Bill Text: MI HB4397 | 2019-2020 | 100th Legislature | Engrossed


Bill Title: Insurance; no-fault; no-fault law; eliminate. Amends secs. 1833, 1910, 2102, 2103, 2116a, 2118, 2120, 3009, 3017, 3020, 3037, 3101, 3102, 3103, 3104, 3131, 3135, 3163, 3171, 3172, 3179, 3303 & 6107 of 1956 PA 218 (MCL 500.1833 et seq.). TIE BAR WITH: HB 4398'19, HB 4399'19, HB 4400'19, HB 4401'19, HB 4402'19, HB 4403'19

Spectrum: Partisan Bill (Republican 1-0)

Status: (Engrossed) 2019-05-09 - Referred To Committee Of The Whole [HB4397 Detail]

Download: Michigan-2019-HB4397-Engrossed.html

HB-4397, As Passed House, May 9, 2019

 

 

 

 

 

 

 

 

 

 

 

 

SUBSTITUTE FOR

 

HOUSE BILL NO. 4397

 

(As Amended May 9, 2019)

 

 

 

 

 

 

 

 

 

 

     A bill to amend 1956 PA 218, entitled

 

"The insurance code of 1956,"

 

by amending sections 150, 2105, 2106, 2108, 2111, 2111f, 2118, 2120, 2151, 3101, 3101a,

 

3104, 3107, 3111, 3112, 3113, 3114, 3115, 3135, 3142, 3145, 3148, 3157,

 

3163, 3172, 3173a, 3174, 3175, and 3177 (MCL 500.150, 500.2105, 500.2106,

 

500.2108, 500.2111, 500.2111f, 500.2118, 500.2120, 500.2151, 500.3101, 500.3101a, 500.3104,

 

500.3107, 500.3111, 500.3112, 500.3113, 500.3114, 500.3115,

 

500.3135, 500.3142, 500.3145, 500.3148, 500.3157, 500.3163, 500.3172,

 

500.3173a, 500.3174, 500.3175, and 500.3177), section 150 as

 

amended by 1992 PA 182, section 2108 as amended by 2015 PA 141, section 2111 as amended by 2012 PA 441,

 

sections 2118 and 2120 as amended by 2007 PA 35, section 3101 as

 

amended by 2017 PA 140, section 3101a as amended by 2018 PA 510,

 

section 3104 as amended by 2002 PA 662, section 3107 as amended by

 

2012 PA 542, section 3113 as amended by 2016 PA 346, section 3114


as amended by 2016 PA 347, section 3135 as amended by 2012 PA 158,

 

section 3163 as amended by 2002 PA 697, sections 3172, 3173a, 3174,

 

and 3175 as amended by 2012 PA 204, section 3177 as amended by

 

1984 PA 426, and section 2151 as added by 2012 PA 165 and by adding sections 261, 1245, 2111f, 2116b, 3107c, 3107d,

 

3107e, 3157a, and 3157b and chapter 63.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 150. (1) Any Except as provided in subsection (5), any

 

person who violates any provision of this act for which a specific

 

penalty is not provided under any other provision of this act or of

 

other laws applicable to the violation shall must be afforded an

 

opportunity for a hearing before the commissioner pursuant to

 

director under the administrative procedures act of 1969, Act No.

 

306 of the Public Acts of 1969, being sections 1969 PA 306, MCL

 

24.201 to 24.328. of the Michigan Compiled Laws. If the

 

commissioner director finds that a violation has occurred, the

 

commissioner director shall reduce the findings and decision to

 

writing and shall issue and cause to be served upon on the person

 

charged with the violation a copy of the findings and an order

 

requiring the person to cease and desist from the violation. In

 

addition, the commissioner director may order any of the following:

 

     (a) Payment of a civil fine of not more than $500.00 for each

 

violation. However, if the person knew or reasonably should have

 

known that he or she was in violation of this act, the commissioner

 

director may order the payment of a civil fine of not more than

 

$2,500.00 for each violation. With respect to filings made under

 

chapters 21, 22, 23, 24, and 26, "violation" means a filing not in

 

compliance with the provisions of those chapters and does not

 


include an action with respect to an individual policy based upon

 

on a noncomplying filing. With respect to an act or omission

 

described in section 4503, a fine under this section may be ordered

 

in addition to and not instead of a penalty or restitution under

 

section 4511. An order of the commissioner director under this

 

subdivision shall must not require the payment of civil fines

 

exceeding $25,000.00. $50,000.00. A fine collected under this

 

subdivision shall must be turned over to the state treasurer and

 

credited to the general fund, except that a fine collected for an

 

act or omission under section 4503 must be credited to the

 

automobile insurance fraud fund created in section 6304.

 

     (b) The suspension, limitation, or revocation of the person's

 

license or certificate of authority.

 

     (2) After notice and opportunity for hearing, the commissioner

 

director may by order reopen and alter, modify, or set aside, in

 

whole or in part, an order issued under this section if, in the

 

commissioner's director's opinion, conditions of fact or law have

 

changed to require that action or the public interest requires that

 

action.

 

     (3) If a person knowingly violates a cease and desist order

 

under this section and has been given notice and an opportunity for

 

a hearing held pursuant to Act No. 306 of the Public Acts under the

 

administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to

 

24.328, the commissioner director may order a civil fine of

 

$10,000.00 for each violation, or a suspension, limitation, or

 

revocation of a the person's license, or both. A fine collected

 

under this subsection shall must be turned over to the state


treasurer and credited to the general fund, except that if the

 

cease and desist order related to an act or omission under section

 

4503, the fine must be credited to the automobile insurance fraud

 

fund created in section 6304.

 

     (4) The commissioner director may apply to the Ingham county

 

County circuit court for an order of the court enjoining a

 

violation of this act.

 

     (5) Notwithstanding subsection (1), this section applies to an

 

act or omission described in section 4503.

 

     Sec. 261. (1) The department shall maintain on its internet

 

website a page that does all of the following:

 

     (a) Advises that the department may be able to assist a person

 

who believes that an automobile insurer is not paying benefits, not

 

making timely payments, or otherwise not performing as it is

 

obligated to do under an insurance policy.

 

     (b) Advises the person of selected important rights that the

 

person has under chapter 20 that specifically relate to automobile

 

insurers and the payment of benefits by automobile insurers.

 

     (c) Allows the person to submit an explanation of the facts of

 

the person's problems with the automobile insurer.

 

     (d) Allows the person to submit electronically, or instructs

 

the person how to provide paper copies of, any documentation to

 

support the facts submitted under subdivision (c).

 

     (e) Explains to the person the steps that the department will

 

take and that may be taken after information is submitted under

 

this section.

 

     (f) Anything else that the director determines to be important


House Bill No. 4397 as amended May 9, 2019

in relation to subdivisions (a) to (e).

 

     (2) The department shall maintain on its internet website a

 

page that advises consumers about the changes to automobile

 

insurance in this state that were made by the amendatory act that

 

added this section, including, among any other information that the

 

director determines to be important, ways to shop competitively for

 

insurance.

 

     (3) The department shall maintain on its internet website a

 

page that allows a person to report insurance fraud and unfair

 

settlement and claims practices to the department.

 

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     Sec. 2105. (1) No A policy of automobile insurance or home

 

insurance shall must not be offered, bound, made, issued, delivered

 

or renewed in this state on and after January 1, 1981, except in

 

conformity with unless the policy conforms to this chapter. This

 

chapter shall not apply to policies of automobile insurance or home

 

insurance offered, bound, made, issued, delivered or renewed in

 

this state before January 1, 1981.


House Bill No. 4397 as amended May 9, 2019

     (2) This chapter shall does not apply to insurance written on

a group, franchise, blanket policy, or similar basis which that

offers home insurance or automobile insurance to all members of the

group, franchise plan, or blanket coverage who are eligible

persons. [(3) An insurer, including, but not limited to, an insurer that

 writes insurance as described in subsection (2) and an insurer that is exempted from any of the requirements of this chapter for any reason, shall not establish or maintain rates or rating classifications for automobile insurance based on a factor that is not allowed, or that is prohibited, under section 2111.                                                                                                                                                                                                                                                   

                                                                   

                

Sec. 2106. (1) Except as specifically provided in this chapter, the provisions of chapter 24 and chapter 26 shall DO not apply to automobile insurance and home insurance.

     (2) Subject to section 2108(6), an insurer shall file and use rates for automobile insurance in accordance with chapter 24.

     (3) An insurer may use rates for automobile insurance or home insurance as soon as those rates are filed.

     (4) To the extent that other provisions of this code ACT are inconsistent with the provisions of this chapter, this chapter shall govern GOVERNS with respect to automobile insurance and home insurance.]

     Sec. 2108. (1) On the effective date of a manual of

classification, manual of rules and rates, rating plan, or

modification of a manual of classification, manual of rules and

rates, or rating plan that an insurer proposes to use for

[automobile insurance or] home insurance, the insurer shall file the

manual or plan with the director.[For automobile insurance, an insurer

 shall file a manual or plan described in this subsection in accordance with subsection (6).] Each filing under this subsection

 

must state the character and extent of the coverage contemplated.

An insurer that is subject to this chapter and that maintains rates

 

in any part of this state shall at all times maintain rates in

 

effect for all eligible persons meeting the underwriting criteria

 

of the insurer.

 

     (2) An insurer may satisfy its obligation to make filings

 

under subsection (1) by becoming a member of, or a subscriber to, a

 

rating organization licensed under chapter 24 or chapter 26 that

 

makes the filings, and by filing with the director a copy of its

 

authorization of the rating organization to make the filings on its

 

behalf. This chapter does not require an insurer to become a member

 

of or a subscriber to a rating organization. An insurer may file

 

and use deviations from filings made on its behalf. The deviations

 

are subject to this chapter.


     (3) A filing under this section must be accompanied by a

 

certification by or on behalf of the insurer that, to the best of

 

the insurer's information and belief, the filing conforms to the

 

requirements of this chapter.

 

     (4) A filing under this section must include information that

 

supports the filing with respect to the requirements of section

 

2109. The information may include 1 or more of the following:

 

     (a) The experience or judgment of the insurer or rating

 

organization making the filing.

 

     (b) The interpretation of the insurer or rating organization

 

of any statistical data it relies on.

 

     (c) The experience of other insurers or rating organizations.

 

     (d) Any other relevant information.

 

     (5) Except as otherwise provided in this subsection, the

 

department shall make a filing under this section and any

 

accompanying information open to public inspection on filing. An

 

insurer or a rating organization filing on the insurer's behalf may

 

designate information included in the filing or any accompanying

 

information as a trade secret. The insurer or the rating

 

organization filing on behalf of the insurer shall demonstrate to

 

the director that the designated information is a trade secret. If

 

the director determines that the information is a trade secret, the

 

information is not subject to public inspection and is exempt from

 

the freedom of information act, 1976 PA 442, MCL 15.231 to 15.246.

 

As used in this subsection, "trade secret" means that term as

 

defined in section 2 of the uniform trade secrets act, 1998 PA 448,

 

MCL 445.1902. However, trade secret does not include filings and


House Bill No. 4397 as amended May 9, 2019

information accompanying filings under this section that were

 

subject to public inspection before the effective date of the

 

amendatory act that added this sentence.January 11, 2016.

[(6) For automobile insurance, an insurer shall file a manual or plan described in this subsection in accordance with chapter 24, except that the manual or plan must remain on file for a waiting period of 90 days before it becomes effective, which period may not be extended by the director, and the waiting period applies regardless of whether supporting information is required by the director under section 2406(1).]

     [(7)] An insurer shall not make, issue, or renew a contract or

 

policy except in accordance with filings that are in effect for the

 

insurer under this chapter.

 

     [(8)] A filing under this chapter must specify that the insurer

 

will not refuse to insure, refuse to continue to insure, or limit

 

the amount of coverage available because of the location of the

 

risk, and that the insurer recognizes those practices to constitute

 

redlining. An insurer shall not engage in redlining as described in

 

this subsection.

[Sec. 2111. (1) Notwithstanding any provision of this act or this chapter to the contrary, classifications and territorial base rates used by an insurer in this state with respect to automobile insurance or home insurance shall must conform to the applicable requirements of this section.

     (2) Classifications established under this section for automobile insurance shall must be based only on 1 or more of the following factors, which shall must be applied by an insurer on a uniform basis throughout this state:

     (a) With respect to all automobile insurance coverages:

     (i) Either the age of the driver; the length of driving experience; or the number of years licensed to operate a motor vehicle.

     (ii) Driver primacy, based on the proportionate use of each vehicle insured under the policy by individual drivers insured or to be insured under the policy.

     (iii) Average miles driven weekly, annually, or both.

     (iv) Type of use, such as business, farm, or pleasure use.

     (v) Vehicle characteristics, features, and options, such as engine displacement, ability of the vehicle and its equipment to protect passengers from injury, and other similar items, including vehicle make and model.

     (vi) Daily or weekly commuting mileage.

     (vii) Number of cars insured by the insurer or number of licensed operators in the household. However, number of licensed operators shall must not be used as an indirect measure of marital status.

     (viii) Amount of insurance.

     (b) In addition to the factors prescribed in subdivision (a), with respect to personal protection insurance coverage:

     (i) Earned income.

     (ii) Number of dependents of income earners insured under the policy.

     (iii) Coordination of benefits.

     (iv) Use of a safety belt.

     (c) In addition to the factors prescribed in subdivision (a), with respect to collision and comprehensive coverages:

     (i) The anticipated cost of vehicle repairs or replacement, which may be measured by age, price, cost new, or value of the insured automobile, and other factors directly relating to that anticipated cost.

     (ii) Vehicle make and model.

     (iii) Vehicle design characteristics related to vehicle damageability.

     (iv) Vehicle characteristics relating to automobile theft prevention devices.

     (d) With respect to all automobile insurance coverage other than comprehensive, successful completion by the individual driver or drivers insured under the policy of an accident prevention education course that meets the following criteria:

     (i) The course shall must include a minimum of 8 hours of classroom instruction.

     (ii) The course shall must include, but not be limited to, a review of all of the following:

     (A) The effects of aging on driving behavior.

     (B) The shapes, colors, and types of road signs.

     (C) The effects of alcohol and medication on driving.

     (D) The laws relating to the proper use of a motor vehicle.

     (E) Accident prevention measures.

     (F) The benefits of safety belts and child restraints.

     (G) Major driving hazards.

     (H) Interaction with other highway users, such as motorcyclists, bicyclists, and pedestrians.

     (3) Each insurer shall establish a secondary or merit rating plan for automobile insurance, other than comprehensive coverage. A secondary or merit rating plan required under this subsection shall must provide for premium surcharges for any or all coverages for automobile insurance, other than comprehensive coverage, based upon on any or all of the following, when that information becomes available to the insurer:

     (a) Substantially at-fault accidents.

     (b) Convictions for, determinations of responsibility for civil infractions for, or findings of responsibility in probate court for civil infractions for violations under chapter VI of the Michigan vehicle code, 1949 PA 300, MCL 257.601 to 257.750. However, an insured shall must not be merit rated classified for rating purposes based on a civil infraction under chapter VI of the Michigan vehicle code, 1949 PA 300, MCL 257.601 to 257.750, for a period of time longer than that which the secretary of state's office carries points for that infraction on the insured's motor vehicle record.

     (3) (4) An insurer shall not establish or maintain rates or rating classifications for automobile insurance based on sex or marital status or a non-driving factor.

     (4) (5) Notwithstanding other provisions of this chapter, automobile insurance risks MAY be grouped by territory.

     (5) (6) This section does not limit insurers or rating organizations from establishing and maintaining statistical reporting territories. This section does not prohibit an insurer from establishing or maintaining, for automobile insurance, a premium discount plan for senior citizens in this state who are 65 years of age or older, if the plan is uniformly applied by the insurer throughout this state. If an insurer has not established and maintained a premium discount plan for senior citizens, the insurer shall offer reduced premium rates to senior citizens in this state who are 65 years of age or older and who drive less than 3,000 miles per year, regardless of statistical data.

     (6) (7) Classifications established under this section for home insurance other than inland marine insurance provided by policy floaters or endorsements shall must be based only on 1 or more of the following factors:

     (a) Amount and types of coverage.

     (b) Security and safety devices, including locks, smoke detectors, and similar, related devices.

     (c) Repairable structural defects reasonably related to risk.

     (d) Fire protection class.

     (e) Construction of structure, based on structure size, building material components, and number of units.

     (f) Loss experience of the insured, based on prior claims attributable to factors under the control of the insured that have been paid by an insurer. An insured's failure, after written notice from the insurer, to correct a physical condition that presents a risk of repeated loss shall be considered is a factor under the control of the insured for purposes of this subdivision.

     (g) Use of smoking materials within the structure.

     (h) Distance of the structure from a fire hydrant.

     (i) Availability of law enforcement or crime prevention services.

     (7) (8) Notwithstanding other provisions of this chapter, home insurance risks may be grouped by territory.

     (8) (9) An insurer may use factors in addition to those permitted by this section for insurance if the plan is consistent with the purposes of this act and reflects reasonably anticipated reductions or increases in losses or expenses.

     (9) As used in this section, "non-driving factors" means any factor for which there is no rational correlation between the factor and insurance losses. The director shall promulgate rules under the administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328, to establish the factors that are non-driving factors. After the effective date of the amendatory act that added this subsection, an insurer shall not use a factor to establish a rate for automobile insurance if the factor is in the rules promulgated under this subsection.

Sec. 2111f. (1) Before 6 months after the effective date of the amendatory act that added this section, an insurer that offers automobile insurance in this state shall file premium rates for personal protection insurance coverage for automobile insurance policies effective after 6 months after the effective date of the amendatory act that added this section and before 1 year and 6 months after the effective date of the amendatory act that added this section.

     (2) The premium rates filed under subsection (1), and any subsequent premium rates filed by the insurer for personal protection insurance coverage under automobile insurance policies effective before 5 years and 6 months after the effective date of the amendatory act that added this section, must result, as nearly as practicable, in an average reduction per vehicle from the premium rates for personal protection insurance coverage that were in effect for the insurer on May 1, 2019 as follows:

     (a) For policies subject to the coverage limits under section 3107c(1)(a), an average 80% or greater reduction per vehicle.

     (b) For policies subject to the coverage limits under section 3107c(1)(b), an average 60% or greater reduction per vehicle.

     (c) For policies subject to the coverage limits under section 3107c(1)(c), an average 30% or greater reduction per vehicle.

     (d) For policies not subject to any coverage limit under section 3107c(1)(d), an average 10% or greater reduction per vehicle.

     (3) For a policy under which an election under section 3107d has been made to not maintain coverage for personal protection insurance benefits payable under section 3107(1)(a), the premium rates filed under subsection (1), and any subsequent premium rates filed by the insurer for personal protection insurance coverage under automobile insurance policies effective before 5 years and 6 months after the effective date of the amendatory act that added this section, must result in no premium charge for coverage for personal protection insurance benefits payable under section 3107(1)(a).

     (4) The director shall review premium rates filed by an insurer under subsections (1) to (3) for compliance with subsections (1) to (3). The director shall disapprove a filing that does not comply with subsections (1) to (3).

     (5) If the director disapproves a premium rate filing under subsection (4), the insurer shall submit a revised premium rate filing to the director within 15 days of the disapproval. The premium rate filing is subject to review in the same manner as an original premium rate filing under subsection (4).

     (6) After 6 months after the effective date of the amendatory act that added this section and before 5 years and 6 months after the effective date of the amendatory act that added this section, an insurer shall not issue or renew an automobile insurance policy in this state unless the premium rates filed by the insurer for personal protection insurance coverage are approved under this section.

     (7) For purposes of calculating a personal protection insurance premium or premium rate under this section, the premium includes the catastrophic claims assessment imposed under section 3104.]

     Sec. 2116b. (1) Subject to subsection (2), an automobile

 

insurer shall not refuse to insure, refuse to continue to insure,

 

limit coverage available to, charge a reinstatement fee for, or

 

increase the premiums for automobile insurance for an eligible

 

person solely because the person previously failed to maintain

 

insurance required by section 3101 for a vehicle owned by the

 

person.

 

     (2) This section only applies to an eligible person that

 

applies for automobile insurance within 1 year after the effective

 

date of this section.

 

     Sec. 2118. (1) As a condition of maintaining its certificate

 

of authority, an insurer shall not refuse to insure, refuse to

 

continue to insure, or limit coverage available to an eligible

 

person for automobile insurance, except in accordance with

 

underwriting rules established pursuant to as provided in this


section and sections 2119 and 2120.

 

     (2) The underwriting rules that an insurer may establish for

 

automobile insurance shall must be based only on the following:

 

     (a) Criteria identical to the standards set forth in section

 

2103(1).

 

     (b) The insurance eligibility point accumulation in excess of

 

the amounts established by section 2103(1) of a member of the

 

household of the eligible person insured or to be insured, if the

 

member of the household usually accounts for 10% or more of the use

 

of a vehicle insured or to be insured. For purposes of this

 

subdivision, a person who is the principal driver for 1 automobile

 

insurance policy shall be is rebuttably presumed not to usually

 

account for more than 10% of the use of other vehicles of the

 

household not insured under the policy of that person.

 

     (c) With respect to a vehicle insured or to be insured,

 

substantial modifications from the vehicle's original manufactured

 

state for purposes of increasing the speed or acceleration

 

capabilities of the vehicle.

 

     (d) Except as otherwise provided in section 2116a or 2116b,

 

failure by the person to provide proof that insurance required by

 

section 3101 was maintained in force with respect to any vehicle

 

that was both owned by the person and driven or moved by the person

 

or by a member of the household of the person during the 6-month

 

period immediately preceding application. Such The proof shall must

 

take the form of a certification by the person on a form provided

 

by the insurer that the vehicle was not driven or moved without

 

maintaining the insurance required by section 3101 during the 6-


month period immediately preceding application.

 

     (e) Type of vehicle insured or to be insured, based on 1 of

 

the following, without regard to the age of the vehicle:

 

     (i) The vehicle is of limited production or of custom

 

manufacture.

 

     (ii) The insurer does not have a rate lawfully in effect for

 

the type of vehicle.

 

     (iii) The vehicle represents exposure to extraordinary expense

 

for repair or replacement under comprehensive or collision

 

coverage.

 

     (f) Use of a vehicle insured or to be insured for

 

transportation of passengers for hire, for rental purposes, or for

 

commercial purposes. Rules under this subdivision shall must not be

 

based on the use of a vehicle for volunteer or charitable purposes

 

or for which reimbursement for normal operating expenses is

 

received.

 

     (g) Payment of a minimum deposit at the time of application or

 

renewal, not to exceed the smallest deposit required under an

 

extended payment or premium finance plan customarily used by the

 

insurer.

 

     (h) For purposes of requiring comprehensive deductibles of not

 

more than $150.00, or of refusing to insure if the person refuses

 

to accept a required deductible, the claim experience of the person

 

with respect to comprehensive coverage.

 

     (i) Total abstinence from the consumption of alcoholic

 

beverages except if such beverages are consumed as part of a

 

religious ceremony. However, an insurer shall not utilize use an


underwriting rule based on this subdivision unless the insurer has

 

been was authorized to transact automobile insurance in this state

 

prior to before January 1, 1981, and has consistently utilized used

 

such an underwriting rule as part of the insurer's automobile

 

insurance underwriting since being authorized to transact

 

automobile insurance in this state.

 

     (j) One or more incidents involving a threat, harassment, or

 

physical assault by the insured or applicant for insurance on an

 

insurer employee, agent, or agent employee while acting within the

 

scope of his or her employment, so long as if a report of the

 

incident was filed with an appropriate law enforcement agency.

 

     Sec. 2120. (1) Affiliated insurers may establish underwriting

 

rules so that each affiliate will provide automobile insurance only

 

to certain eligible persons. This subsection shall apply applies

 

only if an eligible person can obtain automobile insurance from 1

 

of the affiliates. The underwriting rules shall must be in

 

compliance with this section and sections 2118 and 2119.

 

     (2) An insurer may establish separate rating plans so that

 

certain eligible persons are provided automobile insurance under 1

 

rating plan and other eligible persons are provided automobile

 

insurance under another rating plan. This subsection shall apply

 

applies only if all eligible persons can obtain automobile

 

insurance under a rating plan of the insurer. Underwriting rules

 

consistent with this section and sections 2118 and 2119 shall must

 

be established to define the rating plan applicable to each

 

eligible person.

 

     (3) Underwriting rules under this section shall must be based


only on the following:

 

     (a) With respect to a vehicle insured or to be insured,

 

substantial modifications from the vehicle's original manufactured

 

state for purposes of increasing the speed or acceleration

 

capabilities of the vehicle.

 

     (b) Except as otherwise provided in section 2116a or 2116b,

 

failure of the person to provide proof that insurance required by

 

section 3101 was maintained in force with respect to any vehicle

 

owned and operated by the person or by a member of the household of

 

the person during the 6-month period immediately preceding

 

application or renewal of the policy. Such The proof shall must

 

take the form of a certification by the person that the required

 

insurance was maintained in force for the 6-month period with

 

respect to such the vehicle.

 

     (c) For purposes of insuring persons who have refused a

 

deductible lawfully required under section 2118(2)(h), the claim

 

experience of the person with respect to comprehensive coverage.

 

     (d) Refusal of the person to pay a minimum deposit required

 

under section 2118(2)(g).

 

     (e) A person's insurance eligibility point accumulation under

 

section 2103(1)(h), or the total insurance eligibility point

 

accumulation of all persons who account for 10% or more of the use

 

of 1 or more vehicles insured or to be insured under the policy.

 

     (f) The type of vehicle insured or to be insured as provided

 

in section 2118(2)(e).

[Sec. 2151. As used in this chapter:

     (a) "Adverse action" means an increase in any charge for, or a reduction or other adverse or unfavorable change in the terms of coverage or amount of, any personal insurance, existing or applied for.

     (b) "Consumer reporting agency" means any person which, that, for monetary fees or dues or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties.

     (c) "Credit information" means any credit-related information derived from a credit report, found on a credit report itself, or provided on an application for personal insurance. Information that is not credit-related shall is not be considered credit information, regardless of whether it is contained in a credit report or in an application, or is used to calculate an insurance score.

     (d) "Credit report" means any written, oral, or other communication of information by a consumer reporting agency bearing on a consumer's credit worthiness, credit standing, or credit capacity that is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in the rating of personal insurance.

     (e) "Insurance score" means a number or rating that is derived from an algorithm, computer application, model, or other process that is based in whole or in part on credit information for the purposes of predicting the future insurance loss exposure of an individual applicant or insured.

     (f) "Personal insurance" means property/casualty insurance written for personal, family, or household use, including automobile, home, motorcycle, mobile home, noncommercial dwelling fire, boat, personal watercraft, snowmobile, and recreational vehicle, whether written on an individual, group, franchise, blanket policy, or similar basis. Personal insurance does not include automobile insurance.]

     Sec. 3101. (1) The Except as provided in section 3107d, the

 

owner or registrant of a motor vehicle required to be registered in


this state shall maintain security for payment of benefits under

 

personal protection insurance , and property protection insurance

 

as required under this chapter, and residual liability insurance.

 

Security is only required to be in effect during the period the

 

motor vehicle is driven or moved on a highway. Notwithstanding any

 

other provision in this act, an insurer that has issued an

 

automobile insurance policy on a motor vehicle that is not driven

 

or moved on a highway may allow the insured owner or registrant of

 

the motor vehicle to delete a portion of the coverages under the

 

policy and maintain the comprehensive coverage portion of the

 

policy in effect.

 

     (2) As used in this chapter:

 

     (a) "Automobile insurance" means that term as defined in

 

section 2102.

 

     (b) "Commercial quadricycle" means a vehicle to which all of

 

the following apply:

 

     (i) The vehicle has fully operative pedals for propulsion

 

entirely by human power.

 

     (ii) The vehicle has at least 4 wheels and is operated in a

 

manner similar to a bicycle.

 

     (iii) The vehicle has at least 6 seats for passengers.

 

     (iv) The vehicle is designed to be occupied by a driver and

 

powered either by passengers providing pedal power to the drive

 

train of the vehicle or by a motor capable of propelling the

 

vehicle in the absence of human power.

 

     (v) The vehicle is used for commercial purposes.

 

     (vi) The vehicle is operated by the owner of the vehicle or an


employee of the owner of the vehicle.

 

     (c) "Electric bicycle" means that term as defined in section

 

13e of the Michigan vehicle code, 1949 PA 300, MCL 257.13e.

 

     (d) "Golf cart" means a vehicle designed for transportation

 

while playing the game of golf.

 

     (e) "Highway" means highway or street as that term is defined

 

in section 20 of the Michigan vehicle code, 1949 PA 300, MCL

 

257.20.

 

     (f) "Moped" means that term as defined in section 32b of the

 

Michigan vehicle code, 1949 PA 300, MCL 257.32b.

 

     (g) "Motorcycle" means a vehicle that has a saddle or seat for

 

the use of the rider, is designed to travel on not more than 3

 

wheels in contact with the ground, and is equipped with a motor

 

that exceeds 50 cubic centimeters piston displacement. For purposes

 

of this subdivision, the wheels on any attachment to the vehicle

 

are not considered as wheels in contact with the ground. Motorcycle

 

does not include a moped or an ORV.

 

     (h) "Motorcycle accident" means a loss that involves the

 

ownership, operation, maintenance, or use of a motorcycle as a

 

motorcycle, but does not involve the ownership, operation,

 

maintenance, or use of a motor vehicle as a motor vehicle.

 

     (i) "Motor vehicle" means a vehicle, including a trailer, that

 

is operated or designed for operation on a public highway by power

 

other than muscular power and has more than 2 wheels. Motor vehicle

 

does not include any of the following:

 

     (i) A motorcycle.

 

     (ii) A moped.


     (iii) A farm tractor or other implement of husbandry that is

 

not subject to the registration requirements of the Michigan

 

vehicle code under section 216 of the Michigan vehicle code, 1949

 

PA 300, MCL 257.216.

 

     (iv) An ORV.

 

     (v) A golf cart.

 

     (vi) A power-driven mobility device.

 

     (vii) A commercial quadricycle.

 

     (viii) An electric bicycle.

 

     (j) "Motor vehicle accident" means a loss that involves the

 

ownership, operation, maintenance, or use of a motor vehicle as a

 

motor vehicle regardless of whether the accident also involves the

 

ownership, operation, maintenance, or use of a motorcycle as a

 

motorcycle.

 

     (k) "ORV" means a motor-driven recreation vehicle designed for

 

off-road use and capable of cross-country travel without benefit of

 

road or trail, on or immediately over land, snow, ice, marsh,

 

swampland, or other natural terrain. ORV includes, but is not

 

limited to, a multitrack or multiwheel drive vehicle, a motorcycle

 

or related 2-wheel, 3-wheel, or 4-wheel vehicle, an amphibious

 

machine, a ground effect air cushion vehicle, an ATV as defined in

 

section 81101 of the natural resources and environmental protection

 

act, 1994 PA 451, MCL 324.81101, or other means of transportation

 

deriving motive power from a source other than muscle or wind. ORV

 

does not include a vehicle described in this subdivision that is

 

registered for use on a public highway and has the security

 

required under subsection (1) or section 3103 in effect.


     (l) "Owner" means any of the following:

 

     (i) A person renting a motor vehicle or having the use of a

 

motor vehicle, under a lease or otherwise, for a period that is

 

greater than 30 days.

 

     (ii) A person renting a motorcycle or having the use of a

 

motorcycle under a lease for a period that is greater than 30 days,

 

or otherwise for a period that is greater than 30 consecutive days.

 

A person who borrows a motorcycle for a period that is less than 30

 

consecutive days with the consent of the owner is not an owner

 

under this subparagraph.

 

     (iii) A person that holds the legal title to a motor vehicle

 

or motorcycle, other than a person engaged in the business of

 

leasing motor vehicles or motorcycles that is the lessor of a motor

 

vehicle or motorcycle under a lease that provides for the use of

 

the motor vehicle or motorcycle by the lessee for a period that is

 

greater than 30 days.

 

     (iv) A person that has the immediate right of possession of a

 

motor vehicle or motorcycle under an installment sale contract.

 

     (m) "Power-driven mobility device" means a wheelchair or other

 

mobility device powered by a battery, fuel, or other engine and

 

designed to be used by an individual with a mobility disability for

 

the purpose of locomotion.

 

     (n) "Registrant" does not include a person engaged in the

 

business of leasing motor vehicles or motorcycles that is the

 

lessor of a motor vehicle or motorcycle under a lease that provides

 

for the use of the motor vehicle or motorcycle by the lessee for a

 

period that is longer than 30 days.


     (3) Security required by subsection (1) may be provided under

 

a policy issued by an authorized insurer that affords insurance for

 

the payment of benefits described in subsection (1). A policy of

 

insurance represented or sold as providing security is considered

 

to provide insurance for the payment of the benefits.

 

     (4) Security required by subsection (1) may be provided by any

 

other method approved by the secretary of state as affording

 

security equivalent to that afforded by a policy of insurance, if

 

proof of the security is filed and continuously maintained with the

 

secretary of state throughout the period the motor vehicle is

 

driven or moved on a highway. The person filing the security has

 

all the obligations and rights of an insurer under this chapter.

 

When the context permits, "insurer" as used in this chapter,

 

includes a person that files the security as provided in this

 

section.

 

     (5) An insurer that issues a policy that provides the security

 

required under subsection (1) may exclude coverage under the policy

 

as provided in section 3017.

 

     Sec. 3101a. (1) An insurer, in conjunction with the issuance

 

of an automobile insurance policy, shall provide to the insured 1

 

certificate of insurance for each insured vehicle and for private

 

passenger nonfleet automobiles listed on the policy shall supply to

 

the secretary of state the automobile insurer's name, the name of

 

the named insured, the named insured's address, the vehicle

 

identification number for each vehicle listed on the policy, and

 

the policy number. The insurer shall transmit the information

 

required under this subsection in a format as required by the


secretary of state. The secretary of state shall not require the

 

information to be transmitted more frequently than every 14 days.

 

     (2) The secretary of state shall provide policy information

 

received under subsection (1) to the Michigan automobile insurance

 

placement facility as required for the Michigan automobile

 

insurance placement facility to comply with this act. Information

 

received by the Michigan automobile insurance placement facility

 

under this subsection is confidential and is not subject to the

 

freedom of information act, 1976 PA 442, MCL 15.231 to 15.246. The

 

Michigan automobile insurance placement facility shall only use the

 

information for purposes of administering the assigned claims plan

 

under this chapter and shall not disclose the information to any

 

person unless it is for the purpose of administering the assigned

 

claims plan or in compliance with an order by a court of competent

 

jurisdiction in connection with a fraud investigation or

 

prosecution.

 

     (3) (2) The secretary of state shall provide policy

 

information received under subsection (1) to the department of

 

health and human services as required for the department of health

 

and human services to comply with 2006 PA 593, MCL 550.281 to

 

550.289.

 

     (4) (3) The secretary of state shall accept as proof of

 

vehicle insurance a transmission of the insured vehicle's vehicle

 

identification number. Policy information submitted by an insurer

 

and received by the secretary of state under this section is

 

confidential, is not subject to the freedom of information act,

 

1976 PA 442, MCL 15.231 to 15.246, and shall must not be disclosed


to any person except the department of health and human services

 

for purposes of 2006 PA 593, MCL 550.281 to 550.289, or pursuant to

 

an order by a court of competent jurisdiction in connection with a

 

claim or fraud investigation or prosecution. The transmission to

 

the secretary of state of a vehicle identification number is proof

 

of insurance to the secretary of state for motor vehicle

 

registration purposes only and is not evidence that a policy of

 

insurance actually exists between an insurer and an individual.

 

     (5) (4) A person who supplies false information to the

 

secretary of state under this section or who issues or uses an

 

altered, fraudulent, or counterfeit certificate of insurance is

 

guilty of a misdemeanor punishable by imprisonment for not more

 

than 1 year or a fine of not more than $1,000.00, or both.

 

     (6) (5) The department of health and human services shall

 

report to the senate and house of representatives appropriations

 

committees and standing committees concerning insurance issues on

 

the number of claims and total dollar amount recovered from

 

automobile insurers under 2006 PA 593, MCL 550.281 to 550.289. The

 

reports required by this subsection must be given to the

 

appropriations committees and standing committees concerning

 

insurance issues by December 30 of each year and must cover the

 

preceding 12-month period.

 

     (7) (6) As used in this section:

 

     (a) "Automobile insurance" means that term as defined in

 

section 3303.

 

     (b) "Private passenger nonfleet automobile" means that term as

 

defined in section 3303.


     Sec. 3104. (1) An The catastrophic claims association is

 

created as an unincorporated, nonprofit association. to be known as

 

the catastrophic claims association, hereinafter referred to as the

 

association, is created. Each insurer engaged in writing insurance

 

coverages that provide the security required by section 3101(1)

 

within in this state, as a condition of its authority to transact

 

insurance in this state, shall be a member of the association and

 

shall be is bound by the plan of operation of the association. Each

 

An insurer engaged in writing insurance coverages that provide the

 

security required by section 3103(1) within in this state, as a

 

condition of its authority to transact insurance in this state,

 

shall be is considered to be a member of the association, but only

 

for purposes of premiums under subsection (7)(d). Except as

 

expressly provided in this section, the association is not subject

 

to any laws of this state with respect to insurers, but in all

 

other respects the association is subject to the laws of this state

 

to the extent that the association would be if it were an insurer

 

organized and subsisting under chapter 50.

 

     (2) The For a motor vehicle accident policy issued or renewed

 

before 6 months after the effective date of the amendatory act that

 

added section 3107c and for a motor vehicle accident policy issued

 

or renewed after 6 months after the effective date of the

 

amendatory act that added section 3107c for which the coverage

 

level under section 3107c(1)(d) applies, the association shall

 

provide and each member shall accept indemnification for 100% of

 

the amount of ultimate loss sustained under personal protection

 

insurance coverages in excess of the following amounts in each loss


occurrence:

 

     (a) For a motor vehicle accident policy issued or renewed

 

before July 1, 2002, $250,000.00.

 

     (b) For a motor vehicle accident policy issued or renewed

 

during the period July 1, 2002 to June 30, 2003, $300,000.00.

 

     (c) For a motor vehicle accident policy issued or renewed

 

during the period July 1, 2003 to June 30, 2004, $325,000.00.

 

     (d) For a motor vehicle accident policy issued or renewed

 

during the period July 1, 2004 to June 30, 2005, $350,000.00.

 

     (e) For a motor vehicle accident policy issued or renewed

 

during the period July 1, 2005 to June 30, 2006, $375,000.00.

 

     (f) For a motor vehicle accident policy issued or renewed

 

during the period July 1, 2006 to June 30, 2007, $400,000.00.

 

     (g) For a motor vehicle accident policy issued or renewed

 

during the period July 1, 2007 to June 30, 2008, $420,000.00.

 

     (h) For a motor vehicle accident policy issued or renewed

 

during the period July 1, 2008 to June 30, 2009, $440,000.00.

 

     (i) For a motor vehicle accident policy issued or renewed

 

during the period July 1, 2009 to June 30, 2010, $460,000.00.

 

     (j) For a motor vehicle accident policy issued or renewed

 

during the period July 1, 2010 to June 30, 2011, $480,000.00.

 

     (k) For a motor vehicle accident policy issued or renewed

 

during the period July 1, 2011 to June 30, 2013, $500,000.00.

 

     (l) For a motor vehicle accident policy issued or renewed

 

during the period July 1, 2013 to June 30, 2015, $530,000.00.

 

     (m) For a motor vehicle accident policy issued or renewed

 

during the period July 1, 2015 to June 30, 2017, $545,000.00.


     (n) For a motor vehicle accident policy issued or renewed

 

during the period July 1, 2017 to June 30, 2019, $555,000.00.

 

     (o) For a motor vehicle accident policy issued or renewed

 

during the period July 1, 2019 to June 30, 2021, $580,000.00.

 

Beginning July 1, 2013, 2021, this $500,000.00 $580,000.00 amount

 

shall must be increased biennially on July 1 of each odd-numbered

 

year, for policies issued or renewed before July 1 of the following

 

odd-numbered year, by the lesser of 6% or the consumer price index,

 

Consumer Price Index, and rounded to the nearest $5,000.00. This

 

The association shall calculate this biennial adjustment shall be

 

calculated by the association by January 1 of the year of its July

 

1 effective date.

 

     (3) An insurer may withdraw from the association only upon on

 

ceasing to write insurance that provides the security required by

 

section 3101(1) in this state.

 

     (4) An insurer whose membership in the association has been

 

terminated by withdrawal shall continue continues to be bound by

 

the plan of operation, and upon on withdrawal, all unpaid premiums

 

that have been charged to the withdrawing member are payable as of

 

the effective date of the withdrawal.

 

     (5) An unsatisfied net liability to the association of an

 

insolvent member shall must be assumed by and apportioned among the

 

remaining members of the association as provided in the plan of

 

operation. The association has all rights allowed by law on behalf

 

of the remaining members against the estate or funds of the

 

insolvent member for sums money due the association.

 

     (6) If a member has been merged or consolidated into another


insurer or another insurer has reinsured a member's entire business

 

that provides the security required by section 3101(1) in this

 

state, the member and successors in interest of the member remain

 

liable for the member's obligations.

 

     (7) The association shall do all of the following on behalf of

 

the members of the association:

 

     (a) Assume 100% of all liability as provided in subsection

 

(2).

 

     (b) Establish procedures by which members shall must promptly

 

report to the association each claim that, on the basis of the

 

injuries or damages sustained, may reasonably be anticipated to

 

involve the association if the member is ultimately held legally

 

liable for the injuries or damages. Solely for the purpose of

 

reporting claims, the member shall in all instances consider itself

 

legally liable for the injuries or damages. The member shall also

 

advise the association of subsequent developments likely to

 

materially affect the interest of the association in the claim.

 

     (c) Maintain relevant loss and expense data relative relating

 

to all liabilities of the association and require each member to

 

furnish statistics, in connection with liabilities of the

 

association, at the times and in the form and detail as may be

 

required by the plan of operation.

 

     (d) In a manner provided for in the plan of operation,

 

calculate and charge to members of the association a total premium

 

sufficient to cover the expected losses and expenses of the

 

association that the association will likely incur during the

 

period for which the premium is applicable. The total premium shall


must include an amount to cover incurred but not reported losses

 

for the period and may must be adjusted for any excess or deficient

 

premiums from previous periods. Excesses or deficiencies from

 

previous periods may must either be fully adjusted in a single

 

period or may be adjusted over several periods in a manner provided

 

for in the plan of operation. Each member shall must be charged an

 

amount equal to that member's total written car years of insurance

 

providing the security required by section 3101(1) or 3103(1), or

 

both, written in this state during the period to which the premium

 

applies, with the total written car years of insurance multiplied

 

by the applicable average premium per car. The average premium per

 

car shall be is the total premium, calculated as adjusted for any

 

excesses or deficiencies, divided by the total written car years of

 

insurance providing the security required by section 3101(1) or

 

3103(1), or both, written in this state of all members during the

 

period to which the premium applies, excluding cars insured under a

 

policy with a coverage limit under section 3107c(1)(a), (b), or (c)

 

or as to which an election to not maintain personal protection

 

insurance benefits has been made under section 3107d except for any

 

portion of total premium that is an adjustment for a deficiency in

 

a previous period. A member may not be charged a premium for a car

 

insured under a policy with a coverage limit under section

 

3107c(1)(a), (b), or (c) or as to which an election to not maintain

 

personal protection insurance benefits has been made under section

 

3107d other than for the portion of the total premium attributable

 

to an adjustment for a deficiency in a previous period. A member

 

shall must be charged a premium for a historic vehicle that is


insured with the member of 20% of the premium charged for a car

 

insured with the member. As used in this subdivision:

 

     (i) "Car" includes a motorcycle but does not include a

 

historic vehicle.

 

     (ii) "Historic vehicle" means a vehicle that is a registered

 

historic vehicle under section 803a or 803p of the Michigan vehicle

 

code, 1949 PA 300, MCL 257.803a and 257.803p.

 

     (e) Require and accept the payment of premiums from members of

 

the association as provided for in the plan of operation. The

 

association shall do either of the following:

 

     (i) Require payment of the premium in full within 45 days

 

after the premium charge.

 

     (ii) Require payment of the premiums to be made periodically

 

to cover the actual cash obligations of the association.

 

     (f) Receive and distribute all sums money required by the

 

operation of the association.

 

     (g) Establish procedures for reviewing claims procedures and

 

practices of members of the association. If the claims procedures

 

or practices of a member are considered inadequate to properly

 

service the liabilities of the association, the association may

 

undertake or may contract with another person, including another

 

member, to adjust or assist in the adjustment of claims for the

 

member on claims that create a potential liability to the

 

association and may charge the cost of the adjustment to the

 

member.

 

     (h) Provide any records necessary or requested by the director

 

for the actuarial examination under subsection (21).


     (i) Subject to subsection (23), obey an order of the director

 

for a rebate under subsection (22).

 

     (8) In addition to other powers granted to it by this section,

 

the association may do all of the following:

 

     (a) Sue and be sued in the name of the association. A judgment

 

against the association shall does not create any direct liability

 

against the individual members of the association. The association

 

may provide for the indemnification of its members, members of the

 

board of directors of the association, and officers, employees, and

 

other persons lawfully acting on behalf of the association.

 

     (b) Reinsure all or any portion of its potential liability

 

with reinsurers licensed to transact insurance in this state or

 

approved by the commissioner.director.

 

     (c) Provide for appropriate housing, equipment, and personnel

 

as may be necessary to assure the efficient operation of the

 

association.

 

     (d) Pursuant to the plan of operation, adopt reasonable rules

 

for the administration of the association, enforce those rules, and

 

delegate authority, as the board considers necessary to assure the

 

proper administration and operation of the association consistent

 

with the plan of operation.

 

     (e) Contract for goods and services, including independent

 

claims management, actuarial, investment, and legal services, from

 

others within in or without outside of this state to assure the

 

efficient operation of the association.

 

     (f) Hear and determine complaints of a company or other

 

interested party concerning the operation of the association.


     (g) Perform other acts not specifically enumerated in this

 

section that are necessary or proper to accomplish the purposes of

 

the association and that are not inconsistent with this section or

 

the plan of operation.

 

     (9) A board of directors is created , hereinafter referred to

 

as the board, which shall be responsible for the operation of and

 

shall operate the association consistent with the plan of operation

 

and this section.

 

     (10) The plan of operation shall must provide for all of the

 

following:

 

     (a) The establishment of necessary facilities.

 

     (b) The management and operation of the association.

 

     (c) Procedures to be utilized in charging premiums, including

 

adjustments from excess or deficient premiums from prior periods.

 

The plan must require that any deficiency from a prior period be

 

amortized over not fewer than 15 years.

 

     (d) Procedures for a rebate to members of the association, for

 

distribution to insureds as provided in subsection (24), as ordered

 

by the director under subsection (22). The procedures must provide

 

for a distribution of a rebate attributable to a historic vehicle

 

equal to 20% of the rebate for a car that is not a historic

 

vehicle.

 

     (e) (d) Procedures governing the actual payment of premiums to

 

the association.

 

     (f) (e) Reimbursement of each member of the board by the

 

association for actual and necessary expenses incurred on

 

association business.


     (g) (f) The investment policy of the association.

 

     (h) (g) Any other matters required by or necessary to

 

effectively implement this section.

 

     (11) Each The board shall must include members that would

 

contribute a total of not less than 40% of the total premium

 

calculated pursuant to under subsection (7)(d). Each director shall

 

be board member is entitled to 1 vote. The initial term of office

 

of a director shall be board member is 2 years.

 

     (12) As part of the plan of operation, the board shall adopt

 

rules providing for the composition and term of successor boards to

 

the initial board and the terms of board members, consistent with

 

the membership composition requirements in subsections (11) and

 

(13). Terms of the directors shall board members must be staggered

 

so that the terms of all the directors board members do not expire

 

at the same time and so that a director board member does not serve

 

a term of more than 4 years.

 

     (13) The board shall must consist of 5 directors, board

 

members and the commissioner director, who shall be serve as an ex

 

officio member of the board without vote.

 

     (14) Each director The director shall be appointed by the

 

commissioner and appoint the board members. A board member shall

 

serve until that member's his or her successor is selected and

 

qualified. The board shall elect the chairperson of the board.

 

shall be elected by the board. A The director shall fill any

 

vacancy on the board shall be filled by the commissioner consistent

 

with as provided in the plan of operation.

 

     (15) After the board is appointed, the The board shall meet as


often as the chairperson, the commissioner, director, or the plan

 

of operation shall require, requires, or at the request of any 3

 

members of the board. board members. The chairperson shall retain

 

the right to may vote on all issues. Four members of the board

 

board members constitute a quorum.

 

     (16) An The board shall furnish to each member of the

 

association an annual report of the operations of the association

 

in a form and detail as may be determined by the board. shall be

 

furnished to each member.

 

     (17) Not more than 60 days after the initial organizational

 

meeting of the board, the board shall submit to the commissioner

 

for approval a proposed plan of operation consistent with the

 

objectives and provisions of this section, which shall provide for

 

the economical, fair, and nondiscriminatory administration of the

 

association and for the prompt and efficient provision of

 

indemnity. If a plan is not submitted within this 60-day period,

 

then the commissioner, after consultation with the board, shall

 

formulate and place into effect a plan consistent with this

 

section.

 

     (18) The plan of operation, unless approved sooner in writing,

 

shall be considered to meet the requirements of this section if it

 

is not disapproved by written order of the commissioner within 30

 

days after the date of its submission. Before disapproval of all or

 

any part of the proposed plan of operation, the commissioner shall

 

notify the board in what respect the plan of operation fails to

 

meet the requirements and objectives of this section. If the board

 

fails to submit a revised plan of operation that meets the


requirements and objectives of this section within the 30-day

 

period, the commissioner shall enter an order accordingly and shall

 

immediately formulate and place into effect a plan consistent with

 

the requirements and objectives of this section.

 

     (17) (19) The proposed plan of operation or Any amendments to

 

the plan of operation are subject to majority approval by the

 

board, ratified ratification by a majority of the membership of the

 

association having a vote, with voting rights being apportioned

 

according to the premiums charged in subsection (7)(d), and are

 

subject to approval by the commissioner.director.

 

     (18) (20) Upon approval by the commissioner and ratification

 

by the members of the plan submitted, or upon the promulgation of a

 

plan by the commissioner, each An insurer authorized to write

 

insurance providing the security required by section 3101(1) in

 

this state, as provided in this section, is bound by and shall

 

formally subscribe to and participate in the plan approved of

 

operation as a condition of maintaining its authority to transact

 

insurance in this state.

 

     (19) (21) The association is subject to all the reporting,

 

loss reserve, and investment requirements of the commissioner

 

director to the same extent as would is a member of the

 

association.

 

     (20) (22) Premiums charged members by the association shall

 

must be recognized in the rate-making procedures for insurance

 

rates in the same manner that expenses and premium taxes are

 

recognized. If a member of the association passes on any portion of

 

the premium payable under this section to an insured, the amount


passed on must equal the portion of the premium payable by the

 

member under this section attributable to the car or historic

 

vehicle insured, including any adjustments for excesses or

 

deficiencies from a previous period.

 

     (21) (23) The commissioner director or an authorized

 

representative of the commissioner director may visit the

 

association at any time and examine any and all of the

 

association's affairs. Beginning July 1, 2019, and every third year

 

after 2019, the director shall engage 1 or more independent

 

actuaries to examine the affairs and records of the association for

 

the previous 3 years. The actuarial examination must be conducted

 

using sound actuarial principles consistent with the applicable

 

statements of principles and the code of professional conduct

 

adopted by the Casualty Actuarial Society. By September 1, 2019 and

 

by September 1 of every third year after 2019, the director shall

 

provide a report to the legislature on the results of the audit

 

conducted under this subsection.

 

     (22) If the actuarial examination under subsection (21) shows

 

that the assets of the association exceed 120% of its liabilities,

 

including incurred but not reported liabilities, and if the rebate

 

will not threaten the association's ongoing ability to provide

 

reimbursements for personal protection insurance benefits based on

 

sound actuarial principles consistent with the applicable

 

statements of principles and the code of professional conduct

 

adopted by the Casualty Actuarial Society, the director shall order

 

the association to rebate an amount equal to the difference between

 

the total excess and 120% of the liabilities of the association,


including incurred but not reported liabilities, under subsection

 

(10)(d) and order the members of the association to distribute the

 

rebates under subsection (24).

 

     (23) Within 30 days after receiving an order from the director

 

under subsection (22), the association may request a hearing to

 

review the order by filing a written request with the director. The

 

department shall conduct the review as a contested case under the

 

administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to

 

24.328.

 

     (24) A member of the association shall distribute any rebate

 

it receives under subsection (10)(d) to the persons that it insures

 

under policies that provide the security required under section

 

3101(1) or 3103(1), or both, and that are subject to a premium

 

under this section on a uniform basis per car and historic vehicle

 

in a manner and on the date or dates provided by the director in

 

accordance with an order issued by the director. A rebate

 

attributable to a historic vehicle must be equal to 20% of the

 

rebate for a car that is not a historic vehicle.

 

     (25) By September 1 of each year, the association shall

 

prepare, submit to the committees of the senate and house of

 

representatives with jurisdiction over insurance matters, and post

 

on the association website an annual consumer statement, written in

 

a manner intended for the general public. The statement must

 

include all of the following:

 

     (a) The number of claims opened during the preceding 12

 

months, the amount expended on the claims, and the future

 

anticipated costs of the claims.


     (b) For each of the preceding 10 years, the total number of

 

open claims, the amount expended on the claims, and the anticipated

 

future costs of the claims.

 

     (c) For each of the preceding 10 years, the total number of

 

claims closed and the amount expended on the claims.

 

     (d) For each of the preceding 10 years, the ratio of claims

 

opened to claims closed.

 

     (e) For each of the preceding 10 years, the average length of

 

open claims.

 

     (f) A statement of the current financial condition of the

 

association and the reasons for any deficit or surplus in collected

 

assessments compared to losses.

 

     (g) A statement of the assumptions, methodology, and data used

 

to make revenue projections. As used in this subdivision, "revenue"

 

means return on investments.

 

     (h) A statement of the assumptions, methodology, and data used

 

to make cost projections.

 

     (i) A list of the association's assets, sorted by category or

 

type of asset, such as stocks, bonds, or mutual funds, and the

 

expected return on each asset.

 

     (j) The total amount of the association's discounted and

 

undiscounted liabilities and a description and explanation of the

 

liabilities, including an explanation of the association's

 

definition of the terms discounted and undiscounted.

 

     (k) Measures taken by the association to contain costs.

 

     (l) A statement explaining what portion of the assessment to

 

insureds as recognized in rates under subsection (20) is


attributable to claims occurring in the previous 12 months,

 

administrative costs, and the amount, if any, to adjust for past

 

deficits.

 

     (m) A statement explaining any qualifications identified by

 

the independent auditors in the most recent audit report prepared

 

under subsection (21).

 

     (n) A loss payment summary for each of the preceding years by

 

category.

 

     (o) For each of the preceding 10 years, an injury type

 

summary, categorizing the injuries suffered by claimants the

 

payment of whose claims are being reimbursed by the association, by

 

brain injuries, injuries resulting in quadriplegia, injuries

 

resulting in paraplegia, burn injuries, and other injuries.

 

     (p) A summary of investment returns over the preceding 10

 

years showing the investment balance, the investment gain, and the

 

percentage return on the investment balance.

 

     (q) A summary of the mortality assumptions used in making cost

 

projections.

 

     (r) A summary of any financial practices that differ from

 

those found in the National Association of Insurance Commissioners

 

Accounting Practices and Procedures Manual.

 

     (26) By September 1 of each year, the association shall

 

prepare and provide to the committees of the senate and house of

 

representatives with jurisdiction over insurance matters an annual

 

report of the association. The report must contain all of the

 

following:

 

     (a) An executive summary.


     (b) A discussion of the mortality assumptions used by the

 

association in making cost projections.

 

     (c) An evaluation of the accuracy of the association's

 

actuarial assumptions over the preceding 5 years.

 

     (d) The annual consumer statement prepared under subsection

 

(25).

 

     (e) Anything else the association determines is necessary to

 

advise the legislature about the operations of the association.

 

     (27) (24) The association does not have liability for losses

 

occurring before July 1, 1978. After the effective date of the

 

amendatory act that added section 3107c, the association does not

 

have liability for an ultimate loss under personal protection

 

insurance coverage for a motor vehicle accident policy to which a

 

limit under section 3107c(1)(a) to (c) is applicable.

 

     (28) (25) As used in this section:

 

     (a) "Association" means the catastrophic claims association

 

created in subsection (1).

 

     (b) "Board" means the board of directors of the association

 

created in subsection (9).

 

     (c) "Car" includes a motorcycle but does not include a

 

historic vehicle.

 

     (d) (a) "Consumer price index" Price Index" means the

 

percentage of change in the consumer price index Consumer Price

 

Index for all urban consumers in the United States city average for

 

all items for the 24 months prior to before October 1 of the year

 

prior to before the July 1 effective date of the biennial

 

adjustment under subsection (2)(k) (2)(o) as reported by the United


States department of labor, bureau of labor statistics, Department

 

of Labor, Bureau of Labor Statistics, and as certified by the

 

commissioner.director.

 

     (e) "Historic vehicle" means a vehicle that is a registered

 

historic vehicle under section 803a or 803p of the Michigan vehicle

 

code, 1949 PA 300, MCL 257.803a and 257.803p.

 

     (f) (b) "Motor vehicle accident policy" means a policy

 

providing the coverages required under section 3101(1).

 

     (g) (c) "Ultimate loss" means the actual loss amounts that a

 

member is obligated to pay and that are paid or payable by the

 

member, and do not include claim expenses. An ultimate loss is

 

incurred by the association on the date that the loss occurs.

 

     Sec. 3107. (1) Except as provided in subsection (2), Subject

 

to the exceptions and limitations in this chapter, personal

 

protection insurance benefits are payable for the following:

 

     (a) Allowable expenses consisting of all reasonable charges

 

incurred for reasonably necessary products, services and

 

accommodations for an injured person's care, recovery, or

 

rehabilitation. Allowable expenses within personal protection

 

insurance coverage shall do not include either of the following:

 

     (i) Charges for a hospital room in excess of a reasonable and

 

customary charge for semiprivate accommodations, except if unless

 

the injured person requires special or intensive care.

 

     (ii) Funeral and burial expenses in excess of the amount set

 

forth in the policy, which shall must not be less than $1,750.00 or

 

more than $5,000.00.

 

     (b) Work loss consisting of loss of income from work an


injured person would have performed during the first 3 years after

 

the date of the accident if he or she had not been injured. Work

 

loss does not include any loss after the date on which the injured

 

person dies. Because the benefits received from personal protection

 

insurance for loss of income are not taxable income, the benefits

 

payable for such the loss of income shall must be reduced 15%

 

unless the claimant presents to the insurer in support of his or

 

her claim reasonable proof of a lower value of the income tax

 

advantage in his or her case, in which case the lower value shall

 

apply. must be applied. For the period beginning October 1, 2012

 

through September 30, 2013, the benefits payable for work loss

 

sustained in a single 30-day period and the income earned by an

 

injured person for work during the same period together shall must

 

not exceed $5,189.00, which maximum shall apply must be applied pro

 

rata to any lesser period of work loss. Beginning October 1, 2013,

 

the maximum shall must be adjusted annually to reflect changes in

 

the cost of living under rules prescribed by the commissioner

 

director, but any change in the maximum shall apply must be applied

 

only to benefits arising out of accidents occurring subsequent to

 

after the date of change in the maximum.

 

     (c) Expenses not exceeding $20.00 per day, reasonably incurred

 

in obtaining ordinary and necessary services in lieu of those that,

 

if he or she had not been injured, an injured person would have

 

performed during the first 3 years after the date of the accident,

 

not for income but for the benefit of himself or herself or of his

 

or her dependent.

 

     (2) Both of the following apply to personal protection


insurance benefits payable under subsection (1):

 

     (a) A person who is 60 years of age or older and in the event

 

of an accidental bodily injury would not be eligible to receive

 

work loss benefits under subsection (1)(b) may waive coverage for

 

work loss benefits by signing a waiver on a form provided by the

 

insurer. An insurer shall offer a reduced premium rate to a person

 

who waives coverage under this subsection subdivision for work loss

 

benefits. Waiver of coverage for work loss benefits applies only to

 

work loss benefits payable to the person or persons who have signed

 

the waiver form.

 

     (b) An insurer shall is not be required to provide coverage

 

for the medical use of marihuana or for expenses related to the

 

medical use of marihuana.

 

     Sec. 3107c. (1) Except as provided in section 3107d, and

 

subject to subsection (5), for an insurance policy that provides

 

the security required under section 3101(1) and is issued or

 

renewed after 6 months after the effective date of the amendatory

 

act that added this section, the person named or to be named in the

 

policy shall, in a way required under section 3107e and on a form

 

approved by the director, select 1 of the following coverage levels

 

for personal protection insurance benefits under section

 

3107(1)(a):

 

     (a) A limit per person per loss occurrence, consisting of both

 

of the following:

 

     (i) A $50,000.00 limit for any personal protection insurance

 

benefits under section 3107(1)(a).

 

     (ii) An additional $200,000.00 for medically necessary


treatment rendered at an acute care unit or trauma center of a

 

hospital immediately after the accidental bodily injury and until

 

the patient is stable.

 

     (b) A limit of $250,000.00 per individual per loss occurrence

 

for any personal protection insurance benefits under section

 

3107(1)(a).

 

     (c) A limit of $500,000.00 per individual per loss occurrence

 

for any personal protection insurance benefits under section

 

3107(1)(a).

 

     (d) No limit for personal protection insurance benefits under

 

section 3107(1)(a).

 

     (2) The form required under subsection (1) must do all of the

 

following:

 

     (a) State, in a conspicuous manner, the benefits and risks

 

associated with each coverage option.

 

     (b) Provide a way for the person to mark the form to

 

acknowledge that he or she has read the form and understands the

 

options available.

 

     (c) Allow the insured person to mark the form to make the

 

selection of coverage level under subsection (1).

 

     (d) Require the person to sign the form.

 

     (3) If an insurance policy is issued or renewed as described

 

in subsection (1) and the person named in the policy has not made

 

an effective selection under subsection (1) but a premium or

 

portion of a premium has been paid, there is a rebuttable

 

presumption that the amount of the premium accurately reflects the

 

level of coverage applicable to the policy under subsection (1).


     (4) If an insurance policy is issued or renewed as described

 

in subsection (1), the person named in the policy has not made an

 

effective selection under subsection (1), and a presumption under

 

subsection (3) does not apply, the limit under subsection (1)(a)

 

applies to the policy.

 

     (5) The coverage level selected under subsection (1) applies

 

to the person named in the policy, the person's spouse, and a

 

relative of either domiciled in the same household, and any other

 

person with a right to claim personal protection insurance benefits

 

under the policy.

 

     (6) If benefits are payable under section 3107(1)(a) under 2

 

or more insurance policies, the benefits are only payable up to an

 

aggregate coverage limit for both or all of the policies that

 

equals the highest available coverage limit under any 1 of the

 

policies.

 

     (7) An insurer shall offer, for a policy that provides the

 

security required under section 3101(1) to which a limit under

 

subsection (1)(a) to (c) applies, a rider that will provide

 

coverage for attendant care in excess of the applicable limit.

 

     Sec. 3107d. (1) For an insurance policy that provides the

 

security required under section 3101(1) and is issued or renewed

 

after 6 months after the effective date of the amendatory act that

 

added this section, the person named or to be named in the policy

 

who is a qualified person may, in a way required under section

 

3107e and on a form approved by the director, elect to not maintain

 

coverage for personal protection insurance benefits payable under

 

section 3107(1)(a). The person named in the policy shall, when


requesting issuance or renewal of the policy, provide to the

 

insurer a document from the person that provides the qualified

 

health coverage stating that the person named in the policy has

 

qualified health coverage.

 

     (2) The form required under subsection (1) must do all of the

 

following:

 

     (a) Require the person named or to be named in the policy to

 

mark the form to certify whether he or she is a qualified person.

 

     (b) Disclose in a conspicuous manner that a qualified person

 

is not obligated to but may purchase coverage for personal

 

protection insurance coverage benefits payable under section

 

3107(1)(a).

 

     (c) State, in a conspicuous manner, the coverage levels

 

available under section 3107c.

 

     (d) State, in a conspicuous manner, the benefits and risks

 

associated with not maintaining the coverage.

 

     (e) State, in a conspicuous manner, that if during the term of

 

the policy the person ceases to have qualified health insurance,

 

the person has 14 days to notify the insurer or the person will be

 

excluded from all personal protection insurance coverage benefits

 

under section 3107(1)(a).

 

     (f) Provide a way for the person named or to be named in the

 

policy to mark the form to acknowledge that he or she has read the

 

form and understands it and that he or she understands the options

 

available to him or her.

 

     (g) If the person named or to be named in the policy is a

 

qualified person, provide the person a way to mark the form to


elect not to maintain the coverage.

 

     (h) Require the person to sign the form.

 

     (3) If an insurance policy is issued or renewed as described

 

in subsection (1) and the person named in the policy has not made

 

an effective election under subsection (1) but a premium or portion

 

of a premium has been paid, there is a rebuttable presumption that

 

the amount of the premium accurately reflects whether the person

 

elected to maintain coverage for personal protection benefits under

 

section 3107(1)(a).

 

     (4) If an insurance policy is issued or renewed as described

 

in subsection (1), the person named in the policy has not made an

 

effective election under subsection (1), and a presumption under

 

subsection (3) does not apply, the policy is considered to provide

 

personal protection benefits under section 3107(1)(a).

 

     (5) An election under this section applies to the person named

 

in the policy, the person's spouse, a relative of either domiciled

 

in the same household, and any other person who would have had a

 

right to claim personal protection insurance benefits under the

 

policy but for the election.

 

     (6) If a person named in an insurance policy under which

 

coverage for personal protection insurance benefits payable under

 

section 3107(1)(a) are not maintained under this section ceases,

 

during the term of the policy, to be covered under qualified health

 

coverage, the person shall, within 14 days, notify the insurer that

 

the person is no longer a qualified person. All of the following

 

apply under this subsection:

 

     (a) During the 14-day period, if a person to whom the election


under this section applies as described in subsection (5) suffers

 

accidental bodily injury arising from a motor vehicle accident, the

 

person is entitled to claim benefits under the assigned claims

 

plan.

 

     (b) If the person named in the insurance policy notifies the

 

insurer within the 14-day period, the person shall obtain insurance

 

that provides the security required under section 3101(1) that

 

includes the coverage that was not maintained under this section.

 

     (c) If the person named in the insurance policy does not

 

notify the insurer within the 14-day period and a person to whom

 

the election under this section applies as described in subsection

 

(5) suffers accidental bodily injury arising from a motor vehicle

 

accident, unless the injured person is entitled to coverage under

 

some other policy, the injured person is not entitled to be paid

 

personal protection insurance benefits under section 3107(1)(a) for

 

the injury.

 

     (7) As used in this section:

 

     (a) "Qualified health coverage" means either of the following:

 

     (i) Other health or accident coverage that does not exclude or

 

limit coverage for injuries related to motor vehicle accidents.

 

     (ii) Coverage under the federal Medicare program established

 

under subchapter XVIII of the social security act, 42 USC 1395 to

 

1395lll.

 

     (iii) Medicaid coverage under a program for medical assistance

 

established under subchapter XIX of the social security act, 42 USC

 

1396 to 1396w-5.

 

     (b) "Qualified person" means a person who has qualified health


coverage.

 

     Sec. 3107e. (1) A form under section 3107c or 3107d must be

 

delivered to the person insured or to be insured under the policy

 

using 1 of the following methods:

 

     (a) Personal delivery.

 

     (b) First-class mail, postage prepaid.

 

     (c) Electronic means in accordance with section 2266.

 

     (2) A person must make a selection under section 3107c or an

 

election under section 3107d in 1 of the following ways:

 

     (a) Marking and signing a paper form.

 

     (b) Giving verbal instructions, in person or telephonically,

 

that the form be marked and signed in behalf of the person.

 

     (c) Electronically marking the form and providing an

 

electronic signature as provided in the uniform electronic

 

transactions act, 2000 PA 305, MCL 450.831 to 450.849.

 

     Sec. 3111. Personal protection insurance benefits are payable

 

for accidental bodily injury suffered in an accident occurring out

 

of this state, if the accident occurs within the United States, its

 

territories and possessions, or in Canada, and the person whose

 

injury is the basis of the claim was at the time of the accident a

 

named insured under a personal protection insurance policy, his the

 

spouse of a named insured, a relative of either domiciled in the

 

same household, or an occupant of a vehicle involved in the

 

accident, whose if the occupant was a resident of this state or if

 

the owner or registrant of the vehicle was insured under a personal

 

protection insurance policy or has provided security approved by

 

the secretary of state under subsection (4) of section


3101.3101(4).

 

     Sec. 3112. Personal protection insurance benefits are payable

 

to or for the benefit of an injured person or, in case of his or

 

her death, to or for the benefit of his or her dependents. A health

 

care provider listed in section 3157 may make a claim and assert a

 

direct cause of action against an insurer, or under the assigned

 

claims plan under sections 3171 to 3175, to recover overdue

 

benefits payable for charges for products, services, or

 

accommodations provided to an injured person. Payment by an insurer

 

in good faith of personal protection insurance benefits, to or for

 

the benefit of a person who it believes is entitled to the

 

benefits, discharges the insurer's liability to the extent of the

 

payments unless the insurer has been notified in writing of the

 

claim of some other person. If there is doubt about the proper

 

person to receive the benefits or the proper apportionment among

 

the persons entitled thereto, to the benefits, the insurer, the

 

claimant, or any other interested person may apply to the circuit

 

court for an appropriate order. The court may designate the payees

 

and make an equitable apportionment, taking into account the

 

relationship of the payees to the injured person and other factors

 

as the court considers appropriate. In the absence of a court order

 

directing otherwise the insurer may pay:

 

     (a) To the dependents of the injured person, the personal

 

protection insurance benefits accrued before his or her death

 

without appointment of an administrator or executor.

 

     (b) To the surviving spouse, the personal protection insurance

 

benefits due any dependent children living with the spouse.


     Sec. 3113. A person is not entitled to be paid personal

 

protection insurance benefits for accidental bodily injury if at

 

the time of the accident any of the following circumstances

 

existed:

 

     (a) The person was willingly operating or willingly using a

 

motor vehicle or motorcycle that was taken unlawfully, and the

 

person knew or should have known that the motor vehicle or

 

motorcycle was taken unlawfully.

 

     (b) The person was the owner or registrant of a motor vehicle

 

or motorcycle involved in the accident with respect to which the

 

security required by section 3101 or 3103 was not in effect.

 

     (c) The person was not a resident of this state. , was an

 

occupant of a motor vehicle or motorcycle not registered in this

 

state, and the motor vehicle or motorcycle was not insured by an

 

insurer that has filed a certification in compliance with section

 

3163.

 

     (d) The person was operating a motor vehicle or motorcycle as

 

to which he or she was named as an excluded operator as allowed

 

under section 3009(2).

 

     (e) The person was the owner or operator of a motor vehicle

 

for which coverage was excluded under a policy exclusion authorized

 

under section 3017.

 

     Sec. 3114. (1) Except as provided in subsections (2), (3), and

 

(5), a personal protection insurance policy described in section

 

3101(1) applies to accidental bodily injury to the person named in

 

the policy, the person's spouse, and a relative of either domiciled

 

in the same household, if the injury arises from a motor vehicle


accident. A personal injury insurance policy described in section

 

3103(2) applies to accidental bodily injury to the person named in

 

the policy, the person's spouse, and a relative of either domiciled

 

in the same household, if the injury arises from a motorcycle

 

accident. If personal protection insurance benefits or personal

 

injury benefits described in section 3103(2) are payable to or for

 

the benefit of an injured person under his or her own policy and

 

would also be payable under the policy of his or her spouse,

 

relative, or relative's spouse, the injured person's insurer shall

 

pay all of the benefits and is not entitled to recoupment from the

 

other insurer.

 

     (2) A person suffering who suffers accidental bodily injury

 

while an operator or a passenger of a motor vehicle operated in the

 

business of transporting passengers shall receive the personal

 

protection insurance benefits to which the person is entitled from

 

the insurer of the motor vehicle. This subsection does not apply to

 

a passenger in any of the following, unless the passenger is not

 

entitled to personal protection insurance benefits under any other

 

policy:

 

     (a) A school bus, as defined by the department of education,

 

providing transportation not prohibited by law.

 

     (b) A bus operated by a common carrier of passengers certified

 

by the department of transportation.

 

     (c) A bus operating under a government sponsored

 

transportation program.

 

     (d) A bus operated by or providing service to a nonprofit

 

organization.


     (e) A taxicab insured as prescribed in section 3101 or 3102.

 

     (f) A bus operated by a canoe or other watercraft, bicycle, or

 

horse livery used only to transport passengers to or from a

 

destination point.

 

     (g) A transportation network company vehicle.

 

     (h) A motor vehicle insured under a policy for which the

 

person named in the policy has elected to not maintain coverage for

 

personal protection insurance benefits under section 3107d.

 

     (3) An employee, his or her spouse, or a relative of either

 

domiciled in the same household, who suffers accidental bodily

 

injury while an occupant of a motor vehicle owned or registered by

 

the employer, shall receive personal protection insurance benefits

 

to which the employee is entitled from the insurer of the furnished

 

vehicle. This subsection does not apply to a motor vehicle insured

 

under a policy for which the person named in the policy has elected

 

to not maintain coverage for personal protection insurance benefits

 

under section 3107d.

 

     (4) Except as provided in subsections (1) to (2) and (3), a

 

person suffering who suffers accidental bodily injury arising from

 

a motor vehicle accident while an occupant of a motor vehicle who

 

is not covered under a personal protection insurance policy as

 

provided in subsection (1) shall claim personal protection

 

insurance benefits from insurers in the following order of

 

priority:

 

     (a) The insurer of the owner or registrant of the vehicle

 

occupied.

 

     (b) The insurer of the operator of the vehicle occupied.under


the assigned claims plan under sections 3171 to 3175.

 

     (5) A Subject to subsections (6) and (7), a person suffering

 

who suffers accidental bodily injury arising from a motor vehicle

 

accident that shows evidence of the involvement of a motor vehicle

 

while an operator or passenger of a motorcycle shall claim personal

 

protection insurance benefits from insurers in the following order

 

of priority:

 

     (a) The insurer of the owner or registrant of the motor

 

vehicle involved in the accident.

 

     (b) The insurer of the operator of the motor vehicle involved

 

in the accident.

 

     (c) The motor vehicle insurer of the operator of the

 

motorcycle involved in the accident.

 

     (d) The motor vehicle insurer of the owner or registrant of

 

the motorcycle involved in the accident.

 

     (6) If an applicable insurance policy in an order of priority

 

under subsection (5) is a policy for which the person named in the

 

policy has elected to not maintain coverage for personal protection

 

insurance benefits under section 3107d, the injured person shall

 

claim benefits only under other policies, subject to subsection

 

(7), in the same order of priority for which no such election has

 

been made. If there are no other policies for which no such

 

election has been made, the injured person shall claim benefits

 

under the next order of priority or, if there is not a next order

 

of priority, under the assigned claims plan under sections 3171 to

 

3175.

 

     (7) If personal protection insurance benefits are payable


under subsection (5) under 2 or more insurance policies in the same

 

order of priority, the benefits are only payable up to an aggregate

 

coverage limit for both or all of the policies that equals the

 

highest available coverage limit under any 1 of the policies.

 

     (8) (6) If Subject to subsections (6) and (7), if 2 or more

 

insurers are in the same order of priority to provide personal

 

protection insurance benefits under subsection (5), an insurer

 

paying that pays benefits due is entitled to partial recoupment

 

from the other insurers in the same order of priority, and a

 

reasonable amount of partial recoupment of the expense of

 

processing the claim, in order to accomplish equitable distribution

 

of the loss among all of the insurers.

 

     (9) (7) As used in this section:

 

     (a) "Personal vehicle", "prearranged ride", and

 

"transportation network company digital network", and

 

"transportation network company prearranged ride" mean those terms

 

as defined in section 2 of the limousine, taxicab, and

 

transportation network company act, 2016 PA 345, MCL 257.2102.

 

     (b) "Transportation network company vehicle" means a personal

 

vehicle while the driver is logged on to the transportation network

 

company digital network or while the driver is engaged in a

 

transportation network company prearranged ride.

 

     Sec. 3115. (1) Except as provided in subsection (1) of section

 

3114, 3114(1), a person suffering who suffers accidental bodily

 

injury while not an occupant of a motor vehicle shall claim

 

personal protection insurance benefits from insurers in the

 

following order of priority:


     (a) Insurers of owners or registrants of motor vehicles

 

involved in the accident.

 

     (b) Insurers of operators of motor vehicles involved in the

 

accident.under the assigned claims plan under sections 3171 to

 

3175.

 

     (2) When 2 or more insurers are in the same order of priority

 

to provide personal protection insurance benefits an insurer paying

 

benefits due is entitled to partial recoupment from the other

 

insurers in the same order of priority, together with a reasonable

 

amount of partial recoupment of the expense of processing the

 

claim, in order to accomplish equitable distribution of the loss

 

among such insurers.

 

     (3) A limit upon the amount of personal protection insurance

 

benefits available because of accidental bodily injury to 1 person

 

arising from 1 motor vehicle accident shall be determined without

 

regard to the number of policies applicable to the accident.

 

     Sec. 3135. (1) A person remains subject to tort liability for

 

noneconomic loss caused by his or her ownership, maintenance, or

 

use of a motor vehicle only if the injured person has suffered

 

death, serious impairment of body function, or permanent serious

 

disfigurement.

 

     (2) For a cause of action for damages pursuant to under

 

subsection (1) filed on or after July 26, 1996, or (3)(d), all of

 

the following apply:

 

     (a) The issues of whether the injured person has suffered

 

serious impairment of body function or permanent serious

 

disfigurement are questions of law for the court if the court finds


either of the following:

 

     (i) There is no factual dispute concerning the nature and

 

extent of the person's injuries.

 

     (ii) There is a factual dispute concerning the nature and

 

extent of the person's injuries, but the dispute is not material to

 

the determination whether the person has suffered a serious

 

impairment of body function or permanent serious disfigurement.

 

However, for a closed-head injury, a question of fact for the jury

 

is created if a licensed allopathic or osteopathic physician who

 

regularly diagnoses or treats closed-head injuries testifies under

 

oath that there may be a serious neurological injury.

 

     (b) Damages shall must be assessed on the basis of comparative

 

fault, except that damages shall must not be assessed in favor of a

 

party who is more than 50% at fault.

 

     (c) Damages shall must not be assessed in favor of a party who

 

was operating his or her own vehicle at the time the injury

 

occurred and did not have in effect for that motor vehicle the

 

security required by section 3101 at the time the injury occurred.

 

     (3) Notwithstanding any other provision of law, tort liability

 

arising from the ownership, maintenance, or use within this state

 

of a motor vehicle with respect to which the security required by

 

section 3101 was in effect is abolished except as to:

 

     (a) Intentionally caused harm to persons or property. Even

 

though a person knows that harm to persons or property is

 

substantially certain to be caused by his or her act or omission,

 

the person does not cause or suffer that harm intentionally if he

 

or she acts or refrains from acting for the purpose of averting


injury to any person, including himself or herself, or for the

 

purpose of averting damage to tangible property.

 

     (b) Damages for noneconomic loss as provided and limited in

 

subsections (1) and (2).

 

     (c) Damages for allowable expenses, work loss, and survivor's

 

loss as defined in sections 3107 to 3110 in excess of any

 

applicable limit under section 3107c or the daily, monthly, and 3-

 

year limitations contained in those sections, or without limit for

 

allowable expenses if an election to not maintain that coverage was

 

made under section 3107d. The party liable for damages is entitled

 

to an exemption reducing his or her liability by the amount of

 

taxes that would have been payable on account of income the injured

 

person would have received if he or she had not been injured.

 

     (d) Damages for economic loss by a nonresident. in excess of

 

the personal protection insurance benefits provided under section

 

3163(4). Damages under this subdivision are not recoverable to the

 

extent that benefits covering the same loss are available from

 

other sources, regardless of the nature or number of benefit

 

sources available and regardless of the nature or form of the

 

benefits.However, to recover under this subdivision, the

 

nonresident must have suffered death, serious impairment of body

 

function, or permanent serious disfigurement.

 

     (e) Damages up to $1,000.00 to a motor vehicle, to the extent

 

that the damages are not covered by insurance. An action for

 

damages under this subdivision shall must be conducted as provided

 

in subsection (4).

 

     (4) All of the following apply to an action for damages under


subsection (3)(e):

 

     (a) Damages shall must be assessed on the basis of comparative

 

fault, except that damages shall must not be assessed in favor of a

 

party who is more than 50% at fault.

 

     (b) Liability is not a component of residual liability, as

 

prescribed in section 3131, for which maintenance of security is

 

required by this act.

 

     (c) The action shall must be commenced, whenever legally

 

possible, in the small claims division of the district court or the

 

municipal court. If the defendant or plaintiff removes the action

 

to a higher court and does not prevail, the judge may assess costs.

 

     (d) A decision of the court is not res judicata in any

 

proceeding to determine any other liability arising from the same

 

circumstances that gave rise to the action.

 

     (e) Damages shall must not be assessed if the damaged motor

 

vehicle was being operated at the time of the damage without the

 

security required by section 3101.

 

     (5) As used in this section, "serious impairment of body

 

function" means an objectively manifested impairment of an

 

important body function that affects the person's general ability

 

to lead his or her normal life.

 

     Sec. 3142. (1) Personal protection insurance benefits are

 

payable as loss accrues.

 

     (2) Personal Subject to subsection (3), personal protection

 

insurance benefits are overdue if not paid within 30 days after an

 

insurer receives reasonable proof of the fact and of the amount of

 

loss sustained. If Subject to subsection (3), if reasonable proof


House Bill No. 4397 as amended May 9, 2019

is not supplied as to the entire claim, the amount supported by

reasonable proof is overdue if not paid within 30 days after the

proof is received by the insurer. Any Subject to subsection (3),

any part of the remainder of the claim that is later supported by

reasonable proof is overdue if not paid within 30 days after the

proof is received by the insurer. For the purpose of calculating

the extent to which benefits are overdue, payment shall must be

treated as made on the date a draft or other valid instrument was

placed in the United States mail in a properly addressed, postpaid

envelope, or, if not so posted, on the date of delivery.

     (3) For personal protection insurance benefits under section

3107(1)(a), payment for a product, service, or accommodations is

not overdue if a bill for the product, service, or accommodations

is not provided to the insurer within 90 days after the product,

service, or accommodations is provided.

     (4) (3) An overdue payment bears simple interest at the rate

of 12% per annum.

[Sec. 3145. (1) An action for recovery of personal protection insurance benefits payable under this chapter for accidental bodily injury may not be commenced later than 1 year after the date of the accident causing the injury unless written notice of injury as provided herein has been given to the insurer within 1 year after the accident or unless the insurer has previously made a payment of personal protection insurance benefits for the injury. If Subject to subsection (2), if the notice has been given or a payment has been made, the action may be commenced at any time within 1 year after the most recent allowable expense, work loss, or survivor's loss has been incurred. However, the claimant may not recover benefits for any portion of the loss incurred more than 1 year before the date on which the action was commenced. The notice of injury required by this subsection may be given to the insurer or any of its authorized agents by a person claiming to be entitled to benefits therefor because of the injury, or by someone in his the person's behalf. The notice shall must give the name and address of the claimant and indicate in ordinary language the name of the person injured and the time, place, and nature of his the person's injury.

     (2) The limitation under subsection (1) on recovery of benefits incurred more than 1 year before an action is commenced is tolled from the date the person claiming the benefits makes a specific claim for the benefits until the date the insurer formally denies the claim. This subsection does not apply if the person claiming the benefits fails to pursue the claim with reasonable diligence.

     (3) (2) An action for recovery of property protection insurance benefits shall may not be commenced later than 1 year after the accident.]

     Sec. 3148. (1) An Subject to subsections (3), (6), and (7), an

attorney is entitled to may be awarded a reasonable fee for

advising and representing a claimant in an action for personal or

property protection insurance benefits which that are overdue. The

attorney's fee shall be is a charge against the insurer in addition

to the benefits recovered, if the court finds that the insurer

unreasonably refused to pay the claim or unreasonably delayed in

making proper payment. An attorney advising or representing an

injured person concerning a claim for payment of personal

 

protection insurance benefits from an insurer shall not claim,


file, or serve a lien for payment of a fee or fees until all of the

 

following apply:

 

     (a) A payment for the claim is authorized under this chapter.

 

     (b) A payment for the claim is overdue under this chapter.

 

     (c) The attorney notifies the resident agent of the insurer in

 

writing that the payment for the claim is overdue under this

 

chapter.

 

     (d) Within 30 days after the insurer receives the notice under

 

subdivision (c), the insurer does not either provide reasonable

 

proof that the insurer is not responsible for the payment or take

 

remedial action.

 

     (2) If an attorney claims, files, serves, or enforces a lien

 

in a manner prohibited by subsection (1), an insurer or other

 

person aggrieved by the lien is entitled to court costs and

 

reasonable attorney fees related to opposition of the imposition of

 

the lien.

 

     (3) If an action involves a number of claims, the court shall

 

reduce an attorney's fee under subsection (1) in the proportion

 

that the number of claims that were not determined to have been

 

unreasonably refused or delayed bears to the total number of claims

 

presented in the action.

 

     (4) (2) An A court may award an insurer may be allowed by a

 

court an award of a reasonable sum amount against a claimant as an

 

attorney's attorney fee for the insurer's attorney in defense

 

defending against a any of the following:

 

     (a) A claim that was in some respect fraudulent or so

 

excessive as to have no reasonable foundation.


     (b) A claim for benefits for a treatment, product, service,

 

rehabilitative occupational training, or accommodation that was not

 

medically necessary or that was for an excessive amount.

 

     (c) A claim for which the client was solicited by the attorney

 

in violation of the law of this state or the Michigan rules of

 

professional conduct.

 

     (5) To the extent that personal or property protection

 

insurance benefits are then due or thereafter come due to the

 

claimant because of loss resulting from the injury on which the

 

claim is based, such a an attorney fee awarded in favor of the

 

insurer may be treated taken as an offset against such the

 

benefits. ; also, judgment Judgment may also be entered against the

 

claimant for any amount of a an attorney fee awarded against him

 

and that is not offset in this way against benefits or otherwise

 

paid.

 

     (6) For a dispute over payment for allowable expenses under

 

section 3107(1)(a) for attendant care or nursing services, attorney

 

fees may be awarded in relation to expenses recovered for the 12

 

months preceding the date the insurer is notified of the dispute.

 

Attorney fees must not be awarded in relation to expenses paid

 

after the date the insurer is notified of the dispute, including

 

any future payments ordered after the judgment is entered.

 

     (7) A court shall not award a fee to an attorney for advising

 

or representing a claimant in an action for personal or property

 

protection insurance benefits for a treatment, product, service,

 

rehabilitative occupational training, or accommodation provided to

 

the claimant if the attorney or a related person of the attorney


has, or had at the time the treatment, product, service,

 

rehabilitative occupational training, or accommodation was

 

provided, a direct or indirect financial interest in the person

 

that provided the treatment, product, service, rehabilitative

 

occupational training, or accommodation. For purposes of this

 

subsection, a direct or indirect financial interest exists if the

 

person that provided the treatment, product, service,

 

rehabilitative occupational training, or accommodation makes a

 

direct or indirect payment or grants a financial incentive to the

 

attorney or a related person of the attorney relating to the

 

treatment, product, service, rehabilitative occupational training,

 

or accommodation within 24 months before or after the treatment,

 

product, service, rehabilitative occupational training, or

 

accommodation is provided.

 

     Sec. 3157. (1) A Subject to subsections (2) and (3), a person,

 

including, but not limited to, a physician, hospital, clinic, or

 

other person or institution, that lawfully rendering renders

 

treatment, products, services, or accommodations to an injured

 

person for an accidental bodily injury covered by personal

 

protection insurance, and a person or institution providing or that

 

provides rehabilitative occupational training to the injured person

 

following the injury, may charge a reasonable amount for the

 

treatment, training, products, services, and accommodations.

 

rendered. The charge shall must not exceed the amount the person or

 

institution customarily charges for like treatment, training,

 

products, services, and accommodations in cases not involving that

 

do not involve personal protection insurance.


House Bill No. 4397 as amended May 9, 2019

     (2) Subject to subsections (3)[,(6), and (7)], a person

 that renders

a treatment, training, product, service, or accommodation to an

 

injured person for an accidental bodily injury is not eligible for

 

payment or reimbursement under this chapter of more than the amount

 

payable for the treatment, training, product, service, or

 

accommodation under R 418.10101 to R 418.101503 of the Michigan

 

Administrative Code or schedules of maximum fees for worker's

 

compensation developed under those rules, in effect on the

 

effective date of the amendatory act that added this subsection.

 

The director shall review any changes to R 418.10101 to R

 

418.101503 of the Michigan Administrative Code or schedules of

 

maximum fees for worker's compensation developed under those rules.

 

If the director determines that the changes are reasonable and

 

appropriate for purposes of assuring affordable automobile

 

insurance in this state, the changes apply for purposes of this

 

subsection and the director shall issue an order to that effect.

 

     (3) For attendant care rendered in the injured person's home,

 

an insurer is only required to pay benefits for attendant care up

 

to the hourly limitation in section 315 of the worker's disability

 

compensation act of 1969, 1969 PA 317, MCL 418.315. This subsection

 

only applies if the attendant care is provided directly, or

 

indirectly through another person, by any of the following:

 

     (a) An individual who is related to the injured person.

 

     (b) An individual who is domiciled in the household of the

 

injured person.

 

     (c) An individual with whom the injured person had a business

 

or social relationship before the injury.


     (4) An insurer may contract to pay benefits for attendant care

 

for more than the hourly limitation under subsection (3).

 

     (5) If R 418.10101 to R 418.101503 of the Michigan

 

Administrative Code or schedules of maximum fees for worker's

 

compensation developed under those rules, in effect on the

 

effective date of the amendatory act that added this subsection,

 

including any changes applicable under subsection (2), do not

 

provide an amount payable for treatment, training, product,

 

service, or accommodation rendered to an injured person for

 

accidental bodily injury covered by personal protection insurance

 

or rehabilitative occupational training to the injured person

 

following the injury, the person that renders the treatment,

 

product, service, or accommodation is not eligible for payment or

 

reimbursement under this chapter of more than the average amount

 

accepted by the person as payment or reimbursement in full for the

 

treatment, training, product, service, or accommodation during the

 

preceding calendar year in cases that do not involve personal

 

protection insurance.

 

     (6) A neurological rehabilitation clinic is not entitled to

 

payment or reimbursement for a treatment, training, product,

 

service, or accommodation unless the neurological rehabilitation

 

clinic is accredited by the Commission on Accreditation of

 

Rehabilitation Facilities or a similar organization recognized by

 

the director for purposes of accreditation under this subsection.

 

This subsection does not apply to a neurological rehabilitation

 

clinic that is in the process of becoming accredited as required

 

under this subsection on the effective date of the amendatory act


House Bill No. 4397 as amended May 9, 2019

that added this subsection, unless 3 years have passed since the

 

beginning of that process and the neurological rehabilitation

 

clinic is still not accredited.

[(7) Subsections (2) to (6) do not apply to emergency medical services rendered by an ambulance operation. As used in this subdivision:

     (i) "Ambulance operation" means that term as defined in section 20902 of the public health code, 1978 PA 368, MCL 333.20902.

     (ii) "Emergency medical services" means that term as defined in section 20904 of the public health code, 1978 PA 368, MCL 333.20904.]

     [(8)] Subsections (2) to [(7)] apply to a treatment, training,

 

product, service, or accommodation rendered after the effective

 

date of the amendatory act that added this subsection, regardless

 

of when the accidental bodily injury occurred. Subsections (2) to

 

[(7)] apply regardless of whether indemnification for the charge is

 

being made by the catastrophic claims association under section

 

3104.

 

     [(9)] As used in this section, "neurological rehabilitation

 

clinic" means a person that provides post-acute brain and spinal

 

rehabilitation care.

 

     Sec. 3157a. (1) By rendering any treatment, products,

 

services, or accommodations to 1 or more injured persons for an

 

accidental bodily injury covered by personal protection insurance

 

under this chapter after the effective date of the amendatory act

 

that added this section, a physician, hospital, clinic, or other

 

person is considered to have agreed to do both of the following:

 

     (a) Submit necessary records and other information concerning

 

treatment, products, services, or accommodations provided for

 

utilization review under this section.

 

     (b) Comply with any decision of the department under this

 

section.

 

     (2) A physician, hospital, clinic, or other person or

 

institution that knowingly submits false or misleading records or

 

other information to an insurer, the association created under


section 3104, or the department under this section is guilty of a

 

misdemeanor punishable by imprisonment for not more than 1 year or

 

a fine of not more than $1,000.00, or both.

 

     (3) The department shall promulgate rules under the

 

administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to

 

24.328, to do both of the following:

 

     (a) Establish criteria or standards for utilization review

 

that identify utilization of treatment, products, services, or

 

accommodations under this chapter above the usual range of

 

utilization for the treatment, products, services, or

 

accommodations based on medically accepted standards.

 

     (b) Provide procedures related to utilization review,

 

including procedures for all of the following:

 

     (i) Acquiring necessary records, medical bills, and other

 

information concerning the treatment, products, services, or

 

accommodations provided.

 

     (ii) Allowing an insurer to request an explanation for and

 

requiring a physician, hospital, clinic, or other person to explain

 

the necessity or indication for treatment, products, services, or

 

accommodations provided.

 

     (iii) Appealing determinations.

 

     (4) If a physician, hospital, clinic, or other person provides

 

treatment, products, services, or accommodations under this chapter

 

that are not usually associated with, are longer in duration than,

 

are more frequent than, or extend over a greater number of days

 

than the treatment, products, services, or accommodations usually

 

require for the diagnosis or condition for which the patient is


being treated, the insurer or the association created under section

 

3104 may require the physician, hospital, clinic, or other person

 

to explain the necessity or indication for the treatment, products,

 

services, or accommodations in writing under the procedures

 

provided under subsection (3).

 

     (5) If an insurer or the association created under section

 

3104 determines that a physician, hospital, clinic, or other person

 

improperly overutilized or otherwise rendered or ordered

 

inappropriate treatment, products, services, or accommodations, or

 

that the cost of the treatment, products, services, or

 

accommodations was inappropriate under this chapter, the physician,

 

hospital, clinic, or other person may appeal the determination to

 

the department under the procedures provided under subsection (3).

 

     (6) If the department determines that an insurer complies with

 

the criteria or standards for utilization review established under

 

subsection (3), the department shall certify the insurer.

 

     (7) As used in this section, "utilization review" means the

 

initial evaluation by an insurer or the association created under

 

section 3104 of the appropriateness in terms of both the level and

 

the quality of treatment, products, services, or accommodations

 

provided under this chapter based on medically accepted standards.

 

     Sec. 3157b. Any proprietary information or sensitive

 

personally identifiable information regarding a patient that is

 

submitted to the department under section 3157a is exempt from

 

disclosure under section 13(e) of the freedom of information act,

 

1976 PA 442, MCL 15.243, and the department shall exempt any such

 

information from disclosure under any other applicable exemptions


under section 13 of the freedom of information act, 1976 PA 442,

 

MCL 15.243.

 

     Sec. 3163. (1) An insurer authorized to transact automobile

 

liability insurance and personal and property protection insurance

 

in this state shall file and maintain a written certification that

 

any is not required to provide personal protection insurance or

 

property protection insurance benefits under this chapter for

 

accidental bodily injury or property damage occurring in this state

 

arising from the ownership, operation, maintenance, or use of a

 

motor vehicle as a motor vehicle by an out-of-state resident who is

 

insured under its the insurer's automobile liability insurance

 

policies. , is subject to the personal and property protection

 

insurance system under this act.

 

     (2) A nonadmitted insurer may voluntarily file the

 

certification described in subsection (1).

 

     (3) Except as otherwise provided in subsection (4), if a

 

certification filed under subsection (1) or (2) applies to

 

accidental bodily injury or property damage, the insurer and its

 

insureds with respect to that injury or damage have the rights and

 

immunities under this act for personal and property protection

 

insureds, and claimants have the rights and benefits of personal

 

and property protection insurance claimants, including the right to

 

receive benefits from the electing insurer as if it were an insurer

 

of personal and property protection insurance applicable to the

 

accidental bodily injury or property damage.

 

     (4) If an insurer of an out-of-state resident is required to

 

provide benefits under subsections (1) to (3) to that out-of-state


resident for accidental bodily injury for an accident in which the

 

out-of-state resident was not an occupant of a motor vehicle

 

registered in this state, the insurer is only liable for the amount

 

of ultimate loss sustained up to $500,000.00. Benefits under this

 

subsection are not recoverable to the extent that benefits covering

 

the same loss are available from other sources, regardless of the

 

nature or number of benefit sources available and regardless of the

 

nature or form of the benefits.

 

     Sec. 3172. (1) A person entitled to claim because of

 

accidental bodily injury arising out of the ownership, operation,

 

maintenance, or use of a motor vehicle as a motor vehicle in this

 

state may obtain claim personal protection insurance benefits

 

through the assigned claims plan if no any of the following apply:

 

     (a) No personal protection insurance is applicable to the

 

injury. , no

 

     (b) No personal protection insurance applicable to the injury

 

can be identified. , the

 

     (c) No personal protection insurance applicable to the injury

 

cannot can be ascertained because of a dispute between 2 or more

 

automobile insurers concerning their obligation to provide coverage

 

or the equitable distribution of the loss. , or the

 

     (d) The only identifiable personal protection insurance

 

applicable to the injury is, because of financial inability of 1 or

 

more insurers to fulfill their obligations, inadequate to provide

 

benefits up to the maximum prescribed. In that case, unpaid

 

     (2) Unpaid benefits due or coming due as described in

 

subsection (1) may be collected under the assigned claims plan, and


the insurer to which the claim is assigned is entitled to

 

reimbursement from the defaulting insurers to the extent of their

 

financial responsibility.

 

     (3) A person entitled to claim personal protection insurance

 

benefits through the assigned claims plan under subsection (1)

 

shall file a completed application on a claim form provided by the

 

Michigan automobile insurance placement facility and provide

 

reasonable proof of loss to the Michigan automobile insurance

 

placement facility. The Michigan automobile insurance placement

 

facility or an insurer assigned to administer a claim on behalf of

 

the Michigan automobile insurance placement facility under the

 

assigned claims plan shall specify in writing the materials that

 

constitute a reasonable proof of loss within 60 days after receipt

 

by the Michigan automobile insurance placement facility of an

 

application that complies with this subsection.

 

     (4) The Michigan automobile insurance placement facility or an

 

insurer assigned to administer a claim on behalf of the Michigan

 

automobile insurance placement facility under the assigned claims

 

plan is not required to pay an interest penalty in connection with

 

a claim for any period of time during which the claim is reasonably

 

in dispute.

 

     (5) (2) Except as otherwise provided in this subsection,

 

personal protection insurance benefits, including benefits arising

 

from accidents occurring before March 29, 1985, payable through the

 

assigned claims plan shall must be reduced to the extent that

 

benefits covering the same loss are available from other sources,

 

regardless of the nature or number of benefit sources available and


regardless of the nature or form of the benefits, to a person

 

claiming personal protection insurance benefits through the

 

assigned claims plan. This subsection only applies if the personal

 

protection insurance benefits are payable through the assigned

 

claims plan because no personal protection insurance is applicable

 

to the injury, no personal protection insurance applicable to the

 

injury can be identified, or the only identifiable personal

 

protection insurance applicable to the injury is, because of

 

financial inability of 1 or more insurers to fulfill their

 

obligations, inadequate to provide benefits up to the maximum

 

prescribed. under subsection (1)(a), (b), or (d). As used in this

 

subsection, "sources" and "benefit sources" do not include the

 

program for medical assistance for the medically indigent under the

 

social welfare act, 1939 PA 280, MCL 400.1 to 400.119b, or

 

insurance under the health insurance for the aged act, title and

 

disabled under subchapter XVIII of the social security act, 42 USC

 

1395 to 1395kkk-1.1395lll.

 

     (6) (3) If the obligation to provide personal protection

 

insurance benefits cannot be ascertained because of a dispute

 

between 2 or more automobile insurers concerning their obligation

 

to provide coverage or the equitable distribution of the loss, and

 

if a method of voluntary payment of benefits cannot be agreed upon

 

among or between the disputing insurers, all of the following

 

apply:

 

     (a) The insurers who are parties to the dispute shall, or the

 

claimant may, immediately notify the Michigan automobile insurance

 

placement facility of their inability to determine their statutory


obligations.

 

     (b) The claim shall be assigned by the Michigan automobile

 

insurance placement facility shall assign the claim to an insurer

 

and the insurer shall immediately provide personal protection

 

insurance benefits to the claimant or claimants entitled to

 

benefits.

 

     (c) An action The insurer assigned the claim by the Michigan

 

automobile insurance placement facility shall be immediately

 

commenced commence an action on behalf of the Michigan automobile

 

insurance placement facility by the insurer to whom the claim is

 

assigned in circuit court to declare the rights and duties of any

 

interested party.

 

     (d) The insurer to whom the claim is assigned shall join as

 

parties defendant to the action commenced under subdivision (c)

 

each insurer disputing either the obligation to provide personal

 

protection insurance benefits or the equitable distribution of the

 

loss among the insurers.

 

     (e) The circuit court shall declare the rights and duties of

 

any interested party whether or not other relief is sought or could

 

be granted.

 

     (f) After hearing the action, the circuit court shall

 

determine the insurer or insurers, if any, obligated to provide the

 

applicable personal protection insurance benefits and the equitable

 

distribution, if any, among the insurers obligated, and shall order

 

reimbursement to the Michigan automobile insurance placement

 

facility from the insurer or insurers to the extent of the

 

responsibility as determined by the court. The reimbursement


ordered under this subdivision shall must include all benefits and

 

costs paid or incurred by the Michigan automobile insurance

 

placement facility and all benefits and costs paid or incurred by

 

insurers determined not to be obligated to provide applicable

 

personal protection insurance benefits, including reasonable,

 

actually incurred attorney fees and interest at the rate prescribed

 

in section 3175 as of applicable on December 31 of the year

 

preceding the determination of the circuit court.

 

     (7) The Michigan automobile insurance placement facility and

 

the insurer to whom a claim is assigned by the Michigan automobile

 

insurance placement facility are only required to provide personal

 

protection insurance benefits under section 3107(1)(a) up to the

 

limit provided in section 3107c(1)(a).

 

     Sec. 3173a. (1) The Michigan automobile insurance placement

 

facility shall review a claim for personal protection insurance

 

benefits under the assigned claims plan, shall make an initial

 

determination of a claimant's the eligibility for benefits under

 

this chapter and the assigned claims plan, and shall deny an

 

obviously ineligible a claim . The that the Michigan automobile

 

insurance placement facility determines is ineligible under this

 

chapter or the assigned claims plan. If a claimant or person making

 

a claim through or on behalf of a claimant fails to cooperate with

 

the Michigan automobile insurance placement facility as required by

 

subsection (2), the Michigan automobile insurance placement

 

facility shall suspend benefits to the claimant under the assigned

 

claims plan. A suspension under this subsection is not an

 

irrevocable denial of benefits, and must continue only until the


Michigan automobile insurance placement facility determines that

 

the claimant or person making a claim through or on behalf of a

 

claimant cooperates or resumes cooperation with the Michigan

 

automobile insurance placement facility. The Michigan automobile

 

insurance placement facility shall promptly notify in writing the

 

claimant shall be notified promptly in writing and any person that

 

submitted a claim through or on behalf of a claimant of the a

 

denial and the reasons for the denial.

 

     (2) A claimant or a person making a claim through or on behalf

 

of a claimant shall cooperate with the Michigan automobile

 

insurance placement facility in its determination of eligibility

 

and the settlement or defense of any claim or suit, including, but

 

not limited to, submitting to an examination under oath and

 

compliance with sections 3151 to 3153. There is a rebuttable

 

presumption that a person has satisfied the duty to cooperate under

 

this section if all of the following apply:

 

     (a) The person submitted a claim for personal protection

 

insurance benefits under the assigned claims plan by submitting to

 

the Michigan automobile insurance placement facility a complete

 

application on a form provided by the Michigan automobile insurance

 

placement facility in accordance with the assigned claims plan.

 

     (b) The person provided reasonable proof of loss under the

 

assigned claims plan as described in section 3172.

 

     (c) If required under this subsection to submit to an

 

examination under oath, the person submitted to the examination,

 

subject to all of the following:

 

     (i) The person was provided at least 21 days' notice of the


examination.

 

     (ii) The examination was conducted in a location reasonably

 

convenient for the person.

 

     (iii) Any reasonable request by the person to reschedule the

 

date, time, or location of the examination was accommodated.

 

     (3) The Michigan automobile insurance placement facility may

 

perform its functions and responsibilities under this section and

 

the assigned claims plan directly or through an insurer assigned by

 

the Michigan automobile insurance placement facility to administer

 

the claim on behalf of the Michigan automobile insurance placement

 

facility. The assignment of a claim by the Michigan automobile

 

insurance placement facility to an insurer is not a determination

 

of eligibility under this chapter or the assigned claims plan, and

 

a claim assigned to an insurer by the Michigan automobile insurance

 

placement facility may later be denied if the claim is not eligible

 

under this chapter or the assigned claims plan.

 

     (4) (2) A person who presents or causes to be presented an

 

oral or written statement, including computer-generated

 

information, as part of or in support of a claim to the Michigan

 

automobile insurance placement facility, or to an insurer to which

 

the claim is assigned under the assigned claims plan, for payment

 

or another benefit knowing that the statement contains false

 

information concerning a fact or thing material to the claim

 

commits a fraudulent insurance act under section 4503 that is

 

subject to the penalties imposed under section 4511. A claim that

 

contains or is supported by a fraudulent insurance act as described

 

in this subsection is ineligible for payment or of personal


protection insurance benefits under the assigned claims plan.

 

     (5) The Michigan automobile insurance placement facility may

 

contract with other persons for all or a portion of the goods and

 

services necessary for operating and maintaining the assigned

 

claims plan.

 

     Sec. 3174. A person claiming through the assigned claims plan

 

shall notify the Michigan automobile insurance placement facility

 

of his or her claim within the time that would have been allowed

 

for filing an action for personal protection insurance benefits if

 

identifiable coverage applicable to the claim had been in effect.

 

The 1 year after the date of the accident. On an initial

 

determination of a claimant's eligibility for benefits through the

 

assigned claims plan, the Michigan automobile insurance placement

 

facility shall promptly assign the claim in accordance with the

 

plan and notify the claimant of the identity and address of the

 

insurer to which the claim is assigned. An action by the a claimant

 

shall not be commenced more than 30 days after receipt of notice of

 

the assignment or the last date on which the action could have been

 

commenced against an insurer of identifiable coverage applicable to

 

the claim, whichever is later.must be commenced as provided in

 

section 3145.

 

     Sec. 3175. (1) The assignment of claims under the assigned

 

claims plan shall must be made according to procedures established

 

in the assigned claims plan that assure fair allocation of the

 

burden of assigned claims among insurers doing business in this

 

state on a basis reasonably related to the volume of automobile

 

liability and personal protection insurance they write on motor


vehicles or the number of self-insured motor vehicles. An insurer

 

to whom claims have been assigned shall make prompt payment of loss

 

in accordance with this act. An insurer is entitled to

 

reimbursement by the Michigan automobile insurance placement

 

facility for the payments, the established loss adjustment cost,

 

and an amount determined by use of the average annual 90-day United

 

States treasury bill yield rate, as reported by the council of

 

economic advisers Council of Economic Advisers as of December 31 of

 

the year for which reimbursement is sought, as follows:

 

     (a) For the calendar year in which claims are paid by the

 

insurer, the amount shall must be determined by applying the

 

specified annual yield rate specified in this subsection to 1/2 of

 

the total claims payments and loss adjustment costs.

 

     (b) For the period from the end of the calendar year in which

 

claims are paid by the insurer to the date payments for the

 

operation of the assigned claims plan are due, the amount shall

 

must be determined by applying the annual yield rate specified in

 

this subsection to the total claims payments and loss adjustment

 

costs multiplied by a fraction, the denominator of which is 365 and

 

the numerator of which is equal to the number of days that have

 

elapsed between the end of the calendar year and the date payments

 

for the operation of the assigned claims plan are due.

 

     (2) The An insurer assigned a claim by the Michigan automobile

 

insurance placement facility under the assigned claims plan or a

 

person authorized to act on behalf of the plan may bring an action

 

for reimbursement and indemnification of the claim on behalf of the

 

Michigan automobile insurance placement facility. The insurer to


whom claims have which the claim has been assigned shall preserve

 

and enforce rights to indemnity or reimbursement against third

 

parties and account to the Michigan automobile insurance placement

 

facility for the rights and shall assign the rights to the Michigan

 

automobile insurance placement facility on reimbursement by the

 

Michigan automobile insurance placement facility. This section does

 

not preclude an insurer from entering into reasonable compromises

 

and settlements with third parties against whom rights to indemnity

 

or reimbursement exist. The insurer shall account to the Michigan

 

automobile insurance placement facility for any compromises and

 

settlements. The procedures established under the assigned claims

 

plan shall of operation must establish reasonable standards for

 

enforcing rights to indemnity or reimbursement against third

 

parties, including a standard establishing an amount below which

 

actions to preserve and enforce the rights need not be pursued.

 

     (3) An action to enforce rights to indemnity or reimbursement

 

against a third party shall must not be commenced after the later

 

of 2 the following:

 

     (a) Two years after the assignment of the claim to the

 

insurer. or 1

 

     (b) One year after the date of the last payment to the

 

claimant.

 

     (c) One year after the date the responsible third party is

 

identified.

 

     (4) Payments for the operation of the assigned claims plan not

 

paid by the due date shall bear interest at the rate of 20% per

 

annum.


     (5) The Michigan automobile insurance placement facility may

 

enter into a written agreement with the debtor permitting the

 

payment of the judgment or acknowledgment of debt in installments

 

payable to the Michigan automobile insurance placement facility. A

 

default in payment of installments under a judgment as agreed

 

subjects the debtor to suspension or revocation of his or her motor

 

vehicle license or registration in the same manner as for the

 

failure by an uninsured motorist to pay a judgment by installments

 

under section 3177, including responsibility for expenses as

 

provided in section 3177(4).

 

     Sec. 3177. (1) An The insurer obligated to pay personal

 

protection insurance benefits for accidental bodily injury to a

 

person arising out of the ownership, maintenance, or use of an

 

uninsured motor vehicle as a motor vehicle may recover such all

 

benefits paid, and appropriate incurred loss adjustment costs and

 

expenses, and incurred attorney fees from the owner or registrant

 

of the uninsured motor vehicle or from his or her estate. Failure

 

of such a person the owner or registrant to make payment within 30

 

days after a judgment is entered in an action for recovery under

 

this subsection is a ground for suspension or revocation of his or

 

her motor vehicle registration and license as defined in section 25

 

of the Michigan vehicle code, Act No. 300 of the Public Acts of

 

1949, being section 257.25 of the Michigan Compiled Laws. An 1949

 

PA 300, MCL 257.25. For purposes of this section, an uninsured

 

motor vehicle for the purpose of this section is a motor vehicle

 

with respect to which security as required by sections 3101 and

 

3102 is not in effect at the time of the accident.


     (2) The Michigan automobile insurance placement facility may

 

make a written agreement with the owner or registrant of an

 

uninsured vehicle or his or her estate permitting the payment of a

 

judgment described in subsection (1) in installments payable to the

 

Michigan automobile insurance placement facility. The motor vehicle

 

registration and license shall of an owner or registrant who makes

 

a written agreement under this subsection must not be suspended or

 

revoked and, the motor vehicle registration and license shall if

 

already suspended or revoked under subsection (1), must be restored

 

if the debtor enters into a written agreement with the secretary of

 

state permitting the payment of the judgment in installments, if

 

the payment of any installments is not in default.

 

     (3) The secretary of state, upon on receipt of a certified

 

abstract of court record of a judgment described in subsection (1)

 

or notice from the an insurer or the Michigan automobile insurance

 

placement facility or its designee of an acknowledgment of a debt

 

described in subsection (1), shall notify the owner or registrant

 

of an uninsured vehicle of the provisions of subsection (1) at that

 

person's the owner or registrant's last recorded address recorded

 

with the secretary of state and inform that person the owner or

 

registrant of the right to enter into a written agreement under

 

this section with the secretary of state Michigan automobile

 

insurance placement facility or its designee for the payment of the

 

judgment or debt in installments.

 

     (4) Expenses for the suspension, revocation, or reinstatement

 

of a motor vehicle registration or license under this section are

 

the responsibility of the owner or registrant or of his or her


estate. An owner or registrant whose registration or license is

 

suspended under this section shall pay any reinstatement fee as

 

required under section 320e of the Michigan vehicle code, 1949 PA

 

300, MCL 257.320e.

 

CHAPTER 63

 

AUTOMOBILE INSURANCE FRAUD TASK FORCE

 

     Sec. 6301. As used in this chapter:

 

     (a) "Automobile insurance fraud" means a fraudulent insurance

 

act as described in section 4503 that is committed in connection

 

with automobile insurance, including an application for automobile

 

insurance, regardless of whether the act constitutes a crime or

 

another violation of law.

 

     (b) "Fund" means the automobile insurance fraud fund created

 

in section 6304.

 

     (c) "Task force" means the automobile insurance fraud task

 

force created under section 6302.

 

     Sec. 6302. (1) The automobile insurance fraud task force is

 

created in the department of state police. Members of the task

 

force shall perform their duties on the task force under the

 

direction of the director of the department of state police.

 

     (2) The task force consists of the following members,

 

appointed as follows:

 

     (a) Five officers of the department of state police as

 

described under section 6 of 1935 PA 59, MCL 28.6, appointed by the

 

director of the department of state police.

 

     (b) One employee of the department, appointed by the director.

 

     (c) One representative of the catastrophic claims association


created under section 3104, appointed by the catastrophic claims

 

association board.

 

     (d) One employee of the Michigan automobile insurance

 

placement facility who is involved in the operation of the assigned

 

claims plan created under section 3171, appointed by the Michigan

 

automobile insurance placement facility.

 

     (e) One employee of the department of attorney general,

 

appointed by the attorney general.

 

     (3) A member of the task force shall serve at the pleasure of

 

the person that appointed the member. If a vacancy occurs on the

 

task force, the person with the power to appoint a member to the

 

vacant position shall make an appointment in the same manner as the

 

original appointment.

 

     (4) The task force shall do all of the following:

 

     (a) Receive records from the anti-fraud unit created under

 

Executive Order No. 2018-9.

 

     (b) Collect and maintain claims of automobile insurance fraud.

 

     (c) Investigate claims of automobile insurance fraud.

 

     (d) Maintain records of its investigations.

 

     (e) Pursue the prosecution, whether criminal or civil, of

 

persons that commit automobile insurance fraud.

 

     (5) The task force may do 1 or more of the following:

 

     (a) Share records of its investigations with other law

 

enforcement agencies and departments and agencies of this state.

 

     (b) Review records of other law enforcement agencies and

 

departments and agencies of this state to assist in the

 

investigation of automobile insurance fraud and enforcement of laws


relating to automobile insurance fraud.

 

     (c) Conduct outreach and coordination efforts with local and

 

state law enforcement agencies and departments and agencies of this

 

state to promote investigation and prosecution of automobile

 

insurance fraud.

 

     (d) Anything else that it determines is necessary to

 

investigate and prosecute automobile insurance fraud in this state.

 

     Sec. 6303. (1) Within 60 days after the effective date of this

 

chapter, the anti-fraud unit created as provided in Executive Order

 

No. 2018-9 shall transfer all records regarding claims of

 

automobile insurance fraud and investigation of claims of

 

automobile insurance fraud in its possession to the task force.

 

     (2) After the anti-fraud unit has transferred the records as

 

required by subsection (1), the anti-fraud unit is dissolved.

 

     Sec. 6304. (1) The automobile insurance fraud fund is created

 

within the state treasury.

 

     (2) The state treasurer may receive money or other assets from

 

any source for deposit into the fund. The state treasurer shall

 

direct the investment of the fund. The state treasurer shall credit

 

to the fund interest and earnings from fund investments.

 

     (3) Money in the fund at the close of the fiscal year must

 

remain in the fund and not lapse to the general fund.

 

     (4) The department of state police is the administrator of the

 

fund for auditing purposes.

 

     (5) The department of state police shall disburse money from

 

the fund, upon appropriation, as follows:

 

     (a) Until 5 years after the effective date of this section,


money in the fund must be disbursed to the department of state

 

police, the department, the catastrophic claims association, the

 

Michigan automobile insurance placement facility, and the

 

department of the attorney general, in proportion to the number of

 

officers, employees, or representatives each of these has on the

 

task force. Money disbursed under this subdivision must be used for

 

the operation of the task force.

 

     (b) Beginning 5 years after the effective date of this

 

section, the department of state police shall expend money from the

 

fund, upon appropriation for the operation of the task force.

 

     Sec. 6305. (1) An insurer authorized to transact automobile

 

insurance in this state shall report data regarding automobile

 

insurance fraud by medical providers, attorneys, or other persons

 

to the task force.

 

     (2) The department shall cooperate with the task force and

 

shall provide all available statistics on automobile fraud and

 

unfair claims practices to the task force on request.

 

     Sec. 6307. (1) Beginning July 1 of the year after the

 

effective date of the amendatory act that added this section, the

 

task force shall prepare and publish an annual report to the

 

legislature on the task force's efforts to prevent automobile

 

insurance fraud by medical providers, attorneys, or other persons,

 

unfair claims practices of insurance companies, and cost savings

 

that have resulted from those efforts.

 

     (2) The annual report to the legislature required by this

 

section must detail the automobile insurance fraud by medical

 

providers, attorneys, or other persons and unfair claims practices


of insurance companies occurring in this state for the previous

 

year, assess the impact of the fraud and unfair claims practices on

 

rates charged for automobile insurance, and outline any

 

expenditures made by the task force. The director shall cooperate

 

in developing the report as requested by the task force and shall

 

make available to the task force records and statistics concerning

 

automobile insurance fraud by medical providers, attorneys, or

 

other persons and unfair claims practices, including the number of

 

instances of suspected and confirmed automobile insurance fraud,

 

number of prosecutions and convictions involving automobile

 

insurance fraud, automobile insurance fraud recidivism, unfair

 

settlement practices and claims practices, including those reported

 

to the department under section 261, reimbursement rate practices,

 

timeliness of claims practices, and the use of independent medical

 

examiners. The task force shall evaluate the impact automobile

 

insurance fraud by medical providers, attorneys, or other persons

 

has on the citizens of this state and the costs incurred by the

 

citizens through insurance, police enforcement, prosecution, and

 

incarceration because of automobile insurance fraud. The task force

 

shall evaluate the impact unfair claims practices by insurers have

 

on the citizens of this state and shall determine the costs

 

incurred by the citizens through unnecessary litigation and bad-

 

faith practices.

 

     (3) The task force shall submit the annual report to the

 

legislature required by this section to the standing committees of

 

the senate and house of representatives with primary jurisdiction

 

over insurance issues and the director.


     Enacting section 1. Section 3112 of the insurance code of

 

1956, 1956 PA 218, MCL 500.3112, as amended by this amendatory act,

 

applies to products, services, or accommodations provided after the

 

effective date of this amendatory act.

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