P&CMImedium
Under MCL 500.2403, when is a Michigan P&C rate considered 'excessive'?
AWhenever it exceeds the prior year's filed rate by more than 5%, regardless of whether the long-run profit is reasonable in relation to the risk
BWhen any policyholder believes the premium is too high
When it is likely to produce a long-run profit unreasonably high in relation to the risk
DOnly when DIFS has issued a press release labeling it excessive
Why this is the answer
MCL 500.2403 defines 'excessive' in actuarial terms: the rate is likely to produce a long-run profit that is unreasonably high in relation to the riskiness of the insurance. A fixed year-over-year percentage trigger, a single policyholder's subjective view, or a DIFS press release are not the legal test. The DIFS Director, after notice and hearing, applies the standard to disapprove rates.
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