Michigan lawmakers have approved a state budget that increases funding for the Department of Insurance and Financial Services (DIFS) by $785,000, reversing an earlier proposal that would have cut millions from the regulator’s budget.
For the 2025-2026 fiscal year, DIFS will operate with a budget of $79.4 million, according to an analysis of the omnibus appropriation bill dated Oct. 2. The legislation allocates an additional $330,000 for attorney general services, reflecting an uptick in civil and criminal cases referred by the regulator.
The bill also includes a $995,000 economic adjustment increase, while removing $500,000 in one-time appropriations that previously funded an automobile insurance study and a consumer outreach campaign.
A statement from House Republicans noted that the House version of the budget sought to reduce overall spending by 3.7% compared with the current fiscal year. DIFS is primarily funded through fees and fines, which accounted for 98% of its funding for the 2024-2025 fiscal year, consistent with recent years.
Earlier in the budget process, the Michigan House of Representatives proposed a $5.2 million reduction in DIFS funding. Department director Anita Fox warned that such a cut could hinder the agency’s ability to serve consumers and maintain market stability. The House plan was lower than both the Senate’s proposed reduction and the governor’s recommended increase.
DIFS oversees more than 455,000 agents, companies, banks, and credit unions across Michigan, with a staff of over 400 employees. The department’s responsibilities include licensing, investigations, and responding to consumer complaints, as well as broader regulatory duties in the state’s insurance and financial sectors.
In addition to budget changes, Michigan lawmakers are advancing a package of bills to strengthen insurance fraud penalties. The proposed reforms would introduce tiered penalty structures and expand enforcement authority for DIFS under the Health Care False Claims Act.
These measures would require insurers to report suspected fraud and are intended to bolster oversight and enforcement in the state’s insurance sector.
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