WeVote
Log In

Bill

AA

Bill

HB 5694

Insurance: unfair trade practices; unfair trade practices in the insurance industry; revise. Amends sec. 2025 of 1956 PA 218 (MCL 500.2025) & repeals secs. 2024a & 2024b of 1956 PA 218 (MCL 500.2024a & 500.2024b).

2023-2024 Regular Session Introduced by Abraham Aiyash and 18 co-sponsors

Insurers may offer certain value‑added products or services tied to coverage to policyholders, with cost caps and consumer protections, replacing small nominal gifts.

notice given to discharge committee
#insurance:unfairtradepractices
0
WeVote Research Nonpartisan
Bill Summary · HB 5694

HB 5694 — Insurance: unfair trade practices; modify gifts/value‑added services

Sponsor: Rep. Brenda Carter
Subject: Insurance — unfair trade practices (amends MCL 500.2025; repeals MCL 500.2024a & 500.2024b)
Introduced: April 30, 2024 (House); Latest listed status: notice given to discharge committee (Dec. 10, 2024). Passed by the House June 26, 2024 (Roll Call 104–6). Fiscal note: no appreciable state/local fiscal impact.

Main purpose

HB 5694 revises Michigan’s rules on prohibited “rebates” and gifts by insurers to applicants and policyholders. It replaces narrow nominal gift exceptions with an express authorization for insurers to provide certain value‑added products or services (free or discounted) tied to insurance coverage, subject to conditions intended to protect consumers.

Key provisions

  • Amends section 2025 of the Insurance Code (MCL 500.2025).
  • Repeals sections 2024a and 2024b (MCL 500.2024a & 500.2024b), which currently authorize small nominal gifts (e.g., up to $5 for life insurance, $50 per year for property‑casualty).
  • Permits a life or property‑and‑casualty insurer (acting directly or through employees, affiliates, insurance producers, or third‑party representatives) to offer value‑added products/services that:
    • Relate to the insurance coverage; and
    • Are primarily designed to achieve one or more specified objectives, including loss mitigation/control, lowering claim costs, risk education/monitoring, health enhancement, financial wellness, post‑loss services, incentivizing healthier behavior, or assisting with employee/retiree benefit administration.
  • Cost test: the insurer’s cost for providing the product/service to a given customer must be reasonable compared to that customer’s premiums or insurance coverage for the policy class.
  • Disclosure: insurers/producers providing the product/service must give customers contact information for questions.
  • Regulatory rulemaking: the Director of the Department of Insurance and Financial Services (DIFS) may adopt rules under the Administrative Procedures Act to implement the section and ensure consumer protections, including consumer data protections, privacy, disclosure requirements, and guards against unfair discrimination.
  • Defines “customer” broadly (policyholder, applicant, certificate holder, insured, etc.).

Who is affected

  • Insurers (life and property & casualty) and their producers/third‑party representatives — they may offer expanded services but must meet criteria and disclosure obligations.
  • Consumers/applicants/policyholders — may receive free or discounted services tied to insurance (e.g., health screenings, risk monitoring, fire prevention services); protections for privacy, discrimination, and reasonable cost are authorized by DIFS rulemaking.
  • DIFS — given rulemaking authority; bill states no appreciable fiscal impact.

Policy context and concerns

  • The bill tracks an NAIC model adopted by other states according to committee testimony.
  • Supporters argue value‑added services can reduce losses and benefit consumers.
  • Concerns raised in testimony focus on potential misuse of data from services (e.g., health screenings) that might be used against consumers in underwriting or claims.

Legislative status (high level)

  • Passed the Michigan House June 26, 2024 (104–6) and transmitted to the Senate / referred to relevant committees. Record shows subsequent committee activity and calendars through 2025; most recent procedural note provided: notice given to discharge committee (Dec. 10, 2024). Companion bill: SB 3050.

If you want, I can produce a one‑page legislative timeline of actions or extract the exact differences between the introduced and final House substitute versions.

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

Sign in to ask a question.