June 7, 2018, Introduced by Rep. Kosowski and referred to the Committee on Insurance.
A bill to amend 1956 PA 218, entitled
"The insurance code of 1956,"
by amending sections 2027 and 2151 (MCL 500.2027 and 500.2151),
section 2027 as amended by 1998 PA 26 and section 2151 as added by
2012 PA 165, and by adding section 2027a.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 2027. Unfair methods of competition and unfair or
deceptive acts or practices in the business of insurance include:
(a)
Refusing to insure, or refusing to continue to insure, or
limiting the amount of coverage available to an individual or risk
because of any of the following:
(i) Race, color, creed, marital status, sex, or national
origin, except that marital status may be used to classify
individuals or risks for the purpose of insuring family units.
(ii) The residence, age, disability, or lawful occupation of
the individual or the location of the risk, unless there is a
reasonable relationship between the residence, age, disability, or
lawful occupation of the individual or the location of the risk and
the extent of the risk or the coverage issued or to be issued, but
subject
to subparagraph (iii) and section 2027a. This section shall
does not prohibit an insurer from specializing in or limiting its
transactions of insurance to certain occupational groups, types, or
risks
as approved by the commissioner of insurance. director. The
commissioner
director shall approve the specialization for an
insurer licensed to do business in this state and whose articles of
incorporation contained a provision on July 1, 1976, requiring that
specialization.
(iii) For property insurance, the location of the risk, unless
there is a statistically significant relationship between the
location of the risk and a risk of loss due to fire within the area
in which the insured property is located. As used in this
subparagraph, "area" means a single zip code number under the
zoning
improvement plan of the United States postal service.Postal
Service.
(b) Refusing to insure or refusing to continue to insure an
individual or risk solely because the insured or applicant was
previously denied insurance coverage by an insurer.
(c) Charging a different rate for the same coverage based on
sex, marital status, age, residence, location of risk, disability,
or lawful occupation of the risk unless the rate differential is
based on sound actuarial principles, a reasonable classification
system, and is related to the actual and credible loss statistics
or, for new coverages, reasonably anticipated experience, in
the
case
of new coverages. This but
subject to section 2027a. Except as
provided
in section 2027a, this subdivision shall
does not apply if
the
rate has previously been approved by the commissioner.director.
Sec. 2027a. It is an unfair method of competition and an
unfair or deceptive act or practice in the business of insurance
for an automobile insurer to refuse to insure, refuse to continue
to insure, limit the amount of coverage available, or charge a
different rate or premium for the same coverage based on the credit
history or lack of credit history for an insured or applicant.
Sec. 2151. As used in this chapter:
(a) "Adverse action" means an increase in any charge for, or a
reduction or other adverse or unfavorable change in the terms of
coverage or amount of, any personal insurance, existing or applied
for.
(b)
"Consumer reporting agency" means any person which, that,
for monetary fees or dues or on a cooperative nonprofit basis,
regularly engages in whole or in part in the practice of assembling
or evaluating consumer credit information or other information on
consumers for the purpose of furnishing consumer reports to third
parties.
(c) "Credit information" means any credit-related information
derived from a credit report, found on a credit report itself, or
provided on an application for personal insurance. Information that
is
not credit-related shall is
not be considered credit
information, regardless of whether it is contained in a credit
report or in an application, or is used to calculate an insurance
score.
(d) "Credit report" means any written, oral, or other
communication of information by a consumer reporting agency bearing
on a consumer's credit worthiness, credit standing, or credit
capacity that is used or expected to be used or collected in whole
or in part for the purpose of serving as a factor in the rating of
personal insurance.
(e) "Insurance score" means a number or rating that is derived
from an algorithm, computer application, model, or other process
that is based in whole or in part on credit information for the
purposes of predicting the future insurance loss exposure of an
individual applicant or insured.
(f) "Personal insurance" means property/casualty insurance
written for personal, family, or household use, including
automobile,
home, motorcycle, mobile home,
noncommercial dwelling
fire, boat, personal watercraft, snowmobile, and recreational
vehicle, whether written on an individual, group, franchise,
blanket policy, or similar basis. Personal insurance does not
include automobile insurance.