SENATE BILL No. 1371

June 4, 2002, Introduced by Senator BYRUM and referred to the Committee on Financial Services.

A bill to amend 1956 PA 218, entitled

"The insurance code of 1956,"

(MCL 500.100 to 500.8302) by adding sections 4003 and 4403.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

1 SEC. 4003. AN INSURER OBLIGATED TO PAY BENEFITS OR CLAIMS

2 UNDER A LIFE INSURANCE POLICY HAS A DUTY TO DEAL FAIRLY AND IN

3 GOOD FAITH WITH ANY PERSON CLAIMING THE BENEFITS. AN INSURER

4 THAT BREACHES THIS DUTY TO DEAL FAIRLY AND IN GOOD FAITH IS

5 LIABLE FOR COMPENSATORY, CONSEQUENTIAL, AND EXEMPLARY DAMAGES

6 PROXIMATELY CAUSED BY THE BREACH.

7 SEC. 4403. AN INSURER OBLIGATED TO PAY BENEFITS OR CLAIMS

8 UNDER A GROUP LIFE INSURANCE POLICY HAS A DUTY TO DEAL FAIRLY AND

9 IN GOOD FAITH WITH ANY PERSON CLAIMING THE BENEFITS. AN INSURER

10 THAT BREACHES THIS DUTY TO DEAL FAIRLY AND IN GOOD FAITH IS

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1 LIABLE FOR COMPENSATORY, CONSEQUENTIAL, AND EXEMPLARY DAMAGES

2 PROXIMATELY CAUSED BY THE BREACH.

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