LANSING – State Representative Mary Valentine (D-Norton Shores) today blasted insurance giants that began running attack radio ads on legislators in an effort to squelch a movement to strengthen consumer protections and hold insurance companies and their CEOs accountable for breaking their promises to policyholders.
"If insurance companies think we will back down because of a smear campaign, they are sorely mistaken," said Valentine, a sponsor of one of the bills in the plan. "These companies are profiting from Michigan's lack of consumer protections, and that's unacceptable. Holding CEOs accountable for denying legitimate claims will show them that they have to play by the same rules as the people who keep them in business.
The attack ads – which are funded by a previously unknown group called the Coalition to Insure Michigan's Future – began airing this week. Members of the group appear to include out-of-state insurance special interest groups.
The attack campaign came on the heels of House efforts to have Michigan join 46 other states that punish insurance companies that wrongfully deny legitimate claims. The House plan also will hold CEOs and corporate leaders accountable for encouraging the practice of boosting profits by denying or low-balling valid claims.
Jo Anne Katzman of Bloomfield Hills, a former claims adjuster with Allstate Insurance Company who became a whistle-blower, saw firsthand why consumers need stronger protections against the wrongful practices of the insurance industry.
"I could no longer look people in the eye knowing our insurance company would turn its back on them in their hour of need," said Katzman, who worked for Allstate from 2002 to 2003. "The employees who regularly delayed or denied claims were awarded with promotions and rewards. Having worked on the inside, I can tell you that no one is in good hands with Allstate or with any other insurance company until Michigan toughens its consumer protection laws."
Valentine and other legislators introduced their plan in July to protect the growing number of victims of unfair insurance practices because of Michigan's weak consumer protection laws.
"When you and I don't keep our word, we are held accountable," Valentine said. "It's time insurance company CEOs are held to the same standards. The pockets of the special interest groups might be deep, but our commitment to protecting our residents is even deeper."
The House plan will:
- Hold insurance company CEOs and corporate leaders accountable when they knowingly foster or encourage wrongful denial of claims by making the misconduct a felony that could result in four years in prison plus a $50,000 fine.
- Strengthen consumer protections by punishing insurance companies that repeatedly deny consumer claims with penalties including a $1 million fine.
- Create a whistle-blower protection plan to shield employees who report that an insurance company is engaging in wrongful denial of claims.
- Require insurance companies to repair a consumer's credit rating when harmed by wrongful denial of coverage.
The bills are currently in front of the House Committee on Insurance.
Wrongful denial testimony is available at: www.stopinsurancedenial.com