SENATE BILL NO. 500

September 10, 2019, Introduced by Senators BRINKS, MOSS and ALEXANDER 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 2108 and 2478 (MCL 500.2108 and 500.2478), section 2108 as amended by 2019 PA 21 and section 2478 as amended by 1984 PA 7, and by adding section 2108a.

the people of the state of michigan enact:

Sec. 2108. (1) On the effective date of a manual of classification, manual of rules and rates, rating plan, or modification of a manual of classification, manual of rules and rates, or rating plan that an insurer proposes to use for home insurance, the insurer shall file the manual or plan with the director. For automobile insurance, an insurer shall file a manual or plan described in this subsection in accordance with subsection (6). Each filing under this subsection must state the character and extent of the coverage contemplated. An insurer that is subject to this chapter and that maintains rates in any part of this state shall at all times maintain rates in effect for all eligible persons meeting the underwriting criteria of the insurer.

(2) An insurer may satisfy its obligation to make filings under subsection (1) by becoming a member of, or a subscriber to, a rating organization licensed under chapter 24 or chapter 26 that makes the filings, and by filing with the director a copy of its authorization of the rating organization to make the filings on its behalf. This chapter does not require an insurer to become a member of or a subscriber to a rating organization. An insurer may file and use deviations from filings made on its behalf. The deviations are subject to this chapter.

(3) A filing under this section must be accompanied by a certification by or on behalf of the insurer that, to the best of the insurer's information and belief, the filing conforms to the requirements of this chapter.

(4) A filing under this section must include information that supports the filing with respect to the requirements of section 2109. The information may include 1 or more of the following:

(a) The experience or judgment of the insurer or rating organization making the filing.

(b) The interpretation of the insurer or rating organization of any statistical data it relies on.

(c) The experience of other insurers or rating organizations.

(d) Any other relevant information.

(5) Except as otherwise provided in this subsection, the department shall make a filing under this section and any accompanying information open to public inspection on filing. An insurer or a rating organization filing on the insurer's behalf may designate information included in the filing or any accompanying information as a trade secret. The insurer or the rating organization filing on behalf of the insurer shall demonstrate to the director that the designated information is a trade secret. If the director determines that the information is a trade secret, the information is not subject to public inspection and is exempt from disclosure under the freedom of information act, 1976 PA 442, MCL 15.231 to 15.246. As used in this subsection, "trade secret" means that term as defined in section 2 of the uniform trade secrets act, 1998 PA 448, MCL 445.1902. However, trade secret does not include filings and information accompanying filings under this section that were subject to public inspection before January 11, 2016.

(6) For automobile insurance, an insurer shall file a manual or plan in accordance with chapter 24, except that the manual or plan must remain on file for a waiting period of 90 days before it becomes effective, which period may not be extended by the director, and the waiting period applies regardless of whether supporting information is required by the director under section 2406(1). Upon written application by the insurer, the director may authorize a filing that he or she has reviewed to become effective before expiration of the waiting period.

(7) An insurer shall not make, issue, or renew a contract or policy except in accordance with filings that are in effect for the insurer under this chapter.

(8) A filing under this chapter must specify that the insurer will not refuse to insure, refuse to continue to insure, or limit the amount of coverage available because of the location of the risk, and that the insurer recognizes those practices to constitute redlining. An insurer shall not engage in redlining as described in this subsection.

(9) An insurer that knowingly includes false or misleading information in a filing under this section shall pay a civil fine not to exceed $100,000.00 to be recovered by the director and paid into the general fund.

Sec. 2108a. Beginning January 1, 2020 and each January 1 thereafter, the department shall post on the department's website a comparison of insurance rates, based on filings under sections 2108 and 2406, for those lines of insurance that the director determines are of most interest to individual purchasers of insurance. The posting under this section must be designed to provide useful information to consumers so that they may make informed comparisons of rates. The posting must include sample policy rates or premiums for sample consumers.

Sec. 2478. (1) Subject to subsection subsections (3) and (4), the commissioner director may, if he or she finds that any person or organization a person has violated a provision of this chapter, previous to before the date of his or her finding, impose a civil fine of not more than $300.00 for each violation, and if the violation is wilful, willful, the commissioner director may impose a civil fine of not more than $1,500.00 for each violation. A civil fine shall must not be imposed for an offense that was committed more than 12 months prior to before the date of the commissioner's director's findings. A fine collected under this subsection shall must be turned over to the state treasurer and credited to the general fund of the this state.

(2) The commissioner director may suspend the license of any a rating organization or insurer which that fails to comply with an order of the commissioner director within the time specified by the order, or any extension of the order which that the commissioner may grant, director grants, but the suspension shall does not affect the validity or continued effectiveness of rates previously filed and effective. The commissioner director shall not suspend the license of any a rating organization or insurer for failure to comply with an order until the time prescribed for an appeal from the order has expired, or, if an appeal has been taken, until the order has been affirmed. The commissioner director may determine when a suspension of license shall become becomes effective, and the suspension shall remain remains in effect for the period fixed by him or her, time ordered by the director unless he or she the director modifies or rescinds the suspension, or until the order upon on which the suspension is based is modified, rescinded, or reversed.

(3) A civil fine shall must not be imposed and a license shall must not be suspended or revoked except upon on a written order of the commissioner, director specifying the alleged violation and stating his or her findings, made after a hearing held upon on not less than 10 days' written notice to the person or organization. An Except as otherwise provided in subsection (4), an order issued by the commissioner pursuant to director under this section shall must not require the payment of civil fines exceeding $10,000.00.

(4) Both of the following apply to a violation of section 2474:

(a) For a person who willfully withholds information, the person shall pay a civil fine not to exceed $5,000.000 for each 30-day period that the person violates section 2474 as described in this subdivision. A civil fine under this subdivision must not exceed $100,000.00 to be recovered by the director and paid into the general fund.

(b) For a person who knowingly gives false or misleading information, the person shall pay a civil fine not to exceed $100,000.00 to be recovered by the director and paid into the general fund.