Property/casualty insurers and their trade associations are pushing back against a new campaign by Illinois Secretary of State Alexi Giannoulias (pictured above) that seeks to limit the use of socioeconomic data in auto insurance pricing.
Industry representatives say the proposed restrictions could interfere with long-standing actuarial practices that help carriers assess risk and maintain a stable market.
In a joint statement, national insurance trade groups and the Illinois Insurance Association said allowing insurers to continue using a broad range of objective criteria is essential for setting rates accurately.
The groups said existing laws already prohibit using race, income, religion or ethnicity in pricing, and removing other risk factors could disrupt the market.
The campaign from Giannoulias calls on insurers to avoid what he describes as “discriminatory rate setting practices,” including the use of credit scores, age, and third-party data sourced from social media and mobile applications.
Giannoulias said only a driver’s on-road behavior should be used to determine premiums. His office cited Illinois-focused studies showing that drivers with safe records but poor credit often pay significantly more for coverage than drivers with excellent credit and a conviction for driving under the influence.
The office said these practices contributed to an 18% average rate increase in 2024, with another 4% rise projected this year.
Giannoulias’ campaign includes a website and planned town hall meetings to collect feedback from policyholders on rate setting.
"The current system results in fewer Illinoisans being able to afford insurance and fewer opting to pay for it, making our roads less safe for everyone,” he said.
Supporters of the campaign include the American Association of Retired Persons, which represents 1.7 million members in Illinois. Philippe Largent, AARP Illinois state director, said older drivers are often among the safest on the road and their rates should reflect that.
Earlier this year, the Illinois House passed HB 1234, directing the secretary of state’s office to conduct a formal investigation into how non-driving factors – such as ZIP codes, credit scores, and age – affect insurance premiums.
The study, due by Jan. 1, 2026, is intended to provide lawmakers with a detailed analysis of whether pricing disparities disproportionately impact certain demographic groups.
The Illinois Insurance Association and other industry stakeholders have questioned the decision to have the secretary of state lead the HB 1234 review. Kevin Martin, executive director of the Illinois Insurance Association, has criticized the move, saying the review should be handled by the state’s Department of Insurance, which has expertise in insurance regulation and market dynamics.
Industry representatives also argue that having the secretary of state oversee the process could lead to findings that do not fully reflect actuarial principles or market realities.
The debate in Illinois mirrors discussions in other states. In New York, legislators have proposed limits on using credit history as a primary factor in underwriting or renewing auto policies.
Supporters of the New York bill argue that credit-based pricing creates disparities that are not tied to driving behavior. Insurers in the state, meanwhile, have voiced similar concerns as their counterparts in Illinois, warning that restrictions on risk factors could lead to less accurate pricing and reduced competition in the market.
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