DIFS seeks $1.63 million in restricted authority and five staff to expand appeals, enforcement and cybersecurity

Director Anita Fox told the House Appropriations subcommittee on Licensing and Regulatory Affairs on March 20 that the Department of Insurance and Financial Services is seeking $1,634,200 in additional state‑restricted spending authority for fiscal 2026, including five full‑time positions to handle growing volumes of appeals, enforcement cases, cybersecurity events and technology needs.

The request, Fox said, reflects growth in the industries the department regulates — insurance, state‑chartered banks and credit unions, mortgage companies, money transmitters and others — and the department’s fee‑funded operating model. "We are, totally fee funded, restricted funds," Fox said, adding the department does not draw on the general fund and uses industry fees to finance licensing and oversight.

The budget ask breaks down to about $955,000 for employee payroll adjustments and administrative costs that are routine statewide, with the remainder allocated to five new staff: one to support independent external medical appeals under the Patient's Right to Independent Review Act (PRIRA); one to process rising numbers of insurance producer license applications and misconduct reviews; one administrative law specialist for increasing legal complexity; one cybersecurity investigator; and one lead analyst for information‑technology modernization. Fox told the committee the department has seen large growth in market activity — producer license counts rose 97.4% since 2014; bank assets have grown about 41% since 2019; and money‑transmission licensing and transaction volumes have increased sharply in recent years — and that staffing is intended to keep processing and enforcement timelier.

Fox described the PRIRA work as an expanding consumer service: after insurers’ internal appeals, consumers may request an independent review through the department. "We provide an outlet Michiganders can come to, the department and ask for an independent review," Fox said, noting an outreach campaign last year and an expedited 72‑hour process for emergency cases. The department said it handled about 50,000 consumer phone calls in 2024, processed roughly 9,500 formal complaints and more than 3,000 written requests for assistance; about 8,000 of the complaints were insurance related and about 1,000 involved financial institutions. Fox reported the department recovered approximately $22,500,000 for Michiganders in the last year, a roughly 15% increase from 2023.

Fox also addressed licensure administration and the persistent administrative burden from low perpetual fees for some out‑of‑state producer licenses. By statute, she said, an out‑of‑state producer license carries a $10 fee that remains in effect for the licensee’s lifetime; DIF often spends staff time tracking down licensees with outdated contact information and cannot revoke licenses it cannot locate. "We can't even revoke a license if I can't find the person," Fox said. She said the department is working on statutory language to modernize renewals and align fees with services provided.

On auto insurance, Fox said Michigan’s 2019 reforms reduced the personal injury protection portion of premiums but that other cost drivers — inflation, supply chain effects on repair costs, weather‑related claims and increases in collision severity and theft — have driven premium increases nationally and in Michigan. She said the department now has outside actuaries review every auto rate filing and has at times negotiated reductions with carriers.

Fox also updated the committee on the contract for the legislatively requested study of the 2019 auto insurance reforms: the department issued a request for proposals and contracted with Milliman, an actuarial firm, and expects the contractor to complete the report in time to meet the legislature’s Sept. 30, 2025 deadline.

During questioning, members raised concerns about the budgets and fee structures that support DIF’s work and the visibility of consumer services. Representative Barb Steele praised the department’s live call center and said her staff received courteous assistance when checking the department’s phone line. Fox emphasized DIF’s consumer‑facing work — including mailed complaint forms for residents without internet access — and noted that much of DIF’s outreach depends on legislator offices and partner organizations because DIF’s licensee databases do not equal a broad consumer contact list.

The subcommittee approved the minutes from its March 20, 2025 meeting earlier in the session.