This bill amends the Michigan Insurance Code of 1956, specifically section 4511, to redefine the penalties associated with committing fraudulent insurance acts. The previous language that classified all fraudulent insurance acts as felonies with a maximum penalty of four years imprisonment or a fine of up to $50,000 has been removed. Instead, the bill introduces a tiered penalty system based on the amount of the fraudulent claim and the number of claims involved. For instance, if the fraudulent claim is less than $1,000, it is classified as a misdemeanor with a maximum penalty of one year in prison or a fine of up to $2,000. Conversely, more severe penalties are established for larger claims, with felonies punishable by up to 20 years in prison for claims of $100,000 or more.

Additionally, the bill mandates that individuals found guilty of these offenses must pay restitution as outlined in existing laws. It also allows for the aggregation of fraudulent claims made within a 12-month period to determine the total amount involved, which could lead to enhanced penalties. The prosecuting attorney is required to include prior convictions in the complaint if seeking enhanced sentences, and the court must notify the appropriate licensing authority if a practitioner or insurer is found guilty of a fraudulent act. This comprehensive approach aims to strengthen the enforcement against insurance fraud in Michigan.

Statutes affected:
House Introduced Bill: 500.4511