The bill amends the Michigan Insurance Code of 1956 by adding a new section, 4506, which establishes a protocol for insurers regarding suspected fraudulent insurance acts. Under this new section, if an insurer believes or knows that a fraudulent act has occurred involving a Michigan policyholder or a claim submitted through the assigned claims plan, they are required to report this to the director using a prescribed form. The report must include any requested information about the alleged fraudulent act and the parties involved. The director is then tasked with reviewing these reports and conducting further investigations as deemed necessary. If appropriate, the director may report the suspected fraud to the insurer, relevant agencies, or law enforcement.

Additionally, the bill outlines circumstances under which insurers are not required to submit reports, specifically if initial investigations do not substantiate the suspicion of fraud or if there are no reasonable grounds to believe that fraud occurred. It also clarifies that insurers must still report any suspected legal violations to authorized agencies. Furthermore, authorized agencies are mandated to provide any requested documentation or evidence to the director and to assist in the investigation process.

Statutes affected:
House Introduced Bill: 500.100, 500.8302