Key Takeaways
- The Department of Insurance and Financial Services (DIFS) regulates all P&C insurance activities in Michigan
- The Director of DIFS is appointed by the Governor and serves at the Governor's pleasure
- Michigan uses a "file and use" rate system for most P&C lines, allowing rates to be used after filing
- DIFS has authority over licensing, rate review, market conduct, consumer protection, and insurer solvency
- The Director can issue cease and desist orders, impose fines, and revoke licenses
Last updated: January 2026
Department of Insurance and Financial Services (DIFS)
Important: This study guide covers Michigan state-specific Property & Casualty insurance content only. You should complete the national Property & Casualty exam preparation first, as it covers the foundational insurance concepts tested on your exam.
The Department of Insurance and Financial Services (DIFS) is the state agency responsible for regulating the Property & Casualty insurance industry in Michigan.
The Director of DIFS
The Director of DIFS is:
- Appointed by the Governor
- Serves at the Governor's pleasure (no fixed term)
- Responsible for enforcing the Michigan Insurance Code
- Authorized to adopt regulations, review rates, investigate violations, and discipline licensees
Director Powers for P&C Insurance
| Power | Description |
|---|---|
| Licensing | Issue, suspend, and revoke producer licenses |
| Rate Review | File and use system for most P&C rates |
| Market Conduct | Examine insurer business practices |
| Enforcement | Investigate and prosecute violations |
| Consumer Protection | Handle complaints and protect policyholders |
| Rulemaking | Adopt rules interpreting the Insurance Code |
| Cease & Desist | Issue orders to stop illegal activities |
Michigan Rate Regulation
Michigan uses different rate systems for different lines:
Rate Systems by Line
| Line of Insurance | Rate System |
|---|---|
| Personal Auto | File and use (reformed 2019) |
| Homeowners | File and use |
| Commercial Lines | File and use |
| Workers' Compensation | DIFS approval required |
File and Use
Under Michigan file and use:
- Rates can be used after filing with DIFS
- DIFS reviews rates for compliance
- Rates must not be excessive, inadequate, or unfairly discriminatory
- DIFS can disapprove rates after review
Exam Tip: DIFS is pronounced "diffs" and regulates both insurance and financial services in Michigan.
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Test Your Knowledge
How is the Director of DIFS selected in Michigan?
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Test Your Knowledge
What does DIFS stand for in Michigan insurance regulation?
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