Department of Insurance and Financial Services asks for five staff and $1.6 million in FY26 to handle rising caseloads and cybersecurity

The Department of Insurance and Financial Services (DIFS) asked the Senate Appropriations Subcommittee on Licensing and Regulatory Affairs and Insurance and Financial Services for five new full‑time positions and roughly $1.6 million in additional restricted fund authority for fiscal 2026 to expand enforcement, consumer protection and technology support.

DIFS Director Anita Fox said the request is driven by growth in the sectors the department regulates and by an increase in consumer appeals and cyber‑breach reporting. “We’re asking for a total of five FTEs,” Fox said, enumerating positions to handle independent medical‑review appeals, licensing investigations, market regulation, legal support and technology services.

The department summarized the FY26 request as about $1,603,420 in additional restricted funding. Fox detailed that roughly $849,200 would support the new insurance‑sector FTEs, about $330,000 would support increased criminal case referrals and $955,000 would cover routine payroll adjustments and other administrative costs rolled forward from previous years. The FY26 request also removes one‑time restricted funding in FY25 for an auto study and other outreach efforts that will not be renewed.

Nut graf: The department said the new staff are intended to keep pace with rapid growth in licensing and financial activity in Michigan, to process more independent review appeals and to investigate increasingly frequent cyber incidents — core functions DIFS says protect consumers and support market stability.

Fox told the committee the department has seen broad growth across regulated activities: total premiums in life, health and property/casualty up about 33% since 2019, producer licensing counts up 97% since 2014, bank assets up 41% and credit union assets up 63% in the same period. She said appeals to independent review have doubled since 2020, with more than 2,000 appeals in 2024.

The five positions Fox described are: - One independent review appeals staffer to handle a projected increase in expedited medical‑necessity appeals (72‑hour expedited review process). - One insurance investigation manager to supervise increased licensing investigations. - One administrative loss specialist to provide legal support and guidance as new statutes expand the department’s responsibilities (including pharmacy benefit managers). - One company market regulation analyst to monitor insurer compliance and investigate market conduct and cyber incidents. - One technology services departmental specialist to oversee the department’s information systems and troubleshooting for licensing and filings.

Fox also reviewed the department’s consumer services operations, noting a live call center open weekdays and a specialty hotline for auto‑insurance questions created in 2020. The department reported answering 153,322 calls in 2024 and said it recovered about $22,500,000 for Michigan residents through complaint handling in 2024 — a 15% increase from 2023.

Fox said the FY25 auto‑insurance study contract has been finalized and the contractor expects to deliver a report by the statutory deadline of Sept. 30, 2025. She also described outreach toolkits the department gives to regulated institutions to warn customers about phone spoofing and other frauds.

Committee members asked for follow‑up data on how many of DIFS’s insurance complaints were auto‑related; Fox said staff would provide that breakdown after the hearing. There were no formal votes related to the budget request during the presentation.

Ending: Fox said DIFS will continue to provide follow‑up data and that the department’s FY26 request is intended to match staff capacity to growing licensing volumes, appeals and cybersecurity reporting so the agency can “proactively identify market conduct issues” and maintain consumer protections.