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Michigan bans price optimization in property and casualty insurance pricing
The law, signed September 21, 2026, takes effect immediately and classifies price optimization as an unfair method of competition and a deceptive practice.
Michigan has enacted a new law banning price optimization for property and casualty insurers, effective immediately after it was signed on September 21, 2026, Insurance Business reports.
The measure amends the state insurance code to treat price optimization as an unfair method of competition and an unfair or deceptive act or practice, making the practice ineligible for ratemaking under the new Section 2027a.
Under the statute, insurers are prohibited from using pricing inputs tied to factors unrelated to risk, including the likelihood a customer will shop around, switch carriers, or cancel.
The law also bars insurers from estimating a policyholder’s willingness to pay more than other customers for the same coverage and from using price elasticity of demand, whether for an individual policyholder or a group.