A hearing is going to be held by the Michigan Office of Financial and Insurance Services. Nine groups will either be attending the hearing or submitting written versions of their comments.
Other states are already attempting to limit or ban the use of discretionary clauses in disability and health insurance contracts. America’s Health Insurance Plans, Washington, will be participating in the hearings and is already saying, “the proposed Michigan rule will inevitably increase the cost of coverage for Michigan policyholders, and may force employers to limit or even cancel their benefit plans.”
For those of you confused as to what a discretionary clause is here is a definition from the law firm website truckerhuss.com:
A discretionary clause in an insurance contract is one that confers discretionary authority on the insurer, when making a benefit determination, to interpret the terms and conditions of the policy and to determine the eligibility of an insured for benefits under the policy. This type of policy provision is designed to limit a court's review of the decisions of the insurer, as the claims review fiduciary, to an abuse of discretion standard under the holding of the U.S. Supreme Court in Firestone Tire and Rubber Co. v. Bruch, 489 U.S. 101 (1989).
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