Bill Text: MI HB4455 | 2011-2012 | 96th Legislature | Engrossed
Bill Title: Insurance; no-fault; duties of the assigned claims facility; transfer to Michigan automobile insurance placement facility and transfer duties regarding self-insurers from the secretary of state to the insurance commissioner. Amends secs. 1910, 3171, 3172, 3173a, 3174, 3175, 3320 & 3330 of 1956 PA 218 (MCL 500.1910 et seq.); adds secs. 3101d & 3178 & repeals sec. 531 of 1949 PA 300 (MCL 257.531).
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2012-07-18 - Assigned Pa 204'12 With Immediate Effect [HB4455 Detail]
Download: Michigan-2011-HB4455-Engrossed.html
HB-4455, As Passed Senate, June 14, 2012
SUBSTITUTE FOR
HOUSE BILL NO. 4455
(As amended June 14, 2012)
<<A bill to amend 1956 PA 218, entitled
"The insurance code of 1956,"
by amending sections 1910, 3171, 3172, 3173a, 3174, 3175, 3320, and 3330
(MCL 500.1910, 500.3171, 500.3172, 500.3173a, 500.3174, 500.3175,
500.3320, and 500.3330), sections 3172 and 3175 as amended and section
3173a as added by 1984 PA 426 and section 3320 as amended by 1980 PA 461,
And by adding sections 3101d and 3178; and to repeal acts and parts of
acts.>>
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
<<Sec. 1910. (1) Insurance shall not be
placed by a licensee with an unauthorized insurer when if coverage is available from an authorized
insurer.
(2) There shall be is a
rebuttable presumption that the following coverages are available from an
authorized insurer:
(a) No-fault automobile insurance, as required by
section 3101, which is not written for a person who is self-insuring motor
vehicles pursuant to section 531 of Act No. 300 of the Public Acts of 1949,
being section 257.531 of the Michigan Compiled Lawsunder section 3101d.
(b) Private passenger automobile physical damage coverage.
(c) Homeowners and property insurance on
owner-occupied dwellings, the value
of which is less than the maximum limits of coverage which that are available for the property under the
general rules of the Michigan basic property insurance association.
(d) Any coverage readily available from 3 or more authorized insurers, unless the authorized insurers quote a premium and terms not competitive with the premium and terms quoted by an unauthorized insurer.
(e) Worker's compensation insurance which that is not written for an employer which that is partially self-insured pursuant to under
section 611 of Act No. 317
of the Public Acts of 1969, as amended, being section the
worker's disability compensation act of 1969, 1969 PA 317, MCL 418.611. of the Michigan Compiled Laws.
(3) There shall be is a rebuttable presumption that the following coverages are
unavailable from an authorized insurer:
(a) Coverages where with respect to which 1 portion of the risk is acceptable to
authorized insurers, but another portion of the same risk is not acceptable.
The entire coverage may be placed with eligible unauthorized insurers if it can
be shown that eligible unauthorized insurers will accept the entire coverage
but not the rejected portion alone.
(b) Any coverage that the licensee is unable to procure after diligent search among authorized insurers.
(4) The commissioner shall maintain, on a
current basis, a list of those lines of insurance for which coverages are
determined by the commissioner to be generally unavailable in the authorized
insurance market. Any person may request in writing that the commissioner add
or remove a coverage from the current list. The commissioner shall grant or
deny a request within 30 days after receiving the written request. The
commissioner shall encourage dissemination of information regarding the availability
of coverages , for which the public interest necessitates additions to
or deletions from the list. The list shall be published at least quarterly and
shall be revised as required. The commissioner shall make the list available to
all licensees and other members of the public, upon request.
Sec. 3101d. (1) A person in whose name more than 25 motor vehicles are registered may qualify as a self-insurer by obtaining a certificate of self-insurance issued by the commissioner under subsection (2).
(2) The commissioner may, in his or her discretion, on the application of a person who wishes to qualify under subsection (1), issue a certificate of self-insurance to the person if the commissioner is satisfied that the person has and will continue to have the ability to pay judgments obtained against the person.
(3) On not less than 5 days' notice and a hearing in accordance with the notice, the commissioner may on reasonable grounds cancel a certificate of self-insurance issued under this section. Failure to pay a judgment within 30 days after the judgment becomes final is a reasonable ground for the cancellation of a certificate of self-insurance.>>
Sec.
3171. (1) The Until
an assigned claims plan is approved
under subsection (3), the secretary of state shall organize and
maintain an assigned claims facility and plan. A self-insurer and
insurer writing insurance as provided by this chapter in this state
shall participate in the assigned claims plan. Costs incurred in
the operation of the facility and the plan shall be allocated
fairly among insurers and self-insurers. The secretary of state
House Bill No. 4455 (H-1) as amended February 7, 2012
shall promulgate rules to implement the facility and plan in
accordance
with and subject to Act No. 306 of the Public Acts of
1969,
as amended, being sections 24.201 to 24.315 of the Compiled
Laws
of 1948.the administrative
procedures act of 1969, 1969 PA
306, MCL 24.201 to 24.328. After an assigned claims plan is
approved under subsection (3), the secretary of state shall
continue to maintain the assigned claims facility and plan
organized under this subsection as required by the plan approved
under subsection (3).
(2) The Michigan automobile insurance placement facility shall
adopt and maintain an assigned claims plan. A self-insurer or
insurer writing insurance as provided by this chapter in this state
shall participate in the assigned claims plan. Costs incurred in
the administration of the assigned claims plan shall be allocated
fairly among insurers and self-insurers. On approval under
subsection (3), the Michigan automobile insurance placement
facility shall implement the assigned claims plan.
(3) By [AUGUST 1], 2012, the Michigan automobile insurance
placement facility board of governors shall adopt an assigned
claims plan by majority vote and shall submit it to the
commissioner for his or her approval. The commissioner shall review
the plan within 30 days and respond in writing as provided in this
subsection. If the commissioner finds that the plan meets the
requirements of this chapter, he or she shall approve it. If the
commissioner finds that the plan fails to meet the requirements of
this chapter, he or she shall state in what respects the plan is
deficient and shall afford the Michigan automobile insurance
House Bill No. 4455 (H-1) as amended February 7, 2012
placement facility board of governors 10 days within which to
correct the deficiency. If the commissioner and the Michigan
automobile insurance placement facility board of governors fail to
agree that the plan submitted, with any corrections, meets the
requirements of this chapter, either party to the controversy may
submit the issue to the circuit court for Ingham county for a
determination. If the commissioner fails to render a written
decision on the assigned claims plan within 30 days after receipt
of the plan, the plan shall be considered approved. The Michigan
automobile insurance placement facility shall forward a plan
approved under this subsection to the secretary of state. The plan
takes effect on approval by the commissioner.
(4) Amendments to the assigned claims plan approved under
subsection (3) shall be adopted by the board of governors and
approved by the commissioner as provided in subsection (3). [Until the
date established in the plan under subsection (5)(c), the board of governors shall give the secretary of state advance notice of any proposed amendments to the plan.]
(5) The plan adopted under subsection (3) shall include all of
the following:
(a) The date on and after which all claims for benefits
through the assigned claims plan under section 3172 shall be filed
with the Michigan automobile insurance placement facility.
(b) The date by which existing claims that have been assigned
under the plan maintained by the secretary of state under
subsection (1) will be transferred to the Michigan automobile
insurance placement facility to be included in and administered
under the adopted plan.
(c) A date by which all functions of the assigned claims plan
maintained by the secretary of state, with the exception of driver
House Bill No. 4455 (H-1) as amended February 7, 2012
license and vehicle sanctions, will be transferred to the Michigan
automobile insurance placement facility.
(d) Requirements for the transfer of records relating to
assigned claims from the secretary of state to the Michigan
automobile insurance placement facility and the disposition by the
secretary of state of records relating to assigned claims.
(e) Reimbursement of the secretary of state by the Michigan
automobile insurance placement facility for all of the following:
(i) Expenses of developing the plan under subsection (6).
(ii) Expenses of transferring operations from the assigned
claims facility to the Michigan automobile insurance placement
facility.
(iii) Expenses incurred by the secretary of state after the
transfer of operations from the assigned claims facility to the
Michigan automobile insurance placement facility for operations
performed by the secretary of state on behalf of the Michigan
automobile insurance placement facility.
(6) The secretary of state and the Michigan automobile
insurance placement facility shall cooperate and mutually develop
the aspects of the plan to be adopted under subsection (3) that are
required under subsection (5).
(7) The secretary of state shall provide the Michigan
automobile insurance placement facility with all information
necessary for the operation of the assigned claims fund.
[(8) One year after the date established under subsection (5)(c), the commissioner shall report in writing to the senate and house of representatives standing committees on insurance issues on the cost of the transfer of the assigned claims plan to the Michigan automobile insurance placement facility and the effectiveness of operations under the new plan.
(9)] As used in this section:
(a) "Michigan automobile insurance placement facility" means
the Michigan automobile insurance placement facility created under
chapter 33.
(b) "Michigan automobile insurance placement facility board of
governors" means the board of governors created under section 3310.
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 personal protection insurance benefits through an
the assigned claims plan if no personal protection insurance is
applicable to the injury, no personal protection insurance
applicable to the injury can be identified, the personal protection
insurance applicable to the injury 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, 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. In such that case,
unpaid
benefits
due or coming due are subject to being may be collected
under
the assigned claims plan , and
the insurer to which the claim
is
assigned , or the assigned claims facility if the claim is
assigned
to it, is entitled to reimbursement
from the defaulting
insurers to the extent of their financial responsibility.
(2) Except as otherwise provided in this subsection, personal
protection insurance benefits, including benefits arising from
accidents
occurring before the effective date of this subsection
March
29, 1985, payable through an the assigned
claims plan shall
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 shall
only
apply when 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. 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, Act No. 280 of the Public Acts of 1939, being sections
400.1
to 400.121 of the Michigan Compiled Laws 1939 PA 280, MCL
400.1 to 400.119b, or insurance under the health insurance for the
aged
act, title XVIII of the social security amendments of 1965
act, 42 USC 1395 to 1395kkk-1.
(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 shall apply:
(a) The insurers who are parties to the dispute shall, or the
claimant
may, immediately notify the assigned claims Michigan
automobile insurance placement facility of their inability to
determine their statutory obligations.
(b)
The claim shall be assigned by the assigned claims
Michigan automobile insurance placement facility to an insurer
which
and the insurer shall immediately provide personal protection
insurance benefits to the claimant or claimants entitled to
benefits.
(c) An action shall be immediately commenced on behalf of the
assigned
claims Michigan automobile
insurance placement facility by
the
insurer to whom the claim is assigned in circuit court for the
purpose
of declaring 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, therefor, and
shall
order reimbursement to the assigned claims 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
include
all benefits and costs paid or incurred by the assigned
claims
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 December 31
of the year preceding the determination of the circuit court.
Sec.
3173a. (1) The assigned claims Michigan automobile
insurance placement facility shall make an initial determination of
the
a claimant's eligibility for benefits under the
assigned claims
plan and shall deny an obviously ineligible claim. The claimant
shall be notified promptly in writing of the denial and the reasons
for the denial.
(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 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 benefits under the assigned claims plan.
Sec.
3174. A person claiming through an 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 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. , or of the facility if the claim is
assigned
to it. An action by the 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.
Sec. 3175. (1) The assignment of claims under the assigned
claims
plan shall be made according to rules
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 of 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. and An
insurer is thereupon
entitled
to reimbursement by the assigned claims Michigan
automobile
insurance placement facility for the
payments, and the
established
loss adjustment cost, together with 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 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 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 facility and the assigned claims
plan
are due, the amount will shall
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 facility and the assigned
claims plan are due.
(2) The insurer to whom claims have been assigned shall
preserve and enforce rights to indemnity or reimbursement against
third
parties and account to the assigned claims Michigan
automobile
insurance placement facility therefor
for the rights and
shall
assign such the rights to the assigned claims Michigan
automobile
insurance placement facility upon on reimbursement
by
the
assigned claims Michigan
automobile insurance placement
facility.
This section shall 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 assigned claims Michigan
automobile
insurance placement facility for such
any compromises
and
settlements. The rules promulgated under section 3171 shall
House Bill No. 4455 as amended June 13, 2012
include
a rule establishing procedures
established under the
assigned claims plan shall establish reasonable standards for
enforcing rights to indemnity or reimbursement against third
parties,
including a standard establishing a value for such rights
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 not be commenced after the later of 2
years after the assignment of the claim to the insurer or 1 year
after the date of the last payment to the claimant.
(4)
Payments for the operation of the assigned claims facility
and
plan not paid by the due date shall
bear interest at the rate
of 20% per annum.
(5)
The secretary of state through 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.
<<Sec. 3178. After an assigned claims plan is approved under section 3171(3), the Michigan automobile insurance placement facility board of governors shall report annually to tHE COMMISSIONER AND THE COMMISSIONER SHALL REPORT TO the standing committees of the senate and house of representatives with primary jurisdiction over insurance matters on the effectiveness of the assigned claims plan, including detailed demographic information on the individuals who are submitting claims and whose claims are being assigned.>>
Sec. 3320. (1) The facility, with respect to private passenger
nonfleet automobiles, shall provide for all of the following:
(a) The equitable distribution of applicants to designated
participating members in accordance with the plan of operation.
(b) Issuance of policies of automobile insurance to qualified
applicants as provided in the plan of operation.
(c) The appointment of a number of participating members
appointed by the facility to act on behalf of the facility for the
distribution of risks or for the servicing of insureds, as provided
in the plan of operation and consistent with this section. The
facility shall do all of the following:
(i) Appoint those members having the 5 highest participation
ratios, as defined in section 3303(e)(i), to act on behalf of the
facility.
(ii) Appoint other members to act on behalf of the facility who
volunteer to so act and who meet reasonable servicing standards
established in the plan of operation, up to a maximum of 5 in
addition to those appointed pursuant to subparagraph (i).
(iii) Appoint additional members to act on behalf of the
facility as necessary to do all of the following:
(A) Assure convenient access to the facility for all citizens
of this state.
(B) Assure a reasonable quality of service for persons insured
through the facility.
(C) Assure a reasonable representation of the various
insurance marketing systems.
(D) Assure reasonable claims handling.
(E) Assure a reasonable range of choice of insurers for
persons insured through the facility.
(d) Standards and monitoring procedures to assure that
participating members acting on behalf of the facility do all of
the following:
(i) Provide service to persons insured through the facility
equivalent to the service provided to persons insured by the
insurer voluntarily.
(ii) Handle claims in an efficient and reasonable manner.
(iii) Provide internal review procedures for persons insured
through the facility identical to those established pursuant to
chapter 21 for persons insured voluntarily.
(e)
Establish The establishment
of procedures and guidelines
for the issuance of binders by agents upon receipt of the
application for coverage.
(f)
Provide for the issuance Issuance
of policies of
automobile insurance to qualified applicants whose licenses to
operate
a vehicle have been suspended pursuant to under section
310,
310b, 310d, 315, 321a, 324, 328, 512, 515, 625, 625b, 625f,
748,
801c, or 907 of Act No. 300 of the Public Acts of 1949, as
amended,
being sections the Michigan
vehicle code, 1949 PA 300, MCL
257.310,
257.310b, 257.310d, 257.315, 257.321a, 257.324, 257.328,
257.512, 257.515, 257.625, 257.625b, 257.625f, 257.748, 257.801c,
and
257.907, of the Michigan Compiled Laws, as provided
in the plan
of operation. These policies may be canceled after a period of not
less than 30 days if the insured fails to produce proof that the
suspended license has been reinstated.
(g) Administration of the assigned claims plan as required
under chapter 31.
(2) Automobile insurance made available under this section
shall be equivalent to the automobile insurance normally available
in the voluntary competitive market in forms as approved by the
commissioner
with such any changes, additions, and amendments as
are
adopted by the board of governors
and approved by the
commissioner.
Sec.
3330. (1) The board of governors shall have all has the
power to direct the operation of the facility, including, at a
minimum, the power to do all of the following:
(a) To sue and be sued in the name of the facility. A judgment
against the facility shall not create any liabilities in the
individual participating members of the facility.
(b) To delegate ministerial duties, to hire a manager, to hire
legal counsel, and to contract for goods and services from others.
(c) To assess participating members on the basis of
participation ratios pursuant to section 3303 to cover anticipated
costs of operation and administration of the facility, to provide
for equitable servicing fees, and to share losses, profits, and
expenses pursuant to the plan of operation.
(d) To impose limitations on cancellation or nonrenewal by
participating members of facility-placed business, in addition to
the limitations imposed by chapters 21 and 32.
(e) To provide for a limited number of participating members
to receive equitable distribution of applicants; or to provide for
a limited number of participating members to service applicants in
a
plan of sharing of losses in accordance with the subsection
section 3320(1)(c) and the plan of operation.
(f) To provide for standards of performance of service for the
participating
members designated pursuant to under
subdivision (e).
(g) To adopt a plan of operation and any amendments to the
House Bill No. 4455 as amended June 14, 2012
plan,
not inconsistent consistent
with this chapter, necessary to
assure the fair, reasonable, equitable, and nondiscriminatory
manner of administering the facility, including compliance with
chapter
21, and to provide for such any
other matters as are
necessary or advisable to implement this chapter, including matters
necessary to comply with the requirements of chapter 21.
(h) To assess self-insurers and insurers consistent with
chapter 31 and the assigned claims plan approved under section
3171.
(2) The board of governors shall institute or cause to be
instituted by the facility or on its behalf an automatic data
processing system for recording and compiling data relative to
individuals insured through the facility. An automatic data
processing system established under this subsection shall, to the
greatest extent possible, be made compatible with the automatic
data processing system maintained by the secretary of state, to
provide for the identification and review of individuals insured
through the facility.
Enacting section 1. Sections 3172, 3173a, 3174, and 3175 of
the insurance code of 1956, 1956 PA 218, MCL 500.3172, 500.3173a,
500.3174, and 500.3175, as amended by this amendatory act, take
effect on the date the assigned claims plan is approved by the
insurance commissioner under section 3171(3) of the insurance code
of 1956, 1956 PA 218, MCL 500.3171.
<<Enacting section 2. Section 1910 of the insurance code of 1956, 1956 PA 218, MCL 500.1910, as amended by this amendatory act, and
section 3101d of the insurance code of 1956, 1956 PA 218, as added by this amendatory act, take effect January 1, 2013.
Enacting section 3. Section 531 of the Michigan vehicle code, 1949 PA 300, MCL 257.531, is repealed effective January 1, 2013.>>
