Bloomington-Normal: Sharon Chung Votes No on Insurance Rate Caps as Pritzker Prepares to Sign Bills

A Bloomington lawmaker breaks with her party to protect two insurance giants in her district

State Rep. Sharon Chung of Bloomington voted against two insurance regulation bills that passed the Illinois General Assembly this week. Her vote put a local face on a national debate over who controls insurance prices: the government or the companies.

The bills now head to Gov. JB Pritzker, who has said he will sign them into law. That means Bloomington-Normal residents could see new rules on how much insurers can raise their rates.

"Too many families have dealt with unexplained, unfair insurance price hikes on their homes and cars, so this legislation helps protect consumers while maintaining the core principles the Illinois business community is built on," Pritzker said.

Why a Bloomington Democrat voted no

Chung represents a district that includes the headquarters of two of Illinois' largest insurers: State Farm in Bloomington and Country Financial in Bloomington.

She said she did not want to vote against companies that support the local economy.

"I've talked to a lot of people of how it's afforded people a really great middle-class lifestyle here at Bloomington Normal. And I couldn't do something that I felt like that could affect that," Chung said.

Chung also argued the state's auto insurance rates are already competitive. Illinois ranks sixth lowest in the nation for auto insurance costs, she said.

"We still have like the sixth lowest auto insurance rates in the entire country," Chung said. "If we're trying to tinker with something that is already somewhat working, I'm afraid of some consequences that could happen that could actually lead to higher rates in the long term."

What the bills do

The legislation includes two separate bills: SB 714 and HB 4273. Both would give the Illinois Department of Insurance the power to reject rate increases it deems "excessive, inadequate, or unfairly discriminatory."

Key provisions include:

• Insurers can implement rate changes immediately but the department can review them within 40 to 60 days depending on the bill
• Companies must notify customers 30 days before an auto rate increase of 10% or more
• Companies must notify customers 60 days before a home insurance rate increase of 10% or more
• Insurers can request a hearing after the department flags a rate

Illinois is currently one of only two states without an insurance rate review process, according to Illinois PIRG.

The fight over who pays

Abe Scarr, director of Illinois PIRG, said the bills create a baseline consumer protection that residents of every other state already have.

"When these bills are signed into law, it will finally be illegal to charge excessive home and auto insurance rates in Illinois. Residents of every other state enjoy these basic consumer protections, which are long overdue in Illinois," Scarr said.

Insurance industry groups pushed back. Kevin Martin of the Illinois Insurance Association warned the proposal could backfire.

"The good driver is going to have to subsidize the bad driver," Martin said.

Martin argued that removing factors like age and ZIP code from rate calculations would force companies to raise prices across the board.

The National Association of Mutual Insurance Companies said the bills expand government control over insurance rates and could lead to fewer options and higher prices for consumers.

What happens next for Bloomington-Normal residents

Pritzker pushed for the legislation after State Farm raised homeowner premiums by 27.2% last summer. The governor's office called the increase an example of unchecked corporate power.

Country Financial, also based in Bloomington, recently cut auto insurance rates in Illinois by 8%. However, home insurance rates could rise again this summer as severe weather continues to hit Central Illinois.

Both bills passed on mostly partisan lines. With Pritzker expected to sign, the new rate review system will take effect once the governor's pen hits the paper.

For Bloomington-Normal residents, the question is no longer whether the rules will change. The question is whether the changes will lower their bills or raise them.