December 9, 2015, Introduced by Reps. Banks, Gay-Dagnogo, Callton, Hovey-Wright, Byrd, Robinson, Cochran, Talabi, Geiss, Lane, Liberati, Rutledge, Chang, Garrett, Guerra, Durhal, Kosowski, Schor, Moss, Phelps, Love, Neeley, Greimel and Derek Miller and referred to the Committee on Insurance.
A bill to amend 1956 PA 218, entitled
"The insurance code of 1956,"
by amending the title and sections 3109, 3142, 3157, 3301, 3330,
and 4501 (MCL 500.3109, 500.3142, 500.3157, 500.3301, 500.3330, and
500.4501), the title as amended by 2002 PA 304, section 3109 as
amended by 2012 PA 454, section 3330 as amended by 2012 PA 204, and
section 4501 as amended by 2012 PA 39, and by adding section 3181
and chapter 63.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
TITLE
An act to revise, consolidate, and classify the laws relating
to the insurance and surety business; to regulate the incorporation
or formation of domestic insurance and surety companies and
associations and the admission of foreign and alien companies and
associations; to provide their rights, powers, and immunities and
to prescribe the conditions on which companies and associations
organized, existing, or authorized under this act may exercise
their powers; to provide the rights, powers, and immunities and to
prescribe the conditions on which other persons, firms,
corporations, associations, risk retention groups, and purchasing
groups engaged in an insurance or surety business may exercise
their powers; to provide for the imposition of a privilege fee on
domestic
insurance companies and associations; and the state
accident
fund; to provide for the imposition
of a tax on the
business of foreign and alien companies and associations; to
provide for the imposition of a tax on risk retention groups and
purchasing groups; to provide for the imposition of a tax on the
business of surplus line agents; to provide for the imposition of
regulatory fees on certain insurers; to provide for assessment fees
on certain health maintenance organizations; to modify tort
liability arising out of certain accidents; to provide for limited
actions with respect to that modified tort liability and to
prescribe certain procedures for maintaining those actions; to
require security for losses arising out of certain accidents; to
provide for the continued availability and affordability of
automobile insurance and homeowners insurance in this state and to
facilitate the purchase of that insurance by all residents of this
state at fair and reasonable rates; to provide for certain
reporting with respect to insurance and with respect to certain
claims against uninsured or self-insured persons; to prescribe
duties for certain state departments and officers with respect to
that reporting; to provide for certain assessments; to establish
and
continue certain state insurance funds; to modify and clarify
the
status, rights, powers, duties, and operations of the nonprofit
malpractice
insurance fund; to provide for the
departmental
supervision and regulation of the insurance and surety business
within
this state; to provide for regulation over of worker's
compensation self-insurers; to provide for the conservation,
rehabilitation, or liquidation of unsound or insolvent insurers; to
provide for the protection of policyholders, claimants, and
creditors of unsound or insolvent insurers; to provide for
associations of insurers to protect policyholders and claimants in
the event of insurer insolvencies; to prescribe educational
requirements for insurance agents and solicitors; to provide for
the regulation of multiple employer welfare arrangements; to create
an
automobile theft prevention authority 1 or more authorities to
reduce insurance fraud and the number of automobile thefts in this
state ; and to
prescribe the powers and duties of the automobile
theft
prevention authority; authorities;
to provide certain for the
powers
and duties upon of certain officials, departments, and
authorities of this state; to provide for an appropriation; to
repeal acts and parts of acts; and to provide penalties for the
violation of this act.
Sec. 3109. (1) Benefits provided or required to be provided
under the laws of any state or the federal government shall be
subtracted from the personal protection insurance benefits
otherwise payable for the injury under this chapter.
(2) An injured person is a natural person suffering accidental
bodily injury.
(3) An insurer providing personal protection insurance
benefits under this chapter may offer, at appropriately reduced
premium
rates, a deductible of a specified dollar amount. This
deductible
(4) An insurer providing personal protection benefits under
this chapter may offer, at appropriately reduced premium rates, a
requirement for copayments in specified dollar amounts.
(5) A deductible under subsection (3) or a copayment
requirement under subsection (4) may be applicable to all or any
specified types of personal protection insurance benefits, but
shall
apply only to benefits payable to
the person named in the
policy, his or her spouse, and any relative of either domiciled in
the same household.
Sec. 3142. (1) Personal protection insurance benefits are
payable as loss accrues.
(2) 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 reasonable proof
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 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 be is 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) An overdue payment bears simple interest at the rate of
12% per annum.
(4) A reasonable showing that the claimed benefit is within
the general category of benefits not payable under applicable other
health and accident coverage is sufficient reasonable proof that no
other health and accident coverage is applicable. As used in this
subsection, "reasonable showing" shall not be construed to require
any 1 particular form of documentation, including, but not limited
to, requiring an explanation of benefit or explanation of review.
(5) An insurer who refuses to pay a claim or unreasonably
delays in making proper payment of a claim is presumed to have
acted unreasonably under section 3148. This presumption may be
rebutted only by clear and convincing evidence justifying the
denial or delay in payment.
(6) By January 1, 2017, an automobile insurer and an
association formed under section 3104 shall accept electronic
documentation of proof of the personal protection insurance claim
and the amount of the loss sustained.
Sec.
3157. (1) A Except
as provided in subsections (2) and
(3), a physician, hospital, clinic, or other person or institution
lawfully rendering treatment to an injured person for an accidental
bodily injury covered by personal protection insurance, and a
person or institution providing rehabilitative occupational
training following the injury, may charge a reasonable amount for
the products, services and accommodations rendered. The charge
shall not exceed the amount the person or institution customarily
charges for like products, services and accommodations in cases not
involving insurance.
(2) On January 1, 2016, each hospital in this state shall file
with the director in a standard electronic format the hospital's
chargemaster for all charges that were in effect on January 1,
2015. A hospital shall demonstrate compliance with this subsection
by providing evidence that the chargemaster submitted was in effect
on January 1, 2015. Beginning January 1, 2016, a hospital shall not
require payment from an insurer under subsection (1) of more than
80% of the hospital's charge for inpatient, outpatient,
rehabilitation, and skilled nursing facility services. This limit
on payment does not apply to professional services rendered by an
independent practitioner or to post-acute services provided outside
of a licensed hospital facility.
(3) A hospital shall not bill an insurer more than the
hospital's January 1, 2015 chargemaster rates as established under
subsection (2) until January 1, 2018. Beginning January 1, 2018,
the hospital charges may be increased, but only by the rate of
increase in the medical care services component of the consumer
price index as determined by the federal Bureau of Labor
Statistics.
(4) The director may require each hospital in this state to
submit a list of up to 100 most frequently billed diagnostic
related grouping charges in a separate document to increase the
usability of the chargemaster information.
Sec. 3181. (1) Notwithstanding any provision of this act to
the contrary, by December 31 of the year in which the amendatory
act that added this section takes effect, an insurer that issues
automobile insurance policies shall file rates for automobile
insurance policies issued or renewed after December 31 of the year
in which the amendatory act that added this section takes effect
that will result in the reduction in premiums required under
subsection (2).
(2) The rates for an insurer filed under subsection (1) must
result in a per-policy reduction in the annual premium from the
annual premium for the year in which the amendatory act that added
this section takes effect equal to 12% or more of the average
annual premium.
(3) As used in this section only:
(a) "Automobile insurance policy" means an insurance policy
that provides the security required by section 3101(1) for 1 or
more motor vehicles owned by 1 or more individuals who reside in a
city, township, or village in this state to which either of the
following applies:
(i) The city, township, or village has a population of 500,000
or more.
(ii) Thirty-five percent or more of the motor vehicles owned
by drivers who reside in the city, township, or village do not have
the security required by section 3101(1).
(b) "Average annual premium" means the average annual premium
for insurance policies issued in the year before the year in which
the amendatory act that added this section takes effect that
provided the security required by section 3101(1) for motor
vehicles owned by individuals who resided in the city, township, or
village.
(c) "Motor vehicle" means a private passenger nonfleet
automobile as that term is defined in section 3303.
Sec. 3301. (1) Every insurer authorized to write automobile
insurance in this state shall participate in an organization for
the purpose of doing all of the following:
(a) Providing the guarantee that automobile insurance coverage
will be available to any person who is unable to procure that
insurance through ordinary methods.
(b) Preserving to the public the benefits of price competition
by encouraging maximum use of the normal private insurance system.
(c) Providing funding for the Michigan automobile insurance
fraud authority.
(2) The organization created under this chapter shall be
called the "Michigan automobile insurance placement facility".
Sec. 3330. (1) The board of governors 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 section 3320(1)(c)
and the plan of operation.
(f) To provide for standards of performance of service for the
participating members designated under subdivision (e).
(g) To adopt a plan of operation and any amendments to the
plan, 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 any other matters 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.
(i) Until December 31, 2020, to annually assess participating
members and self-insurers an aggregate amount not to exceed
$21,000,000.00 to cover anticipated costs of operation and
administration of the Michigan automobile insurance fraud
authority. A member or self-insurer that pays money for the costs
and administration of the Michigan automobile insurance fraud
authority shall not pay the money from premium revenue, but shall
pay the money from other earnings or investments. Notwithstanding
any other provision of this act to the contrary, an insurer, the
director or department, or any other person shall not include or
consider the payment of money as described in this subsection with
respect to establishing a rate.
(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.
(3) Before March 1, 2016, the board of governors shall amend
the plan of operation to establish appropriate procedures necessary
to make assessments for and carry out the administrative duties and
functions of the Michigan automobile insurance fraud authority.
Sec. 4501. As used in this chapter:
(a) "Authorized agency" means the department of state police;
a city, village, or township police department; a county sheriff's
department; a United States criminal investigative department or
agency; the prosecuting authority of a city, village, township,
county,
or state or of the United States; the office of financial
and
insurance regulation; department;
the Michigan automobile
insurance fraud authority; or the department of state.
(b) "Financial loss" includes, but is not limited to, loss of
earnings, out-of-pocket and other expenses, repair and replacement
costs, investigative costs, and claims payments.
(c) "Insurance policy" or "policy" means an insurance policy,
benefit contract of a self-funded plan, health maintenance
organization contract, nonprofit dental care corporation
certificate, or health care corporation certificate.
(d) "Insurer" means a property-casualty insurer, life insurer,
third party administrator, self-funded plan, health insurer, health
maintenance organization, nonprofit dental care corporation, health
care corporation, reinsurer, or any other entity regulated by the
insurance laws of this state and providing any form of insurance.
(e) "Michigan automobile insurance fraud authority" means the
Michigan automobile insurance fraud authority created under section
6302.
(f) (e)
"Organization" means an
organization or internal
department of an insurer established to detect and prevent
insurance fraud.
(g) (f)
"Person" includes an
individual, insurer, company,
association, organization, Lloyds, society, reciprocal or inter-
insurance exchange, partnership, syndicate, business trust,
corporation, and any other legal entity.
(h) (g)
"Practitioner" means a
licensee of this state
authorized to practice medicine and surgery, psychology,
chiropractic,
or law, any other licensee of the this state, or an
unlicensed health care provider whose services are compensated,
directly or indirectly, by insurance proceeds, or a licensee
similarly licensed in other states and nations, or the practitioner
of any nonmedical treatment rendered in accordance with a
recognized religious method of healing.
(i) (h)
"Runner",
"capper", or "steerer" means a person who
receives a pecuniary or other benefit from a practitioner, whether
directly or indirectly, for procuring or attempting to procure a
client, patient, or customer at the direction or request of, or in
cooperation with, a practitioner whose intent is to obtain benefits
under a contract of insurance or to assert a claim against an
insured or an insurer for providing services to the client,
patient, or customer. Runner, capper, or steerer does not include a
practitioner who procures clients, patients, or customers through
the use of public media.
(j) (i)
"Statement" includes, but
is not limited to, any
notice statement, proof of loss, bill of lading, receipt for
payment, invoice, account, estimate of property damages, bill for
services, claim form, diagnosis, prescription, hospital or doctor
record, X-rays, test result, or other evidence of loss, injury, or
expense.
CHAPTER 63
MICHIGAN AUTOMOBILE INSURANCE FRAUD AUTHORITY
Sec. 6301. As used in this chapter:
(a) "Authority" means the Michigan automobile insurance fraud
authority created in section 6302.
(b) "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.
(c) "Board" means the board of directors of the authority.
(d) "Car years" means net direct private passenger and
commercial nonfleet vehicle years of insurance providing the
security required by section 3101(1) written in this state for the
second previous calendar year as reported to the statistical agent
of each insurer.
(e) "Facility" means the Michigan automobile insurance
placement facility created under chapter 33.
Sec. 6302. (1) The Michigan automobile insurance fraud
authority is created within the facility. The facility shall
provide staff for the authority and shall carry out the
administrative duties and functions as directed by the board.
(2) The authority is not a state agency, and the money of the
authority is not state money. However, the authority shall comply
with the freedom of information act, 1976 PA 442, MCL 15.231 to
15.246, as if the authority were a public body. A record or portion
of a record, material, data, or other information received,
prepared, used, or retained by the authority in connection with the
investment of assets or of an insurer that relates to financial or
proprietary information and is considered by the person or insurer
providing the authority with the record, material, data, or
information as confidential and acknowledged by the authority as
confidential is not subject to disclosure by the authority. As used
in this subsection:
(a) "Financial or proprietary information" means information
that has not been publicly disseminated or that is unavailable from
other sources, the release of which might cause the person
providing the information to the authority significant competitive
harm. Financial or proprietary information includes, but is not
limited to, financial performance data and projections, financial
statements, and product and market data.
(b) "Public body" means that term as defined in section 2 of
the freedom of information act, 1976 PA 442, MCL 15.232.
(3) The authority shall do all of the following:
(a) Provide financial support to state or local law
enforcement agencies for programs designed to reduce the incidence
of automobile insurance fraud.
(b) Provide financial support to state or local prosecutorial
agencies for programs designed to reduce the incidence of
automobile insurance fraud.
(c) Provide financial support to an independent entity that
the director shall establish to investigate the claims practices of
insurers and to evaluate if those claims practices create
unnecessary disputes, treat claimants or medical providers
unfairly, increase litigation, or cause unnecessary delays in the
payment of claims.
(4) The authority may provide financial support to law
enforcement, prosecutorial, insurance, education, or training
associations for programs designed to reduce the incidence of
automobile insurance fraud.
(5) The purposes, powers, and duties of the authority are
vested in and shall be exercised by a board of directors. The board
of directors consists of 25 members as follows:
(a) Eight members who represent automobile insurers in this
state, including the following:
(i) At least 2 members who represent insurer groups with
350,000 or more car years.
(ii) At least 2 members who represent insurer groups with
fewer than 350,000 but 100,000 or more car years.
(iii) At least 1 member who represents insurer groups with
fewer than 100,000 car years.
(b) The director or his or her designee.
(c) The attorney general or his or her designee.
(d) The director of the department of state police or his or
her designee.
(e) Two members who represent other law enforcement agencies
in this state.
(f) One member who represents prosecuting attorneys in this
state.
(g) Two members who represent the general public.
(h) Three members who represent consumer rights and patient
advocacy groups.
(i) One member of the medical community who cares primarily
for patients with acute medical needs.
(j) Three members of the medical community who care primarily
for patients with subacute medical needs.
(k) Two licensed attorneys knowledgeable about the no-fault
law of this state.
(6) The members of the board representing insurers shall be
elected by authorized insurers that provide automobile insurance in
this state from a list of nominees proposed by the board of
governors of the facility. In preparing the list of nominees for
the members, the board of governors of the facility shall solicit
nominations from authorized insurers that provide automobile
insurance in this state.
(7) The governor shall appoint the members of the board
representing law enforcement agencies other than the department of
state police. In appointing the members, the governor shall solicit
input from various law enforcement associations in this state.
(8) The governor shall appoint the member of the board
representing prosecuting attorneys. In appointing the member, the
governor shall solicit input from the Prosecuting Attorneys
Association of Michigan.
(9) The governor shall appoint the members of the board who
represent the general public. The governor shall appoint
individuals who are residents of this state and are not employed by
or under contract with a state or local unit of government or an
insurer.
(10) The governor shall appoint the 4 medical community
members of the board. In appointing these members, the governor
shall solicit input from the medical community in this state. The
governor shall appoint individuals who are residents of this state
and are not employed by or under contract with a state or local
unit of government or an insurer.
(11) The governor shall appoint the 3 consumer rights and
patient advocacy members of the board. In appointing these members,
the governor shall solicit input from consumer rights and patient
advocacy groups in this state. The governor shall appoint
individuals who are residents of this state and are not employed by
or under contract with a state or local unit of government or an
insurer.
(12) The State Bar of Michigan shall elect the 2 attorney
members of the board.
(13) Except as otherwise provided in this subsection, a member
of the board shall serve for a term of 4 years or until his or her
successor is elected, designated, or appointed, whichever occurs
later. Of the members first elected or appointed under this
section, 2 members representing insurers, 1 member representing law
enforcement agencies, and 1 member who represents the general
public shall serve for a term of 2 years, 3 members representing
insurers, the member representing prosecuting attorneys, 1 member
who represents the general public, 2 members who represent consumer
rights and patient advocacy groups, 2 members of the medical
community, and 1 of the attorneys elected by the State Bar of
Michigan shall serve for a term of 3 years, and 3 members
representing insurers, 1 member representing law enforcement
agencies, 1 member who represents consumer rights and patient
advocacy groups, 2 members of the medical community, and 1 of the
attorneys elected by the state bar shall serve for a term of 4
years.
(14) The board is dissolved on January 1, 2021.
Sec. 6303. (1) A member of the board shall serve without
compensation, except that the board shall reimburse a member in a
reasonable amount for necessary travel and expenses.
(2) A majority of the members of the board constitute a quorum
for the transaction of business at a meeting or the exercise of a
power or function of the authority, notwithstanding the existence
of 1 or more vacancies. Notwithstanding any other provision of law
to the contrary, action may be taken by the authority at a meeting
on a vote of the majority of its members present in person or
through the use of amplified telephonic equipment, if authorized by
the bylaws or plan of operation of the board. The authority shall
meet at the call of the chair or as may be provided in the bylaws
of the authority. Meetings of the authority may be held anywhere in
this state.
(3) The board shall adopt a plan of operation by a majority
vote of the board. Vacancies on the board shall be filled in
accordance with the plan of operation.
(4) The board shall conduct its business at meetings that are
held in this state, open to the public, and held in a place that is
available to the general public. However, the board may establish
reasonable rules to minimize disruption of a meeting of the board.
At least 10 days but not more than 60 days before a meeting, the
board shall provide public notice of the meeting at the board's
principal office and on a publicly accessible internet website. The
board shall include in the public notice of its meeting the address
where minutes of the board may be inspected by the public. The
board may meet in a closed session for any of the following
purposes:
(a) To consider the hiring, dismissal, suspension,
disciplining, or evaluation of officers or employees of the
authority.
(b) To consult with its attorney.
(c) To comply with state or federal law, rules, or regulations
regarding privacy or confidentiality.
(5) The board shall display information concerning the
authority's operations and activities, including, but not limited
to, the annual financial report required under section 6310, on a
publicly accessible internet website.
(6) The board shall keep minutes of each board meeting. The
board shall make the minutes open to public inspection and
available at the address designated on the public notice of its
meetings. The board shall make copies of the minutes available to
the public at the reasonable estimated cost for printing and
copying. The board shall include all of the following in the
minutes:
(a) The date, time, and place of the meeting.
(b) The names of board members who are present and board
members who are absent.
(c) Board decisions made during any portion of the meeting
that was open to the public.
(d) All roll call votes taken at the meeting.
Sec. 6304. On January 1, 2021, the authority is dissolved.
Sec. 6305. The board has the powers necessary to carry out its
duties under this act, including, but not limited to, the power to
do the following:
(a) Sue and be sued in the name of the authority.
(b) Solicit and accept gifts, grants, loans, and other aid
from any person, the federal government, this state, a local unit
of government, or an agency of the federal government, this state,
or a local unit of government.
(c) Make grants and investments.
(d) Procure insurance against any loss in connection with its
property, assets, or activities.
(e) Invest at its discretion any money held in reserve or
sinking funds or any money not required for immediate use or
disbursement and to select and use depositories for its money.
(f) Contract for goods and services and engage personnel as
necessary.
(g) Indemnify and procure insurance indemnifying any member of
the board for personal loss or accountability resulting from the
member's action or inaction as a member of the board.
(h) Perform other acts not specifically enumerated in this
section that are necessary or proper to accomplish the purposes of
the authority and that are not inconsistent with this section or
the plan of operation.
Sec. 6307. (1) Before April 1 of each year from 2016 to 2020,
an insurer or self-insurer engaged in writing insurance coverages
that provide the security required by section 3101(1) in this
state, as a condition of its authority to transact insurance in
this state, shall pay to the facility, for deposit into the account
of the authority, an assessment determined by the facility as
provided in the plan of operation. The assessment shall be based on
the ratio of the car years written by the insurer or self-insurer
to the total car years written in this state by all insurers and
self-insurers.
(2) The facility shall segregate all money received under
subsection (1) from other money of the facility, if applicable. The
facility shall only expend the money received under subsection (1)
as directed by the board.
Sec. 6308. (1) An insurer authorized to transact automobile
insurance in this state, as a condition of its authority to
transact insurance in this state, shall report automobile insurance
fraud data and claims practices to the authority using the format
and procedures adopted by the board.
(2) The department of state police shall cooperate with the
authority and shall provide available motor vehicle fraud and theft
statistics to the authority on request.
(3) The board shall develop performance metrics that are
consistent, controllable, measurable, and attainable. The board
shall use the metrics each year to evaluate new applications
submitted for funding consideration and to renew funding for
existing programs.
Sec. 6310. (1) Beginning January 1 of the year after the
effective date of the amendatory act that added this section, the
authority shall prepare and publish an annual financial report, and
beginning July 1 of the year after the effective date of the
amendatory act that added this section, the authority shall prepare
and publish an annual report to the legislature on the authority's
efforts to prevent automobile insurance fraud and unfair claims
practices of insurers and cost savings that have resulted from
those efforts.
(2) The annual report to the legislature required under
subsection (1) must detail the automobile insurance fraud and
unfair claims practices of insurers occurring in this state for the
previous year, assess the impact of the fraud and unfair claims
practices of insurers on rates charged for automobile insurance,
summarize prevention programs, and outline allocations made by the
authority. The members of the board, insurers, and the director
shall cooperate in developing the report as requested by the
authority and shall make available to the authority records and
statistics concerning automobile insurance fraud and unfair claims
practices of insurers, including the number of instances of
suspected and confirmed insurance fraud, the number of prosecutions
and convictions involving automobile insurance fraud, automobile
insurance fraud recidivism, unfair settlement practices and claims
practices, including the claims practices of the association under
section 3104, reimbursement rate practices, timeliness of claims
practices, and the use of independent medical examiners and special
investigation units. The authority shall evaluate the impact
automobile insurance fraud 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 authority 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 that delay,
withhold, or deny policyholder benefits that are based on
legitimate claims, including special investigation units that
report suspected fraud and abuse cases that are not based on
independent, appropriate, and good-faith investigation. The
authority shall also report on all of the following:
(a) Processing, submission, and billing practices, and shall
recommend appropriate standardization practices.
(b) The costs of unnecessary litigation and bad faith
practices that delay, withhold, or deny policyholder benefits, and
shall recommend any changes to existing laws to reduce these costs.
(3) The authority shall submit the report to the legislature
required by this section to the senate and house of representatives
standing committees with primary jurisdiction over insurance issues
and the director.
Enacting section 1. The title and sections 3301, 3330, and
4501 of the insurance code of 1956, 1956 PA 218, MCL 500.3301,
500.3330, and 500.4501, as amended by this amendatory act, and
chapter 63 of the insurance code of 1956, 1956 PA 218, as added by
this amendatory act, take effect January 1, 2016.