Court Opinion

ID: 7959018
Source: CourtListenerOpinion
Date Created: 2022-09-09 00:28:16.016431+00
Date Added: 2024-06-11T16:34:16.945284
License: Public Domain

R. B. Martin, J.
(dissenting). The bureau believes three factors must be examined in consider*564ing whether there "* * * is a reasonable relationship between the * * * lawful occupation * * * and the extent of the risk”: (1) Is the risk so large as to preclude development of a meaningful rate? (2) Would the maximum loss threaten the insurer’s solvency? (3) Would the premium be so large as to approach the amount of recovery?
The company and intervenor felt the statutory language is explicit and unmistakably clear in permitting the insurance companies the discretion to write or refuse insurance based on reasonable risk classifications.
The bureau was citing the company for violation of the code. The bureau had the burden of proof of showing that violation. MCL 500.2030(2); MSA 24.12030(2). The bureau claimed it proved the violation by showing the company relied on improper standards in refusing to give disability mortgage insurance to miners. The company responded that the bureau was using the wrong standards. We have then basically a question of law as to which party had adopted the proper standard for determining whether an unfair trade practice existed. The company’s practice certainly met the standards the company set for itself but did not meet the standards as set by the bureau.
In searching the Insurance Code and its federal progenitor (§ 59 Stat 33-34 [1945]; 15 USC 1011-1015) for some concise legislative statement of the purpose of the code, I find none. It is apparent that the principal purpose was to regulate the insurance industry to protect the insuring public from companies which couldn’t carry out their portion of the insurance contract.
The Uniform Trade Practices Act, MCL 500.2001 et seq.; MSA 24.12001 et seq., was aimed specifically at various particular types of unfair competi*565tion, fraudulent acts, and misleading practices. Section 2027 was added in 1976. It is aimed at "unfair methods of competition and unfair or deceptive acts and practices in the business of insurance”.
It is an unfair practice to refuse to insure anyone because of "race, color, creed, marital status, sex or national origin”, except for one limited reason relative to marital status.
This is in subsection (a)(i).
The statute then says it is an unfair practice to refuse to insure because of (a)(ii) "residence, age, handicap or lawful occupation of the individual or the location of the risk, unless there is a reasonable relationship between the residence, age, handicap, or lawful occupation of the individual or the location of the risk and the extent of the risk”.
Looking at the two groups as applicants for life, disability, or fire insurance, race, color, creed, marital status, sex, or national origin should not cause any difference in the risk involved generally. No one should be refused insurance because of any of those factors. The Legislature saw it that way and spoke.
As to the second group, residence, age, handicap, location of risk, and occupation, all may well greatly affect the risk. The Legislature then said a company could not refuse to insure because of any of these factors "unless there was a reasonable relationship between the residence, age, handicap, location of risk or occupation, and the extent of the risk”.
In looking at the record, the witnesses on both sides showed there was a reasonable relationship between the occupation and the extent of the risk. Even the bureau’s expert felt there was substan*566tially more risk involved in the B classification of occupations than in the average occupation.
If the Legislature meant to guarantee that every worker, no matter the occupation, have life or mortgage disability insurance, no matter the risk, provided the bureau’s three factors were met, it could have said so. However, the Legislature has recognized that some elements should not be a factor in a company’s decision to insure or not to insure (color, sex, national origin, etc.). Relative to other elements, the reasonableness of the relationship between the element and the extent of the risk must be considered (age, handicap, occupation, etc.). Certainly, there is more risk of disability for miners than for people in Class AAA. There is a reasonable relationship between the occupation and the extent of the risk. The Legislature did not create any other standard except the reasonableness of the relationship between the occupation and the extent of the risk. If it had wanted to guarantee more life or disability insurance being available for any occupation, it could have enumerated the criteria the bureau here used in ruling on the case. The language is not in the statute and I believe the bureau exceeded its authority in requiring these standards.
This thinking is corroborated by the fact that the Michigan Legislative Joint Committee on Administrative Rules, on March 4, 1980, rejected a proposed rule interpreting § 2027 in the manner the bureau suggests should be done in this case.
If the statute or this section of the statute had been drafted, passed, and approved by the Governor for the stated purpose of forcing insurance companies to write life and disability insurance for anyone in a high risk occupation unless the bureau’s standards had been met, the whole Legisla*567ture could have adopted the bureau’s standards or at least its joint committee could have.
This Court does not determine whether the bureau’s standards are practical, reasonable, and the best of many ideas. From a review of the record, the commission has failed to show the company violated the statutory standards. The circuit court should be affirmed.