The Complexities of Michigan’s Clear Slate Regulation and Insurance coverage Compliance


This submit is a part of a sequence sponsored by AgentSync.

Michigan’s Clear Slate bundle is now absolutely in impact. Whereas the legal guidelines goal to present dignity to people with tough authorized histories, they’ll undoubtedly trigger complications for compliance departments tasked with overseeing onboarding and ongoing compliance for insurance coverage producers, variable traces brokers, or adjusters.

What’s the Michigan Clear Slate regulation?

The Clear Slate regulation is a bundle of payments Michigan Gov. Gretchen Whitmer signed into regulation in 2020. This group of payments created extra paths for individuals who have previous convictions to use to have their convictions put aside. This implies the conviction is dismissed, as are any penalties or ongoing authorized penalties.

This regulation is novel in that, not solely does it present a path ahead for these with civil and prison convictions to use to put aside their convictions, it really has provisions for robotically setting apart some convictions after sure time durations. And, maybe most progressive of all, it contains some felony convictions amongst these earmarked for automated setting apart.

Whereas the regulation went into impact from a technical standpoint in 2021, the state had a two-year buffer to present the state police database time to replace its protocols. So, efficient April 11, 2023, the state started notifying different authorities companies of data that needs to be put aside.

Now, every day, the state notifies different companies to withdraw or amend these robotically put aside data.

What does the Clear Slate regulation do for people with prison data?

You probably have a prison document, the state could set it apart if the conviction meets sure standards. Having your conviction document put aside means any ongoing punishment related to the document could also be eradicated. That will imply you not must make funds to the state, conduct ongoing probationary check-ins, or report your prison historical past to potential employers.

The document of the conviction may not be expunged, however a background verify could not return the prison document, or, if it does, will report it as dismissed.

What actions don’t qualify to be robotically put aside in Michigan?

The state lists the next convictions as being ineligible for automated dismissal:

  • An assaultive crime.
  • A critical misdemeanor.
  • Against the law of dishonesty.
  • Another offense that’s punishable by 10 or extra years’ imprisonment.
  • A violation of the legal guidelines of Michigan listed below chapter XVII of the code of prison process, 1927 PA 175, MCL 777.1 to 777.69, the weather of which contain a minor, weak grownup, harm or critical impairment, or demise.
  • Any violation associated to human trafficking.
  • Any of the next site visitors offenses:
    • A conviction for working whereas intoxicated dedicated by any individual.
    • Any site visitors offense dedicated by a person with an endorsement on his or her operator’s or chauffeur’s license to function a industrial motorcar that was dedicated whereas the person was working the industrial motorcar or was in one other method a industrial motorcar violation.
    • Any site visitors offense that causes harm or demise.

If a conviction falls exterior of that listing, nevertheless, it might be robotically put aside if it was a misdemeanor that was sentenced seven or extra years in the past or a felony conviction the place your time was served a decade or extra in the past.

There are some nuances right here concerning what number of convictions you will have or how lengthy your sentence was for any given offense.

How many individuals are affected by the Michigan Clear Slate regulation?

In keeping with Michigan information retailers, 1 million Michiganders could profit from the automated set-aside provisions of the laws. And that’s to not point out the others who’ll doubtless apply to have the state contemplate their case if it will possibly’t be robotically put aside.

How is the Michigan Division of Insurance coverage dealing with the Clear Slate regulation?

The Michigan DOI has expanded the listing of potential convictions that the state commissioner’s workplace considers proof of “an absence of fine ethical character.” This would appear to point the Michigan DOI is presenting a number of new limitations to working within the business, but, the brand new administrative code additionally delivers new provisions that give insurance coverage candidates a course of to rebut their prison data.

So, if in case you have a previous arson cost or, say, racketeering, the state could reject your software to be an insurance coverage producer or adjuster, however you may argue in favor of your rehabilitation and supply private character statements from associates and employers to show the superior nature of your present character.

Why is Michigan’s Clear Slate regulation troubling to insurance coverage compliance officers?

Sadly, with a change of this scale and involving so many entities that document and report prison histories, there are sure to be hiccups.

Think about you had a felony conviction again within the day. Perhaps you bought busted with, say, a number of weed in 2012. And also you’ve been self-disclosing this very irritating cost and having to elucidate all the pieces about it and about your self for years.

Michigan robotically units it apart, which is so variety. However, as a result of it’s automated, you don’t notice this has occurred, and now, as you apply for a nonresident insurance coverage license in Georgia, you report your previous felony. However then the state runs its necessary background verify and returns no such felony document.

Now you will have a difficulty the place you’ve overdisclosed one thing problematic, and your disclosure conflicts along with your official document.

Conversely, let’s think about you resolve not to report your epic Mary Jane incident. In spite of everything, you’re savvy and it’s being expunged out of your resident state’s data. However then a service background verify pulls previous information for you, and finds an unreported previous conviction. Both state of affairs might be problematic for somebody attempting to get their insurance coverage license, notably in a state exterior of Michigan.

Compassion in compliance

We’re not advocating in opposition to Michigan’s Clear Slate legal guidelines; individuals deserve a break generally. Dumb decisions you make many years prior to now don’t at all times need to observe you round. However we acknowledge that the method of updating service and company insurance policies and totally different state background verify necessities to mesh with the Clear Slate data could also be gradual and trigger some yellow flags and compliance complications within the meantime.

Hopefully, even in a legacy business that depends on know-how and repeatable processes, insurance coverage continues to be sufficient of a relationship-driven business that the method of updating information as data are put aside or expunged is one in all human-first compassion.

For those who’re involved in extra about the methods producers can lose their licenses, or in how 1033 waivers may also help producers restore their potential to work in insurance coverage, we’ve bought you coated.

For carriers and companies seeking to validate information or deal with quick, correct background checks on your insurance coverage producers, variable traces brokers, or insurance coverage adjusters, see what AgentSync can do.



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