Michigan Insurance Law & Code
Beyond getting licensed, Michigan producers must know the substantive rules of the state's insurance law that protect policyholders. This chapter covers the regulator's rule-making authority, required policy protections such as the free-look right and replacement rules, the state's life and health insurance guaranty association, and its unfair trade practice and claims standards. These are Michigan-specific overlays on the national policy provisions.
Required Policyholder Protections
Michigan law requires certain protections in individual policies. A key example is the free-look (right-to-examine) provision, which lets the policyowner return a newly delivered policy within the stated period for a full premium refund. The state also regulates grace periods, required disclosures, and the handling of replacement transactions, where a producer switching a client's coverage must provide the required notices and let the existing insurer be given an opportunity to conserve the policy.
The Guaranty Association and Insurer Solvency
The Michigan life and health insurance guaranty association is a safety net that pays certain covered claims when a member insurer becomes insolvent, subject to statutory dollar limits that vary by benefit type. Importantly, state law prohibits producers and insurers from using the existence of the guaranty association as an inducement to buy insurance or in advertising. It is a backstop, not a marketing tool.
Unfair Trade Practices and Claims Handling
Michigan has adopted an Unfair Trade Practices law, based on the NAIC model, that defines and prohibits unfair methods of competition and deceptive acts in insurance, including misrepresentation, false advertising, unfair discrimination, and improper claim settlement. State law also sets standards and time frames for how insurers must acknowledge, investigate, and pay or deny claims. Producers should understand these rules because they shape what may accurately be represented during a sale.
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State-specific details
State exam facts
- State regulator
- Michigan Department of Insurance and Financial Services
- Exam vendor
- PSI
- Prelicensing education
- 20 hours per line (40 hours combined life & health)
Who regulates life & health insurance licensing in Michigan?
The Michigan Department of Insurance and Financial Services (DIFS) licenses resident producers and contracts with PSI Services as its prelicensing and examination vendor.
Does Michigan require prelicensing education for the life & health exam?
Yes. Michigan requires 20 hours of approved prelicensing education for each individual line of authority (40 hours for a combined life and health license). The prelicensing certificate is valid for 12 months.
What score do I need to pass the Michigan life & health exam?
Michigan passing scores vary by exam and are not the standard 70% used in most states, so confirm the current threshold for your specific exam with DIFS/PSI before testing.
Sources: https://www.michigan.gov/difs, https://www.psiexams.com/
In the Michigan Life & Health Insurance Producer Exam guide: A KEY CONCEPT box, a Common Traps list and a Check Yourself set closing each of the 9 national chapters. Practice here stays free.