The Illinois Commercial Auto Assigned Risk Plan has posted underwriting losses approaching levels typically associated with market distress, raising new questions about oversight, exposure verification and whether some trucking companies may be exploiting the system.
Financial data obtained by FreightWaves shows that, across active policy years from 2014 through the second quarter of 2025, the Illinois commercial assigned risk pool recorded:
- $435.7 million in earned premium
- $625.3 million in incurred losses (including IBNR)
- $67.1 million in loss adjustment expenses
- $129.6 million in other underwriting expenses
That translates to a combined ratio well above 150% over the period — and roughly 191% as of the second quarter of 2025, meaning the program is paying out nearly $1.91 for every dollar it collects.
Zach Meiborg, President of the Meiborg Companies, says these losses “absolutely” stem from the fraudulent reporting on carriers part and the historical lack of oversight in the state pool of insurance.
“This is a huge problem because we have quality insurance companies turning away from writing insurance in Illinois because they’re compelled by state law to participate in the state pool, when these insurance providers know they’re going to get hosed in the state pool,” Meiborg said in an interview with FreightWaves. “The problem has recently gotten better with the use of a technology such as GenLogs, but we have a long way to go.”
How the assigned risk pool works
Illinois requires insurers writing commercial auto liability coverage in the state to participate in an assigned risk mechanism. The program was designed to ensure coverage remains available to businesses unable to obtain insurance in the voluntary market.
Premiums in the assigned risk market are typically significantly higher than standard rates, reflecting elevated risk profiles.
Meiborg said the numbers show the structure has possibly been abused.
Some carriers allegedly underreport fleet size when applying for coverage, Meiborg said. He claims certain policies are issued on a “fleet card” or self-reported basis without vehicle-level verification, allowing operators to insure a fraction of their actual trucks.
“Where these fleets are filling out their application showing that they have 10 trucks, what they actually are running are closer to 100 or 200 trucks,” Meiborg said.
He contends that compliant carriers ultimately subsidize those allegedly gaming the system through higher premiums.
Broker: ‘They caught it — and they’re working on it’
Chris Patrick, vice president at transportation insurance brokerage Cottingham & Butler, said the Illinois assigned risk pool financial results over the last decade are “really bad” from an underwriting standpoint, but cautioned against oversimplifying the cause.
Patrick said AIPSO, the nonprofit that administers assigned risk business in many states, has tightened rules significantly in recent months.
“In June, there were 210 motor carriers in the Assigned Risk Plan… this past month it’s down to 130,” Patrick said.
He added that policy forms have been revised and rates increased to discourage abuse, and that application approval has become more restrictive.
“They didn’t catch it up front. They caught it — now they’re working on it,” Patrick said.
Patrick acknowledged that misrepresentation can occur in commercial trucking insurance, particularly when agents and carriers act in concert. But he also noted underwriting losses can be driven by broader industry pressures including:
- Nuclear verdict exposure
- Claim severity inflation
- Long-tail reserve development
- Aggressive entry of new carriers during the 2020–2022 freight boom
“Industry-wide, auto liability typically doesn’t make much money,” Patrick said.
Industry pressures add fuel
The surge in new authorities during the COVID-era freight boom brought thousands of new small carriers into the market. As freight rates have fallen and insurance costs risen, some operators may be under financial strain.
“To stay alive, they’re resorting to doing this kind of stuff,” Patrick said of bad actors allegedly underreporting exposure.
Safety advocates note that underinsuring fleets can increase risk to the public if improperly covered vehicles are involved in crashes.
Patrick pointed to “chameleon carriers” — companies that shut down and reopen under new authorities — as an ongoing enforcement challenge.
$500 million claim under scrutiny
Whether cumulative underwriting losses approach $500 million depends on how the losses are calculated — including how reserves develop across policy years and how operating expenses are attributed.
The financial data shows total incurred losses exceeding earned premium by roughly $190 million across active policy years through Q2 2025, before adding expenses.
FreightWaves contacted the Illinois Department of Insurance seeking comment on:
- Audit processes within the commercial assigned risk market
- Exposure verification controls
- Enforcement and fraud investigations
- The accuracy of the financial data
The department has not responded.
A bigger industry issue?
Patrick noted that Illinois is not necessarily unique, and that assigned risk commercial auto markets in other states may also face adverse underwriting results.
Still, both men agree the current numbers are not sustainable.
“The problem is tremendous,” Patrick said.
Meiborg believes greater transparency is needed.
“If we could just shed light on the fraud, it will really help to clean up our industry,” he said.
