LANSING – House and Senate Democrats today introduced a legislative plan that addressed the rising cost of insurance in Michigan. The multi-part package will lower the cost of insurance, strengthen consumer protections and improve industry accountability.
"Affordable, reliable insurance is a critical part of our families' financial security," Governor Jennifer M. Granholm said. "I am hopeful that legislative leaders will schedule quick action on this important package."
The Democratic package consists of 20 initiatives that will strengthen regulations to bring fair, affordable and accessible auto and homeowners' insurance to Michigan citizens. The package addresses three primary areas of concern: rates, consumer protection and industry accountability.
"This is one of the biggest financial burdens our constituents deal with, and the complex insurance industry makes it almost impossible for consumers to know if they are paying a fair price," Sen. Martha G. Scott (D-Highland Park) said. "These bills will help make sure we are not taken advantage of by big insurance companies."
A recent report by the National Association of Insurance Commissioners found that rates in Michigan are the tenth highest in the nation and the highest in the Midwest.
Among other things, the Democratic reform package will:
· Require insurance companies to immediately roll back rates by 20 percent;
· Provide stronger tools to the insurance commissioner in determining where rates are excessive and ordering refunds where found;
· Provide flexibility in setting base rates to provide more affordable insurance;
· Establish an Office of Insurance Ratepayer Advocate to represent and protect the interests of consumers; and
· Prohibit insurance companies from using an individual's credit history or credit score to determine insurance rates.
"We desperately need insurance reform," said Rep. Morris Hood (D-Detroit, Dearborn), lead sponsor of the legislation. "We want to make insurance fair for all consumers and this legislation will do that."
"We must find real solutions to the pocketbook issues Michigan citizens face," Sen. Buzz Thomas (D-Detroit) said. "Reducing insurance rates will provide substantial relief for everyone."
"We have to fight insurance companies and their unscrupulous practice of excessive rates and this legislation gives us the power to do that," Rep. Virgil Smith (D-Detroit) said.
"Insurance costs are getting out of hand and this legislation will help Michigan keep the costs down and fair for everyone," Rep. Lamar Lemmons Jr. (D-Detroit) said.
"Insurance rates have to be fair for the consumer," Rep. Marsha Cheeks (D-Detroit) said. "If the insurance industry doesn't want to play fair with the consumer, then we have to implement a law that will force them to do so."
"People want jobs, not higher insurance rates," Rep. Gabe Leland (D-Detroit) said. "Consumers could use the excessive amount of money they pay for insurance on prescription drugs, medical bills or groceries. In this tight economy, we can't afford to allow insurance companies to take advantage of consumers."
"This legislation will help my constituents and residents all over Michigan receive fair treatment on insurance rates," Rep. LaMar Lemmons III (D-Detroit) said. "People shouldn't have to reach deep into their pockets to pay an excessive amount of money for insurance."
"What we want is accountability," Rep. Steve Tobocman (D-Detroit) said. "Insurance companies must take responsibility for the methods of charging high rates and this bill will make sure they own up to their responsibility."