The Michigan Department of Insurance (“Department”) has recently released Bulletin 2026-23-INS regarding the use of price optimization in ratemaking, applicable to all property and casualty insurers. The key highlights are as follows:
- This bulletin supersedes Bulletin 2024-09-INS, issued March 6, 2024, which stated that the use of price optimization in ratemaking is not permitted under Michigan law that prohibits unfairly discriminatory rates.
- Price optimization is defined as “a practice of charging consumers based on an insured’s price tolerance that results in rate or premium adjustments that are not actuarially justified and based on factors unrelated to risk of loss or expense.”
- On September 21, 2026, Governor Whitmer signed into law a bill that amended the Uniform Trade Practices Act, prohibiting property and casualty insurers from using price optimization and codifying Bulletin 2024-09-INS.
Please note that the legislative change became effective on September 21, 2026.
For any questions related to the above referenced bulletin from Michigan, please contact Westmont Associates!