Bill > SB0544

This bill amends the Michigan Insurance Code to prohibit post-claim underwriting and expand protections for insurance policyholders. The bill adds two new provisions to the existing list of unfair insurance practices: first, insurers are now prohibited from completing underwriting after issuing a policy or certificate, or re-underwriting a policy only after a claim is filed. Second, insurers cannot deny claims based on material facts discovered during the claims investigation process that could have been reasonably discovered during the initial underwriting. These changes aim to prevent insurers from avoiding legitimate claims by conducting late or selective investigations that were feasible earlier in the policy process. The bill maintains existing requirements about fair claims handling, such as prompt communication, reasonable investigation, good faith settlement attempts, and proper documentation of complaints. The modifications strengthen consumer protections by ensuring insurers cannot retroactively look for reasons to deny claims that they could have identified before issuing the policy, thus reducing the potential for arbitrary claim denials and providing more certainty for policyholders.