STATE OF MICHIGAN DEPARTMENT OF INSURANCE AND FINANCIAL SERVICES
In the matter of: Personal Auto Filing Timelines under MCL 500.2108(6)
This bulletin provides guidance related to the timing of personal auto rate and rule filings.
Section 2108(6) of the Insurance Code, MCL 500.2108(6), was added by Public Act 21 of 2019, and states:
For automobile insurance, an insurer shall file a manual or plan in accordance with chapter 24, except that the manual or plan must remain on file for a waiting period of 90 days before it becomes effective, which period may not be extended by the director, and the waiting period applies regardless of whether supporting information is required by the director under section 2406(1). Upon written application by the insurer, the director may authorize a filing that he or she has reviewed to become effective before expiration of the waiting period.
In accordance with Section 2108(6), the effective date listed on the General Information tab in SERFF must be no less than 90 days from the date the filing is submitted.
If an insurer requests an effective date prior to the expiration of the 90-day waiting period, DIFS will notify the insurer via a filing objection as soon as practicable that the filing cannot be implemented prior to the expiration of the 90-day period.
Recently, some insurers have requested that DIFS shorten its review time to less than 90 days to account for “lead time” needed to program systems or send renewal notices. Insurers who request an earlier effective date must do so prominently in their filing memorandum and be aware that they are not automatically entitled to an effective date prior to the 91st day after filing. If such a request is made, it may be granted only at the Director’s discretion.
Further, insurers should be aware that unresolved objections that are pending at the conclusion of the 90-day waiting period may result in disapproval of a filing and may necessitate the insurer submitting a new filing.
It is the insurer’s responsibility to ensure filings are implemented in accordance with a compliant effective date. Insurers that issue renewal notices or provide quotes based on unapproved rates or rules prior to the expiration of the 90 days do so at the risk of issuing or renewing policies with rates that have not been approved by the Director, which may subject the insurer to penalties under law.