Bill Text: MI HB6267 | 2023-2024 | 102nd Legislature | Introduced
Bill Title: Insurance: automobile; manuals of rules; provide requirements for. Amends secs. 2021, 2106, 2108, 2112, 2458 & 2652 of 1956 PA 218 (MCL 500.2021 et seq.).
Spectrum: Partisan Bill (Democrat 4-0)
Status: (Introduced - Dead) 2024-12-11 - Bill Electronically Reproduced 12/11/2024 [HB6267 Detail]
Download: Michigan-2023-HB6267-Introduced.html
HOUSE BILL NO. 6267
A bill to amend 1956 PA 218, entitled
"The insurance code of 1956,"
by amending sections 2021, 2106, 2108, 2112, 2458, and 2652 (MCL 500.2021, 500.2106, 500.2108, 500.2112, 500.2458, and 500.2652), sections 2021, 2112, 2458, and 2652 as amended by 2015 PA 141 and sections 2106 and 2108 as amended by 2019 PA 21.
the people of the state of michigan enact:
Sec. 2021. An unfair method of competition and an unfair or deceptive act or practice in the business of insurance includes failure by a rating organization and an insurer that makes its own rates, within a reasonable time after receiving written request for the information and on payment of a reasonable charge, to furnish to an insured affected by a rate made by it, or to the insured authorized representative, all pertinent information to the rate. Pertinent information under this section does not include information that is a trade secret as determined by the director under section 2108(5) 2108 or 2406(6).2406.
Sec. 2106. (1) Except as specifically provided in this chapter, chapter 24 and chapter 26 do not apply to automobile insurance and home insurance.
(2) Subject to section 2108(6), an An insurer shall file rates with the department for approval in compliance with this act.
(3) An insurer may use rates for home insurance as soon as those rates are filed.
(4) To the extent that other provisions of this act are inconsistent with this chapter, this chapter governs with respect to automobile insurance and home insurance.
Sec. 2108. (1) On the effective date of a manual of classification, manual of rules and rates, rating plan, or modification of a manual of classification, manual of rules and rates, or rating plan that an insurer proposes to use for home insurance, the insurer shall file the manual or plan with the director. For automobile insurance, an insurer shall file a manual or plan described in this subsection in accordance with subsection (6). (7). Each filing under this subsection must state the character and extent of the coverage contemplated. An insurer that is subject to this chapter and that maintains rates in any part of this state shall at all times maintain rates in effect for all eligible persons meeting the underwriting criteria of the insurer.
(2) An insurer may satisfy its obligation to make filings under subsection (1) by becoming a member of, or a subscriber to, a rating organization licensed under chapter 24 or chapter 26 that makes the filings, and by filing with the director a copy of its authorization of the rating organization to make the filings on its behalf. This chapter does not require an insurer to become a member of or a subscriber to a rating organization. An insurer may file and use deviations from filings made on its behalf. The deviations are subject to this chapter.
(3) A filing under this section must be accompanied by a certification by or on behalf of the insurer that, to the best of the insurer's information and belief, the filing conforms to the requirements of this chapter.
(4) A filing under this section must include information that supports the filing with respect to the requirements of section 2109. The information may include 1 or more of the following:
(a) The experience or judgment of the insurer or rating organization making the filing.
(b) The interpretation of the insurer or rating organization of any statistical data it relies on.
(c) The experience of other insurers or rating organizations.
(d) Any other relevant information.
(5) A manual of rules or modification of a manual of rules filed with the department must contain, at a minimum, all of the following:
(a) A table of contents.
(b) The rating steps or rate order of calculations.
(c) All rating rules.
(d) All minimum premium rules.
(e) All waived premium rules.
(f) All payment plan options, including required downpayments.
(g) A description of the handling of terminations.
(h) A description of the handling of reinstatements.
(i) A description of the coverages offered, and any rules related to limitations or restrictions to those coverages.
(j) A description of discounts and surcharges applied, and any rules related to when the discounts and surcharges apply.
(6) (5) Except as otherwise provided in this subsection, the department shall make a filing under this section and any accompanying information open to public inspection on filing. An insurer or a rating organization filing on the insurer's behalf may designate information included in the filing or any accompanying information as a trade secret. The insurer or the rating organization filing on behalf of the insurer shall demonstrate to the director that the designated information is a trade secret. If the director determines that the information is a trade secret, the information is not subject to public inspection and is exempt from disclosure under the freedom of information act, 1976 PA 442, MCL 15.231 to 15.246. As used in this subsection, "trade secret" means that term as defined in section 2 of the uniform trade secrets act, 1998 PA 448, MCL 445.1902. However, trade secret does not include filings and information accompanying filings under this section that were subject to public inspection before January 11, 2016.
(7) (6) For automobile insurance, an insurer shall file a manual or plan in accordance with chapter 24, except that the manual or plan must remain on file for a waiting period of 90 days before it becomes effective, which period may not be extended by the director, and the waiting period applies regardless of whether supporting information is required by the director under section 2406(1). Upon On written application by the insurer, the director may authorize a filing that he or she has reviewed to become effective before expiration of the waiting period.
(8) (7) An insurer shall not make, issue, or renew a contract or policy except in accordance with filings that are in effect for the insurer under this chapter.
(9) (8) A filing under this chapter must specify that the insurer will not refuse to insure, refuse to continue to insure, or limit the amount of coverage available because of the location of the risk, and that the insurer recognizes those practices to constitute redlining. An insurer shall not engage in redlining as described in this subsection.
Sec. 2112. (1) Subject to subsection (3), at least annually, in conjunction with a renewal notice, a bill, or other notice of payment due issued to a policyholder in conjunction with an automobile or home insurance contract, an insurer shall send to the policyholder a written notice that all of the following information is available and will be provided to the policyholder on request:
(a) A description of the specific rating classifications by which the rates and premiums for the policy have been determined. The notice must be of sufficient detail and clarity so that the policyholder can reasonably verify the applicability and accuracy of the rating classifications.
(b) A general explanation of the extent to which rates or premiums vary among policyholders on the basis of the rating classifications used by the insurer.
(c) Sources and reasonable procedures by which the policyholder can obtain from the insurer additional information sufficient for the policyholder to calculate and confirm the accuracy of his or her specific premium.
(d) Relevant information regarding the rights of the policyholder, under sections 2113 and 2114, to appeal the application of the insurer's rating plan in determining his or her premium, to obtain documentation from the insurer regarding the determination of the rate, to appeal the application of the insurer's underwriting rules to the policyholder, to request an informal conference with the insurer, and to file with the director a complaint as an aggrieved person.
(e) A description of all of the insurer's underwriting rules based on insurance eligibility points and a description of all of the underwriting rules of the insurer's affiliates based on insurance eligibility points.
(f) A suggestion that the policyholder contact his or her agent to determine if he or she is eligible for insurance from an affiliate of the insurer or under a different rating plan of the insurer that would provide to the policyholder insurance at a more favorable premium.
(2) In a written notice provided under subsection (1), the insurer shall provide the policyholder with a telephone number and an Internet address, by either of which the policyholder may contact the insurer to request the information listed in subsection (1). On request of the policyholder, the insurer shall provide the policyholder with the requested information in either a written or electronic format, as requested by the policyholder.
(3) An insurer is not required to provide information to an insured under this section that is a trade secret as determined by the director under section 2108(5) 2108 or 2406(6).2406.
Sec. 2458. Each rating organization and insurer that makes its own rates, within a reasonable time after receiving written request for the information and on payment of a reasonable charge, shall furnish to an insured affected by a rate made by the rating organization or insurer, or to the insured's authorized representative, all pertinent information as to the rate. Pertinent information under this section does not include information that is a trade secret as determined by the director under section 2108(5) 2108 or 2406(6). 2406. Each rating organization and insurer that makes its own rates shall provide within this state reasonable means for a person aggrieved by the application of its rating system to be heard, in person or by his or her authorized representative, on his or her written request to review the manner in which the rating system has been applied in connection with the insurance afforded to him or her. If the rating organization or insurer fails to grant or reject the request within 30 days after it is made, the applicant may proceed in the same manner as if his or her application had been rejected. A party affected by the action of the rating organization or insurer on the request may appeal, within 30 days after written notice of the action, to the director, who, after a hearing held on not less than 10 days' written notice to the appellant and to the rating organization or insurer, may affirm or reverse the action. A person who requests a hearing before the director under this section may be represented at the hearing by an attorney. A person, other than an individual, that requests a hearing before the director under this section may also be represented by an officer or employee of that person. An individual who requests a hearing before the director under this section may also be represented by a relative of the individual.
Sec. 2652. Each rating organization and insurer that makes its own rates, within a reasonable time after receiving written request for the information and on payment of a reasonable charge, shall furnish to an insured affected by a rate made by it, or to the insured's authorized representative, all pertinent information as to the rate. Pertinent information under this section does not include information that is a trade secret as determined by the director under section 2108(5) 2108 or 2406(6). 2406. Each rating organization and insurer that makes its own rates shall provide within this state reasonable means for a person aggrieved by the application of its rating system to be heard, in person or by his or her authorized representative, on his or her written request to review the manner in which the rating system has been applied in connection with the insurance afforded him or her. If the rating organization or insurer fails to grant or reject the request within 30 days after it is made, the applicant may proceed in the same manner as if the applicant's application had been rejected. A party affected by the action of the rating organization or the insurer on the request may appeal, within 30 days after written notice of the action, to the director, who, after a hearing held on not less than 10 days' written notice to the appellant and to the rating organization or insurer, may affirm or reverse the action.
