Insurer Group Criticizes Michigan House Legislative Proposals

May 2, 2008

The American Insurance Association (AIA) criticized the legislative actions of the Michigan House Democrats’ claiming the proposals do little to address the flaws in the state’s insurance market.

“Once again the House Insurance Committee will likely pass legislation that does nothing to get at the high costs endemic to the state’s insurance system, such as Michigan’s one-of-a-kind unlimited medical benefits. There are other solutions to address the state’s no fault insurance law and help consumers, but the bills up today are not among them,” said John Birkinbine, AIA assistant vice president, Midwest Region.

According to Birkinbine during the past few months the Michigan House Insurance Committee has considered nearly a dozen bills opposed by the insurance industry that would have greatly expanded insurer liability, enacted restrictive regulations that would have stifled business operations, and increased costs.

Four bills heard in committee were: HB 4994 (increases notice requirements and allows for the suspension of the statute of limitations for certain claims), HB 5838 (raises the tort damage threshold for certain accidents from $500 to $1,500), HB 5480 (allows for a private right of action if rates are deemed excessive), and HB 4836 (requires a mandatory offer of uninsured and underinsured motorist coverage), fit that same mold.

AIA has long advocated for significant reforms to the state’s no fault insurance system, which it characterizes as the most generous and costly in the nation. The AIA believes that reforms, such as utilizing a medical fee schedule similar to the workers’ compensation system to manage personal injury protection (PIP) claims, allowing consumers more choice in the level of PIP coverage, enacting strong tort thresholds to reduce “spill over” into the courts for claims and aggressive anti-fraud efforts would help stabilize the system and encourage competition, which benefits consumers.

Source: AIA

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