Michigan Senate Bill SB0245

Michigan 2025-2026 Regular Session

• Introduced: 4/23/25
• Refer: 4/23/25

Caption

Insurance: insurers; processing of a claim; modify duties. Amends secs. 2005, 2006, 2026 & 2049 of 1956 PA 218 (MCL 500.2005 et seq.) & adds sec. 2005b & ch. 30B.

Impact

The proposed changes in SB 245 are significant as they affect existing statutes on claims handling and insurer obligations. Notably, the bill mandates that insurances handling claims must provide a timely response after receiving proof of loss. Insurers that fail to meet these obligations can be held liable for damages, including monetary losses due to delayed payments. This amendment to the law seeks to enhance consumer rights and hold insurers to higher standards, enhancing accountability in the insurance industry. If enacted, it could lead to increased scrutiny of insurer practices and potentially foster a more consumer-centric approach to insurance processing in Michigan.

Summary

Senate Bill 245 aims to amend the Insurance Code of 1956 to enhance consumer protections in the realm of insurance claims processing. The bill includes provisions that compel insurers to act more promptly and fairly when processing claims, including establishing clearer timelines for actions like claim acknowledgment and payment. Additionally, the bill seeks to define unfair methods of competition and deceptive practices that insurance companies may engage in, ensuring accountability through stipulated civil actions for improper conduct. This reflects a broader effort to create an equitable environment for policyholders against potential insurer negligence or malfeasance.

Contention

There is likely to be contention surrounding the implications of this bill. Supporters may argue that it empowers consumers and promotes swift claim resolutions, mitigating the distress often faced by policyholders. Critics, however, may express concerns over increased regulatory burdens on insurers, suggesting it might lead to higher premiums or stricter underwriting processes. The balance between protecting consumer rights and ensuring insurers can operate effectively is a recurring theme in discussions around insurance reform, and SB 245 exemplifies this ongoing debate within the legislative framework.