HB 5735 Summary

• Prohibits insurers from using "price optimization" to establish or vary automobile and home insurance rates, defining price optimization as setting rates based on factors unrelated to risk of loss, including charging the highest market price, assessing policy turnover likelihood, or measuring consumer price elasticity.

• Declares any rate established through or impacted by price optimization to be unfairly discriminatory under Michigan's Insurance Code.

• Requires the director to report to the legislature by April 1, 2017, on the prevalence of price optimization in rate-setting and enforcement actions taken.

• Mandates insurers file underwriting rules with the director before use and make them available for public inspection; allows the director to prohibit underwriting rules found inconsistent with the Insurance Code.

• Requires insurers to apply underwriting rules uniformly throughout the state without exception, ensuring consistent treatment of applicants and insureds meeting or not meeting those rules.