Illinois' director of insurance accused State Farm of failing to turn over nationwide data at a zip-code level relating to its homeowners insurance business, telling a state court that the insurance giant has relied on two "legally baseless objections" to avoid its data-sharing obligations.
In her lawsuit filed Friday in Cook County Circuit Court against various State Farm-affiliated entities, Illinois Department of Insurance Director Ann Gillespie said that State Farm has first incorrectly argued that it can't be required to produce data about insured properties outside Illinois, and second, that she may violate confidentiality protections.
But a state appeals court held in the 2004 case Chicago Alliance for Neighborhood Safety v. City of Chicago that "government bodies are presumed to act lawfully," Gillespie noted. She said she's therefore "not obligated to promise regulated entities that she will follow legal confidentiality protections before the regulated entity cooperates with an examination."
State Farm is also headquartered in Illinois, Gillespie further highlighted, adding that under state law, the "the Illinois-based records of an Illinois-based company … are subject to examination by the director."
"The director has a tangible legal interest in ensuring that State Farm complies with its obligations under the Insurance Code," Gillespie said. "A complete understanding of the affordability crisis in homeowners insurance requires comprehensive data on the financial condition of State Farm, the market and nonfinancial practices of State Farm, and the enterprise risks faced by State Farm."
According to court filings, the dispute centers on the department's November examination into State Farm's financials, in light of the insurer's increase of homeowners premiums by more than 16% nationwide in 2024, which Gilliespie said is the "largest yearly increase since 2002."
As part of the department's examination, it specifically required information "at the zip-code level nationwide" on the total amount of premiums State Farm collected, types of coverage provided, rates of cancellation and rates of nonrenewal, among other types of information, Friday's lawsuit states.
"All these factors ultimately bear on the increasing unaffordability of homeowners insurance to everyday Illinois residents," Gillespie argued, though she said State Farm "nevertheless has refused meaningfully to comply with the November 2024 examination."
Specifically, she said State Farm "demanded" that the data the department sought wouldn't be shared with the National Association of Insurance Commissioners, a group comprising each state's chief insurance regulator, which helps state insurance departments coordinate and establish standards for insurance regulation.
And if the department were to share any data with the NAIC, Gillespie said State Farm further demanded that Gillespie comply with an Illinois insurance code statute permitting the director to share confidential documents with the NAIC and regulatory agencies, provided the recipient promises to keep such documents confidential.
But even after the department allegedly told State Farm in late November that such confidentiality provisions "will apply," the insurer has still not complied with the data requests, most recently denying the department's request this past August, Gillespie alleged.
In a statement Tuesday, Illinois Attorney General Kwame Raoul said "State Farm's obstruction does not just violate the law," but further "prevents the Department of Insurance from obtaining information to help make sure all Illinois homeowners are being treated fairly."
A spokesperson for State Farm, meanwhile, told Law360 that the insurer "did not violate the law," and that Gillespie's lawsuit "is without merit and has nothing to do with Illinois customers or the cost of their insurance."
"State Farm remains committed to collaborating with the Illinois Department of Insurance to benefit Illinois customers," the spokesperson said. "We value our partnerships with state leaders and continue to work together toward finding solutions that allow us to best serve customers and promote a healthy and competitive insurance market."
Gillespie is represented by Illinois Attorney General Kwame Raoul and by Alice Riechers, Thomas J. Verticchio and R. Henry Weaver of the Office of the Illinois Attorney General.
Counsel information for State Farm was not immediately available.
The case is Ann Gillespie v. State Farm Fire and Casualty Insurance Co. et al., case number 2025CH10454, in the Circuit Court of Cook County.
Oct 14
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