Section R. 500.1301 - DefinitionsRule 1. As used in these rules:
(a) "Classification" means a grouping of individuals or risks on the basis of 1 or more characteristics for purposes of measuring and rating differences in anticipated losses or expenses, or both. For purposes of these rules, a classification shall not include a grouping of individuals or risks solely for statistical data gathering purposes.(b) "Code" means Act No. 218 of the Public Acts of 1956, as amended, being S500.100 et seq. of the Michigan Compiled Laws, and known as the insurance code of 1956.(c) "Commissioner" means the Michigan commissioner of insurance and the designees of the commissioner.(d) "Loss portion" means that portion of a rate which is attributable to provisions for incurred losses and allocated loss adjustment expenses.(e) "Loss ratio" means, for purposes of R 500.1307(4)(e), any of the following ratios for a specified time period, as appropriate for the context of evaluation: (i) The ratio of actual incurred losses and allocated loss adjustment expenses to total earned premiums at collected rate levels.(ii) The ratio of actual incurred losses and allocated loss adjustment expenses to total earned premiums at current rate levels.(iii) The ratio of reasonably anticipated incurred losses and allocated loss adjustment expenses to total estimated earned premiums at proposed rate levels.(f) "Private residential property insurance" means insurance for an individual's residence, including insurance for an owner-occupied condominium unit, insurance for owner-occupied residential dwellings containing 4 or fewer apartments or condominium units, and insurance for a tenant of a room, an apartment, or a house, provided by a Michigan standard policy as set forth in section 2832 of the code and, when contained in or indorsed to a Michigan standard policy providing insurance for an individual's residence, other insurance intended primarily to insure residential property, obligations, and liabilities. Private residential property insurance shall not include insurance intended to insure commercial, industrial, professional, or business property, obligations, or liabilities.(g) "Rate differential" means either the ratio of rates for any 2 rating cells or the absolute difference in rates for any 2 rating cells, whichever is applicable for a particular rating system.(h) "Rating cell" means a group of individuals or risks for which a single rate is determined when 2 or more rating classifications are combined to define a population of individuals or risks for rating purposes.(i) "Relativity" means either the ratio of rates for any 2 rating classifications or the absolute difference in rates for any 2 rating classifications, whichever is applicable for a particular rating system.(j) "Uncertainty of loss" means a measure of the nature and the extent of the variability of actual losses for a group of individuals or risks from the mean anticipated loss for the group and includes other similar measures of risk.(k) "Underwriting" means the offer or refusal to insure, the offer or refusal to continue to insure, or the limitation of the amount of coverage available to an individual, risk, or class of individuals or risks.Mich. Admin. Code R. 500.1301