Michigan Gov. Jennifer M. Granholm and Office of Financial and Insurance Services Commissioner Linda A. Watters said in a statement they will investigate home and auto insurance rates in the state to determine if consumers are being subjected to excessive rate increases in their insurance premiums.
For the first time in 20 years, the insurance commissioner has issued a comprehensive data call to all insurance providers licensed to operate in Michigan. The Granholm administration will use the data gathered to determine whether rates being charged are fair or excessive as defined by state law.
The Office of Financial and Insurance Services’ data call will ask all insurance companies licensed in Michigan to provide premium and loss information for geographic areas throughout the state. The data will allow OFIS to check insurance rates against actual loss experience of insurers to determine if rates are excessive as defined by law.
OFIS will also conduct a formal review of the state of competition among auto and home insurance providers. Watters explained that to make a determination of competition, she must give due consideration to relevant markets, the number of insurers, their market shares, trends in the availability of coverage, profitability, and ease of entry and exit from the market.
Watters noted there has not been a formal study of home and auto insurance rates in Michigan since 1981, even though Granholm, as attorney general, asked for a review of rates following her independent investigation that showed rates to be unreasonably high.
“I think the premise that rates are higher is no secret to anybody, no matter what community you might live in,” Doug Cruce, executive director of the Insurance Institute of Michigan, told Crain’s Detroit Business. “We have no concerns that a data call will reveal any information that we haven’t already told people. Insurance rates in Michigan are neither arbitrary or discriminatory. … They are a true reflection of the losses paid for by insurance.”
Topics Michigan
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