Licensing and Regulatory Affairs
The Department of Insurance and Financial Services (DIFS) has the responsibility and rule making authority over licensing, evaluation, and regulation of the insurance and financial industries, including investigating consumer complaints. DIFS enforces statutes and regulations that govern state-chartered banks, credit unions, mortgage lenders, consumer finance entities, insurance companies and agents, health maintenance organizations, and consumer finance entities. Cases coming from DIFS can be regulatory actions by the state against a license, or an applicant for a license. Some of the matters start with consumer complaints; others may be in follow up to civil lawsuits, or from criminal prosecution against a licensee. If a DIFS investigation reveals that a licensed person may have violated the law, DIFS may summarily suspend or revoke the person’s license to practice in this state, or impose fines or other penalties. DIFS may also order an unauthorized person to stop engaging in practices in violation of applicable statutes or regulations. If so, the licensee has a right to challenge the regulatory action by a contested case hearing under the Administrative Procedures Act (APA) of 1969, 1969 PA 306, as amended (MCL 24.201, et seq.) A person whose license has been suspended or revoked may apply with DIFS to have the license reinstated, and if denied, the person may request a hearing to challenge the denial of the reinstatement.
The request for a hearing is filed with DIFS, which will forward the request to the Michigan Office of Administrative Hearings and Rules (MOAHR). A MOAHR Administrative Law Judge (ALJ) will be assigned to the case and hold the hearing under the provisions of the APA and the rules related to the Act as well as the related procedural rules. See MOAHR Administrative Hearing Rules, 2015 MR 1, R 792.10101, et seq, Eff. Jan 15, 2015.
At the hearing, the Attorney General’s office or an attorney from DIFS Office of General Counsel office will represent DIFS. In a case where DIFS seeks to revoke, suspend, or impose a fine or other penalty against a license, DIFS has the burden of proving by a preponderance of evidence (more probable than not) that the action they took against the licensee was proper. DIFS presents its case first. The licensee may be represented by an attorney in the hearing and may cross examine DIFS’ witnesses or challenge documents. After DIFS’ side has finished, the licensee can present witnesses or documents. DIFS may cross examine the licensee’s witnesses or challenge Petitioner’s documents. A person challenging the denial of an application for a new license or seeking reinstatement of a suspended or revoked license has the burden of proof and presents the case first. Each side then has an opportunity to provide a statement (closing argument) supporting why the ALJ should, based upon the facts presented, find in favor of their side of the case. The parties may be permitted or ordered to file post hearing briefs.
After the hearing is completed, the ALJ prepares a Proposal for Decision (PFD) that includes the ALJ’s findings of fact, conclusions of law and a recommendation for final review by the Director of DIFS, who may affirm, modify, or set aside the ALJ PFD as DIFS makes the final decision. The parties may file Exceptions to the PFD within 21days after it is issued, and the opposing party may file a response within 14 days. DIFS decisions may be appealed to the Circuit Court.
The final decisions of the DIFS Director are on the DIFS website under “Hearings and Decisions.”
Information about various types of insurance licenses, as well as their statues and rules, can also be found on the DIFS website.