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Illinois Won't Issue Bulletin on Price Optimization

The state of Illinois has become an outlier on the topic of insurance price optimization. Bucking a national...
January 20, 2016

The state of Illinois has become an outlier on the topic of insurance price optimization. Bucking a national trend, Illinois Acting Insurance Director Anne Melissa Dowling's office said it will not limit or eliminate the use of price optimization because no specific definition of what price optimization is actually exists. Recently, regulators have questioned whether insurers are using non-risk-based factors, including the so-called "price elasticity of demand," to raise the rates of policyholders who are unlikely to respond by moving to another carrier.

To date, 17 states have taken action to prohibit or severely restrict the practice of price optimization. They are: California, Colorado, Connecticut, Delaware, the District of Columbia, Florida, Indiana, Maine, Maryland, Minnesota, Missouri, Montana, Ohio, Pennsylvania, Rhode Island, Vermont and Washington.

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