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
Impact
This bill will have a significant impact on both insurance providers and their clients in Michigan. It strengthens the rights of insured individuals and claimants by ensuring that they receive benefits promptly, which can be crucial, especially in health-related claims. The imposition of a statutory interest on delayed payments highlights the urgency of complying with payment obligations, thereby reducing the incidence of unfair trade practices among insurers. State laws concerning insurance claims will be tightened, potentially leading to improved efficiency and fairness in claims management.
Summary
House Bill 5473 seeks to amend the Insurance Code of 1956, specifically targeting the timely payment of claims made by insured individuals and third-party claimants. The bill stipulates that insurers must pay out benefits as per the insurance policy terms in a timely manner. If claim payments are delayed without just cause, the bill mandates that claimants are entitled to a simple interest of 12% per annum on the unpaid amount starting from the 60th day after satisfactory proof of loss is received by the insurer. This aims to enforce accountability among insurers regarding their claims processing obligations.
Contention
While the bill is designed to protect consumers, there may be contention regarding its practical implications for insurance companies. Some stakeholders argue that the stipulations for timely payment could place undue pressure on insurers, especially in complex claims where disputes may arise over liability or the scope of coverage. There is a concern that the bill might lead insurers to be more conservative in their claims approvals to mitigate financial risks associated with potential interest payments on delayed claims. Balancing the interests of both consumers and insurers will be crucial in the legislative discussions surrounding this bill.
Same As
Health facilities: certificate of need; requirement to obtain a certificate of need; eliminate. Amends secs. 2612, 20101, 20145, 20155, 20161, 20164, 20165, 20166, 21551, 21562 & 21563 of 1978 PA 368 (MCL 333.2612 et seq.) & repeals (See bill).
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.
Insurance: no-fault; personal protection insurance benefits; revise definitions in section because of other amendments. Amends sec. 3107c of 1956 PA 218 (MCL 500.3107c). TIE BAR WITH: HB 5307'23
Insurance: other; certain references in the insurance code; make gender neutral. Amends secs. 2207, 2209, 3110 & 3402 of 1956 PA 218 (MCL 500.2207 et seq.). TIE BAR WITH: HJR F'25
Insurance: other; certain references in the insurance code; make gender neutral. Amends secs. 2207, 2209, 3110 & 3402 of 1956 PA 218 (MCL 500.2207 et seq.). TIE BAR WITH: HJR F'23
Insurance: no-fault; personal protection insurance benefits; revise definitions in section because of other amendments. Amends sec. 3107c of 1956 PA 218 (MCL 500.3107c). TIE BAR WITH: SB 0905'24
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.