Michigan Gov. Rick Synder has proposed the creation of a new Department of Insurance and Financial Services.
Snyder, who is beginning his third year as governor, said the new department will “emphasize consumer protection while helping to create a climate that allows the insurance and financial services industries to thrive. The industries are critical to Michigan, employing more than 150,000 residents and generating more than $9 billion in annual payroll. The new agency will be responsible for consumer protection, outreach and education,” according to an announcement released by the governor’s office.
Snyder also has proposed the creation of an Insurance Fraud Prevention Authority, which would “partner with state and local law enforcement and the insurance industry to provide education, training and enforcement programs to reduce incidents of insurance fraud.”
The governor proposed funding the authority through a $2 per vehicle assessment on insurance companies.
The Michigan Insurance Coalition (MIC), an industry trade group, commended Gov. Snyder for creating the new department and recognizing the importance of the insurance industry in the state.
The MIC noted that according to the Insurance Information Institute (www.iii.org):
- The Michigan insurance industry currently employs more the 57,000 workers.
- Michigan is the home to 73 property casualty companies.
- Property casualty/life and health insurers paid $264 million in premium taxes in Michigan in 2011.
- Most states already have departments in charge of financial services regulation.
Nearby states, such as Ohio and Indiana, have recently established additional economic development arms to attract and expand insurance and finance industry jobs, the MIC said.
National insurance trade group, the Property Casualty Insurers Association of America (PCI), also praised Snyder for making insurance issues a high priority.
We welcome the governor’s “call to elevate the Office of Financial and Insurance Regulation (OFIR) into a department-level agency within state government. This is further evidence of his commitment to creating a positive insurance environment which protects consumers and promotes economic development and job growth,” said Jeffrey Junkas, regional manager for the Property Casualty Insurers Association of America (PCI).
Insurance is currently regulated in Michigan by the Office of Financial and Insurance Regulation (OFIR) led by Commissioner Kevin Clinton. The OFIR is a division of the state Department of Licensing and Regulatory Affairs. Clinton has been tapped to lead the new insurance department.