This post is part of a series sponsored by AgentSync.
Michigan’s clean slate package is now fully in effect. While the laws are intended to give dignity to people with difficult legal backgrounds, they will undoubtedly cause headaches for compliance departments tasked with overseeing the onboarding and ongoing compliance of insurance producers, variable lines brokers, or adjusters.
What is Michigan’s clean slate law?
The Clean Slate Act is a package of bills that Michigan Governor Gretchen Whitmer signed into law in 2020. This group of bills created more avenues for people with prior convictions to apply to have their convictions vacated. This means that the conviction is dismissed, as are any ongoing sanctions or legal consequences.
This law is novel in that it not only provides a path for people with civil and criminal convictions to apply to vacate their convictions, but actually has provisions to automatically vacate some convictions after certain periods of time. And, perhaps most progressive of all, it includes some felony convictions among those slated for automatic expungement.
While the law technically went into effect in 2021, the state had a two-year window to give the state police database time to update its protocols. So, effective April 11, 2023, the state began notifying other government agencies about records that must be reserved.
Now, every day, the state notifies other agencies to remove or amend these automatically set aside records.
What does the clean slate law do for people with criminal records?
If you have a criminal record, the state can expunge it if the conviction meets certain criteria. Having your conviction record set aside means that any ongoing punishment associated with the record can be removed. That may mean you no longer need to make payments to the state, perform ongoing test checks, or report your criminal record to prospective employers.
Criminal records may not be expunged, but a background check may not return criminal records or, if it does, report them as dismissed.
What activities do not qualify to be automatically set aside in Michigan?
The state lists the following convictions as ineligible for automatic dismissal:
- A crime of assault.
- A serious misdemeanor.
- A crime of dishonesty.
- Any other crime that is punishable by ten or more years in prison.
- A violation of Michigan laws listed in Chapter XVII of the Code of Criminal Procedure, 1927 PA 175, MCL 777.1 to 777.69, the elements of which involve a minor, vulnerable adult, serious injury or impairment, or death.
- Any offense related to human trafficking.
- Any of the following traffic violations:
- A conviction for operating while intoxicated committed by any person.
- Any moving violation committed by an individual with an endorsement on their operator’s or driver’s license to operate a commercial motor vehicle that was committed while the individual was operating the commercial motor vehicle or was otherwise a commercial motor vehicle violation.
- Any traffic violation that causes injury or death.
However, if a conviction falls off that list, it can be automatically vacated if it was a misdemeanor conviction that was sentenced seven or more years ago or a felony conviction in which you served your sentence a decade or more ago.
There are some nuances here regarding how many convictions you have or how long your sentence was for a given crime.
How many people are affected by Michigan’s clean slate law?
According Michigan news media, 1 million Michiganders can benefit from the provisions of the automatic set-aside law. And that’s not to mention the others who will likely request that the state consider their case if it can’t be automatically dismissed.
How is the Michigan Department of Insurance handling the clean slate law?
The Michigan DOI has expanded the list of possible sentences that the state commissioner’s office considers evidence of “lack of good moral character.” This would seem to indicate that the Michigan DOI is introducing some new barriers to operating in the industry, however the new administrative code also offers new provisions that give insurance applicants a process to contest their criminal records.
So, if you have a prior charge of arson or, say, racketeering, the state can deny your application to be an insurance producer or adjuster, but you can argue for your rehabilitation and provide personal statements from friends. and employers to demonstrate the superior nature of your present character.
Why Does Michigan’s Clean Slate Law Concern Insurance Compliance Officers?
Unfortunately, with a change of this scale and involving so many entities that record and report criminal records, there are bound to be setbacks.
Imagine that you had a felony conviction in the past. Maybe you got busted with, say, a lot of weed in 2012. And you’ve been self-disclosing this very frustrating charge and having to explain everything about it and about yourself for years.
Michigan automatically drops it, which is kind of nice. But, because he’s automatic, he doesn’t realize this has happened, and now, by applying for a Georgia non-resident insurance license, he reports his old felony. But then the state runs its mandatory background check and returns no felony records.
You now have a problem where you have overdisclosed something problematic and your disclosure conflicts with your official record.
Instead, let’s imagine you decide No to report your epic mary jane incident. After all, you’re smart and you know it’s being removed from the records in your state of residence. But then a background check from the carrier pulls up old data for you and finds a prior unreported conviction. Either scenario could be problematic for someone trying to get their insurance license, particularly in a state outside of Michigan.
Compassion in compliance
We are not advocating against Michigan’s clean slate laws; people deserve a break sometimes. The foolish choices you made decades ago don’t always have to follow you. But we recognize that the process of updating company and agency policies and different state background check requirements to match Clean Slate records can be slow and cause some yellow flags and compliance headaches in the meantime.
Hopefully, even in a legacy industry that relies on technology and repeatable processes, insurance is still a relationship-driven industry, so the process of updating data as records are reserved or deleted is one of human compassion first.
If you are interested in more about the ways in which producers can lose their licensesor how 1033 exemptions can help growers restore your ability to work in insurancewe’ve got you covered.
For insurers and agencies looking to validate data or handle fast and accurate background checks for their insurance producers, variable lines brokers or insurance adjusters, see what AgentSync can do.