Bill Text: MI SB0972 | 2017-2018 | 99th Legislature | Introduced
Bill Title: Insurance; no-fault; rates; prohibit rates based on certain nondriving factors. Amends secs. 2105, 2111 & 2151 of 1956 PA 218 (MCL 500.2105 et seq.).
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2018-05-02 - Referred To Committee On Insurance [SB0972 Detail]
Download: Michigan-2017-SB0972-Introduced.html
SENATE BILL No. 972
May 2, 2018, Introduced by Senator KNEZEK and referred to the Committee on Insurance.
A bill to amend 1956 PA 218, entitled
"The insurance code of 1956,"
by amending sections 2105, 2111, and 2151 (MCL 500.2105, 500.2111,
and 500.2151), section 2111 as amended by 2012 PA 441 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, shall not establish or maintain rates or rating
classifications for automobile insurance based on a factor that is
not allowed, or that is prohibited, under section 2111.
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 must be based only on 1 or more of the
following
factors, which shall must 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 must 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.
(i) (ii) Number
of dependents of income earners insured under
the policy.
(ii) (iii) Coordination
of benefits.
(iii) (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 must include
a minimum of 8 hours of
classroom instruction.
(ii) The course shall must 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
must
provide for premium surcharges for any
or all coverages for
automobile
insurance, other than comprehensive coverage, based upon
on
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 must not be merit rated classified for
rating purposes based on 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.
(3) (4)
An insurer shall not establish or
maintain rates or
rating
classifications for automobile insurance based on sex any of
the following:
(a) Sex or marital status.
(b) Education level attained.
(c) Income.
(d) Consumer credit information or credit score.
(4) (5)
Notwithstanding other provisions of
this chapter,
automobile
insurance risks may must
not be grouped by territory.
(5) (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 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.
(6) (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.
(7) (8)
Notwithstanding other provisions of
this chapter, home
insurance risks may be grouped by territory.
(8) (9)
An insurer may use factors in
addition to those
permitted by this section for insurance if the plan is consistent
with the purposes of this act and reflects reasonably anticipated
reductions or increases in losses or expenses.
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.