LANSING – Insurance companies would have to rollback both automotive and homeowner rates by 20 percent, and the use of credit scores for setting rates would be banned under a multi-part insurance plan Gov. Jennifer Granholm and legislative Democrats announced Monday.

?Affordable, reliable insurance is a critical part of our families? financial security,? said Granholm. ?I am proud to stand with my Democratic colleagues in support of a package that will reduce rates for all customers in Michigan, ensure fairer treatment and greater accountability.?

The Democratic package consists of twenty specific initiatives that will strengthen regulations to bring fair, affordable, and accessible auto and homeowners? insurance to Michigan citizens. The package addresses three primary areas of concern: rates, consumer protection, and industry accountability.

The mandated changes were immediately attacked by the Small Business Association of Michigan.

?Small business owners, nearly all of whom are working families, are in favor of lower insurance rates but they are wary of state government getting involved in price setting for a competitive industry,? said SBAM President Rob Fowler. ?Our members are especially concerned by a statements that a 20 percent rollback is ?reasonable? because of insurance industry profits. Government should not be making decisions about any industry?s profit level. That would be the first tipping of a domino whose final cascade no one could predict.?

Fowler said he understands the affordability issues that motivate Sen. Scott and other southeast Michigan lawmakers to want to take some kind of action to lower insurance rates.

?But lower rates can?t be mandated by government. If they could, we would have advocated for a government mandate to rollback health insurance premiums ? a far bigger problem for small businesses than car and home insurance. Instead, we?ve gone after the underlying issues that contribute to the high cost of health insurance. That would be a productive task for state government: identifying and addressing the underlying causes of high auto and home insurance rates, particularly in the Detroit area.?

But Scott responded by saying for too many years, Michigan law has focused mainly on making insurance available to everyone.

?What good is access to a product that you cannot afford?? she said. ?It?s time we do something to bring down the cost of insurance.?

A recent report by the National Association of Insurance Commissioners on the average cost of auto insurance rates found that rates in Michigan are the tenth highest in the nation and the highest in the Midwest. The Democratic reform package will reduce the cost of insurance for everyone in Michigan by:

Requiring insurance companies to immediately roll back rates by 20 percent;

Providing stronger tools to the Insurance Commissioner in determining where rates are excessive and ordering refunds where found;

Providing flexibility in setting base rates to provide more affordably priced insurance;

Prohibiting insurance companies from using an individual?s credit history or credit score for determining insurance rates.

The comprehensive plan outlined today provides a series of new consumer protections that recognize the unique and fundamental role that insurance plays in society. The plan will protect consumers by:

Establishing an Office of Insurance Ratepayer Advocate dedicated solely to representing and protecting the interests of insurance consumers;

Creating new consumer awareness programs and educational material to help identify actions consumers and community leaders can take to reduce rates;

Prohibiting insurers from being able to deny coverage to a driver with no evidence of prior insurance;

Protecting the legal rights of consumers to bring action against an insurance company that breaks the law and to receive all benefits due to them.