March 6, 2007, Introduced by Reps. Melton, Virgil Smith, Johnson, Sheltrown, Gillard, Hood, Polidori, Kathleen Law, Young, Espinoza, Byrnes, Wojno, Garfield, Scott, Condino, Angerer, Jackson, Gonzales, Warren, Alma Smith and Cheeks and referred to the Committee on Insurance.
A bill to amend 1956 PA 218, entitled
"The insurance code of 1956,"
(MCL 500.100 to 500.8302) by adding chapter 21A.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
CREDIT-BASED INSURANCE SCORING FOR PERSONAL INSURANCE
Sec. 2151. As used in this chapter:
(a) "Insurance score" means a number, rating, classification,
or comparative grouping of risks that is based in whole or in part
on credit information, a credit score, or on items of information
included in a credit report maintained by a consumer reporting
agency that an insurer uses for the purposes of predicting the
future loss exposure of an individual applicant or insured, for
classifying risk, or for setting the premium charged an individual
applicant or insured.
(b) "Personal insurance" means policies underwritten on an
individual or group basis for personal, family, or household use,
subject to chapter 21, 24, or 26, and includes private passenger
automobile, homeowners, motorcycle, boat, personal watercraft,
snowmobile, recreational vehicle, mobile homeowners, and all other
noncommercial vehicular and noncommercial dwelling fire insurance
Sec. 2153. This chapter applies only to personal insurance. If
any provision of this chapter is found to be inconsistent with a
provision of chapter 21, 24, or 26, this chapter controls with
respect to the use of insurance scores in the rating or
underwriting of personal insurance.
Sec. 2155. (1) For new or renewal policies effective on and
after July 1, 2007, an insurer in the conduct of its business or
activities shall not use an insurance score as a rating factor.
(2) For new and renewal policies effective on and after July
1, 2007, an insurer in the conduct of its business or activities
shall not use an insurance score as a basis to refuse to insure,
refuse to continue to insure, or limit coverage available.
Sec. 2157. (1) For new and renewal policies effective on or
after July 1, 2007, an insurer shall adjust base rates in the
(a) Calculate the sum of earned premium at current rate level
for the period January 1, 2006 through December 31, 2006.
(b) Calculate the sum of earned premium at current rate level
with all insurance score discounts eliminated for the period
January 1, 2006 through December 31, 2006.
(c) Reduce base rates by the factor created from the
difference of the number 1 and the ratio of the amount of
subdivision (a) to the amount of subdivision (b).
(2) The insurer shall file with the commissioner a
certification that it has made the base rate adjustment and
documentation describing the calculation of the base rates
adjustment. The insurer shall file the certificate and
documentation not later than May 1, 2007.
Sec. 2159. If an insurer fails to make the filing required
under section 2157, then the insurer in any proceeding to determine
the validity of a personal insurance rate filing shall be subject
to the presumption that the rate filing does not conform to rate
standards under this chapter or chapter 21, 24, or 26.