Bill to regulate homeowners insurance rates could reemerge this session
[February 14, 2026]
By Peter Hancock
SPRINGFIELD — Illinois lawmakers are poised to make a second attempt at
passing a bill that would give state regulators more authority to
control the rising cost of homeowners insurance.
Gov. JB Pritzker called for the legislation last summer after
Bloomington-based State Farm Insurance announced it was raising premiums
in Illinois an average 27.2%, citing years of losses in its property
casualty line of coverage due to weather-related disasters in the state.
A bill to give the Illinois Department of Insurance authority to approve
or reject insurance rate increases passed the Senate during last fall’s
veto session. But when it returned to the House for a vote to concur
with changes the Senate had made, the amended bill fell four votes short
of the 60 needed for passage. That left many to believe the bill had
died.
The following day, however, the bill’s chief House sponsor, Rep. Robyn
Gabel, D-Evanston, refiled a motion to concur, which is allowed under
House rules. And Pritzker has said since the end of the veto session
that he still wants the legislation to pass.
“They get a second bite at the apple,” Kevin Martin, executive director
of the Illinois Insurance Association, said in an interview.
Gabel told Capitol News Illinois through a spokesperson this week that
no decision had been made about calling the bill for a second vote. But
Martin said people in the industry have heard the bill could be called
as early as Tuesday, when the House and Senate return to the Statehouse
to begin the 2026 legislative session in earnest.
Current environment
The controversy over State Farm’s rate hike last year raised attention
to the fact that Illinois stands out among states for having
exceptionally weak regulations over the insurance industry.
Advocates for the legislation argue that every state in the nation
except Illinois has a law that prohibits insurance companies from
charging “inadequate, excessive or unfairly discriminatory” premiums.
And other states’ insurance regulators have authority to review and
modify proposed rate increases.
Illinois, however, is known in the insurance industry as a
“use-and-file” state, meaning companies can raise their rates at any
time and immediately put them into effect before filing the new rate
schedule with state regulators.
The Illinois Department of Insurance has authority to license companies
and agents to do business in the state. It also has authority to make
sure insurance products sold in Illinois comply with state laws and that
companies honor the terms of their policies. But it has no other
authority to review or approve the rates they charge.
Douglas Heller, director of insurance for the Washington-based Consumer
Federation of America, described Illinois’ law last year as “among the
most toothless in the nation.”
In the wake of State Farm’s rate increase last year, Pritzker suggested
the company was trying to shift the cost of disaster-related losses in
other states like California and Florida onto the backs of Illinois
consumers, and he said legislation was needed to prevent that practice
from happening in Illinois.
“As states across the country face even more extreme weather than we do,
we need to make sure Illinois homeowners are not paying for losses that
companies experience in other states,” Pritzker said in an op-ed column
published in the Chicago Tribune that was cosigned by House Speaker
Emanuel “Chris” Welch and Senate President Don Harmon.
State Farm officials firmly denied that allegation, and Martin insisted
no insurance companies in Illinois engage in that practice.
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Rep. Robyn Gabel has filed a motion to take a second vote on a bill
that would give state regulators authority to review and approve
homeowners’ insurance rates in Illinois. (Capitol News Illinois file
photo by Jerry Nowicki)
“We have never seen anything like that, and we would argue very strongly
that that does not happen and cannot happen based on the actuarial data
that the companies have to provide in Illinois on Illinois losses,” he
said.
Proposed changes
Pritzker’s call for new legislation to regulate homeowners insurance
rates led to intense negotiations between the governor’s office,
legislative leaders and the insurance industry. But the final language
wasn’t unveiled until the final hours of the fall veto session.
The language was put into a Senate amendment to House Bill 3799. It
included language prohibiting “excessive, inadequate, or unfairly
discriminatory” rates. It also called for banning the practice of
“cost-shifting” by requiring companies to use state-specific loss data
to develop their rates whenever possible.
The bill also would leave in place the state’s “use-and-file” method of
setting rates, meaning companies would not have to seek advance
clearance from state regulators before implementing rate changes. But it
would require them to give consumers at least 60 days’ advance notice
before raising rates by 10% or more.
The major sticking point for the insurance industry, however, was the
provision giving the Department of Insurance authority to review and
approve or modify rates after they are put into place.
Under the proposed language, if the agency found a company’s rates to be
excessive, inadequate or unfairly discriminatory, it would send the
company a notice specifying the agency’s objections. Companies then
would be allowed to defend their rates at an administrative hearing. But
after that hearing, if the agency still believed the rates violated
standards of the law, it would be authorized to order the company to
rebate excess charges back to customers.
According to Martin, the industry’s main objection to that language was
that there was no limit on how far back in time the agency could look in
its rate review process.
“They can go back forever,” he said.
“We just believe that, in all of the negotiations that we had, for them
to come in at the last minute with this type of language, of the changes
that they made, was just something that we thought was really unfair,”
Martin said.
The House and Senate have each been in session a few days this year,
mainly to introduce new bills and to pass a few resolutions. But the
work of the session will begin in earnest this coming week, starting
Tuesday when both chambers will meet and begin holding committee
hearings.
Pritzker is scheduled to deliver his annual budget and State of the
State address to a joint session of the General Assembly on Wednesday.
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