No Fault Reform
Auto Insurance Reform discussions with the industry, DIFS, and legislators continue, but it is becoming more and more apparent that the legislature in general just does not have an appetite to address this issue yet. The latest attempt at “compromise” by the House Speaker appears to have landed with a thud among proponents and opponents of reform alike.
FYI, the “compromise” elements include a cap ($10 million), a fee schedule (Workers Compensation + 25%), a premium reduction of 10% of the total premium along with a two year freeze, a Low Cost Auto Insurance Policy (LCAIP), a HICA shortfall fix, and revisions to the MCCA that will remove carrier liability and require more transparency of the MCCA. The Speaker has also touted the projected savings as a $730 million tax cut for Michigan drivers. Michigan will still provide the best benefits of the country (200 times more than New York) and our average premium rank will drop from 8th in the nation to an estimated 15th.
Certificates of Insurance & Third Party Certificates
On positive note, Senator Tom Casperson (R – Escanaba) has introduced SB 715. The bill defines a certificate of insurance (COI), outlines what a person shall not do in relation to altering a COI or pressuring someone to alter a COI or delivering a COI that is not reflective of the insurance policy, and provides for penalties for a person if they are found in violation of the new law. A senate hearing on the bill was favorably received and it is hoped another hearing in the near future will provide a vote on the bill.
Certificate of Insurance & SOS
The Fighting Auto Insurance Rip-offs (FAIR) task force initiated by SOS Johnson to address the use of fraudulent auto certificates of insurance continues to meet. Two problems have been identified: First, how to address fraudulent certificates and second, how to address those who purchase coverage, register, and then cancel. Results of the second meeting will lead to increased communication and insurance data sharing between the Michigan State Police, the Secretary of State, and Department of Insurance and Financial Services (DIFS) to verify insured coverage and agency legitimacy.
The Federal Health Insurance Market Place or Exchange continues to have its share of bad publicity – confusion and uncertainty for insureds being a primary concern. However, on a positive note, HB 4576, that would address Navigator regulation and oversight and others who will be operating in the state through the Exchange passed the state house by a 102-7 margin. It appears recent media reports (including Illinois rescinding navigator certification of a known terrorist after a background check) indicating a serious need to oversee the navigator program at the state level and to have the state insure that consumer identity and other personal information is being protected had an impact on the vote. MAIA is working with senate members for further action on the bill.
It’s inherently inequitable to exempt a small class of individuals from being licensed to sell a specific insurance product while requiring others selling the same insurance to be licensed. There are reasons agents are licensed and required to take CE, including the protection of consumers. Self-storage facility (SSF) operators are asking to be exempted in HB 4485. The SSF product is more akin to renter’s or condo insurance and will lead to other interest groups seeking similar exemptions (think Landlords selling insurance to renters or Automobile Salesman selling auto insurance without a license). The policy question is where to draw the line? MAIA is working to draw it now before any more exemptions are granted. HB 4485 has passed the house. For now, MAIA has been able to prevent further action on the bill.