Recent DIFS Bulletin Further Clarifies Insurance Industry Requirements During COVID-19


In response to the COVID-19 pandemic and Governor Whitmer’s shelter-in-place order many Michigan businesses and industries around the State are temporarily shut down and operations suspended. However, one industry that must continue operations is the insurance industry. Pursuant to Governor Whitmer’s shelter-in-place order, workers in the insurance industry are designated as “critical infrastructure workers.” Therefore, they are exempt from this order. Insurance industry workers may continue in-person work operations to the extent that such work cannot be done at home.

On Thursday, April 9, 2020, Whitmer declared an extension of the original shelter-in-place order to April 30, 2020. The extension is formally known as Executive Order 2020-42. Under 2020-42, the insurance industry continues to be considered critical infrastructure and is exempt from this extension and must continue processing and paying insurance claims through this time.

Update: on April 13, 2020, DIFS issued a bulletin requesting insurer flexibility during COVID-19

Tom Sinas Discusses Insurance Industry Requirements on Fox 17 “Know the Law”

Grand Rapids personal injury attorney, Tom Sinas, also spoke on this topic recently on Fox 17 “Know the Law.”


DIFS Bulletin Further Clarifies Insurance Industry Requirements During COVID-19

On March 30, 2020, the Department of Insurance and Financial Services (DIFS) issued a Bulletin further clarifying Governor Whitmer’s Executive Order and the requirements of the insurance industry during the shelter-in-place order.  DIFS Bulletin 2020-12-INS requires insurance industry workers, including “insurance companies, health maintenance organizations, third-party administrators, nonprofit dental care corporations, producers, adjusters, and any workers necessary to the continued operation of these entities” to continue complying with all deadlines and requirements. This includes processing insurance claims and making payments. In this regard, the Bulletin states “[a]ll claims must continue to be paid and processed in a timely manner.”

Insurance Claims Processing and Payment of Settlements and Verdicts

Accordingly, this DIFS Bulletin makes it clear that insurance companies cannot simply shut down because of COVID-19. Insurance adjusters must continue working, processing claims, and making payments in a normal and timely manner, regardless of whether they are working from home or the office. The insurance industry cannot use the COVID-19 pandemic as an excuse to delay or deny payment of benefits.

This DIFS Bulletin also likely applies to outstanding settlements or jury verdicts from recent no-fault lawsuits. The insurance industry must continue paying out these settlements or verdicts in a normal and timely manner. 

Failure to pay and process no-fault claims in a timely manner may subject the insurance company to penalty interest under § 3142 of the No-Fault Act. Pursuant to § 3142, penalty interest at the rate of 12% per annum is owed when a claim becomes overdue. The requirement that the insurance industry continues paying and processing claims means that claims can still become overdue and be subject to penalty interest during this time.

If you are having trouble getting ahold of your no-fault adjuster, or if you think your no-fault insurer is unreasonably delaying payment of your claims as a result of COVID-19, please contact the Sinas Dramis Law Firm for assistance at 866-758-0031 or online here.

Authored by Michigan personal injury attorney, Lauren Kissel