Nessel slams GOP auto insurance bills as ‘carte blanche’ for fraud

Michigan Attorney General Dana Nessel released an official statement today opposing recently passed Republican plans to reform the state’s auto insurance system, saying they would “destroy” her office’s efforts to combat insurance fraud.

“Without any funding appropriations – in addition to the Senate’s 10 percent reduction in our General Fund appropriation – auto insurance fraud will go unprosecuted, leaving this area of criminal activity a free-for-all for any and all bad actors who chose to take advantage of the system,” Nessel said.

She said she supports Gov. Gretchen Whitmer’s expected veto.

“As Michigan’s chief law enforcement official, I am stunned and outraged that the Legislature would deliver this all-encompassing gift to criminals who abuse our state’s auto insurance system, passing those costs along to consumers,” Nessel added. “Criminals should not be granted carte blanche to break the law, and these bills hand them that opportunity.”

Shortly after taking office, Nessel established a new Auto Insurance Fraud Unit to investigate complaints of insurance fraud, the total amount of which reaches over $800 million annually in the state. The Advance reported in March that the unit is partially funded by money saved from eliminating staff positions created by her predecessor, Republican Bill Schuette.

She now says Republicans’ legislation would eliminate that unit and transfer its functions to the Michigan State Police. She noted that the unit currently has 25 cases under investigation and has charged one case with more than $100,000 in insurance fraud.

Senate Bill 1 and House Bill 4397 were both passed during frantic sessions over the past week, and Republicans say they’re currently in negotiations to bring them into alignment and send them to Whitmer’s desk.

Whitmer has indicated that she is likely to veto any legislation that doesn’t feature major changes to what she called “a bill that preserves a corrupt system.”