Insurance: other; penalties for late payment of claims; increase. Amends secs. 2006 & 3142 of 1956 PA 218 (MCL 500.2006 & 500.3142).
Impact
The passage of SB 546 would significantly enhance the rights of claimants in their dealings with insurance companies. The bill establishes clear timelines—30 days for initial payment and additional protocols for correcting claims—thereby placing stricter regulations on how insurance companies process claims. This change is particularly relevant to healthcare providers and individuals filing claims under health insurance, as it seeks to streamline processes and reduce the time taken for claims to be recognized as valid and fully paid.
Summary
Senate Bill 546 aims to amend the Michigan Insurance Code of 1956, specifically sections 2006 and 3142, to strengthen the enforcement of timely payment for insurance claims. The bill mandates that insurance providers must pay insured individuals or third-party claimants promptly according to the terms outlined in their policies. If claims are not settled in a timely manner, beneficiaries will be entitled to a statutory interest of 12% on unpaid claims starting from 60 days after proof of loss has been received by the insurer. This increase in penalties is designed to discourage insurance companies from delaying payments and ensure that claimants receive their benefits without undue delay.
Contention
While the bill is generally seen as beneficial for consumers, there are concerns among insurance providers about the potential for increased financial liability if claims are delayed due to disputes. The provisions allowing for substantial interest penalties could lead to adverse outcomes for insurers who might not be able to settle claims quickly due to complex investigations or lack of sufficient documentation. Stakeholders may debate the balance between protecting consumer rights and ensuring that insurance companies can operate effectively under the bill's new requirements.
Insurance: other; the insurance code of 1956; amend to reflect amendments to the public health code. Amends sec. 2006 of 1956 PA 218 (MCL 500.2006). TIE BAR WITH: HB 5477'24
Insurance: no-fault; assigned claims plan; require unlimited-level benefit reimbursement for bicyclists. Amends sec. 3172 of 1956 PA 218 (MCL 500.3172).
Insurance: property and casualty; insurance withholding amount for fire-damaged homes; increase, and allow for abandoned funds to be used for repairs. Amends sec. 2227 of 1956 PA 218 (MCL 500.2227).
Insurance: other; the insurance code of 1956; amend to reflect amendments to the public health code. Amends sec. 2006 of 1956 PA 218 (MCL 500.2006). TIE BAR WITH: HB 5477'24
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.