It’s time for OFIR and Hollowell to uphold the law – Not Ignore it
Eliminating credit based insurance discounts would increase insurance costs for more than 70% of Michigan policyholders
Lansing, MI – October 9, 2009 – (RealEstateRama) — The Commissioner of the Office of Financial and Insurance Regulation (OFIR) Ken Ross, and Automobile and Home Insurance Consumer Advocate Melvin Butch Hollowell both went before the Michigan Supreme Court today asking the Court to ban the use of credit-based insurance scores. Ross was in the courtroom while Hollowell was holding court outside the Hall of Justice at a press conference to influence the Judge’s decisions.
Even though the legislature permits the use of credit based insurance scores if the practice is limited to providing discounts to people who have higher scores, Ross and Hollowell asked the Court to rubber stamp rules proposed by the Commissioner to disallow those discounts.
Under Michigan’s limited-use law, over 70 percent (70%) of Michigan residents with auto and home insurance receive some type of discount because they have a good credit based insurance score.
The Supreme Court is not deciding the merits of credit based insurance scoring. Today’s hearing is to determine whether OFIR overstepped its bounds by promulgating rules banning even the limited use under which Michigan residents receive discounts.
“If Ken Ross and Butch Hollowell want to change the law regarding the use of credit-based insurance scores in determining auto insurance rates, they were at the wrong end of the Capitol complex this morning, they need to go in front of the legislature like everyone else,” said Tom Shields, spokesperson for Michigan Insurance Coalition (MIC). “Today’s hearing is about the Governor’s attempt to misuse a state agency to pass new laws and disallowing discounts to millions of financially responsible Michigan citizens in the process.”
In 2005, Judge Fisher issued an injunction against OFIR’s attempt to enact a ban and eliminate the discounts. Even though OFIR has approved hundreds of insurance rate filings using credit based insurance scores since that time, OFIR and the Governor then decided to ignore the judges’ ruling by announcing they would be rejecting all rate filings for auto and home insurance companies that use insurance scores. Fortunately the judge enjoined the Governor and the Commissioner for acting arbitrarily and capriciously. Now the Supreme Court has been asked to rule on the Commissioner’s actions.
The Michigan Insurance Coalition (MIC) is an association of insurance companies based in Michigan and around the country that employ thousands of Michigan workers.
