Michigan House Bill HB6266

Michigan 2023-2024 Regular Session

• Introduced: 12/10/24
• Refer: 12/10/24

Caption

Insurance: other; underwriting transparency; provide for. Amends 1956 PA 218 (MLC 500.100 - 500.8302) by adding sec. 2229.

Impact

If enacted, HB6266 would establish a clearer framework for policyholders in Michigan concerning their rights in relation to changes made by insurers. Insurers would be mandated to articulate their rationale for significant alterations to coverage, thereby promoting greater accountability within the insurance industry. The bill is set to take effect for policies issued, amended, or renewed after January 1, 2026, giving stakeholders time to adjust to the new requirements.

Summary

House Bill 6266 aims to amend the 1956 PA 218, commonly known as the Michigan Insurance Code, by introducing new standards for transparency regarding changes in automobile and homeowners insurance policies. The bill specifically requires that any insurer making a 'material change'—defined broadly, including an increase in premium or a reduction in coverage—must provide clear written notice to the insured. This notice must explain either the principal factors behind the change or inform the insured of their right to request such an explanation in writing.

Contention

There may be notable debates surrounding this bill, particularly regarding the balance of power between insurers and consumers. Proponents of the legislation argue that increased transparency will empower policyholders, enabling them to make informed decisions about their insurance options. Conversely, some industry representatives may express concerns that the stringent requirements could lead to operational challenges and increased costs for insurers, potentially impacting policyholder premiums overall. As this bill progresses, discussions about its implications on both consumer rights and the insurance market are likely to continue.