates accurately and effectively. By using a variety of rating factors, insurers can more accurately assess drivers’ risks and price their products based on the probability and severity of insurance claims. Using these tools benefits consumers and is the fairest way to set insurance rates.
The leader has denied that if insurers cannot use risk factors when determining rates, this will lead to a one-size-fits-all approach to pricing, eliminating competition in the market and ultimately raising prices for all consumers. As prices for all Illinois consumers increase, access and affordability will dramatically decrease.
The insurance industry urges lawmakers to reconsider the bill and work with them to find solutions that benefit consumers without raising 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 industry concerns will be taken into account in the ongoing debate on 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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