Bill Text: MI SB0472 | 2017-2018 | 99th Legislature | Introduced

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Bill Title: Insurance; no-fault; short-term insurance policies; allow. Amends secs. 2123 & 3020 of 1956 PA 218 (MCL 500.2123 & 500.3020).

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2017-06-21 - Referred To Committee On Insurance [SB0472 Detail]

Download: Michigan-2017-SB0472-Introduced.html

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SENATE BILL No. 472

 

 

June 21, 2017, Introduced by Senators YOUNG and JOHNSON and referred to the Committee on Insurance.

 

 

     A bill to amend 1956 PA 218, entitled

 

"The insurance code of 1956,"

 

by amending sections 2123 and 3020 (MCL 500.2123 and 500.3020),

 

section 3020 as amended by 2006 PA 106.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 2123. (1) Except as provided in subsection (2), or (3),

 

or (6), a termination of insurance shall is not be effective unless

 

the insurer, at least 30 days prior to before the date of

 

termination, delivers or mails to the named insured at the person's

 

last known address a written notice of the termination. The notice

 

shall must state the effective date of termination and each

 

specific reason for the termination.

 

     (2) A Except as provided in subsection (6), a notice of

 

termination mailed or delivered within the first 55 days after the

 

initial issuance of a policy may be made effective not less than 20

 

days after the date of mailing or delivery of the notice.

 

     (3) A notice of termination for nonpayment of premium shall be

 

is effective as provided in the policy.

 

     (4) A termination of insurance shall is not be effective

 

unless the termination is due to because of reasons which that

 

conform to the underwriting rules of the insurer for that

 

insurance.

 

     (5) This section shall does not authorize an insurer to

 

terminate an automobile insurance policy in violation of chapter

 

32.

 

     (6) An insurer that issues an automobile policy described in

 

section 3020(5) shall not terminate the policy during the policy

 

term. Subsections (1) and (2) and this subsection do not apply to

 

nonrenewal of a policy described in section 3020(5).

 

     Sec. 3020. (1) A An authorized insurer shall not issue or

 

deliver in this state a policy of casualty insurance, except

 

worker's compensation and mortgage guaranty insurance, including

 

all classes of motor vehicle coverage, shall not be issued or

 

delivered in this state by an insurer authorized to do business in

 

this state except as otherwise provided in this section, for which

 

a premium or advance assessment is charged, unless the policy

 

contains the following provisions:

 

     (a) That the policy may be canceled at any time at the request

 

of the insured, in which case the insurer shall refund the excess

 

of paid premium or assessment above the pro rata rates for the

 

expired time, except as otherwise provided in subsections (2), (3),

and (4).

 

     (b) Except as otherwise provided in subdivision (d), that the

 

policy may be canceled at any time by the insurer by mailing to the

 

insured at the insured's address last known to the insurer or an

 

authorized agent of the insurer, with postage fully prepaid, a not

 

less than 10 days' written notice of cancellation with or without

 

tender of the excess of paid premium or assessment above the pro

 

rata premium for the expired time.

 

     (c) That the minimum earned premium on any policy canceled

 

pursuant to as provided in this subsection, other than automobile

 

insurance as defined in section 2102(2)(a) and (b), shall will not

 

be less than the pro rata premium for the expired time or $25.00,

 

whichever is greater.

 

     (d) That an insurer may refuse to renew a malpractice

 

insurance policy only by mailing to the insured at the insured's

 

address last known to the insurer or an authorized agent of the

 

insurer, with postage fully prepaid, a not less than 60 days'

 

written notice of refusal to renew. As used in this subdivision,

 

"malpractice insurance" means malpractice insurance as described in

 

section 624(1)(h).

 

     (2) An insurer may file a rule with the commissioner director

 

providing for a minimum retention of premium for automobile

 

insurance as defined in section 2102(2)(a) and (b). The rule shall

 

must describe the circumstances under which the retention is

 

applied and shall set forth the amount to be retained, which is

 

subject to the approval of the commissioner. director. The rule

 

shall must include, but need not be limited to, the following

provisions:

 

     (a) That a minimum retention shall will be applied only when

 

the amount exceeds the amount that would have been retained had the

 

policy been canceled on a pro rata basis.

 

     (b) That a minimum retention does not apply to renewal

 

policies.

 

     (c) That a minimum retention does not apply when if a policy

 

is canceled for the following reasons:

 

     (i) The insured is no longer required to maintain security

 

pursuant to under section 3101(1).

 

     (ii) The insured has replaced the automobile insurance policy

 

being canceled with an automobile insurance policy from another

 

insurer and provides provided proof of the replacement coverage to

 

the canceling insurer.

 

     (3) Notwithstanding subsection (1), an insurer may issue a

 

noncancelable, nonrefundable, 6-month prepaid automobile insurance

 

policy in order for an insured to meet the registration

 

requirements of section 227a of the Michigan vehicle code, 1949 PA

 

300, MCL 257.227a.

 

     (4) An insurer may provide for a short rate premium for

 

insurance on a motorcycle, watercraft, off-road vehicle, or

 

snowmobile. As used in this subsection:

 

     (a) "Motorcycle" means that term as defined in section 3101.

 

     (b) "Off-road vehicle" means an ORV as defined in section

 

81101 of the natural resources and environmental protection act,

 

1994 PA 451, MCL 324.81101.

 

     (c) "Snowmobile" means that term as defined in section 82101

of the natural resources and environmental protection act, 1994 PA

 

451, MCL 324.82101.

 

     (d) "Watercraft" means that term as defined in section 80301

 

of the natural resources and environmental protection act, 1994 PA

 

451, MCL 324.80301.

 

     (5) Notwithstanding subsection (1), an insurer may issue a

 

noncancelable, nonrefundable, 7-, 14-, 21-, or 28-day prepaid

 

automobile insurance policy.

 

     (6) (5) Cancellation as prescribed in this section is without

 

prejudice to any claim originating before the cancellation. The

 

mailing of notice is prima facie proof of notice. Delivery of

 

written notice is equivalent to mailing.

 

     (7) (6) A notice of cancellation, including a cancellation

 

notice under section 3224, shall must be accompanied by a statement

 

that the insured shall not operate or permit the operation of the

 

vehicle to which notice of cancellation is applicable, or operate

 

any other vehicle, unless the vehicle is insured as required by

 

law.

 

     (8) (7) An insurer who wishes to provide for a short rate

 

premium under subsection (4) shall file with the commissioner

 

pursuant to director under chapter 24 or 26 a rule establishing a

 

short rate premium. The rule shall must describe the circumstances

 

under which the short rate is applied and shall set forth state the

 

amount or percentage to be retained.