Officials from the Michigan Department of Insurance and Financial Services (DIFS) gave an overview of the agency’s duties, recent statistics and ongoing projects to the Senate Committee on Finance, Insurance and Consumer Protection.

Joseph (Joe) Sullivan, legislative liaison manager for DIFS, told the committee that the department is fee-funded and oversees both insurance companies and state‑chartered financial institutions. "Every Michigan resident is impacted by the products that we oversee," Sullivan said, adding that DIFS’s mission is to ensure consumers have access to safe, secure insurance and financial services.

Why it matters: DIFS enforces state insurance and financial statutes, reviews rate and form filings, investigates market conduct, operates a consumer call center, and administers the external-review process for disputed health‑insurance coverage decisions (the Patient Right to Independent Review Act, or PRIRA). The department’s work affects Michigan households, insurers, banks, credit unions and regulated nonbank lenders.

Key figures and programs reported to the committee:

- Consumer contact and complaints: DIFS answered more than 153,000 phone calls in 2024 and recorded over 9,000 consumer complaints and roughly 3,000 written inquiries. Sullivan said about 8,000 of the complaints were insurance-related and about 1,000 involved financial institutions; DIFS said it recovered over $22 million for consumers in 2024. Sullivan described the distinction between an "inquiry" and a formal "complaint," noting a complaint requires a consumer’s agreement for the department to intervene.

- Fraud investigations and market enforcement: DIFS’s fraud investigation unit, created by executive order in 2018 and codified in 2019, is complaint-driven and also receives mandatory reports from regulated entities. The department reported roughly 4,000 fraud cases last year, with a rising trend from about 2,500 in 2021 and a little over 3,000 in 2023. The market regulation section opened about 80 investigations in 2024 involving 411 respondents and reported roughly $3.3 million in recoveries and settlements.

- External review (PRIRA): External-review appeals have roughly doubled since 2020; DIFS reported just over 2,000 appeals in 2024. Sullivan provided a high-level outcome summary for 2024: about 430 appeals were upheld (insurer determination accepted), 233 were reversed, and roughly 1,400 were not accepted, dismissed, or withdrawn during the process.

- Licensing and supervision: DIFS oversees licensing for more than 500,000 insurance‑related licensees (up from about 450,000 in the prior presentation) and supervises 67 state‑chartered banks (about $53 billion in assets) and 117 state‑chartered credit unions (more than $88 billion in assets). The department said licensing activity has risen across its regulated industries.

- Access-to-banking initiative: The Michigan Open Account Coalition, a partnership involving DIFS, the Michigan Bankers Association and the Michigan Credit Union League, has expanded low‑barrier account offerings: the share of Michiganders who were unbanked fell from 5.4% (2022 data) to 3.2% (2023 data); the number of participating financial institutions increased from 16 to 34 and available accounts from 17 to 37.

- Ongoing work and staffing: DIFS said a contract for a legislatively required auto‑insurance study was finalized and expected to be completed in the fall; an annual auto rate‑filing report is in the data‑collection stage for a fall delivery. The department reported it has filled a no‑fault specialist position and is recruiting for an outreach coordinator. Sullivan said the agency’s FTE vacancy rate "tends to hover" around 7% and pointed to a statutorily required FTE report available to the legislature for precise counts.

Questions from senators focused on the volume and categorization of complaints, staffing, how the fraud unit pursues provider-side fraud and the role of federal regulators such as the Consumer Financial Protection Bureau. Ross Yednock (banking) and Parker Fisher (insurance) answered technical questions about supervision, licensing and interagency coordination. Sullivan said DIFS has memoranda of understanding with the attorney general and state police and that coordination with national bodies such as the National Insurance Crime Bureau (NICB) would be more effective with strengthened reporting thresholds and interstate information sharing.

No committee votes or formal motions were taken on the DIFS presentation. The committee adjourned after questions and the presentation concluded; no additional follow-up items were recorded on the transcript.