State statute · Michigan

Unfair and Prohibited Trade Practices and Frauds

MCL Chapter 500, Insurance Code of 1956, Chapter 20, selected Secs. 500.2003-500.2026

Publisher: Michigan Legislature
Edition: MCL Chapter 500 Ch. 20, complete through PA 91 of 2026, retrieved 2026-09-11
Last checked: 2026-09-11
Status: US state statute

Edition and licensing notes

Publisher. Michigan Legislature (legislature.mi.gov)

Status. US state statute; public domain.

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What this document is

MCL Chapter 500, Insurance Code of 1956, Chapter 20 - Unfair and Prohibited Trade Practices and Frauds (selected Secs. 500.2003-500.2026) is a state statute published by Michigan Legislature (legislature.mi.gov). It is one of the Michigan documents that insurance license exam questions are written from, including michigan life & health, michigan property & casualty practice questions. This page summarizes it and points to the official version, which is the text to rely on.

Sections cited in practice questions

Each practice answer shows the exact passage it comes from. These are sections of this document that questions cite, with a short excerpt from the source text.

MCL § 500.2026(2) (Complaint Records and Agent Forwarding Duty)
“If a complaint relating to an insurer is received by an agent of the insurer, the agent shall promptly forward the complaint to the insurer unless the agent resolves the complaint to the satisfaction of the insured within a reasonable time.”
MCL § 500.2026(1) (Course of Conduct: Persistent Tendency and Enumerated Prongs)
“Unfair methods of competition and unfair or deceptive acts or practices in the business of insurance, other than isolated incidents, are a course of conduct indicating a persistent tendency to engage in that type of conduct and include: (a) Misrepresenting pertinent facts or insurance policy...”
MCL § 500.2009 (False or Maliciously Derogatory Statements as to Financial Condition)
“Unfair methods of competition and unfair or deceptive acts or practices in the business of insurance include the making, publishing, disseminating, or circulating, directly or indirectly, or aiding, abetting, or encouraging the making, publishing, disseminating, or circulating of an oral or written...”
MCL § 500.2005(b)-(d) (Misrepresentations - dividends, surplus, and legal reserve system)
“(b) Misrepresents the dividends or share of the surplus to be received on an insurance policy. (c) Makes a false or misleading statement as to the dividends or share of surplus previously paid on an insurance policy. (d) Makes a misleading statement or misrepresentation as to the financial...”
MCL § 500.2025(3) (Exclusions from Discrimination and Rebates)
“Nothing in sections 2017 through 2024 shall be construed as including within the definition of discrimination or rebates any of the following practices: (1) In the case of any contract of life insurance or life annuity, paying bonuses to policyholders or otherwise abating their premiums in whole or...”
MCL § 500.2005a(c) (Marketing That Conceals Its Insurance Solicitation Purpose)
“An unfair method of competition and an unfair or deceptive act or practice in the business of insurance includes all of the following: (a) Knowingly making any misleading representation or incomplete or fraudulent comparison of any insurance policies, certificates, or contracts of insurers, health...”
MCL § 500.2024a (Merchandise Given to Life Insurance Applicants)
“Beginning January 1, 1986, sections 2024, 2066, and 2070 shall not be construed to prohibit a life insurer or life insurance agent from giving to each applicant for a life insurance policy an article of merchandise having an invoice value of $5.00 or less.”
MCL § 500.2005(h) (Misrepresentations - policy described as a security)
“(h) Misrepresents an insurance policy as being a security. This subdivision shall not apply to an insurance policy which must be registered as a security pursuant to the law of this state or of the United States.”
MCL § 500.2005(e) (Misrepresentations - policy name and commissioner approval)
“(e) Uses a name or title of an insurance policy or class of insurance policies misrepresenting the true nature of that insurance policy or class of insurance policies. A policy approved by the commissioner shall be conclusively presumed not to misrepresent the true nature of that policy.”
MCL § 500.2020 (Unfair Discrimination in Accident or Health Insurance)
“The following are defined as unfair methods of competition and unfair and deceptive acts or practices in the business of insurance: Making or permitting any unfair discrimination between individuals of the same class and of essentially the same hazard in the amount of premium, membership, or policy...”
MCL 500.2006(1) and (2) (Payment of benefits on timely basis; liability for claim pursuant to judgment)
“(1) A person must pay on a timely basis to its insured, a person directly entitled to benefits under its insured's insurance contract, or a third party tort claimant the benefits provided under the terms of its policy, or, in the alternative, the person must pay to its insured, a person directly...”
MCL 500.2016(1)(b) to (d) and (2) (Unfair trade practices applied to worker's compensation insurance; premium deposit condition; misrepresentation exception)
“(b) As a condition of obtaining worker's compensation insurance, requiring a premium deposit greater than 25% of the total projected annual premium or $2,500.00, whichever is greater. (c) As a condition of obtaining worker's compensation insurance, requiring the purchase of any other form of...”

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