Gongwer: Coalition Comes Out Against Insurance Claims Legislation

A coalition has formed against a pair of bills introduced earlier this year in the Legislature that would require insurers to act in good faith to promptly pay claims.

The Don't Touch MI Rates Coalition consists of the Michigan Chamber of Commerce, the Michigan Manufacturing Association, the Insurance Alliance of Michigan and other businesses and trade associations.

It is opposing SB 329 Trackand HB 4681 Track, which were introduced in May and haven't had a hearing yet. The bills would require insurers to act in good faith and prohibit delays in payment for claims. Violations under the bill could lead to damages paid to the insured harmed.

A statement from the coalition said the potential for disruption of the insurance market could lead to higher auto, home and other insurance costs.

"The proposed bills will create costly and frivolous lawsuits over insurance claims, which means everyday Michiganders may end up paying more for insurance," Tim Daman, president and CEO of the Lansing Regional Chamber of Commerce, said in a statement. "This is the last thing consumers need, when they are already feeling the impact of higher costs due to inflation."

Rep. Kelly Breen (D-Novi), sponsor of the bill in the House, said the industry is telling their clients "if you want us to treat you fairly, it will cost more."

"If insurance companies did what they were supposed to do all of the time there wouldn't be a need for this bill," she said, adding that business groups often say rates will go up when the Legislature considers taking an action.

"They do in many cases unreasonably deny … valid claims," Breen said.

Still, she said the language needs work and she hopes the industry comes to the table. She said no one has reached out to her to work on the bill or provide more information.

SB 329 was sent to the Senate Finance, Insurance and Consumer Protection Committee. HB 4681 was sent to the House Insurance and Financial Services Committee Track.