A method of processing video data includes classifying, by processing circuitry, luma samples of a neighboring luma block of a reference block and luma samples of a neighboring luma block of a current block into a plurality of groups and deriving, by the processing circuitry, one or more local illumination compensation parameters for each group of the plurality of groups to generate a plurality of local illumination compensation parameters for the current block. The method further includes deriving, by the processing circuitry, a plurality of linear models between the neighboring luma block of the reference block and the neighboring luma block of the current block using the plurality of local illumination compensation parameters for the current block and generating, by the processing circuitry, a prediction block using the plurality of linear models.