Gov. Rick Snyder wasted no time implementing one of his proposals from his State of the State address, signing an executive order to create the new state Department of Insurance and Financial Services...
Jan. 18--Gov. Rick Snyder wasted no time implementing one of his proposals from Wednesday night's State of the State address, signing an executive order Thursday to create the new state Department of Insurance and Financial Services.
The department, whose duties had been under the umbrella of Licensing and Regulatory Affairs, is designed to give issues related to insurance and financial services more of a focal point in state government.
It also is meant to recognize the significance of those industries in Michigan's economy. The two sectors employ 150,000 people in Michigan and generate $9 billion in annual payroll. There are 300 state banks and credit unions and 149 insurance companies in the state.
Snyder's executive order takes effect in 60 days. Kevin Clinton, who serves as the Office of Financial and Insurance Regulation commissioner, is to become the director of the new department but will have to be confirmed by the Michigan Senate.
The new department comes in tandem with Snyder's call for auto insurance reform that would include changes to the state's no-fault system. Michigan is one of only 12 states that have no-fault insurance, which pays for unlimited lifetime benefits for people critically injured in auto accidents. The insurance industry says that as a result, Michigan residents pay some of the highest insurance rates in the country.
Legislation died last year after emotional committee hearings. Consumers, doctors and other medical professionals testified that capping benefits would cause catastrophically injured people to quickly go bankrupt.
Snyder said Thursday that he hopes that once legislators and residents learn the gravity of the state's insurance costs, action will be taken. The average auto insurance claim in Michigan is $44,000, the highest in the nation.
"Something really needs to be done," he said.
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