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Bill

HB 6265

Insurance: other; market conduct exams; require insurers to pay for. Amends 1956 PA 218 by adding ch. 4A.

2023-2024 Regular Session Introduced by Kristian Grant and 3 co-sponsors

Michigan bill would require insurance companies to pay for regulatory market conduct examinations instead of shifting costs elsewhere, potentially increasing industry expenses and consumer premiums.

bill electronically reproduced 12/10/2024
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Bill Summary · HB 6265

Legislative bill overview

HB 6265 would amend Michigan's Insurance Code (Public Act 218 of 1956) by adding a new chapter requiring insurance companies to pay for market conduct examinations conducted by the Michigan Department of Insurance and Financial Services. Market conduct exams are regulatory reviews that assess whether insurers comply with insurance laws and treat consumers fairly.

Why is this important

Currently, the cost allocation for these examinations may fall on Michigan's insurance regulatory agency or be passed to consumers through insurance pools. Shifting examination costs directly to insurers could reduce taxpayer burden and align regulatory expenses with those who benefit from regulatory oversight, though it may marginally increase insurance costs if companies pass expenses to policyholders.

Potential points of contention

  • Cost burden on insurers: Insurance companies may argue that mandated exam payments increase operational costs, potentially leading to higher premiums for consumers or reduced competitiveness in Michigan's insurance market
  • Regulatory funding model: Debate over whether regulatory costs should be industry-funded versus taxpayer-funded, with implications for how Michigan finances its insurance department
  • Implementation details: The bill currently lacks specifics on exam frequency, scope, cost calculation methodology, and exemptions for smaller insurers, which could affect different market segments differently

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

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