Bill Text: MI SB1057 | 2019-2020 | 100th Legislature | Engrossed
Bill Title: Medical marihuana: licenses; proof of financial responsibility criteria; modify. Amends sec. 408 of 2016 PA 281 (MCL 333.27408). TIE BAR WITH: SB 1058'20
Spectrum: Partisan Bill (Republican 1-0)
Status: (Engrossed - Dead) 2020-09-30 - Referred To Committee On Government Operations [SB1057 Detail]
Download: Michigan-2019-SB1057-Engrossed.html
SENATE BILL NO. 1057
August 15, 2020, Introduced by Senator
VANDERWALL and referred to the Committee on Regulatory Reform.
A bill to amend 2016 PA 281, entitled
"Medical marihuana facilities licensing act,"
by amending section 408 (MCL 333.27408).
the people of the state of michigan enact:
Sec. 408. (1) Before the board marijuana regulatory agency grants or renews any license under this act, the licensee or applicant shall file with the department marijuana regulatory agency proof of financial responsibility for liability for bodily injury to lawful users resulting from the manufacture, distribution, transportation, or sale of adulterated marihuana or adulterated marihuana-infused product in an amount not less than $100,000.00. The licensee or applicant must include with its filing an attestation of compliance on a form approved by the marijuana regulatory agency. The proof of financial responsibility may be in any of the form of cash, unencumbered securities, a liability insurance policy, or a constant value bond executed by a surety company authorized to do business in this state.following forms:
(a) Cash, if the licensee or applicant submits the cash to the marijuana regulatory agency.
(b) Unencumbered securities, if all of the following conditions are met:
(i) The licensee or applicant pledges unencumbered securities valued at $100,000.00 or more to this state. The value of unencumbered securities must be determined by the current market price as reported at the time of filing.
(ii) The licensee or applicant submits a pledge agreement to the marijuana regulatory agency that lists the unencumbered securities to be used to demonstrate proof of financial responsibility. The pledge agreement must contain original signatures of the licensee or applicant and an officer of the brokerage firm or financial institution where the actual stock certificates are held.
(iii) The licensee or applicant agrees to immediately pledge additional unencumbered securities to this state if the market value of the unencumbered securities already pledged to this state as proof of financial responsibility is, at any time, less than $100,000.00.
(c) A liability insurance policy, if all of the following conditions are met:
(i) The policy is issued by a carrier licensed or authorized in this state to transact insurance business of the type and nature required to comply with this section.
(ii) An officer of the insurance company issuing the policy signs the attestation of compliance that the licensee or applicant is required to file under this subsection.
(d) A constant value bond executed by a surety company licensed or authorized to do business in this state, if the bond or a separate agreement provides that the bond will be used solely to maintain compliance with this section.
(2) A licensee or applicant may furnish proof of financial responsibility that exceeds the requirements of this section.
(3) A licensee's or applicant's proof of financial responsibility must not include a condition, provision, stipulation, or limitation contained in the policy, or any other endorsement, that relieves the insurer from liability for the payment of any claim for which the insured may be held liable under this act.
(4) The proof of financial responsibility required under this section must cover bodily injuries to a qualifying patient including injuries that are caused by the intentional conduct of the licensee or its employee or agent. However, the proof of financial responsibility is not required to cover bodily injuries to qualifying patients caused by the licensee or its employee or agent if the licensee or its employee or agent acted with the intent to harm.
(5) If at any time a licensee fails to maintain proof of financial responsibility as required under this section, the marijuana regulatory agency shall immediately suspend the licensee's license until the licensee provides to the marijuana regulatory agency proof of financial responsibility as required under this section.
(6) As used in this section:
(a) "Adulterated marihuana" means a product sold as marihuana that contains any unintended substance or chemical or biological matter other than marihuana that causes adverse reaction after ingestion or consumption.
(b) "Bodily injury" does not include expected or intended effect or long-term adverse effect of smoking, ingestion, or consumption of marihuana or marihuana-infused product.
(c) "Securities" means any of the following:
(i) Stocks or bonds registered by the United States Securities and Exchange Commission or the department of insurance and financial services that are offered for public sale in this state and the values of which are regularly reported in a nationally recognized financial publication.
(ii) Obligations of the United States, including bonds, notes, and bills.
(iii) Obligations that are guaranteed fully as to principal and interest by the United States, except those requiring partial payment of principal.
(iv) General obligations of this state.
(v) Unlimited tax general obligation bonds of a political subdivision of this state that are payable directly from the levying of general ad valorem taxes without limitations as to rate or amount.
(vi) An irrevocable trust that contains a guaranteed minimum principal of $100,000.00, has as trustee a financial institution registered in this state, and provides for this state as first beneficiary and claimant of a distribution of up to $100,000.00 from the trust to satisfy judgments arising from liability described in this section.
(vii) An irrevocable letter of credit or a certificate of deposit issued by a bank, savings bank, savings and loan association, or credit union that is licensed to do business in this state and that is pledged to this state as first claimant for distribution of up to $100,000.00 to satisfy judgments arising from liability under this act.
(d) "Unencumbered securities" means securities that are free and clear of all liens and obligations, including their use as collateral, and are, at the time they are filed with the marijuana regulatory agency, without claims or liabilities to third parties.
(7) (2) An insured licensee shall not cancel liability insurance required under this section unless the licensee complies with both of the following:
(a) Gives 30 days' prior written notice to the department.marijuana regulatory agency.
(b) Procures new proof of financial responsibility required under this section and delivers that proof to the department marijuana regulatory agency within 30 days after giving the department marijuana regulatory agency the notice under subdivision (a).
Enacting section 1. This amendatory act does not take effect unless Senate Bill No. 1058 of the 100th Legislature is enacted into law.
