Bill Text: MI HB5520 | 2013-2014 | 97th Legislature | Introduced
Bill Title: Insurance; no-fault; duty of an insurer to deal fairly with insureds and claimants; establish. Amends 1956 PA 218 (MCL 500.100 - 500.8302) by adding sec. 3149.
Spectrum: Partisan Bill (Democrat 16-0)
Status: (Introduced - Dead) 2014-05-08 - Printed Bill Filed 05/07/2014 [HB5520 Detail]
Download: Michigan-2013-HB5520-Introduced.html
HOUSE BILL No. 5520
May 6, 2014, Introduced by Reps. Abed, Cochran, LaVoy, Lamonte, Brinks, Driskell, Hovey-Wright, Oakes, Hobbs, Rutledge, Slavens, Faris, Phelps, Darany, Lipton and Brown and referred to the Committee on Insurance.
A bill to amend 1956 PA 218, entitled
"The insurance code of 1956,"
(MCL 500.100 to 500.8302) by adding section 3149.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 3149. (1) An insurer obligated to pay benefits or claims
for personal protection insurance benefits under this act has a
duty to deal fairly and in good faith with an injured person
claiming those benefits and that person's providers. An insurer
that breaches this duty to deal fairly and in good faith is liable
for compensatory, consequential, noneconomic, economic, and
exemplary damages proximately caused by the breach and the costs of
litigation, including actual attorney fees. A breach of the duty to
deal fairly and in good faith includes, but is not limited to, any
of the following:
(a) Misrepresenting pertinent facts or insurance policy
provisions concerning coverages at issue.
(b) Failing to acknowledge promptly or to act reasonably and
promptly on communications concerning claims arising under the
insurance policy.
(c) Failing to adopt and implement reasonable standards for
the prompt investigation of claims arising under the insurance
policy.
(d) Refusing to pay claims without conducting a reasonable
investigation based on the available information.
(e) Failing to affirm or deny coverage of claims within a
reasonable time after proof of loss statements have been completed.
(f) Failing to attempt in good faith to effectuate prompt,
fair, and equitable settlements of claims in which liability has
become reasonably clear.
(g) Compelling insureds to institute litigation to recover
money due under an insurance policy by offering substantially less
than the amount due the insureds.
(h) Attempting to settle a claim for less than the amount to
which a reasonable person would believe the claimant was entitled,
by reference to written or printed advertising material
accompanying or made part of an application.
(i) Attempting to settle claims on the basis of an application
that was altered without notice to, or knowledge or consent of, the
insured.
(j) Making a claims payment to a policyholder or beneficiary
omitting the coverage under which each payment is being made.
(k) Making known to insureds or claimants a policy of
appealing from arbitration awards in favor of insureds or claimants
for the purpose of compelling them to accept settlements or
compromises less than the amount awarded in arbitration.
(l) Delaying the investigation or payment of claims by
requiring an insured, claimant, or a physician of an insured or
claimant to submit a preliminary claim report and then requiring
subsequent submission of formal proof of loss forms, seeking solely
the duplication of a verification.
(m) Failing to promptly settle claims if liability has become
reasonably clear under 1 portion of the insurance policy coverage
in order to influence settlements under other portions of the
insurance policy.
(n) Failing to promptly provide a reasonable explanation of
the basis in the insurance policy in relation to the facts or
applicable law for denial of a claim or for the offer of a
compromise settlement.
(2) Whether an insurer has breached the duty under subsection
(1) is a question of fact and not of law.
