Politicians there are mad as hatters and taking it out on a perennial target, the auto insurers. Legislators have rolled out a 10-bill package that would, in the words of conservative blogger Eli Lehrer, make "auto insurance into a political hot potato again."
Among the reforms, which apparently have the support of Democratic Gov. Jennifer Granholm and Motor City legislators, are a series of "bad faith" measures that would slam insurers who "wrongly deny claims" by sending company executives to jail.
Instead of having a "file and use" system where insurers raise rates unless there's an objection, all future increases will be filtered through the state insurance commissioner, who would have to approve them.
Insurers would also be prohibited from using consumers' credit scores as a tool to decide who gets insurance and who doesn't. Low credit scores are often used to exclude potential customers who are more likely to have an accident or a car vandalized or stolen. But it is also a subtle form of "redlining" poor people who have been hardest hit by the economic downturn.
The insurers, who write $3 billion of auto coverage in the state, such as the Michigan Insurance Coalition, were predictably angry about the legislative proposals and are threatening to leave, calling it a "political stunt in the run-up to the 2010 elections." In the U.S., insurance, like politics, is local. Every state runs its own insurance department, and what happens in Michigan - at least theoretically - stays in Michigan.
But maybe not this time. States such as recession-ridden California already ban the use of credit scores, and its insurance commissioner Steve Poizner, who is gearing up for a gubernatorial run, is likely to keep a close eye on what happens in Michigan.
Lehrer predicts that "If (these bills) produce votes for their backers, they'll spawn imitators throughout the country." All we can do is wait and watch.