Bill Text: MI HB5736 | 2017-2018 | 99th Legislature | Introduced
Bill Title: Insurance; no-fault; refusal of coverage, premium increase, or reinstatement fee for gap in insurance coverage; prohibit during a 90-day grace period. Amends secs. 2118 & 2120 of 1956 PA 218 (MCL 500.2118 & 500.2120) & adds sec. 2116b.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2018-03-21 - Bill Electronically Reproduced 03/20/2018 [HB5736 Detail]
Download: Michigan-2017-HB5736-Introduced.html
HOUSE BILL No. 5736
March 20, 2018, Introduced by Reps. VanderWall, Howell, Garcia, McCready, Howrylak and Faris and referred to the Committee on Insurance.
A bill to amend 1956 PA 218, entitled
"The insurance code of 1956,"
by amending sections 2118 and 2120 (MCL 500.2118 and 500.2120), as
amended by 2007 PA 35, and by adding section 2116b.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 2116b. For 90 days after the effective date of this
section, 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 failed
to maintain insurance required by section 3101 for a vehicle owned
by the person during the 6-month period immediately preceding
application for the insurance.
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).
Enacting section 1. This amendatory act takes effect 90 days
after the date it is enacted into law.
