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Michigan Supreme Court tightens insurers' shield in consumer protection cases
The court overruled its prior rulings, saying insurers cannot defeat Michigan Consumer Protection Act claims based solely on being a regulated business, and it sent the Eli Lilly insulin pricing case back to trial court.
Michigan's highest court narrowed a decades old exemption insurers and other regulated companies used to dismiss consumer protection lawsuits under the Michigan Consumer Protection Act. On July 31, 2026, the Michigan Supreme Court overruled two of its own decisions, Smith v Globe Life Ins Co and Liss v Lewiston-Richards, Inc, which had allowed regulated businesses to turn aside MCPA claims.
The court said the exemption applies only when the specific conduct alleged is specifically authorized by law, not when a company’s broad line of business is generally licensed or regulated. It criticized the earlier approach for “judicially immunizing” a wide range of industries and stressed that the statute’s text does not include the word “general.”
In Smith, a life insurer had relied on the exemption to defeat a claim that it misrepresented a policy’s terms after denying coverage. Under the court’s narrower test, licensed insurers in Michigan can no longer set aside an MCPA claim just by pointing to their regulated status, the focus shifts to whether the challenged practice itself was authorized.
The ruling also affects a case involving Eli Lilly and its insulin pricing. The Michigan Attorney General is investigating whether Lilly artificially increased list prices of its insulin medications, with the decision noting allegations only, that no MCPA violation has been pleaded, and returning the case to the trial court.