Michigan Requires Auto Insurers to Submit Filing to Demonstrate Compliance

Michigan Requires Auto Insurers to Submit Filing to Demonstrate Compliance

In order the comply with the requirements of MCL 500.2111f(8), Michigan is requiring companies writing personal automobile insurance within the state to submit a filing demonstrating how they are passing along the savings realized from the application of MCL 500.3157(2)-(12). The required filing must be submitted no later than September 9, 2022.

The effective date of the filing listed in SERFF must be at least 90 days from the date the filing is submitted. Companies may request an effective date earlier than the end of the waiting period by making this request in writing in the filing memorandum. In no event shall the initial rate filing mentioned above be effective after January 1, 2023.

SERFF has been updated as follows:

New SERFF Requirement – These requirements have been added to the Supporting Documentation tab of every rate filing, and a copy of the template exhibit is saved on the General Information tab in SERFF.

Section 2111f(8) Savings Realized
Provide the following to demonstrate how the insurer proposes to pass on savings realized from the application of MCL 500.3157(2) through (12) pursuant to MCL 500.2111f(8):

  1. Complete the “Savings Realized Exhibit - 2111f(8)” and attach to this requirement. Detailed instructions are provided in the exhibit template.
  2. Attach a separate exhibit that demonstrates that the base rate adjustment results in premiums that are appropriately reduced for the realized savings.

Insurer groups are required to demonstrate compliance with MCL 500.2111f(8) for each company. If an insurance group experiences a shift in policyholders between affiliated companies (e.g. book transfers), companies may wish to determine the realized savings at the group level and allocate the savings to individual companies based on the current distribution of policyholders by company.

New companies without affiliates that do not have realized savings on accidents that occurred prior to July 2, 2021 must demonstrate that there are no savings by completing the required exhibit and providing an explanation of why there are no savings realized.

This requirement must be satisfied with every rate filing submitted after July 1, 2022, pursuant to MCL 500.2111(8). If the company is submitting an updated analysis from a previously approved filing and the analysis demonstrates that a change is not warranted, the filing must be accompanied by the following attestation in the Comment section below, along with the name and title of the person providing the attestation: “I attest that the proposed rates reflect the company’s current estimate of the savings realized pursuant to MCL 500.2111f(8) and that a change is not warranted at this time.”

Updated SERFF Exhibits – The following exhibits are required for all rate filings and will be updated as follows:

  • PIP Rate Reduction Exhibit – 2111f(2) – The file name has been changed to reference 2111f(2) and the instructions have been updated in SERFF and in the exhibit to include the following:
    • Savings realized pursuant to MCL 500.2111f(8) must be excluded from the 2111f(2) savings in this exhibit. 
  • P&C Checklist Exhibit – The checklist has been updated to include the following attestation:
    • I attest that that the reported savings realized as required by MCL 500.2111f(8) have been excluded from the 2111f(2) savings in the PIP Rate Reduction Exhibit attached to this filing.

Please direct any questions regarding this information or the filings referenced above to difs-oirf@michigan.gov.