The American Council of Life Insurers and America’s Health Insurance Plans are taking Michigan insurance regulators to court over the regulators’ efforts to regulate large group health and large group disability policy contract terms.
The ACLI, Washington, and AHIP, Washington, have filed a suit in the U.S. District Court for the Western District of Michigan contending that the Michigan Office of Financial and Insurance Services has no authority to ban use of discretionary clauses in policies purchased by employers with 50 or more employees.
The ACLI and AHIP are asking the district court for a declaratory judgment stating that any efforts to apply the discretionary clause ban to group insurance plans with 50 or more members are preempted by the Employee Retirement Income Security Act of 1974.
The ACLI and AHIP also are seeking an injunction preventing OFIS from enforcing the rules.
The Michigan OFIS began prohibiting use of discretionary clauses March 1.