Mich. Admin. Code R. 500.1503 - Excessive rates
Current through Vol. 22-05, April 1, 2022
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:
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Rule 3. For the purposes of section 2109(1)(a) of the code, both of the following provisions shall apply:
(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 shall 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 writing or providing the coverage or type of insurance in the relevant market.
(iii) The distribution of rates and market shares for such 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 writings for that and other types of insurance.
(vi) The ability and potential for firms 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.
History: 1981 AACS.