The Agency Audit Section within the Office of Insurance Licensing, Investigations, and Audits plays a critical role in safeguarding Michigan’s insurance marketplace and protecting consumers by monitoring the business practices of insurance agencies, premium finance companies, and other licensed entities. Through proactive oversight and comprehensive audits, the section promotes compliance with state insurance laws and regulations, encourages sound and ethical business practices, and provides guidance to industry participants.
In addition to audit and compliance activities, the section administers the collection and review of surplus lines tax filings and payments. This includes filings submitted by surplus lines producers, risk retention groups, purchasing groups, and policyholders, ensuring accurate reporting and timely remittance of taxes in accordance with Michigan law.
By combining regulatory enforcement with industry support, the Agency Audit Section helps foster a fair, transparent, and consumer-focused insurance environment in the state.
Pursuant to MCL 500.249, DIFS has broad authority to review the business practices and financial condition of insurance agencies to ensure compliance with state laws. These examinations can take place whenever the director deems necessary and may involve reviewing records, contracts, and transactions. These requests can take the form of a survey, which DIFS regularly send to licensees.
Failing to respond to surveys, withholding information, or providing false or incomplete records can lead to regulatory action, such as fines, license suspension or revocation, or other penalties.
Cooperation with information requests is a key part of maintaining compliance and continuing to operate within the industry. When complete and accurate information is provided promptly, the DIFS team can review it more effectively and efficiently. This reduces the likelihood of repeated follow-up requests and extended timelines and helps to ensure a fair and stable marketplace.
