LANSING – The Office of Financial and Insurance Regulation is strictly a regulator, but the launch of the Department of Insurance and Financial Services is an opportunity to take the lead on some issues, Kevin Clinton, director of both, told Gongwer News Service.

But the change will not mean much of an expansion in staff or budget, he said.

“Right now we’re simply a regulatory body,” Clinton said. “I think this gives us the ability to be proactive. This gives us the ability to effectuate change that will create jobs.”

Among the first areas where Clinton expects to be advocating is no-fault insurance. The current unlimited medical care, he said, makes the state unattractive for many insurance companies, and makes Michigan-based insurance companies less competitive in other states.

While the Michigan Catastrophic Claims Association covers all claims past $500,000 per incident, the insurance contracts still leave the insurer liable for the loss. “It’s on their paper … so they don’t have as high a (financial) rating,” he said.

The rating companies, he said, have to judge the insurance companies as though the MCCA could fold and leave them to cover the claims. And he said the situation is not improved by the MCCA’s current $2 billion deficit.

But he said insurers will need to give something to gain caps on the medical liability.

“I think they need to step up to the plate and say, ‘This is what it’s worth to me,'” he said. “I don’t think it’s possible to get these through the Legislature without some guarantee.”

Clinton said he also hopes to do more on mortgage fraud. OFIR has done some in helping to combat the issue, but it has mostly been by catching and punishing the lenders. “Since we’re a regulator, we tend to be reactionary,” he said. “I’d like to put some people out there on fraud and how to recognize it and how to avoid being a victim.”

Becoming a department also means the organization will not be as tied to the actions of other agencies, Mr. Clinton said. For instance, when another agency in the Department of Licensing and Regulatory Affairs cut some positions, the people in those posts bumped into OFIR vacancies under the contract. “We got some really good people,” he said, but in positions he was not necessarily planning to fill.

And budget will be important to the new department. It will be the second department that, by design, will be entirely funded by restricted revenue. Clinton said there is no plan to supplement the fee revenue the agency uses now with general fund.