Pursuant to Executive Order 2013-1, dated January 16, 2013, Michigan Governor Rick Snyder has created a new cabinet-level department of the state government, the Department of Insurance and Financial Services (the “New Department”). Governor Snyder's executive order becomes effective in 60 days. The New Department will replace the existing state insurance regulator, the Office of Financial and Insurance Regulation (“OFIR”), which operated under the aegis of the Department of Licensing and Regulatory Affairs. The Detroit Free Press reports that Kevin Clinton, who serves as the commissioner of the OFIR, will become the director of the New Department, but will have to be approved by the Michigan Senate.
The executive order maintains all currently effective OFIR regulations, bulletins and orders, and transfers all records, personnel and property of the OFIR to the New Department. According to the Governor’s Office, elevation of the OFIR to departmental status is intended to “provide a focal point of consumer protection, enable efficient and effective regulation, and position the insurance and financial services sector for economic growth.” The New Department has been further justified by the importance of the insurance and financial service industries in Michigan’s economy. According to the Governor’s Office:
- these industries directly employ over 150,000 Michigan residents and account for more than $9 billion of annual payroll;
- Michigan is home to over 300 state banks and credit unions and 149 insurance companies;
- Michigan serves as a port of entry and chief U.S. regulator for five Canadian insurance companies; and
- nearly 1,500 out-of-state insurance companies do business in Michigan.