Bill Text: MI SB0994 | 2011-2012 | 96th Legislature | Introduced

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Bill Title: Insurance; unfair trade practices; use of credit score to determine insurance premium; prohibit. Amends sec. 2027 of 1956 PA 218 (MCL 500.2027) & adds sec. 2027a.

Spectrum: Partisan Bill (Democrat 5-0)

Status: (Introduced - Dead) 2012-03-01 - Referred To Committee On Insurance [SB0994 Detail]

Download: Michigan-2011-SB0994-Introduced.html

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SENATE BILL No. 994

 

 

March 1, 2012, Introduced by Senators BIEDA, WHITMER, SMITH, YOUNG and ANDERSON and referred to the Committee on Insurance.

 

 

 

     A bill to amend 1956 PA 218, entitled

 

"The insurance code of 1956,"

 

by amending section 2027 (MCL 500.2027), as amended by 1998 PA 26,

 

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). 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. The commissioner 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.

 

     (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 reasonably anticipated experience in the case of new coverages

 

but subject to section 2027a. This Except as provided in section

 

2027a, this subdivision shall does not apply if the rate has

 

previously been approved by the commissioner.

 

     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 of an insured or applicant.