Michigan Laws 500.2154 – Reasonable exceptions
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Terms Used In Michigan Laws 500.2154
- Credit information: means any credit-related information derived from a credit report, found on a credit report itself, or provided on an application for personal insurance. See Michigan Laws 500.2151
- Foreclosure: A legal process in which property that is collateral or security for a loan may be sold to help repay the loan when the loan is in default. Source: OCC
- in writing: shall be construed to include printing, engraving, and lithographing; except that if the written signature of a person is required by law, the signature shall be the proper handwriting of the person or, if the person is unable to write, the person's proper mark, which may be, unless otherwise expressly prohibited by law, a clear and classifiable fingerprint of the person made with ink or another substance. See Michigan Laws 8.3q
- Insurer: means an individual, corporation, association, partnership, reciprocal exchange, inter-insurer, Lloyds organization, fraternal benefit society, or other legal entity, engaged or attempting to engage in the business of making insurance or surety contracts. See Michigan Laws 500.106
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Rate: means the cost of insurance per payroll before adjustment for an individual insured's size, exposure, or loss experience. See Michigan Laws 500.2402
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
- state: when applied to the different parts of the United States, shall be construed to extend to and include the District of Columbia and the several territories belonging to the United States; and the words "United States" shall be construed to include the district and territories. See Michigan Laws 8.3o
(1) Notwithstanding any other law, rule, or regulation, an insurer that uses credit information shall, on written request from an insured or insurance applicant, provide reasonable exceptions to the application of that credit information on the insurer’s rates, rating classifications, or company or tier placement for an insured or insurance applicant who has experienced and whose credit information has been directly influenced by any of the following events:
(a) Catastrophic event, as declared by the federal or state government.
(b) Serious illness or injury, or serious illness or injury to an immediate family member.
(c) Death of a spouse, child, or parent.
(d) Divorce or involuntary interruption of legally owed alimony or support payments.
(e) Identity theft.
(f) Temporary loss of employment for a period of 3 months or more, if it results from involuntary termination.
(g) Military deployment overseas.
(h) Predatory lending resulting in the foreclosure of, or commencement of proceedings or an action to foreclose, a mortgage of real property owned by the insured or insurance applicant.
(i) Other events, as determined by the insurer.
(2) If an insured or insurance applicant submits a request for an exception under subsection (1), an insurer may, but is not required to do, any of the following:
(a) Require a reasonable written and independently verifiable documentation of the event.
(b) Require the insured or insurance applicant to demonstrate that the event had direct and meaningful impact on the insured’s or insurance applicant’s credit information.
(c) Require a request to be made no more than 60 days from the date of the application for insurance or the policy renewal.
(d) Grant an exception even if the insured or insurance applicant did not provide an initial request for an exception in writing.
(e) Grant an exception where the insured or insurance applicant asks for consideration of repeated events or the insurer has considered this event previously.
(3) A law, rule, or regulation relating to underwriting, rating, or rate filing is not violated by any insurer as a result of granting an exception under this section.
(4) The insurer shall provide notice to insureds and insurance applicants that reasonable exceptions are available and information about how to inquire further.
(5) Within 30 days of the insurer’s receipt of sufficient documentation of an event described in subsection (1), the insurer shall inform the insured or insurance applicant of the outcome of his or her request for a reasonable exception. This communication shall be in writing or provided in the same medium as the request for a reasonable exception.