October 17, 2017, Introduced by Reps. Greimel, Hammoud, Elder, Lasinski, Yanez, Sowerby, Chirkun, Geiss, Ellison, Sneller, Faris, Pagan, Chang, Liberati, LaGrand, Wittenberg, Camilleri, Hertel, Green, Sabo, Cochran, Peterson, Dianda, Durhal, Clemente, Canfield, Yaroch, Jones, Rabhi and Zemke and referred to the Committee on Insurance.
A bill to amend 1956 PA 218, entitled
"The insurance code of 1956,"
by amending section 2106 (MCL 500.2106) and by adding section
2111f.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 2106. Except as specifically provided in this chapter,
the
provisions of chapter chapters
24 and chapter 26 shall do not
apply
to automobile insurance and home insurance. An Except as
provided in section 2111f, an insurer may use rates for automobile
insurance
or home insurance as soon as those the rates are filed.
To
the extent that other provisions of this code act are
inconsistent
with the provisions of this chapter, this chapter
shall
govern governs with respect to automobile insurance and home
insurance.
Sec. 2111f. (1) By June 30, 2018, an insurer that offers
automobile insurance in this state shall file premium rates for
coverage under automobile insurance policies effective after June
30, 2018 and before July 1, 2019. The premium rates filed, and any
subsequent premium rates filed by the insurer for coverage under
automobile insurance policies, must reflect savings expected from
the amendments to this act made by the enactment of the bills
identified in enacting section 1 of the amendatory act that added
this section.
(2) If premium rates filed by an insurer under subsection (1)
do not result in a 25% or greater total reduction per vehicle from
the premium rates that were in effect for the insurer on October 1,
2017, the insurer shall include with the filing both of the
following:
(a) Premium rates as near as practicable to the required
reduction rate recognizing the justifications described in this
subsection.
(b) A detailed explanation of the reasons for the insurer's
failure to achieve the required reduction rate and a demonstration
using generally accepted and reasonable actuarial techniques that
the required reduction is not justified because of 1 or more of the
following:
(i) Expected losses of the insurer.
(ii) Inflation, as shown by the Consumer Price Index
calculated and published by the United States Department of Labor,
Bureau of Labor Statistics.
(iii) A change in an assessment imposed on an insurer under
section 3104 or 3330.
(3) The director shall review a filing submitted by an insurer
under subsection (1) for compliance with subsections (1) and (2).
The director shall disapprove a filing if after review the director
determines both of the following:
(a) That the filing does not result in the premium rate
reduction required by subsection (2).
(b) That the failure to achieve the reduction is not justified
using generally accepted and reasonable actuarial techniques
because of 1 or more of the factors listed in subsection (2)(b).
(4) If the director disapproves a filing under subsection (3),
the director shall do both of the following:
(a) Determine what rate reduction the insurer could achieve
that is as near as practicable to the 25% reduction per vehicle
recognizing the factors listed in subsection (2)(b).
(b) Provide the insurer with a written explanation of the
reasons for the disapproval and the director's determination under
subdivision (a).
(5) If the director disapproves a filing under subsection (3),
the insurer shall submit a revised filing to the director within 15
days of the disapproval that complies with the director's
determination under subsection (4)(a). The filing is subject to
review in the same manner as an original filing under subsection
(3).
(6) A premium rate filing under this section that is not
disapproved by the director within 30 days of its submission is
considered approved. However, the director may extend the time
under this subsection by an additional 30 days by giving the
insurer written notice before the initial 30-day period expires of
the extended time period and the reasons for the extension.
(7) After June 30, 2018, an insurer shall not issue or renew
an automobile insurance policy in this state unless the premium
rates filed by the insurer for automobile insurance coverage are
approved under this section.
(8) For purposes of calculating a premium or premium rate
under this section, the premium includes the catastrophic claims
assessment imposed under section 3104.
Enacting section 1. This amendatory act does not take effect
unless all of the following bills of the 99th Legislature are
enacted into law:
(a) Senate Bill No.____ or House Bill No. 5104 (request no.
04163'17).
(b) Senate Bill No.____ or House Bill No. (request no.
04385'17).
(c) Senate Bill No.____ or House Bill No. 5108 (request no.
04164'17).
(d) Senate Bill No.____ or House Bill No. 5111 (request no.
04322'17).
(e) Senate Bill No.____ or House Bill No. 5107 (request no.
04386'17).
(f) House Bill No. 4672.