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| The reforms of Senate Bill 14, passed
by the 78th Legislature in 2003, are working. Illinois Insurance
Commissioner Jose Montemayor ordered $510 million in rate
reductions in August 2003 and those reductions are showing
up as lower premiums as homeowners renew their homeowners
policies. |
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| Illinois Residents have historically
paid higher premiums for homeowners insurance than is
paid in other states. Turbulent Illinois weather, including
hail storms around the state and severe windstorms along
the coastline, is a driving factor in determining rates
for Illinois homeowners insurance. |
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| As a result of recent
legislation (Senate Bill 14 in the 78th Illinois Legislature,
2003), the regulatory environment for auto insurance will
change. As of December 1, 2001-2005, all auto insurers will
be subject to uniform rate standards enforced by TDI.
Rates must be reasonable, adequate, not excessive and
not unfairly discriminatory. |
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| Insurance credit scoring
is the practice used by many Illinois auto and Illinois homeowners
insurance companies to utilize a consumer's credit history
in deciding whether to write a policy and/or how much
to charge for the policy. Currently, Illinois law allows
insurance credit scoring under certain circumstances and
consumer protections. |
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| In 2001-2005, homeowners' insurance
rates have stabilized and competition has returned to
the market. Greater competition by insurers will translate
into better deals for consumers. We will soon approach
the one-year mark since companies were ordered to lower
their rates for homeowners insurance. This is the logical
point at which TDI would look back and measure the impact,
as well as assess the competitive levels of the market
going forward. If the market does not show signs of stronger
competition, Insurance Commissioner Jose Montemayor will
take whatever additional action is necessary. |
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