December 02, 2003
December 2, 2003
LANSING - Governor Jennifer M. Granholm and Office of Financial and Insurance Services Commissioner Linda A. Watters said today they will investigate home and auto insurance rates in Michigan 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.
"With home and auto insurance rates on the rise, hard working men and women, as well as our seniors, are increasingly being priced out of the market for essential insurance," Granholm said today. "Interestingly, some areas of the state are seeing bigger jumps in premiums than others, and we want to know why.
"When a consumer moves from one community to another and their auto insurance premium doubles, or when a retiree sees their homeowner's insurance premium skyrocket by 600 percent, it is incumbent upon us to make sure that we're not allowing consumers to be victimized," Granholm added. "This is a first step toward dealing with excessive rates in Michigan, and we will be exploring every possible option to address these issues for Michigan's citizens."
Granholm and Watters emphasized that they want to make certain the market stays competitive and that every rate proposed by insurance companies meets the legal test of the law.
The Office of Financial and Insurance Services' (OFIS) 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.
In addition to announcing a data call, Granholm and Watters unveiled a new homebuyer's guide, an annual survey of homeowners' insurance costs across the state, and promoted a new consumer complaint form specifically to address complaints on insurance rate disparities.
The complaint form is available on the web at: www.michigan.gov/ofis and will be distributed across the state.
