Michigan Governor Jennifer Granholm (D) and Office of Financial and Insurance Services Commissioner Linda A. Watters said last Wednesday they sent a legislative panel a set of proposed rules to reduce base insurance rates and prohibit insurers from using credit scores to determine insurance rates. The proposed rules would require insurers to reduce the base premium rates charged to all policyholders. Granholm and other supporters of the change said base rates have increased in recent years to allow insurers to provide discounts to policyholders with better credit scores.

"A low credit score as a result of failure to pay the phone bill or being late on a mortgage payment does not make a person more likely to have his house struck by lightning or his car stolen," Watters said in a news release. Granholm and Watters said the new rules would apply to all personal insurance policies, including auto, home and all others for personal, family or household use. The proposed rules now go to the Joint Committee on Administrative Rules for review, but they are expected to take effect.

Rules Banning Credit Scoring Sent to Mich. Panel (Insurance Journal 1/14/05)

Michigan DOI Press Release (1/12/05)

January 20, 2005