Michigan Senate Regulatory Affairs Committee Chair Jeremy Moss, D-Bloomfield Township, and Majority Vice Chair Dayna Polehanki, D-Livonia on Oct. 15. (Kyle Davidson/Michigan Advance)

A bill sponsored by state Sen. Jeremy Moss, D-Bloomfield, that would ban auto and home insurance companies from using a practice known as price optimization was advanced to the Michigan Senate floor Wednesday.

The vote of the Senate Economic and Community Development Committee to advance Senate Bill 1013 was unanimous. The bill was the subject of testimony at the committee’s June 4 meeting.

Moss previously called the practice of price optimization “shady” and one that companies use to exploit shopping patterns to give consumers the highest rate they might be willing to pay. Aside from jacking up the premium rate, the practice also allows companies to hide rewards, discounts, perks and special offers from consumers who are likely to renew their policies.

A Senate Fiscal Agency analysis of the bill explained that price optimization means establishing rates or varying premiums based on factors that are unrelated to a consumer’s risk of loss, including “considering the likelihood that the insured will engage in activities that result in insurance policy turnover” and “estimating the willingness of the insured to pay a higher premium compared to other insureds.”

In practice, the Michigan Department of Insurance and Financial Services already largely bans price optimization.

After the meeting, Moss told Michigan Advance the unanimous vote showed both Democrats and Republicans in the Senate shared a willingness to rein in the state’s high insurance prices.

Asked if the GOP-controlled House was amenable to curtailing price optimization, Moss said he wanted to take the bill one step at time.

The goal, at present, was to secure another unanimous vote in the upper chamber of the Legislature, as that would also signal that both sides of the aisle were ready to help consumers.

The Insurance Alliance of Michigan has been neutral on the bill, but Moss told the Advance on Wednesday that the organization placed letters on the desks of each committee member before the meeting. The letters indicated the bill would not meet resistance from the organization.

That, too, was a sign of the bill’s momentum as it awaits a full Senate vote and possible consideration by the GOP-led House, if it is interested.

———

Michigan Advance is part of States Newsroom, a national 501(c)(3) nonprofit. For more, go to https://michiganadvance.com.