2009 House Bill 5020

Expand grounds for suing insurance companies

Introduced in the House

May 27, 2009

Introduced by Rep. Mary Valentine (D-91)

To allow a person who believes that an insurance provider has not dealt fairly and in good faith to sue for compensatory, consequential, and exemplary (punitive) damages proximately caused by the breach, notwithstanding the prohibition on punitive damages in other areas of Michigan tort law.

Referred to the Committee on Insurance

Aug. 19, 2009

Reported without amendment

With the recommendation that the substitute (H-2) be adopted and that the bill then pass.

Substitute offered

To replace the previous version of the bill with one that revises details but does not change the substance of the bill as previously described.

The substitute passed by voice vote

Amendment offered by Rep. Cindy Denby (R-47)

To require a person to exhaust "all administrative remedies" before bringing a lawsuit under the provisions of the bill. Having to wait more than 120 days for a ruling by the state insurance commission would be considered "exhausting all administrative remedies".

The amendment failed by voice vote

Amendment offered by Rep. Pete Lund (R-36)

To impose "loser pay" rules on lawsuits the bill would allow against insurance companies if the court finds the suit frivolous.

The amendment failed by voice vote

Amendment offered by Rep. Kevin Green (R-77)

To cap attorney fees awarded under the bill's provsions at one-third of the first $100,000; 15 percent of the amount between $100,000 and $500,000; and 10 percent of the amount between $500,000 and $1 million.

The amendment failed by voice vote

Amendment offered by Rep. Joseph Haveman (R-90)

To also place the burden to act "fairly and good faith" on trial attorneyes suing an insurance company for alleged failure to act in that way.

The amendment failed by voice vote

Passed in the House 61 to 45 (details)

Received in the Senate

Aug. 26, 2009

Referred to the Committee on Economic Development and Regulatory Reform