Mich. Admin. Code R. 500.1503 - Excessive rates
Rule 3. For the purposes of section 2109(1)(a) of the code, MCL 500.2109, both of the following apply in determining whether a rate for automobile insurance or home insurance is excessive:
(a) A rate is unreasonably high for the
insurance coverage provided if it is unreasonably high in relation to
anticipated losses or expenses, or both, or to the uncertainty of loss for the
insurance coverage provided.
(b) A
determination regarding the existence of a reasonable degree of competition
must give due consideration to, at a minimum, all of the following:
(i) The relevant market for the coverage or
the type of insurance to which the rate applies.
(ii) The number of insurers and the number of
self-insurers actively engaged in underwriting or providing the coverage or
type of insurance in the relevant market.
(iii) The distribution of rates and market
shares for those insurers in the relevant market. Market shares may be measured
either by premiums or exposures.
(iv) Past and prospective trends in the
availability of coverage and coverage options for insurance of that type in the
relevant market.
(v) Profits
attributable to insurance of that type in relation to the profitability of
other types of insurance, to the uncertainty of loss for that and other types
of insurance, and to the amount of capital and surplus funds available to
support premium underwritings for that and other types of insurance.
(vi) The ability and potential for insurers
to enter and exit the relevant market and for financial capital and surplus
funds to be allocated to, and to be removed from, the relevant
market.
Notes
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