Illinois Governor JB Pritzker is pushing back against State Farm CEO Jon Farney's claims that tighter state oversight of the insurance industry would "destroy" the current market. In a letter to Farney, Pritzker disputed what he called "factual inaccuracies" in his opponent's stance on the issue.
Pritzker wants to rein in insurance premium hikes, which averaged 27% last summer and caught many homeowners off guard with massive sticker shock. Under a stalled legislative plan that Pritzker is seeking to revive, insurers like State Farm would be allowed to propose rate increases, but state regulators could force consumer refunds if the hikes are deemed unfair or excessive.
Farney argues that this approach would reduce competition, limit coverage options, and ultimately drive up premiums for Illinois homeowners. He pointed out that State Farm is a major employer in the state with 21,000 employees and noted that Illinois homeowners already pay an average of $1,143 per year in insurance costs – significantly less than the national average of $3,303.
Pritzker, however, sees this as an opportunity to level the playing field. He pointed out that eight states have regulatory frameworks similar to what he's proposing, and 41 have even more restrictive standards. In contrast, Texas has a law that allows it to block insurance industry price hikes.
The governor is not backing down, saying that his bill would give regulators the ability to raise an issue if consumers are being overcharged, and require insurers to reimburse them. As long as State Farm uses fair market-based rates, Pritzker claims there's nothing to be concerned about.
State Farm's resistance to tighter regulations comes as no surprise. Industry groups have been opposed to increased oversight of the insurance industry for years. However, with lawmakers set to begin their spring legislative session, Pritzker remains committed to pushing forward with his plan – and it seems State Farm is ready to engage in a battle over what role state regulators should play in setting insurance rates.
Pritzker wants to rein in insurance premium hikes, which averaged 27% last summer and caught many homeowners off guard with massive sticker shock. Under a stalled legislative plan that Pritzker is seeking to revive, insurers like State Farm would be allowed to propose rate increases, but state regulators could force consumer refunds if the hikes are deemed unfair or excessive.
Farney argues that this approach would reduce competition, limit coverage options, and ultimately drive up premiums for Illinois homeowners. He pointed out that State Farm is a major employer in the state with 21,000 employees and noted that Illinois homeowners already pay an average of $1,143 per year in insurance costs – significantly less than the national average of $3,303.
Pritzker, however, sees this as an opportunity to level the playing field. He pointed out that eight states have regulatory frameworks similar to what he's proposing, and 41 have even more restrictive standards. In contrast, Texas has a law that allows it to block insurance industry price hikes.
The governor is not backing down, saying that his bill would give regulators the ability to raise an issue if consumers are being overcharged, and require insurers to reimburse them. As long as State Farm uses fair market-based rates, Pritzker claims there's nothing to be concerned about.
State Farm's resistance to tighter regulations comes as no surprise. Industry groups have been opposed to increased oversight of the insurance industry for years. However, with lawmakers set to begin their spring legislative session, Pritzker remains committed to pushing forward with his plan – and it seems State Farm is ready to engage in a battle over what role state regulators should play in setting insurance rates.
I totally get why Governor Pritzker is pushing back against State Farm's claims 
... like, who wants to see their neighbors getting ripped off by insurance companies 
? 27% premium hikes last summer was straight up crazy! 
It makes total sense that he wants to level the playing field and protect consumers. I'm all for giving regulators some teeth to ensure insurers aren't taking advantage of people who can least afford it 
. And honestly, if State Farm is already getting paid $1,143 a year in insurance costs (way less than the national avg 
... just fair and reasonable rates that benefit everyone.
Texas might be blocking price hikes but that's a special case... the rest of us are stuck dealing with State Farm's rate hikes. Can't say I agree with Farney on this one...
- Peter Peterson (I think Illinois homeowners are tired of being stuck with huge insurance premiums and they need some help, it's time for change!)
. It's all about balance, I guess. The issue at hand seems like a classic case of too much of a good thing - low premiums for homeowners, which sounds great on the surface, but what if it's just not sustainable? The fact that 8 states already have similar regulations means there must be some level of success in this approach 
. Maybe it's not a win-lose situation for both sides? 
she said they're trying to sue the gov for not letting them raise their premiums 
anyway i think gov pritzker has a point about giving consumers refunds if rates r too high 
. And what about all those jobs that Farney mentions? Won't state Farm just be like "screw it" and move its HQ outta Illinois if they can't get their way? 
.
State Farm's argument that tighter oversight would reduce competition and drive up premiums... what if that's not the worst-case scenario? What if it's actually an opportunity for us to redefine what "fair market rates" even means? 
. I think Illinois homeowners deserve better than to be at the mercy of insurance companies! 
. Governor Pritzker is doing us a solid by trying to rein in these huge rate hikes, I hope he can push through his bill without State Farm throwing a wrench in it 
. It would be awesome if Illinois could lead the way and set some standards for insurance companies that actually put consumers first 
.
If the government helps regulate things, we don't have to be sticker shocked when our homeowners insurance costs go up. And btw, who needs Texas's law that lets them block price hikes? 
Can't we just get some consistency here? The only thing I'm worried about is Pritzker's bill being as painful to implement as those 27% premium hikes last summer 
. Guess you could say the battle for affordable insurance rates has begun, and it's gonna be a wild ride! 
. It was like it had a ninja training or something! Everyone was laughing and having a good time, but that squirrel just didn't care. I felt bad for it because it was getting pretty aggressive 
, and State Farm needs to get its act together too 
. What do you think tho? Should state oversight of insurance rates be a thing? 
. Those massive 27% premium hikes are crazy talk! State Farm is a major employer, but that doesn't mean they should be above the law 
. Consumers need protection from unfair rate hikes, and this bill would give them a chance to fight back. I'm all for fair market-based rates, but what's wrong with some state oversight 
. Pritzker's just trying to cover up the real reason he wants to regulate insurance companies - so he can use it as an excuse to raise taxes even more 
. Pritzker says it's about fairness and giving consumers a break, but I'm not buying it 
.