Michigan's highest court has narrowed a decades-old shield that insurers and other regulated companies used to defeat consumer-protection lawsuits.
On July 31, 2026, the Michigan Supreme Court overruled two of its own rulings - Smith v Globe Life Ins Co and Liss v Lewiston-Richards, Inc - that had let regulated businesses turn aside claims under the Michigan Consumer Protection Act (MCPA). The case before the court centered on drugmaker Eli Lilly and its insulin pricing, but the decision sweeps much further. One of the two overruled cases was a life-insurance dispute.
The MCPA bars "unfair, unconscionable, or deceptive" business practices. It carves out an exemption, though, for "[a] transaction or conduct specifically authorized under laws administered by a regulatory board or officer." For years, Smith and Liss read that exemption generously: if a company's broad line of business was licensed or regulated, it was shielded, even where the specific conduct alleged was banned.
The court said that approach went too far, "judicially immunizing" a "broad range of industries." In Smith, a life insurer had relied on the exemption to defeat a claim that it misrepresented a policy's terms after denying coverage.
The justices set a narrower test. What matters is whether the specific conduct alleged - not the company's general business - is "specifically authorized" by law. The word "general," they pointed out, never appears in the statute.
As for Eli Lilly, the Michigan Attorney General is investigating whether it "artificially increased the list prices of its insulin medications," citing gaps between Lilly's insulin in Michigan and abroad, and between branded Humalog and cheaper generic Lispro. Those are allegations only. The court noted no MCPA violation has been pleaded and returned the case to the trial court.
For insurers, the change is direct. Smith, the case that first stretched the exemption this wide, is now overruled. In Michigan, a licensed insurer can no longer set aside an MCPA claim just by citing its regulated status. The question now is whether the specific practice a claimant challenges was itself authorized by law.
