February 6, 2019, Introduced by Senators CHANG, MOSS, WOJNO, GEISS, IRWIN, HERTEL, BULLOCK, LUCIDO and MCBROOM and referred to the Committee on Insurance and Banking.
A bill to amend 1956 PA 218, entitled
"The insurance code of 1956,"
by amending sections 2105, 2110a, 2111, 2111a, and 2151 (MCL
500.2105, 500.2110a, 500.2111, 500.2111a, and 500.2151), sections
2110a and 2111 as amended by 2012 PA 441, section 2111a as added by
2006 PA 610, and section 2151 as added by 2012 PA 165.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec.
2105. (1) No A policy of automobile insurance or home
insurance
shall be offered, bound, made, issued, delivered, or
renewed
in this state on and after January 1, 1981, except in
conformity
must comply with this chapter. This chapter shall not
apply
to policies of automobile insurance or home insurance
offered,
bound, made, issued, delivered or renewed in this state
before
January 1, 1981.
(2)
This Except as provided in
subsection (3), this chapter
shall
does not apply to insurance written on a group,
franchise,
blanket
policy, or similar basis which that
offers home insurance
or automobile insurance to all members of the group, franchise
plan, or blanket coverage who are eligible persons.
(3) An insurer, including, but not limited to, an insurer that
writes insurance as described in subsection (2) and an insurer that
is exempted from any of the requirements of this chapter for any
reason, including an exemption under section 2129, shall not
establish or maintain rates or rating classifications for
automobile insurance based on any factors other than as required
under section 2111.
Sec. 2110a. If uniformly applied to all its insureds, an
insurer may use factors in addition to those permitted by section
2111 for home insurance if the plan is consistent with the purposes
of this act and reflects reasonably anticipated reductions or
increases
in losses or expenses. This section does not affect
benefits
or obligations required under chapter 31. This section
does
not authorize an insurer to offer or prohibit an insurer from
offering
premium discount plans concerning any of the following:
(a)
Health care services, health care providers, or health
care
facilities.
(b)
Automobile repair providers.
(c)
Materials used in the repair of an automobile.
Sec.
2111. (1) Notwithstanding any provision of this act or
this
chapter to the contrary,
classifications and territorial base
rates used by an insurer in this state with respect to automobile
insurance
or home insurance shall must
conform to the applicable
requirements of this section.
(2)
Classifications established under this section for
automobile
insurance shall be based only on 1 or more of the
following
factors, which shall be applied by an insurer on a
uniform
basis throughout this state:
(a)
With respect to all automobile insurance coverages:
(i) Either the age of the driver; the length of
driving
experience;
or the number of years licensed to operate a motor
vehicle.
(ii) Driver primacy, based on the proportionate use of
each
vehicle
insured under the policy by individual drivers insured or
to
be insured under the policy.
(iii) Average miles driven weekly, annually, or both.
(iv) Type of use, such as business, farm, or pleasure
use.
(v) Vehicle characteristics, features, and options,
such as
engine
displacement, ability of the vehicle and its equipment to
protect
passengers from injury, and other similar items, including
vehicle
make and model.
(vi) Daily or weekly commuting mileage.
(vii) Number of cars insured by the insurer or number of
licensed
operators in the household. However, number of licensed
operators
shall not be used as an indirect measure of marital
status.
(viii) Amount of insurance.
(b)
In addition to the factors prescribed in subdivision (a),
with
respect to personal protection insurance coverage:
(i) Earned income.
(ii) Number of dependents of income earners insured
under the
policy.
(iii) Coordination of benefits.
(iv) Use of a safety belt.
(c)
In addition to the factors prescribed in subdivision (a),
with
respect to collision and comprehensive coverages:
(i) The anticipated cost of vehicle repairs or
replacement,
which
may be measured by age, price, cost new, or value of the
insured
automobile, and other factors directly relating to that
anticipated
cost.
(ii) Vehicle make and model.
(iii) Vehicle design characteristics related to vehicle
damageability.
(iv) Vehicle characteristics relating to automobile
theft
prevention
devices.
(d)
With respect to all automobile insurance coverage other
than
comprehensive, successful completion by the individual driver
or
drivers insured under the policy of an accident prevention
education
course that meets the following criteria:
(i) The course shall include a minimum of 8 hours of
classroom
instruction.
(ii) The course shall include, but not be limited to, a
review
of
all of the following:
(A)
The effects of aging on driving behavior.
(B)
The shapes, colors, and types of road signs.
(C)
The effects of alcohol and medication on driving.
(D)
The laws relating to the proper use of a motor vehicle.
(E)
Accident prevention measures.
(F)
The benefits of safety belts and child restraints.
(G)
Major driving hazards.
(H)
Interaction with other highway users, such as
motorcyclists,
bicyclists, and pedestrians.
(3)
Each insurer shall establish a secondary or merit rating
plan
for automobile insurance, other than comprehensive coverage. A
secondary
or merit rating plan required under this subsection shall
provide
for premium surcharges for any or all coverages for
automobile
insurance, other than comprehensive coverage, based upon
any
or all of the following, when that information becomes
available
to the insurer:
(a)
Substantially at-fault accidents.
(b)
Convictions for, determinations of responsibility for
civil
infractions for, or findings of responsibility in probate
court
for civil infractions for violations under chapter VI of the
Michigan
vehicle code, 1949 PA 300, MCL 257.601 to 257.750.
However,
an insured shall not be merit rated for a civil infraction
under
chapter VI of the Michigan vehicle code, 1949 PA 300, MCL
257.601
to 257.750, for a period of time longer than that which the
secretary
of state's office carries points for that infraction on
the
insured's motor vehicle record.
(2) Rates and premiums for automobile insurance must be
determined by application of the following factors as provided in
subsection (3):
(a) The insured's driving safety record.
(b) The number of miles the insured drives annually.
(c) The number of years of driving experience the insured has
had.
(d) Any other factors that the director adopts by rule, as
provided in subsection (4).
(3) In applying factors under subsection (2), an insurer shall
give the greatest weight to the factor in subsection (2)(a), the
second greatest weight to the factor in subsection (2)(b), the
third greatest weight to the factor in subsection (2)(c), and the
least weight to the factors allowed under the rules promulgated
under subsection (2)(d).
(4) Subject to subsection (5), the factors adopted by the
director under subsection (2)(d) may include any factor that is
expressly allowed for establishing rates for automobile insurance
under another section of this chapter or any other factor that has
a substantial relationship to the risk of loss. The rules
promulgated under subsection (2)(d) must prescribe the method for
measuring the respective weight to be given to each factor in
determining automobile insurance rates and premiums.
(5) (4)
An insurer shall not establish
or maintain determine
rates
or rating classifications and
premiums for automobile
insurance
based in any way on sex the following:
(a) Sex or marital status.
(b) Credit information, as that term is defined in section
2151.
(5)
Notwithstanding other provisions of this chapter,
automobile
insurance risks may be grouped by territory.
(6) Notwithstanding any other provision of law to the
contrary, the use of any factor to determine rates and premiums for
automobile insurance other than a factor listed in subsection(2)(a)
to (c) or a factor contained in rules promulgated under subsection
(2)(d) is unfair discrimination for purposes of chapter 20.
(7)
(6) This section does not limit insurers or rating
organizations from establishing and maintaining statistical
reporting territories. This section does not prohibit an insurer
from establishing or maintaining, for automobile insurance, a
premium discount plan for senior citizens in this state who are 65
years of age or older, if the plan is applied in accordance with
subsections (2) to (4) and if the plan is uniformly applied by the
insurer throughout this state. If an insurer has not established
and maintained a premium discount plan for senior citizens, the
insurer shall offer reduced premium rates to senior citizens in
this state who are 65 years of age or older and who drive less than
3,000
miles per year, regardless of statistical data.in accordance
with subsections (2) to (4).
(8) (7)
Classifications established under
this section for
home insurance other than inland marine insurance provided by
policy
floaters or endorsements shall must
be based only on 1 or
more of the following factors:
(a) Amount and types of coverage.
(b) Security and safety devices, including locks, smoke
detectors, and similar, related devices.
(c) Repairable structural defects reasonably related to risk.
(d) Fire protection class.
(e) Construction of structure, based on structure size,
building material components, and number of units.
(f) Loss experience of the insured, based on prior claims
attributable to factors under the control of the insured that have
been paid by an insurer. An insured's failure, after written notice
from the insurer, to correct a physical condition that presents a
risk
of repeated loss shall be considered is a factor under the
control of the insured for purposes of this subdivision.
(g) Use of smoking materials within the structure.
(h) Distance of the structure from a fire hydrant.
(i) Availability of law enforcement or crime prevention
services.
(9) (8)
Notwithstanding other provisions of
this chapter, home
insurance risks may be grouped by territory.
(10) (9)
An insurer may use factors in
addition to those
permitted by this section for home insurance if the plan is
consistent with the purposes of this act and reflects reasonably
anticipated reductions or increases in losses or expenses.
Sec.
2111a. (1) Notwithstanding If
the discount is applied in
accordance with section 2111, an automobile insurer may offer a
premium discount to insureds 50 years of age and older who
successfully
complete a traffic accident prevention course that an
the automobile insurer determines meets all of the criteria listed
in subsection (3).
(2) An automobile insurer may provide the discount under
subsection (1) for 3 years after successful completion of an
initial or refresher traffic accident prevention course.
(3)
A To qualify under
subsection (1), a traffic accident
prevention
course shall provide for must
meet all of the following
requirements:
(a) For an initial traffic accident prevention course,
includes
include not less than 8 hours of classroom instruction
taught
by an instructor certified by the entity person offering the
course. For a refresher traffic accident prevention course,
includes
include not less than 4 hours of classroom instruction
taught
by an instructor certified by the entity person offering the
course.
(b)
Includes, Include, but is not be limited to, instruction
in all of the following areas:
(i) The effects of aging on driving behavior.
(ii) The shapes, colors, and types of road signs.
(iii) The effects of alcohol and other drugs, including
medications, on older drivers.
(iv) Laws relating to the proper use of a motor vehicle and
safe driving behavior.
(v) Traffic crash avoidance and prevention measures.
(vi) The benefits and proper use of motor vehicle occupant
protection systems.
(vii) Major driving hazards and risk factors associated with
traffic crash prevention.
(viii) Interaction with other highway users, such as emergency
vehicles, trucks, motorcyclists, bicyclists, and pedestrians.
(c)
Provides, upon Provide, on
successful completion of the
course, a certificate of completion that may be used in applying
for an automobile insurance premium discount under subsection (1).
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.