Mich. Admin. Code R. 500.1501 - Definitions
Rule 1.
(1) As used
in these rules:
(a) "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. A classification does not include a grouping of individuals or risks
solely for statistical data gathering purposes.
(b) "Code" means the insurance code of 1956,
1956 PA 218, MCL 500.100 to 500.8302.
(c) "Complaint" means a written statement by
a person to an insurer, a producer, or the director claiming that an insurer or
producer has improperly denied him or her automobile insurance or home
insurance or has charged an incorrect premium for automobile insurance or home
insurance.
(d) "Denial" or "denied"
means both declination and termination.
(e) "Incorrect premium" means a premium
charged for automobile insurance or home insurance that is not consistent with
a rate or rating plan or classification approved by the department.
(f) "Loss portion" means the portion of a
rate that is attributable to provisions for incurred losses and allocated loss
adjustment expenses.
(g) "Loss
ratio" 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.
(h) "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.
(i) "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.
(j) "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.
(k) "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.
(2) A term
defined in the code has the same meaning when used in these rules.
Notes
State regulations are updated quarterly; we currently have two versions available. Below is a comparison between our most recent version and the prior quarterly release. More comparison features will be added as we have more versions to compare.
No prior version found.