Mich. Admin. Code R. 500.1501 - Definitions
Current through Vol. 22-05, April 1, 2022
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Rule 1. As used in these rules:
(a) "Automobile insurance" means insurance as defined in section 2102(2) of the code.
(b) "Classification" means a grouping of individuals or risks on the basis of 1 or more characteristics for purposes of measuring and rating differences in anticipated losses or expenses, or both. For purposes of these rules, a classification shall not include a grouping of individuals or risks solely for statistical data gathering purposes.
(c) "Code" means Act No. 218 of the Public Acts of 1956, as amended, being S500.100 et seq. of the Michigan Compiled Laws.
(d) "Commissioner" means the Michigan commissioner of insurance and the designees of the commissioner.
(e) "Complaint" means a statement by a person to an insurer, an agent, or the commissioner that an insurer or agent has improperly denied him or her automobile insurance or home insurance or has charged an inappropriate premium for that insurance.
(f) "Denial" means both declination as defined in section 2102(4) of the code and termination as defined in section 2104(5) of the code.
(g) "Home insurance" means insurance as defined in section 2103(3) of the code.
(h) "Loss portion" means that portion of a rate which is attributable to provisions for incurred losses and allocated loss adjustment expenses.
(i) "Loss ratio," for purposes of R 500.1505(b)(v), means any of the following ratios for a specified time period, as appropriate for the context of evaluation:
(i) The ratio of actual incurred losses to total earned premiums at collected rate levels.
(ii) The ratio of actual incurred losses to total earned premiums at current rate levels.
(iii) The ratio of reasonably anticipated incurred losses to total estimated earned premiums at proposed rate levels.
(j) "Meeting" means a meeting of the commissioner and 1 or both of the following to resolve a complaint:
(i) A person who has made a complaint or the person's designated representative.
(ii) The insurer about which the complaint was made.
(k) "Private informal managerial-level conference" means a personal meeting or a telephone conference involving the person making the complaint or the person's designated representative and a representative of the insurer with authority to decide the contested issues on behalf of the insurer. The conference, if it involves a personal meeting, shall be held within a reasonably accessible distance from the Michigan residence of the person or persons
named on the policy as insured or the location of the risk and shall be at a time reasonably convenient to the person making the complaint or the person's designated representative.
(l) "Rate differential" means either the ratio of rates for any 2 rating cells or the absolute difference in rates for any 2 rating cells, whichever is applicable for a particular rating system.
(m) "Rating cell" means a group of individuals or risks for which a single rate is determined when 2 or more rating classifications are combined to define a population of individuals or risks for rating purposes.
(n) "Relativity" means either the ratio of rates for any 2 rating classifications or the absolute difference in rates for any 2 rating classifications, whichever is applicable for a particular rating system.
(o) "Uncertainty of loss" means a measure of the nature and the extent of the variability of actual losses for a group of individuals or risks from the mean anticipated loss for the group and includes other similar measures of risk.
(p) "Underwriting" means the offer or refusal to insure, the offer or refusal to continue to insure, or the limitation of the amount of coverage available to, an individual, risk, or class of individuals or risks.
History: 1981 AACS.