SB 2947

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Full Text of SB2947
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	SB2947 - 104th General Assembly
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104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
SB2947
Introduced 1/27/2026, by Sen. Michael E. Hastings
SYNOPSIS AS INTRODUCED:
215 ILCS 5/143.17	  from Ch. 73, par. 755.17
215 ILCS 5/Art. XLVIII heading new
215 ILCS 5/1801 new
215 ILCS 5/1802 new
215 ILCS 5/1803 new
215 ILCS 5/1804 new
215 ILCS 5/1805 new
Amends the Illinois Insurance Code. In provisions regarding the notice of intention not to renew a policy of insurance, provides that no company may impose renewal premium increases of more than 10% for policies of fire and extended coverage insurance that are subject to certain cancellation requirements, unless the company mails or delivers by electronic means to the named insured notice of the increase in renewal premium at least 60 days before the policy renewal or anniversary date. Creates the Rates for Fire and Extended Coverage Insurance Article. Contains provisions concerning the purpose and applicability of the Article. Prohibits rates from being excessive, inadequate, or unfairly discriminatory, as specified. Sets forth provisions concerning determinations and notice from the Department of Insurance and hearings on the notice. Provides that credible State-specific loss experience shall be used in the development of rates whenever that data is available and statistically reliable. Authorizes insurers, in order to meet actuarial standards of credibility, to supplement State-specific loss experience with countrywide, regional, or out-of-state loss experience. Effective January 1, 2027.
LRB104 19637 BAB 33086 b
A BILL FOR
		SB2947		LRB104 19637 BAB 33086 b
1    AN ACT concerning regulation.
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 Section 143.17 and by adding Article XLVIII as
6follows:
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
		SB2947	- 2 -	LRB104 19637 BAB 33086 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 notice of 
18the increase in renewal premium at least 60 days before 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 
		SB2947	- 3 -	LRB104 19637 BAB 33086 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(Source: P.A. 100-475, eff. 1-1-18.)
25    (215 ILCS 5/Art. XLVIII heading new)
		SB2947	- 4 -	LRB104 19637 BAB 33086 b
1ARTICLE XLVIII.  RATES FOR FIRE AND EXTENDED COVERAGE INSURANCE
2    (215 ILCS 5/1801 new)
3    Sec. 1801. Purpose. The purpose of this Article is to 
4promote the public welfare by regulating fire and extended 
5coverage insurance rates so that the rates will not be 
6excessive, inadequate, or unfairly discriminatory. Nothing in 
7this Article is intended to prohibit or discourage reasonable 
8competition or to authorize or encourage, except to the extent 
9necessary to accomplish the purpose of this Article, 
10uniformity in insurance rates, rating systems, rating plans, 
11or practices. This Article shall be liberally construed to 
12carry into effect the provisions of this Section.
13    (215 ILCS 5/1802 new)
14    Sec. 1802. Applicability. This Article applies to policies 
15of fire and extended coverage insurance, as defined in 
16subsection (b) of Section 143.13 of this Code, to which 
17Section 143.11 of this Code applies. This Article does not 
18apply to the following:
19        (1) policies for any commercial liability and property 
20    insurance;
21        (2) policies for a structure, all or part of which is 
22    leased or rented, regardless of whether the insured 
23    occupied all or part of the structure as a primary 
24    residence;
		SB2947	- 5 -	LRB104 19637 BAB 33086 b
1        (3) policies for a structure that is unoccupied and 
2    intended by the insured to be sold, leased, or rented or 
3    policies for a structure that is unoccupied and under 
4    active construction, renovation, or substantial 
5    improvement and that is intended by the insured to be 
6    sold, leased, or rented; and
7        (4) policies for a home or dwelling that is part of a 
8    farm policy, regardless of whether the insured owned the 
9    dwelling or occupied the dwelling as a primary residence.
10    (215 ILCS 5/1803 new)
11    Sec. 1803. Rate standards; excessive, inadequate, or 
12unfairly discriminatory.
13    (a) Rates shall not be excessive, inadequate, or unfairly 
14discriminatory.
15    (b) A rate is inadequate if it endangers the solvency of 
16the insurer.
17    (c) A rate is unfairly discriminatory if, after allowing 
18for practical limitations, the price differentials fail to 
19reflect the difference in expected losses and expenses. A rate 
20is not unfairly discriminatory if different rates result for 
21policyholders with similar loss exposures but different 
22expenses, or similar expenses but different loss exposures, so 
23long as the rate reflects the differences with reasonable 
24accuracy.
25    (d) A rate is reasonable and not excessive, inadequate, or 
		SB2947	- 6 -	LRB104 19637 BAB 33086 b
1unfairly discriminatory if it is an actuarially sound estimate 
2of the expected value of all future costs associated with an 
3individual risk transfer.
4    (215 ILCS 5/1804 new)
5    Sec. 1804. Determinations and notice; hearing.
6    (a) If the Department proves through independent actuarial 
7testing consistent with actuarial professional standards that 
8a filing is excessive, inadequate, or unfairly discriminatory 
9pursuant to subsection (d) of this Section and Section 1803, 
10the Department shall send the company notice within 60 days 
11after the filing specifying: (1) in what respects the filing 
12fails to meet the requirements of this Article, and (2) if 
13applicable, any modifications that are required. The notice 
14shall specify a reasonable period after which the filing is no 
15longer effective if the company fails to timely request a 
16hearing under subsection (b). If the company timely requests a 
17hearing under subsection (b), the filing shall remain in 
18effect until the conclusion of the hearing and a final order is 
19issued. If the Department finds that a rate is excessive, 
20inadequate, or unfairly discriminatory pursuant to this 
21Article, the final order may specify a reasonable period after 
22which the filing is no longer effective.
23    (b) The company may request a hearing on the notice within 
2430 days after receipt. Failure to request a hearing within 
25that 30-day period shall be deemed the company's acceptance of 
		SB2947	- 7 -	LRB104 19637 BAB 33086 b
1the Department's determination. Failure by the Department to 
2hold the requested hearing within 60 days after the request 
3and to resolve the outcome of the hearing within 90 days after 
4the initial request shall result in dismissal of the 
5Department's objection and the filing will remain in effect.
6    (c) All material, testing, and communication regarding 
7activities outlined in subsections (a) and (b) of this Section 
8shall be regarded as confidential work papers.
9    (d) Subsections (a), (b), and (c) shall apply only to 
10filings submitted on or after January 1, 2027. Failure of the 
11Department to make timely objections as outlined in subsection 
12(a) shall result in the filing being deemed compliant with 
13this Article.
14    (e) Any party aggrieved by a final order under this 
15Article may seek judicial review in the Circuit Court of 
16Sangamon County under the Administrative Review Law.
17    (215 ILCS 5/1805 new)
18    Sec. 1805. Prohibition on cost-shifting. Credible 
19State-specific loss experience shall be used in the 
20development of rates whenever such data is available and 
21statistically reliable. To meet actuarial standards of 
22credibility, insurers may supplement State-specific loss 
23experience with countrywide, regional, or out-of-state loss 
24experience. Nothing in this Section shall apply to rating 
25relativity development during ratemaking. This Section shall 
		SB2947	- 8 -	LRB104 19637 BAB 33086 b
1only apply to companies issuing policies that are subject to 
2this Article.
3    Section 99. Effective date. This Act takes effect January
41, 2027.