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Office of Regulatory Reinvention Issues Recommendations for Modernizing Insurance and Finance Regulations
Office of Regulatory Reinvention Presents 46 Recommendations to Governor Snyder to Improve Michigan's Insurance and Finance Regulatory System
March 13, 2012 - Today, the Office of Regulatory Reinvention (ORR) released its report to Governor Snyder containing 46 recommendations for improving Michigan's insurance and finance regulations while continuing to protect Michigan's consumers. Gov. Snyder has reviewed the recommendations and has asked the ORR and OFIR to work toward implementing the recommendations.
The ORR formed recommendations after a comprehensive review process, including convening an Advisory Rules Committee of stakeholders that included representatives from banks, consumer protection groups, credit unions, and insurance industry, as well as senior officials from the state's Office of Financial and Insurance Regulation (OFIR).
"One of our top priorities was to evaluate the public benefit of our insurance and finance regulations. We found a number of regulations that were not effectively protecting consumers, and at the same time were adding unnecessary costs to our system," said Steven H. Hilfinger, Chief Regulatory Officer and Department of Licensing and Regulatory Affairs Director. "The insurance and finance industries are very important to Michigan - they provide high paying, technology-oriented jobs that are significant to the state. These recommendations go a long way to make Michigan more competitive in attracting and growing businesses in these sectors, while maintaining necessary consumer protections."
Consumer interests were represented on the committee and shaped many of the recommendations. Thirty-eight of the 46 recommendations were approved unanimously.
The ORR worked closely with OFIR in reviewing existing administrative rules and developing the recommendations through the Insurance and Finance Advisory Rules Committee.
"The committee should be commended for their hard work to eliminate the unnecessary rules and regulations that have hindered the growth of the state's financial service industry," said OFIR Commissioner Kevin Clinton. "Removing regulatory waste will help create jobs and result in lower insurance rates and better financial products for Michigan consumers."
The ORR made several recommendations in order to allow for innovation, make Michigan more competitive, and remove significant government‐mandated costs that have little benefit to the consumer.
The ORR found that the overall regulatory climate between OFIR and the banks, credit unions, and mortgage companies of Michigan is healthy. However, the ORR did identify a few items that could improve the regulatory climate further.
The ORR found that Michigan's insurance system had several regulations which were preventing Michigan from being competitive nationally. Currently, there are approximately 1,600 insurers in Michigan, including several national firms that have a large presence in the state. Insurance companies account for a significant number of Michigan jobs: it is estimated that there are more than 51,000 people in the state employed in the insurance industry.
"The ORR's report offers suggestions to modernize and streamline the business of insurance in Michigan. The report calls for elimination of requirements (not present in other states) which add cost but little or no customer value," said David Field, Regional Counsel for Allstate and Insurance Subcommittee Chair for the Insurance & Finance Advisory Rules Committee. "The changes called for will take costs out of the system and make Michigan a friendlier place for insurers currently not doing business here, to come and compete. Increased competition and elimination of needless costs are direct benefits to consumers. We strongly support the recommendations of the ORR."
The ORR made recommendations that:
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