MI HB5271

Prohibits use of "price optimization" in establishing automobile and home insurance rates, defining it as setting rates based on factors unrelated to risk of loss, including charging the highest price the market will bear or estimating a consumer's willingness to pay higher premiums.

Declares rates established through or impacted by price optimization are unfairly discriminatory, requiring rate differentials to be justified by differences in losses, expenses, or uncertainty of loss supported by sound actuarial principles and credible loss and expense statistics.

Requires insurers to file underwriting rules with the director before use and prohibits establishing underwriting rules through price optimization; filed rules must be available for public inspection.

Directs the director to report to the legislature by April 1, 2018, on the prevalence of price optimization in insurance rates and enforcement actions taken under this section.

Defines "price optimization" to include activities such as charging based on likelihood an insured will shop for better rates, cancel policies early, or fail to renew, and using measures of consumer price elasticity of demand.