Michigan Moves to Protect Consumers Against Insurance Companies

Kudos to Ken Ross, Michigan’s Commissioner for the Office of Financial and Insurance Regulation (OFIR) for doing something to protect homeowners, car owners, and average consumers. Mr. Ross recently signed an order requiring all insurance companies to submit new and revised insurance policies for homes and automobiles to OFIR before sending them directly to the policyholders. His order also gives OFIR the authority to prohibit the issuance of a policy if it contains unreasonable or deceptive exceptions in coverage as well as misleading clauses.

This wise and reasonable move allows the state agency to protect consumers, especially since the Michigan Supreme Court decided that Michigan’s trial courts themselves couldn’t amend insurance contracts on the basis of unreasonable clauses that left policy holders paying heavy premiums for a worthless document.

It’s been 12 years since OFIR has been able to review insurance policies, because previous Commissioner Joe Olsen felt that reviewing policies wasn’t necessary to protect the public. If there’s anything we’ve learned about the last few years, it definitely includes the fact that we can’t count on insurance companies to police themselves.

This is the second major shift in policy under Ken Ross’s leadership of OFIR. Previously, he took on insurance companies who wanted to use credit scores as a basis for determining discounts – even during a time when credit scores were falling across the map due to the economic crisis.