LANSING, Mich. — Michigan's Attorney General Dana Nessel is warning residents that the House and Senate auto insurance reform bills will deliver limited temporary rate reductions and undermine efforts to pursue auto insurance fraud.
She also supports Governor Whitmer’s expected veto.
She made her assessment Friday as she weighed in on the auto no-fault legislation that sped through the Michigan House and Senate earlier this week.
Nessel said, “If passed, this legislation will destroy existing efforts by my department and the Department of Insurance and Financial Services (DIFS) to investigate and prosecute no-fault fraud.”
“The excessive amount of fraud in our state – estimated to be more than $820 million ($108 for every insured vehicle) annually, is one of the single biggest contributors to Michigan’s extraordinarily high auto insurance rates.”
Within weeks of taking office, Nessel established an Auto Insurance Fraud Unit as part of her department.
The unit coordinates with DIFS to utilize the Anti-Fraud Unit (AFU) to receive complaints, and then to investigate and prosecute those complaints where criminal activity has been confirmed.
The unit has received 3,200 complaints in less than a year.
“We currently have more than 25 active cases under investigation and we have already charged one case with an estimated $100,000 in fraudulent activity,” said Nessel.
“We are driven to aggressively investigate and prosecute acts of auto insurance fraud in tandem with the Department of Insurance and Financial Services and the Michigan State Police.”
Nessel says the bills passed by the House and Senate will eliminate the coordinated AFU and all current and new cases would be transferred to the Michigan State Police.
She added that the state police does not have any prosecutors and it does not have prosecutorial authority.
Nessel believes this means the new AFU could not prosecute a single instance of auto insurance fraud.
Nessel also pointed out that the State Police has competing priorities to protect public safety and county prosecutors do not handle auto insurance fraud cases.
“As a former prosecutor, Governor Whitmer surely appreciates how devastating the elimination of the ability to prosecute all instances of auto insurance fraud will be on the state of Michigan,” said Nessel.
“As Michigan’s chief law enforcement official, I am stunned and outraged that the Legislature would deliver this all-encompassing gift to criminals who abuse our state’s auto insurance system, passing those costs along to consumers. I support Governor Whitmer’s expected veto of these imprudent bills."
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