The Illinois Commercial Auto Assigned Risk Plan is facing significant underwriting losses that are near levels indicative of market distress, raising concerns about regulatory oversight, verification of exposures, and potential exploitation of the system by some trucking firms.
Data obtained by FreightWaves indicates that between 2014 and the second quarter of 2025, the Illinois commercial assigned risk pool experienced:
This results in a combined ratio exceeding 150% over the timeframe, reaching approximately 191% by the second quarter of 2025, signifying that the program disburses nearly $1.91 for every dollar it collects.
Zach Meiborg, the President of the Meiborg Companies, asserts that these losses are “absolutely” a result of fraudulent reporting by carriers and a historical lack of regulatory oversight in the state’s insurance pool.
Understanding the Assigned Risk Pool
In Illinois, insurers providing commercial auto liability coverage are mandated to engage in an assigned risk mechanism. This program aims to guarantee that businesses unable to secure insurance in the voluntary market still have access to coverage.
Typically, premiums in the assigned risk market are considerably higher than standard rates, reflecting the increased risk involved.
Meiborg claims evidence suggests that this framework has possibly been misused. He points out that some carriers allegedly underreport their fleet size when seeking coverage, leading to policies being issued on a “fleet card” or self-reported basis without verifying vehicle count, allowing operators to insure significantly fewer trucks than they actually operate.
Broker: Progress Being Made
Chris Patrick, a vice president at transportation insurance brokerage Cottingham & Butler, described the financial results of the Illinois assigned risk pool over the past decade as “really bad” from an underwriting perspective. However, he cautioned against attributing the situation to a single cause.
Patrick noted that AIPSO, the nonprofit managing assigned risk business across many states, has made considerable improvements in recent months. He mentioned that the number of motor carriers in the Assigned Risk Plan decreased from 210 in June to 130 recently. Furthermore, adjustments to policy forms, increased rates, and more stringent application processes have been implemented to deter exploitation.
Wider Industry Pressures
The influx of new carriers during the COVID-era freight boom introduced many small operators into the market. As freight rates have declined and insurance costs have escalated, financially strained operators might resort to underreporting their exposures.
Safety advocates warn that insufficient coverage can pose greater risks to the public when improperly insured vehicles are involved in accidents. Patrick also highlighted the challenge posed by “chameleon carriers,” which are companies that close down and reopen under different authorities.
$500 Million Claim Under Investigation
The question of whether cumulative underwriting losses reach approximately $500 million is contingent on how these losses are computed, including reserve development across policy years and expense allocations.
The financial data shows incurred losses surpassing earned premiums by about $190 million across active policy years through Q2 2025, exclusive of operational expenses.
FreightWaves reached out to the Illinois Department of Insurance for comments regarding audit procedures within the commercial assigned risk market, exposure verification methods, enforcement actions, and the accuracy of the financial data, but has yet to receive a response.
Broader Industry Implications
Patrick suggested that the issues in Illinois are not isolated and that similar adverse underwriting situations may exist in assigned risk commercial auto markets in other states. Both he and Meiborg concur that the current financial results are unsustainable.
“The problem is tremendous,” Patrick remarked, while Meiborg emphasized the necessity for improved transparency in order to confront the issue of fraud within the industry.
