State Farm’s refusal to turn over documents to the Illinois Department of Insurance is more than just another corporate legal spat. It is a test of whether our state regulators can still pierce the veil of secrecy surrounding the country’s largest insurance companies or whether insurers have successfully rewritten the rules of oversight to protect themselves from scrutiny. 1

At the heart of the dispute is something deeply troubling. The Illinois regulator demanded detailed, ZIP-code-level homeowners data spanning several years. This type of data could reveal how the company is pricing policies, where it is retreating from markets, and what it really thinks about affordability and availability. The company refused, invoking trade secret and proprietary protections.

It does not take a rocket scientist to figure out that the documents regulators most need to see are inevitably the ones insurers most want to hide. The communications among senior executives, the internal financial analyses, the underwriting strategies, and the decisions about which communities to non-renew show the insurer’s intent, its motivations, its operational direction, and its true financial status. These documents are indeed highly confidential and may contain legitimately proprietary information. But in a highly regulated industry, confidentiality cannot become immunity. When an insurer chooses to open business and operate in a state and is allowed to sell a product the public must often buy, it also chooses to open its books to the regulator charged with protecting the public.

Insurance companies now seem to be taking a harder line, arguing that regulators cannot have access to this kind of internal information even though state law clearly provides for it. If that strategy succeeds, regulators will be left to oversee billion-dollar companies with nothing more than the data those companies choose to release. Imagine a referee who isn’t allowed to see the rulebook or the game plan but is told to ensure fair play.

What we are witnessing is the transformation of trade secret law into a shield against regulation itself. The industry’s lobbyists push to expand definitions of “confidential” and “proprietary” until almost every meaningful document qualifies. That might be good corporate lawyering, but it is terrible public policy. If these claims of secrecy continue to grow unchecked, insurance regulation will become an empty formality. The result will be less transparency, weaker oversight, and ultimately higher costs and fewer protections for policyholders.

Real oversight requires real access. Regulators must be able to examine the full picture to understand how an insurer is operating, what financial pressures it faces, and whether its market behavior aligns with its legal obligations to policyholders. If the most important documents are off-limits, regulation becomes guesswork.

The insurance industry was granted its special status under the promise of good faith regulation in the public interest. It cannot now use the law to retreat behind locked doors. Transparency and accountability are not optional. They are the price of doing business in a society that entrusts insurers with its financial security.

For readers wishing to see another example of this issue currently at play in Florida, please read Florida’s Insurance Scandal: The “Incomplete” Report That Almost Stayed Buried.

Thought For The Day

“Sunlight is said to be the best of disinfectants; electric light the most efficient policeman.” 
— Louis D. Brandeis

1 Gillespie v. State Farm Fire & Cas. Ins. Co., No. 2025CH10454 (Ill. Cir. Ct. – Cook County [Complaint filed Oct. 10, 2025]).