The bill amends section 2109 of the 1956 Insurance Code of Michigan, focusing on the regulations surrounding rates for automobile and home insurance. It establishes that all rates must not be excessive, inadequate, or unfairly discriminatory. Specifically, a rate is deemed excessive if it is unreasonably high for the coverage provided, and inadequate if it is unreasonably low, potentially endangering the insurer's solvency or harming competition. The bill also clarifies that unfair discrimination occurs when the differences in rates for the same coverage are not justified by differences in losses or expenses.

Additionally, the bill modifies the language regarding the determination of competition in the insurance market. It removes previous criteria for assessing competition and emphasizes that a reasonable classification system and sound actuarial principles must support justifications for rate differentials. The new language aims to ensure that rates reflect actual and credible loss and expense statistics, thereby promoting fairness and competition in the insurance industry.

Statutes affected:
Senate Introduced Bill: 500.2109