Negative Options and Coverage Roll-Ons _____________________________________

STATE OF MICHIGAN DEPARTMENT OF INSURANCE AND FINANCIAL SERVICES Bulletin 2019-12-INS In the matter of: Negative Options and Coverage Roll-Ons _____________________________________/ Issued and entered this 31st day of July 2019 by Anita G. Fox Director This bulletin supersedes Bulletin AD 72-02, issued June 30, 1972, which is hereby rescinded. “Negative options” or “roll-ons” in the sale, issuance, or renewal of insurance include adding or changing any coverage, including optional coverage, for which premium is charged to the insured and which becomes effective unless the insured rejects the coverage. When an insurer uses a negative option or roll-on, it can be confusing to a consumer, even when the insurer uniformly applies the changes to all of its policies. In instances where an insurer fails to notify a consumer of an added or changed coverage, this practice may constitute a violation of the Uniform Trade Practices Act, MCL 500.2001 et seq. Insurers can avoid violations of the UTPA by providing written notice to policyholders each time there is a change to the base policy and/or an endorsement, or when new endorsements are introduced. The notice must clearly explain all changes to coverage as well as the premium impact to the policyholder. If optional coverage and/or endorsements are added, the notice must include information on how the policyholder may opt out of the coverage, and must provide adequate time for the policyholder to do so. Any questions regarding this bulletin should be directed to: Department of Insurance and Financial Services Office of Insurance Rates and Forms 530 W. Allegan Street – 7th Floor P.O. Box 30220 Lansing, Michigan 48909-7720 Toll Free: (877) 999-6442 /s/ ____________________________ Anita G. Fox Director