In the matter of Exemption from filing and approval requirements for certain documents and forms

Issued and entered January 31,1997 by D. Joseph Olson, Commissioner of Insurance

INFORMATIONAL STATEMENT ISSUED PURSUANT TO ACT 306 OF THE PUBLIC ACTS OF 1969 AS AMENDED

Order No. 97-010-M (Order) was issued and entered January 29, 1997, to become effective February 1, 1997. The Order supersedes a 1981 order issued by Commissioner Baerwaldt and exempts several documents and forms from filing and approval requirements. This bulletin is designed to clarify anticipated questions related to the Order.

Recently proposed legislation sought to reduce the volume of rate and form filings which insurance companies are required to file with the Michigan Insurance Bureau. That legislation was based on the recognition that Michigan's approach to rate and form filings has become outdated, ineffective, and unnecessarily costly in relation to the purported protections it provided. The proposal also recognized the limitations on available resources imposed on a responsible state government seeking to "right-size" itself. Regrettably, the legislature adjourned before it voted on the proposals, so they will have to be reintroduced if the legislature intends to conclude its work in this area.

Acting on the same concerns, the Commissioner thoroughly reviewed Insurance Bureau filing procedures to ensure that the Bureau's duties are being pursued, and its resources are being properly allocated to activities most effective in protecting the interests of policyholders, creditors, or the public, and ensuring that Michigan insurers are safe, reliable, and entitled to public confidence. Accordingly, the Commissioner exercised his authority to eliminate certain form filing and approval requirements where those requirements were found to be impractical, or unnecessary for the protection of the public. All other filing requirements, for example those governing rates and rules, are unaffected by the Order.

Prior review of the following documents has been determined by the Commissioner to be necessary for the protection of the public and will still be required to be filed with the Michigan Insurance Bureau:

1. Documents and forms created by a rating organization licensed under section 2436 or 2630 for the use of its members or subscribers in this state.

2. Documents and forms relating to universal life insurance which are to be used by an insurer that has not had a filing for universal life insurance approved in this state since January 10, 1994.

3. Documents and forms relating to automobile insurance which are to be used by an insurer that has not previously had a filing for automobile insurance approved in this state.

4. Documents and forms relating to a certificate of assumption.

5. Documents and forms relating to credit insurance.

6. Documents and forms relating to excess loss insurance to be offered pursuant to MCLA 500.5208; MSA 24.15208.

Documents and forms otherwise subject to the filing requirements in Insurance Code sections 2236, 2242, 3606 and 4430 which are not listed above are no longer required to be filed. Any filings required by other sections of the Insurance Code are unaffected by this order and continue to be subject to those filing requirements. By way of example only, filing requirements related to medicare supplemental policies imposed under MCL 500.3849 and discretionary groups for life insurance under MCL 500.4424, continue to apply.

The Bureau will continue to review select forms for compliance, and where appropriate, require prior approval of those forms in instances where the Commissioner has determined it appropriate for the protection of policyholders and the public. Forms compliance reviews will occur upon the Commissioner's request, by requiring insurers to submit to the Bureau any or all forms which are currently in use. For this reason, each insurer shall:

1. Keep available all forms currently in use for inspection by, or to be transmitted to, the Commissioner.

2. By June 1 of each year, compile a list of forms and documents which are available for issue in Michigan during the previous year and which are exempted from filing. Forms and documents shall be grouped on the list by type, such as individual life policies, group disability, automobile, homeowners, or commercial multi-peril. Each form and document shall be listed by its title and form number. The list shall indicate the date the form was approved, if it was approved, or the date it was placed into use.

3. Keep a copy of each annual list and the exempted forms and documents for three years.

4. Continue to file underwriting rules with the Michigan Insurance Bureau pursuant to MCL 500.2108.

5. Continue to follow rate and form filing and approval procedures as prescribed by law, and, in the case of property and casualty policy lines, in the Insurance Bureau's Property and Liability Filings Procedures Manual.

The exemptions contained in Order No. 97-010-M change the manner in which the Insurance Bureau will review the exempt forms, but does not change an insurer's responsibility to issue forms which comply with the Insurance Code. Failure to comply with all applicable provisions of the Code will cause an insurer to be subject to penalties ranging from a $500 fine to suspension, limitation or revocation of their certificate of authority. Insurers should be aware that the assignment of such penalties will be liberal to ensure continued compliance with all Code requirements.

Any forms or documents submitted to the Insurance Bureau after February 1, 1997, which are not required to be filed under this Order, or otherwise under Michigan law, will be returned to the company that submitted the filing prior to becoming aware of the order.

This bulletin supersedes Bulletin 81-6.

D. Joseph Olson
Commissioner of Insurance