If enacted, SB3213 will require every insurer operating in Illinois to demonstrate that their marketing and underwriting practices are free from discriminatory effects. Insurers will be mandated to file complete rate applications for any changes, ensuring transparency in their rate-setting practices. Any rate changes deemed excessive, inadequate, or unfairly discriminatory will not be approved, thus protecting consumers from unjust premium spikes. The bill also mandates that data provided to the Director of Insurance be available for public inspection, promoting accountability in the insurance industry.
SB3213, known as the Motor Vehicle Insurance Fairness Act, aims to amend the Illinois Insurance Code to enhance fairness in the automobile insurance market. The primary objective of the bill is to prohibit insurance companies from refusing to issue or renew policies based on certain prohibited underwriting and rating factors. This includes factors such as sex, race, marital status, and income level. By introducing this legislation, the bill seeks to create a more equitable environment in which all individuals can access automobile insurance without facing discrimination based on characteristics that have no relation to their driving abilities or risk levels.
Notably, the bill addresses both the underwriting decisions and the use of algorithms in the insurance process. Critics may argue that the restrictions on factors such as geography (zip code) could hinder insurers from adequately assessing risk, while supporters advocate that such measures are necessary to prevent systemic biases in insurance pricing. Furthermore, the introduction of fees for insurers to cover the administrative costs of compliance could also spark debate on whether this places an undue burden on insurance providers, potentially leading to higher costs for consumers in the long run.