Michigan lawmakers are pushing for tougher penalties and mandatory reporting rules to crack down on insurance fraud in the state.
On July 1, 2025, the House introduced a package of bills - House Bills 4715, 4716, 4718, and 4719 - that would amend Michigan’s long-standing Insurance Code of 1956. Together, these proposals aim to make it riskier to commit fraud and safer for insurers to report it without fear of legal backlash.
At the heart of the package is House Bill 4715, which protects insurers, agents, and others who report suspected fraud from civil lawsuits, as long as they don’t act with malice or knowingly provide false information. Reports made to state agencies, the National Insurance Crime Bureau, or similar entities would be protected under the law unless the reporter knew the information was false.
House Bill 4716 lays out a tiered structure of criminal penalties that scale based on the size and scope of the fraud. For instance, a fraudulent act involving $100,000 or more - or 100 or more fraudulent claims - could carry up to 20 years in prison, along with fines of up to $50,000 or triple the fraudulent amount, whichever is greater. The bill would also require courts to notify licensing boards when a practitioner or insurer is convicted, adding professional consequences alongside criminal ones.
House Bill 4718 would create a duty for insurers to report suspected fraud involving Michigan policyholders or assigned claims directly to the state insurance director. The director could investigate further or refer cases to law enforcement or the attorney general.
Finally, House Bill 4719 would give the insurance director greater enforcement tools, including the ability to impose civil fines of up to $5,000 per violation if done knowingly, and to suspend or revoke licenses. These fines would be in addition to any criminal penalties for fraud.
Altogether, the bills reflect one of the state’s most coordinated efforts in recent years to strengthen its fraud laws. The package has been referred to the House Insurance Committee for review. Insurers, brokers, and adjusters working in Michigan should watch this closely, as these changes could significantly reshape fraud reporting and compliance practices.
