The bill amends the Michigan Insurance Code of 1956 to enhance consumer protections within the insurance industry by updating definitions and introducing new provisions. It provides a clearer definition of unfair competition and deceptive practices, explicitly including misrepresentation of policy terms, benefits, and financial conditions. A new section (2005b) extends the applicability of the uniform trade practices act to all insurance policies issued in Michigan, ensuring consistent standards across the board. Additionally, the bill modifies requirements for timely payment of insurance claims, establishing a framework for "clean claims" and outlining the responsibilities of health plans regarding claim processing, including specific timelines for payment and notification.

Furthermore, the bill introduces penalties for violations of these provisions, reinforcing accountability for insurers and health plans. It defines various unfair practices, mandates written standards for claims handling, and requires timely explanations for claim denials. The legislation also establishes a civil cause of action for individuals harmed by violations, allowing them to seek damages and attorney fees. A rebuttable presumption of bad faith is introduced for insurers who fail to comply with the outlined standards, while clarifying that insurers remain liable under existing laws. Overall, the amendments aim to promote transparency, fairness, and accountability in the insurance marketplace in Michigan.

Statutes affected:
Senate Introduced Bill: 500.2005