LANSING – Members of the House and Senate Democratic Caucuses today introduced their legislative package to address the rising cost of insurance in Michigan. The multi-part package will lower the cost of insurance, strengthen consumer protections and improve industry accountability. State Representative Paul Condino (D-Southfield) will introduce a bill requiring insurance companies to roll back rates by 20 percent.
"Affordable, reliable insurance is a critical part of our families' financial security," said Governor Jennifer M. Granholm. "I am hopeful that legislative leaders will schedule quick action on this important package."
The Democratic package consists of 20 initiatives that will strengthen regulations to bring fair, affordable and accessible auto and homeowners' insurance to Michigan citizens. The package addresses three primary areas of concern: rates, consumer protection and industry accountability.
"Insurance rates in Michigan are unaffordable," Condino said. "Michigan residents deserve better. This package will reduce insurance rates and ensure that consumers have a say in setting rates."
A recent report by the National Association of Insurance Commissioners on the average cost of auto insurance rates found that rates in Michigan are the tenth highest in the nation and the highest in the Midwest. Among other things, the Democratic reform package will:
- Provide stronger tools to the Insurance Commissioner in determining where rates are excessive and ordering refunds where found;
- Provide flexibility in setting base rates to provide more affordably priced insurance;
- Establish an Office of Insurance Ratepayer Advocate to represent and protect the interests of consumers; and
- Prohibit insurance companies from using an individual's credit history or credit score for determining insurance rates.
"Insurance rates for homes, automobiles and small businesses are rising with reckless disregard for the best interests of consumers," said State Representative Aldo Vagnozzi (D-Farmington/Farmington Hills) said. "We need to apply the brakes to runaway insurance rates, while ensuring all our citizens have access to affordable insurance."
"It is essential that Michigan residents have a voice in the insurance rate process," said State Representative Marie Donigan (D-Royal Oak). "These measures will offer a layer of protection that currently is not there."
"These initiatives will provide immediate financial relief for thousands of Michigan residents, while assuring stronger oversight of the rate making process," said Sen. Gilda Z. Jacobs (D-Huntington Woods). "Consumers will finally receive the relief and protection they deserve."