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HB 4717

Crimes: definitions; definition of racketeering; include insurance fraud. Amends sec. 159g of 1931 PA 328 (MCL 750.159g).

2025-2026 Regular Session Introduced by Joe Aragona and 9 co-sponsors

Michigan law now classifies systematic insurance fraud as racketeering, enabling prosecutors to pursue organized crime charges with enhanced penalties against coordinated fraud schemes.

REFERRED TO COMMITTEE ON FINANCE, INSURANCE, AND CONSUMER PROTECTION
#crimes:definitions #crimes:fraud #insurance:other
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Bill Summary · HB 4717

Legislative bill overview

HB 4717 amends Michigan's racketeering statute (MCL 750.159g) to include insurance fraud as a predicate act that can constitute organized crime under RICO-style laws. Previously, insurance fraud was not explicitly listed among the criminal activities that could trigger racketeering charges when part of a pattern of criminal conduct.

Why is this important

This change allows prosecutors to pursue more serious organized crime charges against individuals or organizations engaged in systematic insurance fraud schemes, potentially resulting in enhanced penalties and civil remedies. Insurance fraud costs the industry billions annually and often involves organized criminal networks; this law gives authorities stronger tools to combat sophisticated fraud operations.

Potential points of contention

  • Prosecutorial discretion concerns: Critics may argue that broadening racketeering definitions increases the risk of overcharging or pursuing charges that should remain simple fraud cases, affecting defendants' rights to proportional prosecution
  • Insurance industry impact: While supporters contend this protects consumers, insurers may face increased litigation costs if RICO's treble damages provisions apply to insurance fraud disputes previously handled as civil matters
  • Definitional scope: Questions may arise about what constitutes "insurance fraud" under this statute and how it interacts with existing insurance code provisions, potentially creating legal ambiguity

Compiled from official sources — confirm details with the bill’s official record.

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