As planned, a group of Michigan property/casualty insurers has filed a lawsuit challenging the state’s new rule set banning their use of credit scores in auto and homeowners insurance and reducing base rates.
According to Crain’s Detroit Business, the Insurance Institute of Michigan and four insurers—Hastings Mutual Insurance Co., Farm Bureau General Insurance Co. of Michigan, Progressive Michigan Insurance Co. and Frankenmuth Casualty Insurance Co.—the suit was filed in Barry County Circuit Court and argues that Office of Financial and Insurance Services Commissioner does not have the legal authority to enforce the changes via administrative rule.
The rules are scheduled to take effect July 1 and insurers are supposed to file their new rates with OFIS by May 1.
“Contrary to what the insurance industry would have you believe,” Watters said in a statement, “I have clear authority under Michigan law to promulgate these rules and I have an obligation to Michigan consumers to ensure that the insurance industry is properly regulated. The lawsuit that they have filed is nothing but a stall tactic to prevent the rule from happening. This is a prime example of a frivolous lawsuit that we hear so much about in the media.”
OFIS also released a list of auto and homeowners insurers in Michigan who use credit scores and a list of those who do not. It is available on their Web site by clicking here.