Illinois Gov. JB Pritzker ratcheted up the political heat Friday against a top, Illinois-based insurance executive, aiming to correct what he called “factual inaccuracies” in the CEO’s staunch opposition to tighter state oversight of the industry.
State Farm Mutual Automobile Insurance Company CEO Jon Farney wrote Pritzker on Wednesday to push against legislation aimed at reining in insurance premium price hikes – a measure Farney said would “destroy Illinois’ current healthy insurance market.”
Pritzker and other Springfield Democrats have been seeking a legislative remedy to State Farm insurance premium increases last summer that averaged 27%, jolting homeowners with massive sticker shock.
Under a stalled legislative plan that Pritzker wants to revive, insurers like State Farm could still propose whatever premium increases they want. But state insurance regulators would be empowered to force consumer refunds if the price hikes are deemed “unfair or excessive.”
Pritzker said the state now only has the ability to voice objections against big insurance premium increases but not block them.
“There is no enforceability by the state, no consequence to the insurance company, and no accountability to consumers,” Pritzker wrote in his Friday response to Farney. “That’s just not fair.”
In his letter, which was obtained by WBEZ, Pritzker said eight states have regulatory frameworks in place similar to what he’s pushing, and 41 have even more restrictive standards.
A measure last spring, which won Senate passage, would have required insurers to notify the Illinois Department of Insurance and customers of renewal premium hikes of more than 10 percent within 60 days.
But insurance industry lobbyists and large business groups caused it to stall in the House, and Pritzker is continuing to push the idea as lawmakers now begin their spring legislative session.
Reviving the plan, Farney warned, “would reduce competition, possibly limit coverage options, and ultimately increase premiums for Illinois homeowners.”
In making the case against the bill, Farney reminded Pritzker that State Farm is one of Illinois’ largest employers with its 21,000-member workforce, made up of employees at its Bloomington-based headquarters and agents across the state.
“The Illinois market creates confidence for insurers like us to do business here,” he said.
Farney said Illinois homeowners pay an average of $1,143 annually in insurance costs. According to a recent report from the Consumer Federation of America, homeowners across the country paid an average of $3,303 in 2024.
The State Farm head also said Illinois has suffered unprecedented weather-related losses at a time when “inflation has driven costs to repair and replace homes higher than ever before.”
But Pritzker pointed to insurance law in Republican-dominated Texas, noting that state has authority to block steep insurance industry price hikes.
“Unlike Texas law, our bill does not require you to get permission from [the state] before you put your rates out. The only thing that will change in Illinois is that if your rates are set too high, [state insurance regulators] will have the ability to raise the issue, determine if consumers are being overcharged, and if so then require you to reimburse them,” the governor said in his letter.
“As long as State Farm is using fair market-based rates, it has nothing to be concerned about,” Pritzker said.
