Illinois Secretary of State Alexi Giannoulias is facing pushback from property and casualty insurers over his new campaign aimed at limiting the use of socioeconomic data in auto insurance pricing. The campaign has sparked a heated debate about how insurance rates are set and who should be considered a safe driver.
Giannoulias argues that current practices lead to unfair pricing, where drivers with good records but poor credit scores end up paying more than those with bad driving histories but better credit. He claims that only a driver’s on-road behavior should influence their insurance premiums. His office points to studies showing that these practices contributed to an 18% average rate increase in 2024, with another 4% rise expected this year.
The campaign includes a website and plans for town hall meetings to gather feedback from the public about these pricing methods. Giannoulias believes that the current system makes insurance unaffordable for many Illinois residents, which could ultimately make roads less safe.
In response, insurance industry representatives have raised concerns about the proposed restrictions. They argue that these changes could disrupt established actuarial practices that help insurers assess risk effectively. A joint statement from national insurance trade groups and the Illinois Insurance Association emphasized the importance of using a wide range of objective criteria for setting rates accurately. They also pointed out that existing laws already prohibit using race, income, religion, or ethnicity in pricing.
Earlier this year, the Illinois House passed a bill, HB 1234, which mandates an investigation into how non-driving factors like ZIP codes and credit scores affect insurance premiums. The study is due by January 1, 2026, and aims to analyze whether pricing disparities disproportionately affect certain demographic groups. However, industry stakeholders have questioned the decision to have the Secretary of State lead this review, suggesting that the state’s Department of Insurance would be better suited for the task due to its expertise in insurance regulation.
This debate in Illinois mirrors similar discussions in other states. For instance, New York lawmakers are considering limits on the use of credit history in underwriting auto policies. Supporters of these measures argue that credit-based pricing creates unfair disparities unrelated to driving behavior. Insurers, however, warn that such restrictions could lead to less accurate pricing and reduced competition in the market.
As the conversation around insurance pricing continues, both sides of the debate are gearing up for a long discussion about fairness, safety, and the best way to determine insurance rates.