Bill Text: MI HB4244 | 2009-2010 | 95th Legislature | Engrossed

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Bill Title: Insurance; insurers; remedies for failure to timely pay benefits; expand to include attorney fee under certain circumstances. Amends 1956 PA 218 (MCL 500.100 - 500.8302) by adding sec. 2090.

Spectrum: Partisan Bill (Democrat 8-0)

Status: (Introduced - Dead) 2009-08-26 - Referred To Committee On Economic Development And Regulatory Reform [HB4244 Detail]

Download: Michigan-2009-HB4244-Engrossed.html

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HB-4244, As Passed House, August 19, 2009

 

 

 

 

 

 

 

 

 

 

 

 

SUBSTITUTE FOR

 

HOUSE BILL NO. 4244

 

 

 

 

 

 

 

 

 

 

     A bill to amend 1956 PA 218, entitled

 

"The insurance code of 1956,"

 

(MCL 500.100 to 500.8302) by adding section 2027a.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 2027a. (1) A property or casualty insurer shall pay

 

reasonable attorney fees to an attorney who represents the insured

 

in a successful first-party action to recover property or casualty

 

insurance benefits that are overdue. The attorney fee shall be a

 

charge against the property or casualty insurer in addition to the

 

benefits recovered and in addition to all other remedies available.

 

     (2) The insured shall also receive the greater of $10,000.00

 

or 3 times the amount of benefits withheld, if the failure to

 

timely pay benefits under subsection (1) involved 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.

 

     (3) Whether an insurer has violated subsection (2) is a

 

question of fact and not of law.

 

     (4) As used in this section, "property or casualty insurer"

 

means an automobile insurer, a home 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 95th Legislature are

 

enacted into law:

 

     (a) House Bill No. 4844.

 

     (b) House Bill No. 5020.

 

     (c) House Bill No. 5145.

 

     (d) House Bill No. 5146.

 

     (e) House Bill No. 5147.

 

     (f) House Bill No. 5148.

 

     (g) House Bill No. 5150.

 

     (h) House Bill No. 5151.