The bill amends the Michigan Insurance Code of 1956, specifically section 2026, to clarify and expand the definitions of unfair methods of competition and deceptive practices in the insurance industry. It introduces several new provisions that outline specific actions considered unfair, such as failing to promptly acknowledge claims, refusing to pay claims without reasonable investigation, and denying claims based on material facts that should have been discovered during the underwriting process. Additionally, the bill mandates that insurers maintain a complete record of complaints from insureds, detailing the nature and resolution of each complaint.

Key insertions in the bill include the requirement for insurers to provide reasonable explanations for claim denials and to complete underwriting before issuing policies. The language also emphasizes the importance of timely communication and fair settlement practices, aiming to protect consumers from deceptive practices. The bill removes certain phrases to streamline the language, such as changing "based upon" to "based on," and clarifying the definition of a complaint. Overall, the amendments aim to enhance consumer protection and ensure fair treatment in the insurance industry.

Statutes affected:
Senate Introduced Bill: 500.2026