Insurance: other; penalties for late payment of claims; increase. Amends secs. 2006 & 3142 of 1956 PA 218 (MCL 500.2006 & 500.3142).
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Progress
Where this bill stands in the legislative process.
- Introduced
- Passed Senate
- Passed House
- To Governor
- Became Law
Overview
This bill increases penalties for insurance companies that fail to pay claims on a timely basis. It establishes a 12% interest rate on unpaid claims, with escalating rates for longer delays. The bill also outlines procedures for submitting proof of loss and addresses situations where insurers are unable to determine who is entitled to benefits. Finally, it includes reporting requirements for insurers to track timely claim payments.
Key provisions
- Increases interest rates on unpaid claims to 12% per annum, with tiered rates based on the length of delay.
- Establishes procedures for submitting proof of loss and defines when a claim is considered paid on time.
- Addresses situations where insurers are unable to determine the recipient of benefits.
- Requires insurers to notify claimants of reasons for delayed payments.
- Specifies a 3-month grace period for premium tax credit payments under the Affordable Care Act.
- Mandates reporting of claim payment timelines and overdue payments by insurers.
- Defines ‘clean claims’ and outlines requirements for their processing.
- Applies to nonprofit dental care corporations and sets reporting requirements for insurers starting in 2027.
Who is affected
- Insurance companies
- Policyholders
- Healthcare providers
- Consumers
- The insurance industry
Notable changes
Bill text
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Document of record
- Version
- Senate Introduced Bill
- Published
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Sponsors
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No sponsors are on record.
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