Work with experienced legal counsel to ensure compliance with insurance industry regulations

In our previous post, we briefly discussed the widespread concern at present in the insurance industry—specifically, among large insurance companies—over the nearing departure of the man who represents the insurance industry on the Financial Stability Oversight Council. As we noted, the presence of an insurance expert on the council is seen as important to represent the industry and help ensure that fair decisions are made with respect to insurance industry regulation.

Although regulation of the insurance industry at the federal has increased over the years, insurance companies are still mostly regulated at the state level. Compliance with state regulatory requirements is an important task for insurance companies, not only to protect themselves from legal liabilities, but also to earn a strong reputation for fair business dealings with consumers. 

In Michigan, the Department of Insurance and Financial Services, specifically its Market Conduct Section, is responsible for overseeing the business practices of insurance companies and ensuring that consumers are being treated fairly. Market practices like sales, advertising, underwriting, and handling of claims all fall within the purview of DIFS.

One of the tasks of the DIFS, Market Content Section is to conduct market conduct examinations. These include: limited examinations, which involve requests for information; targeted examination, which are focused on reviewing specific lines of business and specific practices; as well as comprehensive examinations, which involve a full scope review of a company’s business practices. DIFS also conducts audits of insurance companies and agents, with the aim of protecting consumers and monitoring business practices.

Michigan insurance companies need to make sure they understand their legal obligations and that they establish sound policies and procedures for ensuring compliance with both state and federal law. Working with an experienced attorney can help ensure an insurance company is meeting its legal obligations and that any issues which arise are effectively addresses as quickly as possible.