The bill amends the 1956 Insurance Code of Michigan by adding Chapter 4A, which establishes comprehensive guidelines for market conduct examinations of insurers. It introduces definitions for key terms such as "complaint," "desk examination," "market analysis," and "targeted examination." The chapter outlines the director's responsibilities in conducting ongoing market analyses and specifies the continuum of market conduct actions that may be taken if further inquiry into an insurer's practices is necessary. The bill emphasizes adherence to established guidelines from the National Association of Insurance Commissioners (NAIC) and mandates that market conduct actions focus on general business practices rather than isolated errors.

Additionally, the bill introduces amendments regarding market conduct surveillance, requiring that personnel be qualified by education and experience, and allows the director to engage qualified outside assistance when needed. It clarifies that individuals affiliated with an insurer under examination can serve as market conduct surveillance personnel if they meet specific criteria. The bill also establishes protections for the director and their representatives against civil actions for good faith conduct, outlines criteria for imposing fines and penalties on insurers, and mandates the collection and reporting of market data to the NAIC. These amendments are set to take effect on January 1, 2026.

Statutes affected:
Substitute (S-1): 500.100, 500.8302
Senate Introduced Bill: 500.100, 500.8302