The bill amends the existing insurance law in Michigan by adding a new section, 2027a, which prohibits property and casualty insurers from using price optimization in their ratemaking processes. Price optimization is defined as a practice where insurers adjust rates or premiums based on an insured's price tolerance rather than on actuarial justifications related to risk of loss or expense. This includes factors such as the likelihood of an insured switching to another insurer for a lower premium or their willingness to pay a higher premium compared to others.

Additionally, the bill outlines specific activities that constitute insurance policy turnover, which includes shopping for lower premiums, canceling policies before their term ends, failing to renew policies, and lodging complaints with the insurer. The intent of this legislation is to protect consumers from unfair pricing practices in the insurance industry, ensuring that rates are based on risk rather than the insurer's assessment of a consumer's price sensitivity. The act is set to take immediate effect upon approval.

Statutes affected:
Substitute (S-1): 500.100, 500.8302
Senate Introduced Bill: 500.2109, 500.2119
As Passed by the Senate: 500.100, 500.8302
As Passed by the House: 500.100, 500.8302
Senate Concurred Bill: 500.100, 500.8302
Senate Enrolled Bill: 500.100, 500.8302