Bill
HB 4071
Allows insurers to offer free or discounted value-added services linked to coverage (e.g., risk reduction, wellness) if related to the policy and cost-appropriate.
Status / Key dates
- Subject: Revision to Michigan Insurance Code (unfair trade practices / rebates) — amends MCL 500.2025.
- Sponsor (House): Rep. Brenda Carter. Companion/related: SB 2058.
- House action: Passed House (substitute H‑2) on May 7, 2025.
- Senate action: Referred to Committee on Finance, Insurance, and Consumer Protection (May 13, 2025).
- Introduced: early 2025 (House introduced Feb 12 / filed Mar 7, 2025 per documents).
Purpose / intent
- To clarify that certain “value‑added” products and services offered by insurers or insurance producers to customers (free or at a discounted price) are not unlawful rebates or prohibited gifts, provided they relate to coverage and meet specified consumer‑protection and proportionality tests. The change implements an NAIC model approach adopted by several other states and is intended to allow insurers to offer services that reduce risk, claims, or otherwise benefit policyholders.
Main provisions (what the bill would do)
- Authorizes life and property‑casualty insurers (and insurance producers, their employees/affiliates, or third‑party representatives) to offer or provide, free or at reduced cost, value‑added products or services not specified in the insurance contract, if all of the following are true:
- The product/service relates to the insurance coverage; and
- It is primarily designed to accomplish one or more enumerated objectives, including:
- Loss mitigation / loss control;
- Reduction of claim or claim‑settlement costs;
- Education about liability or loss risks;
- Monitoring/assessing risk or identifying/eliminating sources of risk;
- Enhancing health;
- Enhancing financial wellness (education, planning);
- Providing post‑loss services;
- Incentivizing behaviors to improve health or reduce death/disability risk;
- Assisting administration of employee/retiree benefit coverage.
- The insurer’s (or producer’s) cost to provide the product/service to an individual customer must be reasonable relative to that customer’s premiums or insurance coverage for the policy class.
- If the insurer or producer supplies the product/service, they must provide contact information so customers can get assistance or answers about it.
- Clarifies that a product or service provided under this section is not “merchandise” for purposes of sections 2024a or 2024b (the statutes that regulate gifts/merchandise to certain applicants).
- Grants the Director authority to adopt rules under the Administrative Procedures Act to implement the section and address consumer protections, including data privacy, consumer disclosures, and unfair discrimination.
Who is affected / likely impacts
- Affected parties: insurers (life and property/casualty), insurance producers/agents, policyholders, applicants, potential applicants.
- Expected impacts:
- Insurers: greater flexibility to provide loss‑control, wellness, monitoring, and other services tied to coverage that may reduce claims costs and improve customer outcomes.
- Consumers: potential access to ancillary services (health screenings, risk monitoring, post‑loss assistance, financial education) at low or no cost; protections added by rulemaking requirement (privacy, disclosures).
- Regulators: rulemaking and enforcement responsibilities; potential for administrative enforcement and fines if provisions are abused or violate anti‑discrimination/data rules.
Fiscal / enforcement notes
- No direct state or local fiscal impact projected. Existing Insurance Code enforcement provisions (administrative hearings; civil fines up to statutory caps) would apply for violations.
- Department of Insurance and Financial Services took a neutral position in committee; multiple industry groups testified in support.
Limitations / notes
- The statute conditions the permissibility of these offerings on the objectives listed and on reasonableness relative to premiums/policy class — not an unlimited authorization to provide value.
- The Director’s forthcoming rules (if adopted) will be important for detail on privacy, disclosures, and discrimination safeguards.
Compiled from official sources — confirm details with the bill’s official record.
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