Bill Text: MI HB5519 | 2013-2014 | 97th Legislature | Introduced
Bill Title: Insurance; insurers; requirement for certain insurers to deal fairly and in good faith with individuals claiming benefits; provide for. Amends 1956 PA 218 (MCL 500.100 - 500.8302) by adding sec. 2203. TIE BAR WITH: HB 5518'14, HB 5520'14, HB 5521'14, HB 5522'14, HB 5523'14, HB 5525'14
Spectrum: Partisan Bill (Democrat 14-0)
Status: (Introduced - Dead) 2014-05-08 - Printed Bill Filed 05/07/2014 [HB5519 Detail]
Download: Michigan-2013-HB5519-Introduced.html
HOUSE BILL No. 5519
May 6, 2014, Introduced by Reps. Brinks, Dillon, Darany, Knezek, Segal, Oakes, Hobbs, Rutledge, Slavens, LaVoy, Faris, Phelps, 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 2203.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 2203. (1) A property or casualty insurer obligated to pay
benefits or claims under a property or casualty insurance policy
has a duty to deal fairly and in good faith with an insured
claiming those benefits. A property or casualty insurer that
breaches this duty to deal fairly and in good faith is liable for
compensatory, consequential, 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 upon 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 upon 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
amounts due under an insurance policy by offering substantially
less than the amounts 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 the physician of either 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 where 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 concerning 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.
(3) As used in this section, "property or casualty insurer"
means a home insurer, an automobile insurer, a commercial property
insurer, or a workers compensation insurer.
Enacting section 1. This amendatory act does not take effect
unless all of the following bills of the 97th Legislature are
enacted into law:
(a) Senate Bill No.____ or House Bill No. 5518 (request no.
03844'13).
(b) Senate Bill No.____ or House Bill No. 5523 (request no.
03845'13).
(c) Senate Bill No.____ or House Bill No.____ (request no.
03846'13).
(d) Senate Bill No.____ or House Bill No.____ (request no.
03846'13 a).
(e) Senate Bill No.____ or House Bill No. 5521 (request no.
03849'13).
(f) Senate Bill No.____ or House Bill No. 5525 (request no.
03850'13).
(g) Senate Bill No.____ or House Bill No. 5522 (request no.
03944'13).
(h) Senate Bill No.____ or House Bill No. 5520 (request no.
03945'13).
