Michigan House Bill HB5197

Michigan 2023-2024 Regular Session

• Introduced: 10/24/23
• Refer: 10/24/23
• Report Pass: 5/16/24
• Engrossed: 6/25/24
• Refer: 6/26/24

Caption

Insurance: other; requirement to file a fraud report; provide for. Amends 1956 PA 218 (MCL 500.100 - 500.8302) by adding sec. 4506.

Impact

The amendment is expected to strengthen the oversight of insurance practices in Michigan, potentially leading to a reduction in fraudulent claims and enhancing consumer protection. By requiring insurers to report suspected fraud, the bill establishes clearer obligations for insurers to remain vigilant against fraudulent activities. It provides the director with the authority to investigate these reports, thereby increasing accountability within the insurance sector.

Summary

House Bill 5197 proposes amendments to the 1956 Insurance Code of Michigan, specifically by introducing a new section, 4506. This section establishes a formal requirement for insurers to report any suspected fraudulent insurance acts involving Michigan policyholders. The bill aims to streamline the reporting process by utilizing forms prescribed by the director of insurance, thereby enhancing the state's ability to monitor and combat insurance fraud effectively.

Sentiment

General sentiment around HB 5197 appears to be positive among lawmakers and stakeholders who advocate for stricter measures against insurance fraud. The bill passed overwhelmingly in the House with 106 votes in favor and only 4 against it, indicating broad bipartisan support. Advocates argue that this legislation will create a safer insurance environment for policyholders and enhance regulatory enforcement.

Contention

While the bill enjoys wide support, some concerns may arise regarding how the reporting requirements will affect insurers, particularly smaller companies that might struggle with the administrative burden. There is also the potential for debate regarding the adequacy of the investigations conducted by the director, especially if resources are limited. However, the overarching goal of the bill—to enhance the fight against insurance fraud—remains a focal point for supporters.