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SB 2692

Interstate Dental and Dental Hygiene Licensure Compact; enact.

2025 Regular Session Introduced by Hob Bryan

Prohibits using out-of-state catastrophe costs in Illinois ratemaking when credible Illinois loss data exist, ensuring rates are actuarially sound and Illinois-focused.

Died In Committee
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Bill Summary · SB 2692

Summary — SB 2692 (Insurance Rate Fairness and Consumer Protection Law)

Note on documents: The provided bill text establishes an insurance regulation (adding Article XLVIII to the Illinois Insurance Code). The bill header metadata also references an “Interstate Dental and Dental Hygiene Licensure Compact,” and the legislative-action dates include inconsistencies. This summary focuses on the text of the bill as provided (Insurance Rate Fairness and Consumer Protection Law). Sponsors shown: Sen. Michael E. Hastings (primary) and Sen. Meg Loughran Cappel (cosponsor). A companion is listed as HB 5197.

Main purpose

Establish a new Insurance Rate Fairness and Consumer Protection Law to (1) define rate-setting standards for certain insurance policies, (2) prohibit insurers from shifting catastrophe or extreme-event losses from other states into Illinois rate development when fully credible Illinois loss experience exists, and (3) protect Illinois policyholders from excessive, inadequate, or unfairly discriminatory rates.

Key provisions

  • Creates Article XLVIII in the Illinois Insurance Code, titled the Insurance Rate Fairness and Consumer Protection Law (215 ILCS 5/Art. XLVIII).
  • Applicability:
    • Applies to companies issuing policies identified by subsections (a) and (b) of Section 143.13 of the Insurance Code and to those subject to Section 143.11 (the bill references those Code sections for scope).
    • Explicit exclusions: commercial automobile and commercial liability/property insurance; nonowners automobile insurance; structures that are leased/rented; unoccupied structures or those under active construction/renovation intended for sale/lease; dwellings included in a farm policy.
  • Purpose clause: Protect policyholders from excessive/inadequate/unfairly discriminatory rates; promote competition consistent with consumer protection; ensure Illinois rates reflect Illinois climate and market rather than other states; require actuarially sound rates.
  • Rate-setting standards (Sec. 1810):
    • Rates shall not be excessive, inadequate, or unfairly discriminatory.
    • Defines “inadequate” to include rates that endanger insurer solvency or would likely diminish competition.
    • Defines “unfairly discriminatory” as price differentials that do not, within practical limits, reflect differences in expected losses and expenses.
    • Establishes that rates are reasonable if they are an actuarially sound estimate of expected future costs of the risk transfer.
  • Prohibition on cost-shifting (Sec. 1815):
    • Insurers issuing covered policies may not include catastrophe or extreme-event losses from other states in Illinois rate development when fully credible Illinois loss experience exists.
    • Exception: this prohibition does not apply to rating-relativity development during ratemaking (i.e., relativities between classes/risk tiers).
  • Effective date: Act takes effect upon becoming law.

Who would be affected

  • Primary: insurers issuing the categories of policies specified by the referenced Insurance Code sections (certain personal lines/property/auto policies as defined in Sec. 143.11/143.13).
  • Secondary: Illinois policyholders (may see rate outcomes more closely tied to Illinois loss experience); actuaries and companies preparing rate filings; the Illinois insurance regulator (review/enforcement responsibilities).
  • Excluded lines: identified commercial lines, nonowner auto, certain leased/ vacant/under-construction dwellings, and farm-policy dwellings.

Potential impacts and considerations

  • Prevents insurers from basing Illinois rates on out‑of‑state catastrophic experience when credible in‑state data exists — likely to limit upward adjustments driven by other states’ events and to require more Illinois-specific actuarial analysis.
  • Could reduce perceived cross-subsidization from other states but may constrain insurers’ ability to rely on broader catastrophic experience where Illinois data are limited.
  • May increase administrative/actuarial burden for rate filings and could prompt disputes over whether Illinois loss experience is “fully credible.”
  • Solvency protections remain important; the bill explicitly treats inadequate rates that risk solvency as prohibited.

Procedural status

  • Sponsor(s): Sen. Michael E. Hastings (primary); Sen. Meg Loughran Cappel (cosponsor).
  • Companion: HB 5197.
  • The provided status history contains inconsistent dates and actions. The top metadata lists the bill as “Died In Committee” (dated 2025-02-04). The bill text indicates it was introduced as Article XLVIII and would be effective upon becoming law. Confirm final status with the Illinois General Assembly records for SB 2692 (104th GA) for authoritative procedural outcome.

Compiled from official sources — confirm details with the bill’s official record.

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