HB1252
INS-MOTOR VEHICLE RATES
TL;DR
Illinois Rep. Will Guzzardi's HB1252 (the Motor Vehicle Insurance Fairness Act) would ban auto insurers from using 16 factors like credit scores, ZIP codes, gender, age, occupation, education, and homeownership when setting rates or deciding whom to insure. Insurers would also need to prove their algorithms and models don't discriminate against protected groups, and every rate change would require state approval with public hearings.
How This Might Impact Your Business
Auto insurers operating in Illinois would lose access to 16 common rating factors including credit scores, ZIP codes, gender, marital status, age, occupation, education level, homeownership, and income, forcing a complete overhaul of pricing models.
Any algorithm or model used for marketing, underwriting, rating, claims handling, or fraud detection must be tested and proven not to disparately impact groups based on race, religion, sex, sexual orientation, disability, or gender identity.
Territorial rating gets sharply limited: ZIP-code-level pricing is banned, and any allowed geographic factor cannot move premiums by more than 25%.
Every rate change requires a full prior-approval filing with the Illinois Department of Insurance, with 60-day public review, mandatory hearings for personal-line increases above 7% (15% for commercial), and public inspection of all submitted data including proprietary models.
Consumer advocates can intervene in any rate proceeding, and insurers must pay their advocacy and witness fees if they meaningfully influence the outcome, adding litigation costs to every filing.
All Illinois auto insurers pay an annual fee of 0.05% of prior-year earned premium to fund enforcement; for a carrier with $500M in Illinois premium, that's $250,000 per year.
Until the Department finalizes new rules (within 90 days of enactment), no rate increases are permitted except via a special hearing showing the insurer cannot earn a reasonable return.
What Should You Do
Have your actuarial and data science teams inventory every variable currently used in Illinois auto rating and underwriting models, and flag which of the 16 prohibited factors would need to be removed or replaced.
Commission a disparate-impact audit of your marketing, underwriting, claims, and fraud algorithms now, since the bill would require insurers to affirmatively demonstrate compliance rather than wait for a complaint.
Ask your government affairs team to track HB1252 through the Illinois House Rules Committee and engage industry trade groups (like the Illinois Insurance Association and APCIA) on lobbying strategy.
Brief your legal and IP teams that rate filings, including model documentation, would become public record; identify what proprietary information could be exposed and prepare redaction or trade-secret arguments.
Model the revenue impact of losing credit-based insurance scoring and ZIP-code rating in Illinois, and stress-test whether current book profitability survives under a prior-approval regime with capped territorial factors.
Who It Affects
Sponsors
Status Timeline
introduced
Rule 19(a) / Re-referred to Rules Committee
January 10, 2025