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Michigan lawmakers consider insurance market reforms

NEWS IN BRIEF — Posted July 27, 2009

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A package of bills under debate in the Michigan House of Representatives would penalize insurance companies who scheme to deny claims to boost profits.

The bills would create legal protection and rewards for insurance company employee whistle-blowers, establish penalties for "bad faith" claims denials and make it a felony for the head of an insurance company to oversee a systemic wrongful denial of claims. Most of the proposals would apply to health insurance companies, along with property and casualty and auto insurers.

Michigan is a no-fault state, meaning that auto insurance policies are supposed to pay for policyholders' medical claims from injuries sustained in an accident, no matter who is at fault. The Michigan State Medical Society is part of the Coalition Protecting Auto No-Fault, a group formed to support maintaining the no-fault rules. The coalition supports the package of bills.

The Michigan House Insurance Committee was debating the measures in mid-July.

Note: This item originally appeared at http://www.ama-assn.org/amednews/2009/07/27/bibf0727.htm.

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