INSURANCE PENALTIES

House Bill 4846

Sponsor:  Rep. Jim Slezak

Committee:  Insurance

Complete to 7-13-09

A SUMMARY OF HOUSE BILL 4846 AS INTRODUCED 4-29-09

The bill would amend the Insurance Code to increase the penalties for engaging in prohibited methods of competition and unfair or deceptive acts.  (The prohibitions are listed in the code.)  Currently, there is a general monetary penalty of up to $500 per violation not to exceed an aggregate of $5,000.  This would increase under House Bill 4846 to $1,000 per violation, up to $10,000 in aggregate.

The code also contains a higher penalty if the violator knew or should have known he or she was in violation.  Currently, that penalty is $2,500 per violation, up to an aggregate of $25,000 over a six-month period.  Under House Bill 4846, this would increase to $5,000 per violation, up to a six-month aggregate of $50,000.

In addition to these penalties, the commissioner of insurance can issue cease and desist orders, can suspend or revoke licenses and certificates, and can require refunds of overcharges.

MCL 500.2038

FISCAL IMPACT:

The bill would increase Insurance Licensing and Regulation Fees revenue by an indeterminate amount.  This revenue source partially supports the activities of the Office of Financial and Insurance Regulation. 

                                                                                           Legislative Analyst:   Chris Couch

                                                                                                  Fiscal Analyst:   Mark Wolf

■ This analysis was prepared by nonpartisan House staff for use by House members in their deliberations, and does not constitute an official statement of legislative intent.