Bill
HB 4716
HB 4716 replaces a single penalty for insurance fraud with tiered penalties by claim amount and number, plus restitution and enhanced penalties for conspiracies and priors.
Status & sponsor
- Introduced July 1, 2025 by Rep. Mike McFall (with multiple co-sponsors).
- Passed by the Michigan House (third reading Sept. 16, 2025; passed with immediate effect Sept. 18, 2025).
- Referred to the Committee on Finance, Insurance, and Consumer Protection (next step in the legislative process).
Purpose
- Replace the current single felony penalty for committing or conspiring to commit a fraudulent insurance act (MCL 500.4511) with a tiered penalty structure that scales criminal classification, maximum imprisonment, and fines according to the number and dollar value of fraudulent claims, participation in a conspiracy, and prior convictions. Restitution remains mandatory.
Key provisions
- Replaces one-size-fits-all penalty (presently: felony up to 4 years and up to $50,000 fine plus restitution) with graduated penalties for fraudulent insurance acts involving claims:
- Misdemeanor (max 1 year; fine up to $2,000 or 3× claim amount, whichever greater)
- Claims total less than $1,000 OR fewer than 5 fraudulent claims.
- Felony (max 5 years; fine up to $10,000 or 3× claim amount)
- Claims $1,000–<$20,000 OR 5–19 fraudulent claims.
- Felony (max 10 years; fine up to $15,000 or 3× claim amount)
- Claims $20,000–<$50,000 OR 20–49 fraudulent claims.
- Felony (max 15 years; fine up to $25,000 or 3× claim amount)
- Claims $50,000–<$100,000 OR 50–99 fraudulent claims.
- Felony (max 20 years; fine up to $50,000 or 3× claim amount)
- Claims $100,000 or more OR 100+ fraudulent claims.
- Aggregation: fraudulent claims made pursuant to a scheme or course of conduct may be aggregated over any 12‑month period to determine the applicable penalty tier.
- Conspiracy enhancement: entering into an agreement or conspiracy to commit fraud subjects the defendant to the next-higher penalty category.
- Prior-conviction enhancements:
- One prior conviction: offenses meeting the lowest category are elevated to the second category.
- Two or more priors: offenses in the first or second category can be elevated to the third category.
- Prosecutor must allege prior convictions on the complaint; the court (not a jury) determines the existence of priors at sentencing or at a separate hearing. Acceptable proof includes judgments, transcripts, presentence reports, or defendant statements.
- Mandatory restitution: defendants convicted under this section must pay restitution consistent with MCL 769.1a and the crime victim’s rights act.
- Licensing notification: if a practitioner or insurer is found responsible or guilty, the court must notify the appropriate state licensing authority.
Who is affected
- Individuals or entities that commit, conspire to commit, or participate in insurance fraud (claimants, medical providers, insurers, agents, third-party administrators).
- Prosecutors, courts, licensing boards, and insurers (through reporting/administrative coordination in companion proposals).
- Potentially increases criminal exposure for organized schemes and repeat offenders.
Related measures and context
- HB 4716 is part of a package (HBs 4713–4719) that includes complementary proposals:
- HB 4714 — aligns sentencing guideline classifications with the new penalty tiers.
- HB 4717 — adds certain insurance fraud offenses to racketeering statutes.
- HB 4718 — would require insurers to report suspected fraud to DIFS.
- HB 4719 — authorizes civil fines for fraudulent insurance acts.
- Restitution and victim-rights provisions remain in force.
Procedural notes / next steps
- Having passed the House, the bill has been transmitted for further consideration (committee referral noted Sept. 18, 2025). If enacted, the new tiered penalties would replace the current single-penalty framework in MCL 500.4511.
Compiled from official sources — confirm details with the bill’s official record.
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