HB 4273

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Full Text of HB4273
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	HB4273 - 104th General Assembly
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			Senate Amendment 001
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		HB4273 Enrolled		LRB104 17031 SPS 30446 b
1    AN ACT concerning business.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 5. The Illinois Insurance Code is amended by
5changing Sections 143.17 and 143.29 and by adding Article
6XLVIII as follows:
7    (215 ILCS 5/143.17)  (from Ch. 73, par. 755.17)
8    Sec. 143.17. Notice of intention not to renew.
9    a. No company shall fail to renew any policy of insurance,
10as defined in subsections (a), (b), (c), and (h) of Section
11143.13, to which Section 143.11 applies, unless it shall send
12by mail to the named insured at least 30 days advance notice of
13its intention not to renew. The company shall maintain proof
14of mailing of such notice on a recognized U.S. Post Office form
15or a form acceptable to the U. S. Post Office or other
16commercial mail delivery service. The nonrenewal shall not
17become effective until at least 30 days from the proof of
18mailing date of the notice to the name insured. Notification
19shall also be sent to the insured's broker, if known, or the
20agent of record, if known, and to the last known mortgagee or
21lien holder. For purposes of this Section, the mortgagee or
22lien holder, insured's broker, or the agent of record may opt
23to accept notification electronically. However, where
		HB4273 Enrolled	- 2 -	LRB104 17031 SPS 30446 b
1cancellation is for nonpayment of premium, the notice of
2cancellation must be mailed at least 10 days before the
3effective date of the cancellation.
4    b. This Section does not apply if the company has
5manifested its willingness to renew directly to the named
6insured. Such written notice shall specify the premium amount
7payable, including any premium payment plan available, and the
8name of any person or persons, if any, authorized to receive
9payment on behalf of the company. If no person is so
10authorized, the premium notice shall so state.
11    b-5. This Section does not apply if the company manifested
12its willingness to renew directly to the named insured.
13However, no company may impose renewal premium increases of 
14more than 10% for lines of business enumerated in subsection 
15(b) of Section 143.13 to which Section 143.11 applies unless 
16the company mails or delivers by electronic means, in 
17compliance with Section 143.34, to the named insured the 
18increase in renewal premium at least 60 days prior to the 
19renewal or anniversary date. No [no] company may impose changes
20in deductibles or coverage for any policy forms applicable to
21an entire line of business enumerated in subsections (a), (b),
22(c), and (h) of Section 143.13 to which Section 143.11 applies
23unless the company mails or delivers by electronic means, in 
24compliance with Section 143.34, to the named insured written
25notice of the change in deductible or coverage at least 60 days
26prior to the renewal or anniversary date. For purposes of this 
		HB4273 Enrolled	- 3 -	LRB104 17031 SPS 30446 b
1subsection, "lines of business enumerated in subsection (b) of 
2Section 143.13 to which Section 143.11 applies" does not 
3include lines of business excluded under paragraph (1), (2), 
4(3), or (4) of Section 1802.
5    Notice shall also be sent to the insured's broker, if
6known, or the agent of record. For purposes of this subsection 
7b-5, policyholder-initiated changes to coverage and exposure 
8changes are not included in the renewal premium increases that 
9require a company to provide notice to the insured.
10    c. Should a company fail to comply with (a) or (b) of this
11Section, the policy shall terminate only on the effective date
12of any similar insurance procured by the insured with respect
13to the same subject or location designated in both policies.
14    d. Renewal of a policy does not constitute a waiver or
15estoppel with respect to grounds for cancellation which
16existed before the effective date of such renewal.
17    e. In all notices of intention not to renew any policy of
18insurance, as defined in Section 143.11 the company shall
19provide the named insured a specific explanation of the
20reasons for nonrenewal.
21    f. For purposes of this Section, the insured's broker, if
22known, or the agent of record and the mortgagee or lien holder
23may opt to accept notification electronically.
24    g. The changes made to this Section by this amendatory Act 
25of the 104th General Assembly apply to renewal premium notices 
26sent on or after July 1, 2027.
		HB4273 Enrolled	- 4 -	LRB104 17031 SPS 30446 b
1(Source: P.A. 100-475, eff. 1-1-18.)
2    (215 ILCS 5/Art. XLVIII heading new)
3ARTICLE XLVIII.  RATES FOR FIRE AND EXTENDED COVERAGE INSURANCE
4    (215 ILCS 5/1801 new)
5    Sec. 1801. Purpose. The purpose of this Article is to 
6promote the public welfare by regulating fire and extended 
7coverage insurance rates so that the rates will not be 
8excessive, inadequate, or unfairly discriminatory. Nothing in 
9this Article is intended to prohibit or discourage reasonable 
10competition or to authorize or encourage, except to the extent 
11necessary to accomplish the purpose of this Article, 
12uniformity in insurance rates, rating systems, rating plans, 
13or practices. This Article shall be liberally construed to 
14carry into effect the provisions of this Section.
15    (215 ILCS 5/1802 new)
16    Sec. 1802. Applicability.
17    (a) This Article applies to policies of fire and extended 
18coverage insurance, as defined in subsection (b) of Section 
19143.13 of this Code, to which Section 143.11 of this Code 
20applies. This Article does not apply to the following:
21        (1) policies for any commercial liability and property 
22    insurance;
23        (2) policies for a structure, all or part of which is 
		HB4273 Enrolled	- 5 -	LRB104 17031 SPS 30446 b
1    leased or rented, regardless of whether the insured 
2    occupied all or part of the structure as a primary 
3    residence;
4        (3) policies for a structure that is unoccupied and 
5    intended by the insured to be sold, leased, or rented or 
6    policies for a structure that is unoccupied and under 
7    active construction, renovation, or substantial 
8    improvement and that is intended by the insured to be 
9    sold, leased, or rented; and
10        (4) policies for a home or dwelling that is part of a 
11    farm policy, regardless of whether the insured owned the 
12    dwelling or occupied the dwelling as a primary residence.
13    (b) The provisions of this Article apply only to filings 
14made on or after July 1, 2027.
15    (215 ILCS 5/1803 new)
16    Sec. 1803. Rate standards; excessive, inadequate, or 
17unfairly discriminatory.
18    (a) Rates shall not be excessive, inadequate, or unfairly 
19discriminatory.
20    (b) A rate is inadequate if it endangers the solvency of 
21the insurer.
22    (c) A rate is unfairly discriminatory if, after allowing 
23for practical limitations, the price differentials fail to 
24reflect the difference in expected losses and expenses. A rate 
25is not unfairly discriminatory if different rates result for 
		HB4273 Enrolled	- 6 -	LRB104 17031 SPS 30446 b
1policyholders with similar loss exposures but different 
2expenses, or similar expenses but different loss exposures, so 
3long as the rate reflects the differences with reasonable 
4accuracy.
5    (d) A rate is reasonable and not excessive, inadequate, or 
6unfairly discriminatory if it is an actuarially sound estimate 
7of the expected value of all future costs associated with an 
8individual risk transfer.
9    (215 ILCS 5/1804 new)
10    Sec. 1804. Determinations and notice; hearing.
11    (a) If the Department determines via actuarial review that 
12a filing is excessive, inadequate, or unfairly discriminatory 
13pursuant to Section 1803, the Department shall send the 
14company notice, within 60 days after receipt of a complete 
15filing, either via the System for Electronic Rates and Forms 
16Filing (SERFF) or another filing system determined by the 
17Department, specifying: (1) in what respects the filing fails 
18to meet the requirements of this Article and (2) if 
19applicable, any modifications that are required. The notice 
20shall specify a reasonable period after which the filing is no 
21longer effective if the company fails to timely request a 
22hearing under subsection (b). If the company timely requests a 
23hearing under subsection (b), the filing shall remain in 
24effect until the conclusion of the hearing and a final order is 
25issued. If the Department finds that a rate is excessive, 
		HB4273 Enrolled	- 7 -	LRB104 17031 SPS 30446 b
1inadequate, or unfairly discriminatory pursuant to this 
2Article, the final order may specify a reasonable period after 
3which the filing is no longer effective and any rebates that 
4must be remitted to affected consumers. Failure of the 
5Department to provide timely notice under this Section within 
660 days after the receipt of a complete filing as defined in 
7subsection (d) shall result in the filing being deemed 
8compliant with this Article. The 60-day period in which the 
9Department is authorized under this Section to determine a 
10filing is excessive, inadequate, or unfairly discriminatory is 
11neither waivable nor subject to extension.
12    (b) The company may request a hearing on the notice within 
1330 days after receipt. Failure to request a hearing within 30 
14days shall be deemed the company's acceptance of the 
15Department's determination. Failure by the Department to hold 
16the requested hearing within 60 days of request, and to 
17resolve the outcome of the hearing within 90 days of the 
18hearing date or the filing of post-briefing submissions 
19allowed by the Hearing Officer, whichever is later, shall 
20result in the dismissal of the Department's notice and shall 
21cause the filing to remain in effect.
22    (c) The action of the Director in objecting to a filing 
23under this Article is subject to judicial review under the 
24Administrative Review Law.
25    (d) A complete filing consists of a rate filing that 
26contains all new or revised rates, a new or revised rate manual 
		HB4273 Enrolled	- 8 -	LRB104 17031 SPS 30446 b
1that includes new or revised rate manual rules, and any 
2experience, judgment, and interpretation of the statistical 
3data relied upon by the company. If the Department finds that 
4the filing is incomplete, then the Department must provide 
5notice to the company within 15 days after receipt of the 
6filing or the filing is deemed complete. The notice must set 
7forth the documents or other information that is required to 
8complete the filing. If such notice is provided, the filing is 
9deemed complete after the additional information specified by 
10the Department in its notice is provided by the company to the 
11Department.
12    (215 ILCS 5/1805 new)
13    Sec. 1805. Prohibition on cost-shifting. Credible 
14State-specific loss experience shall be used in the 
15development of rates whenever such data is available and 
16statistically reliable. To meet actuarial standards of 
17credibility, insurers may supplement State-specific loss 
18experience with countrywide, regional, or out-of-state loss 
19experience. Nothing in this Section shall apply to rating 
20relativity development during ratemaking. This Section shall 
21only apply to companies issuing policies that are subject to 
22this Article.
23    Section 99. Effective date. This Act takes effect July 1,
242027.