Bill Text: MI SB1218 | 2017-2018 | 99th Legislature | Introduced
Bill Title: Insurance; automobile; mandatory automobile insurance; eliminate, and revise handling of catastrophic claims. Amends title & secs. 1910, 2102, 2103, 2118, 2120, 3009, 3017, 3020, 3037, 3101, 3102, 3103, 3104, 3131, 3135, 3163, 3171, 3172, 3179, 3303, 4501 & 6107 of 1956 PA 218 (MCL 500.1910 et seq.) & adds secs. 2112a, 3104a, 3104b & 3104c & ch. 63. TIE BAR WITH: SB 1212'18, SB 1213'18, SB 1214'18, SB 1215'18, SB 1216'18, SB 1217'18
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2018-11-27 - Referred To Committee On Insurance [SB1218 Detail]
Download: Michigan-2017-SB1218-Introduced.html
SENATE BILL No. 1218
November 27, 2018, Introduced by Senator COLBECK 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 1910, 2102, 2103, 2118, 2120,
3009, 3017, 3020, 3037, 3101, 3102, 3103, 3104, 3131, 3135, 3163,
3171, 3172, 3179, 3303, 4501, and 6107 (MCL 500.1910, 500.2102,
500.2103, 500.2118, 500.2120, 500.3009, 500.3017, 500.3020,
500.3037, 500.3101, 500.3102, 500.3103, 500.3104, 500.3131,
500.3135, 500.3163, 500.3171, 500.3172, 500.3179, 500.3303,
500.4501, and 500.6107), the title as amended by 2002 PA 304,
sections 1910, 3171, and 3172 as amended by 2012 PA 204, section
2103 as amended by 2016 PA 449, sections 2118 and 2120 as amended
by 2007 PA 35, sections 3009 and 3037 as amended and section 3017
as added by 2016 PA 346, section 3020 as amended by 2006 PA 106,
section 3101 as amended by 2017 PA 140, section 3102 as amended by
1990 PA 79, section 3103 as amended by 1986 PA 173, section 3104 as
amended by 2002 PA 662, section 3135 as amended by 2012 PA 158,
section 3163 as amended by 2002 PA 697, section 3303 as amended by
1980 PA 461, section 4501 as amended by 2012 PA 39, and section
6107 as amended by 2017 PA 58, and by adding sections 2112a, 3104a,
3104b, and 3104c 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.
1910. (1) Insurance A
licensee shall not be placed by a
licensee
place insurance with an unauthorized insurer if coverage
is available from an authorized insurer.
(2) There is a rebuttable presumption that the following
coverages are available from an authorized insurer:
(a)
No-fault Before July 1,
2020, no-fault automobile
insurance,
as required by section 3101, which that is not written
for a person who is self-insuring motor vehicles under section
3101d.
(b) Automobile liability or motor vehicle liability insurance.
(c) (b)
Private passenger automobile
physical damage coverage.
(d) (c)
Homeowners and property insurance
on owner-occupied
dwellings, the value of which is less than the maximum limits of
coverage that are available for the property under the general
rules
of the Michigan basic property insurance association.Basic
Property Insurance Association.
(e) (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.
(f) (e)
Worker's compensation insurance
that is not written
for an employer that is partially self-insured under section 611 of
the worker's disability compensation act of 1969, 1969 PA 317, MCL
418.611.
(3) There is a rebuttable presumption that the following
coverages are unavailable from an authorized insurer:
(a) Coverages 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 director shall maintain, on a current
basis, a list of those lines of insurance for which coverages are
determined
by the commissioner director
to be generally unavailable
in the authorized insurance market. Any person may request in
writing
that the commissioner director
add or remove a coverage
from
the current list. The commissioner director shall grant or
deny a request within 30 days after receiving the written request.
The
commissioner director 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 must be published at least quarterly and shall
be
revised as required. The commissioner
director shall make the
list available to all licensees and other members of the public,
upon
on request.
Sec. 2102. (1) "Affiliate of", or an insurer "affiliated with"
an insurer, means an insurer that directly, or indirectly through 1
or more intermediaries, controls, or is controlled by, or is under
common control with the insurer specified.
(2) "Automobile insurance" means insurance for private
passenger nonfleet automobiles which provides any of the following:
(a) Automobile liability or motor vehicle liability insurance.
(b) (a)
Security required pursuant to under section
3101.
(c) (b)
Personal protection, property
protection, and residual
liability
insurance for amounts in excess of the amounts required
under chapter 31.
(d) (c)
Insurance coverages customarily
known as comprehensive
and collision.
(e) (d)
Other insurance coverages for a
private passenger
nonfleet automobile as prescribed by rule promulgated by the
commissioner
pursuant to Act No. 306 of the Public Acts of 1969, as
amended,
being sections director under
the administrative
procedures
act of 1969, 1969 PA 306, MCL 24.201 to
24.315 of the
Michigan
Compiled Laws. A 24.328. The
director shall transmit in
advance
a rule proposed for promulgation by
the commissioner
pursuant
to under this section shall be transmitted in advance to
each
member of the standing committee committees in the house and
in
the senate which has with jurisdiction
over insurance.
(3)
"Automobile insurance package policy" means a policy which
that
includes more than 1 of the automobile
insurance coverages
described
in section 2102(2)(a), (b), (c), or (d), subsection (2)
in any combination.
(4) "Declination" means any of the following:
(a) Refusal by an agent to submit an application on behalf of
an applicant to any of the insurers represented by the agent.
(b)
Refusal by an insurer to issue insurance to a person upon
on receipt of an application for insurance.
(c) Offering insurance at higher rates with a different
insurer than that requested by a person.
(d) Offering coverage with less favorable terms or conditions
than those requested by a person.
Sec. 2103. (1) "Eligible person", for automobile insurance,
means a person who is an owner or registrant of an automobile
registered or to be registered in this state or who holds a valid
license to operate a motor vehicle issued by this state, but does
not include any of the following:
(a)
A person who is not required to maintain security under
section
3101, unless the person intends to reside in this state for
30
days or more and makes a written statement of that intention on
a
form approved by the director.
(a) (b)
A person whose license to operate a
vehicle is under
suspension or revocation.
(b) (c)
A person who has been convicted
within the immediately
preceding 5-year period of fraud or intent to defraud involving an
insurance claim or an application for insurance; or an individual
who has been successfully denied, within the immediately preceding
5-year period, payment by an insurer of a claim in excess of
$1,000.00 under an automobile insurance policy, if there is
evidence of fraud or intent to defraud involving an insurance claim
or application.
(c) (d)
A person who, during the
immediately preceding 3-year
period, has been convicted under, or who has been subject to an
order of disposition of the family division of circuit court for a
violation of, any of the following:
(i) Section 601d of the Michigan vehicle code, 1949 PA 300,
MCL 257.601d, or any other law of this state the violation of which
constitutes a felony resulting from the operation of a motor
vehicle.
(ii) Section 625 of the Michigan vehicle code, 1949 PA 300,
MCL 257.625.
(iii) Section 617, 617a, 618, or 619 of the Michigan vehicle
code, 1949 PA 300, MCL 257.617, 257.617a, 257.618, and 257.619.
(iv) Section 626 of the Michigan vehicle code, 1949 PA 300,
MCL 257.626; or a similar violation under the laws of any other
state or a municipality in or outside of this state.
(d) (e)
A person whose vehicle insured or
to be insured under
the policy fails to meet the motor vehicle safety requirements of
sections 683 to 711 of the Michigan vehicle code, 1949 PA 300, MCL
257.683 to 257.711.
(e) (f)
A person whose policy of automobile
insurance has been
canceled because of nonpayment of premium or financed premium
within the immediately preceding 2-year period, unless the premium
due on a policy for which application has been made is paid in full
before issuance or renewal of the policy.
(f) (g)
A person who fails to obtain or maintain
membership in
a club, group, or organization, if membership is a uniform
requirement of the insurer as a condition of providing insurance,
and if the dues, charges, or other conditions for membership are
applied uniformly throughout this state, are not expressed as a
percentage of premium, and do not vary with respect to the rating
classification of the member except for the purpose of offering a
membership fee to family units. Membership fees may vary in
accordance with the amount or type of coverage if the purchase of
additional coverage, either as to type or amount, is not a
condition for reduction of dues or fees.
(g) (h)
A person whose driving record for
the 3-year period
immediately preceding application for or renewal of a policy, has,
under section 2119a, an accumulation of more than 6 insurance
eligibility points.
(2) "Eligible person", for home insurance, means a person who
is the owner-occupant or tenant of a dwelling of any of the
following types: a house, a condominium unit, a cooperative unit, a
room, or an apartment; or a person who is the owner-occupant of a
multiple unit dwelling of not more than 4 residential units.
Eligible person does not include any of the following:
(a) A person who has been convicted, in the immediately
preceding 5-year period, of 1 or more of the following:
(i) Arson, or conspiracy to commit arson.
(ii) A crime under sections 72 to 77, 112, 211a, 377a, 377b,
or 380 of the Michigan penal code, 1931 PA 328, MCL 750.72 to
750.77, 750.112, 750.211a, 750.377a, 750.377b, and 750.380.
(iii) A crime under section 92, 151, 157b, or 218 of the
Michigan penal code, 1931 PA 328, MCL 750.92, 750.151, 750.157b,
and 750.218, based on a crime described in subparagraph (ii)
committed by or on behalf of the person.
(b) A person who has been successfully denied, within the
immediately preceding 5-year period, payment by an insurer of a
claim under a home insurance policy based on evidence of arson,
conspiracy to commit arson, fraud, or conspiracy to commit fraud,
committed by or on behalf of the person.
(c) A person who insures or seeks to insure a dwelling that is
being used for an illegal or demonstrably hazardous purpose.
(d) A person who refuses to purchase an amount of insurance
equal to at least 80% of the replacement cost of the property
insured or to be insured under a replacement cost policy.
(e) A person who refuses to purchase an amount of insurance
equal to at least 100% of the market value of the property insured
or to be insured under a repair cost policy.
(f) A person who refuses to purchase an amount of insurance
equal to at least 100% of the actual cash value of the property
insured or to be insured under a tenant or renter's home insurance
policy.
(g) A person whose policy of home insurance has been canceled
because of nonpayment of premium within the immediately preceding
2-year period, unless the premium due on the policy is paid in full
before issuance or renewal of the policy.
(h) A person who insures or seeks to insure a dwelling, if the
insured value is not any of the following:
(i) For a repair cost policy, at least $15,000.00.
(ii) For a replacement policy, at least $35,000.00 or another
amount established by the director. The director may establish an
amount under this subparagraph biennially by a rule promulgated
under the administrative procedures act of 1969, 1969 PA 306, MCL
24.201 to 24.328, and based on changes in applicable construction
cost indices.
(i) A person who insures or seeks to insure a dwelling that
has physical conditions that clearly present an extreme likelihood
of a significant loss under a home insurance policy.
(j) A person whose real property taxes with respect to the
dwelling insured or to be insured have been and are delinquent for
2 or more years at the time of renewal of, or application for, home
insurance.
(k) A person who has failed to procure or maintain membership
in a club, group, or organization, if membership is a uniform
requirement of the insurer, and if the dues, charges, or other
conditions for membership are applied uniformly throughout this
state, are not expressed as a percentage of premium, and do not
vary with respect to the rating classification of the member except
for the purpose of offering a membership fee to family units.
Membership fees may vary in accordance with the amount or type of
coverage if the purchase of additional coverage, either as to type
or amount, is not a condition for reduction of dues or fees.
(3) "Home insurance" means any of the following, but does not
include insurance intended to insure commercial, industrial,
professional, or business property, obligations, or liabilities:
(a) Fire insurance for an insured's dwelling of a type
described in subsection (2).
(b) If contained in or indorsed to a fire insurance policy
providing insurance for the insured's residence, other insurance
intended primarily to insure nonbusiness property, obligations, and
liabilities.
(c) Other insurance coverages for an insured's residence as
prescribed by rule promulgated by the director under the
administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to
24.328. The director shall transmit a rule proposed for
promulgation under this section in advance to each member of the
standing committees in the house of representatives and the senate
that have jurisdiction over insurance.
(4) "Insurance eligibility points" means all of the following:
(a) Points calculated, according to the following schedule,
for convictions, determinations of responsibility for civil
infractions, or findings of responsibility in probate court:
(i) For a violation of any lawful speed limit by more than 15
miles per hour, or careless driving, 4 points.
(ii) For a violation of any lawful speed limit by more than 10
miles per hour but less than 16 miles per hour, 3 points.
(iii) For a violation of any lawful speed limit by more than 5
miles per hour but less than 11 miles per hour, 2 points.
(iv) For a violation of any speed limit by more than 5 miles
per hour but less than 16 miles per hour on a roadway that had a
lawfully posted maximum speed of 70 miles per hour or greater as of
January 1, 1974, 2 points.
(v) For a violation of a speed limit by less than 6 miles per
hour, 1 point.
(vi) For all other moving violations pertaining to the
operation of motor vehicles, 2 points.
(b) Points calculated, according to the following schedule,
for determinations that the person was substantially at-fault:
(i) For the first substantially at-fault accident, 3 points.
(ii) For the second and each subsequent substantially at-fault
accident, 4 points.
(5) "Insurer" means an insurer authorized to transact in this
state the kind or combination of kinds of insurance constituting
automobile insurance or home insurance.
Sec. 2112a. (1) The director shall develop, or cause to be
developed, and use a consumer information system that will provide
and disseminate price, benefit, and other relevant information on a
readily available basis to purchasers of automobile insurance for
personal, family, or household needs.
(2) The development and use of a consumer information system
under this section may be conducted internally within the
department, in cooperation with the insurance departments of other
states, through outside contractors, or in any other appropriate
manner.
(3) To the extent the director determines it is necessary and
appropriate, insurers, advisory organizations, statistical agents,
and other persons involved in conducting the business of insurance
in this state, to which this section applies, shall cooperate in
the development and use of the consumer information system under
this section.
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, there is a rebuttable presumption that a person who is
the
principal driver for 1 automobile insurance policy shall be
rebuttably
presumed does not to usually account for more than 10%
of
the use of other vehicles another
vehicle of the household that
is
not insured under the policy of that
the 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, 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 proof shall 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.
(d) (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 being of
limited production or of custom
manufacture.
(ii) The insurer does not have having a
rate lawfully in
effect for the type of vehicle.
(iii) The vehicle represents representing exposure to
extraordinary expense for repair or replacement under comprehensive
or collision coverage.
(e) (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.
(f) (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.
(g) (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.
(h) (i)
Total abstinence from the
consumption of alcoholic
beverages
except if such the beverages are consumed as part of a
religious ceremony. However, an insurer shall not utilize 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 such
an underwriting rule as part of the insurer's automobile insurance
underwriting since being authorized to transact automobile
insurance in this state.
(i) (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 be in compliance
must comply 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 The
insurer shall establish underwriting rules consistent with this
section
and sections 2118 and 2119 shall 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, 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 proof shall 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
vehicle.
(b) (c)
For purposes of insuring persons
who have refused a
deductible
lawfully required under section 2118(2)(h), 2118(2)(g),
the claim experience of the person with respect to comprehensive
coverage.
(c) (d)
Refusal of the person to pay a
minimum deposit
required
under section 2118(2)(g).2118(2)(f).
(d) (e)
A person's insurance eligibility
point accumulation
under
section 2103(1)(h), 2103(1)(g),
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.
(e) (f)
The type of vehicle insured or to
be insured as
provided
in section 2118(2)(e).2118(2)(d).
Sec.
3009. (1) An automobile liability or motor vehicle
liability
policy insuring against loss resulting from liability
imposed
by law for property damage, bodily injury, or death
suffered
by any person arising out of the ownership, maintenance,
or
use of a motor vehicle shall not be delivered or issued for
delivery
in this state with respect to any motor vehicle registered
or
principally garaged in this state unless the liability coverage
is
subject to all of the following limits:
(a)
A limit, exclusive of interest and costs, of not less than
$20,000.00
because of bodily injury to or death of 1 person in any
1
accident.
(b)
Subject to the limit for 1 person in subdivision (a), a
limit
of not less than $40,000.00 because of bodily injury to or
death
of 2 or more persons in any 1 accident.
(c)
A limit of not less than $10,000.00 because of injury to
or
destruction of property of others in any accident.
(2)
If authorized by the insured, automobile liability or
motor
vehicle liability coverage may be excluded when a vehicle is
operated
by a named person. An exclusion under this subsection is
not
valid unless the following notice is on the face of the policy
or
the declaration page or certificate of the policy and on the
certificate
of insurance:
Warning—when
a named excluded person operates a vehicle all
liability
coverage is void—no one is insured. Owners of the vehicle
and
others legally responsible for the acts of the named excluded
person
remain fully personally liable.
(3)
A liability policy described in subsection (1) may exclude
coverage
for liability as provided in section 3017.
(4)
If an insurer deletes coverages from an automobile
insurance
policy pursuant to section 3101, the insurer shall send
documentary
evidence of the deletion to the insured.After June 30,
2020, an insurer shall not issue or renew with respect to a motor
vehicle registered or principally garaged in this state an
automobile insurance policy that provides security for payment of
benefits under personal protection insurance or property protection
insurance under chapter 31.
Sec. 3017. (1) An authorized insurer that issues an insurance
policy insuring a personal vehicle may exclude all coverage
afforded under the policy for any loss or injury that occurs while
a transportation network company driver is logged on to a
transportation network company digital network or while a
transportation network company driver is providing a transportation
network company prearranged ride. By way of example and not as
limitation, all of the following coverages may be excluded under
this section:
(a)
Residual liability insurance required under sections 3009
and
or 3101.
(b) Personal protection and property protection insurance
required
under section 3101.
(c) Uninsured and underinsured motorist coverage.
(d) Comprehensive coverage.
(e) Collision coverage, including coverage required to be
offered under section 3037.
(2) This section does not require an automobile insurance
policy to provide coverage under any of the following
circumstances:
(a) While a transportation network company driver is logged on
to a transportation network company digital network.
(b) While a transportation network company driver is engaged
in providing a transportation network company prearranged ride.
(c) While a transportation network company driver otherwise
uses a vehicle to transport passengers for compensation.
(3) This section does not preclude an insurer from providing
coverage for a transportation network company driver's personal
vehicle by contract or endorsement.
(4) An insurer that excludes the coverage described in
subsection (1) does not have a duty to defend or indemnify for any
claim that is expressly excluded. This section does not invalidate
or limit an exclusion contained in a policy, including a policy in
use
or approved for use in this state before the effective date of
this
section, March 21, 2017, that excludes coverage for vehicles
that are used to carry individuals or property for a charge or that
are available for hire by the public. An insurer that defends or
indemnifies for a claim against a transportation network company
driver who is excluded under the terms of the policy has a right of
contribution against other insurers that provided automobile
insurance to the transportation network company driver in
satisfaction of the coverage requirements of section 23 of the
limousine, taxicab, and transportation network company act, 2016 PA
345, MCL 257.2123, at the time of the loss.
(5) An insurer that provides automobile insurance to a
transportation network company shall comply with section 23(5),
(6), and (9) of the limousine, taxicab, and transportation network
company act, 2016 PA 345, MCL 257.2123.
(6) During an investigation of whether a claim is covered
under an insurance policy, a transportation network company and any
insurer that provides coverage under section 23 of the limousine,
taxicab, and transportation network company act, 2016 PA 345, MCL
257.2123, shall cooperate to facilitate the exchange of relevant
information with persons who are directly involved and any insurer
of the transportation network company driver. Relevant information
required to be exchanged under this subsection includes, but is not
limited to, all of the following:
(a) The times that the transportation network company driver
logged on to and logged off of the transportation network company
digital network during the 12 hours preceding the accident and the
12 hours following the accident.
(b) A clear description of the coverage, exclusions, and
limits under any insurance policy maintained as required by section
23 of the limousine, taxicab, and transportation network company
act, 2016 PA 345, MCL 257.2123.
(7) As used in this section, all of the following terms mean
those terms as defined in section 2 of the limousine, taxicab, and
transportation network company act, 2016 PA 345, MCL 257.2102:
(a) "Personal vehicle".
(b)
"Prearranged ride".
(b) (c)
"Transportation network
company".
(c) (d)
"Transportation network
company digital network".
(d) (e)
"Transportation network
company driver".
(e) "Transportation network company prearranged ride".
Sec.
3020. (1) A An authorized
insurer shall not issue or
deliver
in this state a policy of casualty
insurance, except not
including worker's compensation and mortgage guaranty insurance,
but
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 for which a premium
or advance assessment is
charged , unless the policy contains the following provisions:
(a)
That Except as otherwise
provided in subsections (2) and
(3), that the policy may be canceled at any time at the request of
the
insured, in which case the insurer shall will 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 under this subsection, other than automobile insurance
as
defined in section 2102(2)(a), and (b), shall and (c), 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), and (c). 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 a policy is
canceled
for the following reasons:
(i) The insured is no longer required to maintain
security
pursuant
to section 3101(1).
(ii) The because
the insured has replaced the automobile
insurance policy being canceled with an automobile insurance policy
from another insurer and provides 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.
(3) (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.
(4) (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.
(6)
A notice of cancellation, including a cancellation notice
under
section 3224, shall 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.
(5) (7)
An insurer who wishes to provide
for a short rate
premium
under subsection (4) (3) shall file with the commissioner
pursuant
to director as provided in 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 the amount or percentage to be retained.
Sec. 3037. (1) At the time a new applicant for the insurance
required by section 3101 or automobile insurance for a private
passenger nonfleet automobile makes an initial written application
to
the an insurer, an the insurer shall offer both
of the following
collision coverages to the applicant:
(a) Limited collision coverage, which must pay for collision
damage to the insured vehicle without a deductible amount if the
operator of the vehicle is not substantially at fault in the
accident from which the damage arose.
(b) Broad form collision coverage, which must pay for
collision damage to the insured vehicle regardless of fault, with
deductibles in the amounts as approved by the director, which
deductibles must be waived if the operator of the vehicle is not
substantially at fault in the accident from which the damage arose.
(2) In addition to the coverages offered under subsection (1),
an
insurer may offer standard and limited
collision coverage may be
offered
with deductibles as approved by the
director.
(3) An insurer may limit collision coverage offered under this
section as provided in section 3017.
(4)
If the an applicant is required by the an insurer
to sign
the
a written application form described in subsection
(1), and if
the applicant chooses to reject both of the collision coverages, or
limited collision without a deductible, offered under subsection
(1), the rejection must be made in writing, either on a separate
form, as part of the application, or in some combination of these,
as approved by the director. The rejection statement must inform
the applicant of his or her rights if there is damage to the
insured vehicle under the alternative coverage option selected.
(5) If a written application is made by mail, and if the
applicant fails to sign or return a written rejection statement as
required by subsection (4), the requirements of subsection (4) are
considered to be satisfied with respect to the insurer if all of
the following occur:
(a) The application provides the applicant with an opportunity
to select the coverages required to be offered under subsection
(1).
(b) The applicant is requested to sign the rejection
statement, either as part of the application or as a separate form
issued with the application, if the applicant fails to select
either of the coverages specified in subsection (1).
(c) The applicant signed the application as otherwise required
by the insurer.
(6)
At the time of the an initial written application
described in subsection (1), an agent or insurer shall provide the
applicant with a written explanation of collision coverage options
in
easily understandable language, if that the information is not
contained in the application form.
(7) At least annually in conjunction with the renewal of a
private passenger nonfleet automobile insurance policy, or at the
time of an addition, deletion, or substitution of a vehicle under
an existing policy, other than a group policy, an insurer shall
inform the policyholder, on a form approved by the director, of all
of the following:
(a) The current status of collision coverage, if any, for the
vehicle or vehicles affected by the renewal or change and the
rights of the insured under the current coverage if the vehicle is
damaged.
(b) The collision coverages available under the policy and the
rights of the insured under each collision option if the vehicle is
damaged.
(c) Procedures for the policyholder to follow if he or she
wishes to change the current collision coverage.
(8) As used in this section:
(a) "Collision damage" does not include losses customarily
insured under comprehensive coverages.
(b) "Substantially at fault" means a person's action or
inaction was more than 50% of the cause of the accident.
Sec.
3101. (1) The Before July
1, 2020, the owner or
registrant of a motor vehicle required to be registered in this
state shall maintain security for payment of benefits under
personal protection insurance, property protection insurance, and
residual liability insurance. Security under this subsection is
only required to be in effect during the period the motor vehicle
is driven or moved on a highway. Notwithstanding any other
provision in this act, an insurer that has issued an automobile
insurance policy on a motor vehicle that is not driven or moved on
a highway may allow the insured owner or registrant of the motor
vehicle to delete a portion of the coverages required by this
subsection under the policy and maintain the comprehensive coverage
portion of the policy in effect.
(2) As used in this chapter:
(a) "Automobile insurance" means that term as defined in
section 2102.
(b) "Commercial quadricycle" means a vehicle to which all of
the following apply:
(i) The vehicle has fully operative pedals for propulsion
entirely by human power.
(ii) The vehicle has at least 4 wheels and is operated in a
manner similar to a bicycle.
(iii) The vehicle has at least 6 seats for passengers.
(iv) The vehicle is designed to be occupied by a driver and
powered either by passengers providing pedal power to the drive
train of the vehicle or by a motor capable of propelling the
vehicle in the absence of human power.
(v) The vehicle is used for commercial purposes.
(vi) The vehicle is operated by the owner of the vehicle or an
employee of the owner of the vehicle.
(c) "Electric bicycle" means that term as defined in section
13e of the Michigan vehicle code, 1949 PA 300, MCL 257.13e.
(d) "Golf cart" means a vehicle designed for transportation
while playing the game of golf.
(e) "Highway" means highway or street as that term is defined
in section 20 of the Michigan vehicle code, 1949 PA 300, MCL
257.20.
(f) "Moped" means that term as defined in section 32b of the
Michigan vehicle code, 1949 PA 300, MCL 257.32b.
(g) "Motorcycle" means a vehicle that has a saddle or seat for
the use of the rider, is designed to travel on not more than 3
wheels in contact with the ground, and is equipped with a motor
that exceeds 50 cubic centimeters piston displacement. For purposes
of this subdivision, the wheels on any attachment to the vehicle
are not considered as wheels in contact with the ground. Motorcycle
does not include a moped or an ORV.
(h) "Motorcycle accident" means a loss that involves the
ownership, operation, maintenance, or use of a motorcycle as a
motorcycle, but does not involve the ownership, operation,
maintenance, or use of a motor vehicle as a motor vehicle.
(i) "Motor vehicle" means a vehicle, including a trailer, that
is operated or designed for operation on a public highway by power
other than muscular power and has more than 2 wheels. Motor vehicle
does not include any of the following:
(i) A motorcycle.
(ii) A moped.
(iii) A farm tractor or other implement of husbandry that is
not subject to the registration requirements of the Michigan
vehicle code under section 216 of the Michigan vehicle code, 1949
PA 300, MCL 257.216.
(iv) An ORV.
(v) A golf cart.
(vi) A power-driven mobility device.
(vii) A commercial quadricycle.
(viii) An electric bicycle.
(j) "Motor vehicle accident" means a loss that involves the
ownership, operation, maintenance, or use of a motor vehicle as a
motor vehicle regardless of whether the accident also involves the
ownership, operation, maintenance, or use of a motorcycle as a
motorcycle.
(k) "ORV" means a motor-driven recreation vehicle designed for
off-road use and capable of cross-country travel without benefit of
road or trail, on or immediately over land, snow, ice, marsh,
swampland, or other natural terrain. ORV includes, but is not
limited to, a multitrack or multiwheel drive vehicle, a motorcycle
or related 2-wheel, 3-wheel, or 4-wheel vehicle, an amphibious
machine, a ground effect air cushion vehicle, an ATV as defined in
section 81101 of the natural resources and environmental protection
act, 1994 PA 451, MCL 324.81101, or other means of transportation
deriving motive power from a source other than muscle or wind. ORV
does not include a vehicle described in this subdivision that is
registered for use on a public highway and has the security
required under subsection (1) or section 3103 in effect.
(l) "Owner" means any of the following:
(i) A person renting a motor vehicle or having the use of a
motor vehicle, under a lease or otherwise, for a period that is
greater than 30 days.
(ii) A person renting a motorcycle or having the use of a
motorcycle under a lease for a period that is greater than 30 days,
or otherwise for a period that is greater than 30 consecutive days.
A person who borrows a motorcycle for a period that is less than 30
consecutive days with the consent of the owner is not an owner
under this subparagraph.
(iii) A person that holds the legal title to a motor vehicle
or motorcycle, other than a person engaged in the business of
leasing motor vehicles or motorcycles that is the lessor of a motor
vehicle or motorcycle under a lease that provides for the use of
the motor vehicle or motorcycle by the lessee for a period that is
greater than 30 days.
(iv) A person that has the immediate right of possession of a
motor vehicle or motorcycle under an installment sale contract.
(m) "Power-driven mobility device" means a wheelchair or other
mobility device powered by a battery, fuel, or other engine and
designed to be used by an individual with a mobility disability for
the purpose of locomotion.
(n) "Registrant" does not include a person engaged in the
business of leasing motor vehicles or motorcycles that is the
lessor of a motor vehicle or motorcycle under a lease that provides
for the use of the motor vehicle or motorcycle by the lessee for a
period that is longer than 30 days.
(3) Security required by subsection (1) may be provided under
a policy issued by an authorized insurer that affords insurance for
the payment of benefits described in subsection (1). A policy of
insurance represented or sold as providing security is considered
to provide insurance for the payment of the benefits.
(4) Security required by subsection (1) may be provided by any
other method approved by the secretary of state as affording
security equivalent to that afforded by a policy of insurance, if
proof of the security is filed and continuously maintained with the
secretary of state throughout the period the motor vehicle is
driven or moved on a highway. The person filing the security has
all the obligations and rights of an insurer under this chapter.
When the context permits, "insurer" as used in this chapter,
includes a person that files the security as provided in this
section.
(5) An insurer that issues a policy that provides the security
required under subsection (1) may exclude coverage under the policy
as provided in section 3017.
Sec.
3102. (1) A Before July 1,
2020, a nonresident owner or
registrant of a motor vehicle or motorcycle not registered in this
state shall not operate or permit the motor vehicle or motorcycle
to be operated in this state for an aggregate of more than 30 days
in any calendar year unless he or she continuously maintains
security
for the payment of benefits pursuant to under this
chapter.
(2) An owner or registrant of a motor vehicle or motorcycle
with respect to which security is required under this chapter, who
operates the motor vehicle or motorcycle or permits it to be
operated upon a public highway in this state, without having in
full force and effect security complying with this section or
section 3101 or 3103 is guilty of a misdemeanor. A person who
operates
a motor vehicle or motorcycle upon on a public highway in
this state with the knowledge that the owner or registrant does not
have
security in full force and effect as required under this
chapter
is guilty of a misdemeanor .
A person convicted of a
misdemeanor
under this section shall be fined punishable
by a fine
of
not less than $200.00 nor and not more
than $500.00 , imprisoned
or imprisonment for not more than 1 year, or both.
(3) The failure of a person to produce evidence that a motor
vehicle
or motorcycle has had in full force and effect security
complying with this section or section 3101 or 3103 on the date of
the issuance of the citation, creates a rebuttable presumption in a
prosecution under subsection (2) that the motor vehicle or
motorcycle
did not have in full force and effect security complying
with this section or section 3101 or 3103 on the date of the
issuance of the citation.
Sec. 3103. (1) An owner or registrant of a motorcycle shall
provide security against loss resulting from liability imposed by
law for property damage, bodily injury, or death suffered by a
person
arising out of the ownership, maintenance, or use of that
the
motorcycle. The security shall
conform with must meet the
requirements of section 3009(1).
(2)
Each insurer transacting insurance in this state which
that affords coverage for a motorcycle as described in subsection
(1) also shall offer, to an owner or registrant of a motorcycle,
security for the payment of first-party medical benefits only, in
increments
of $5,000.00, payable in the event if the owner or
registrant is involved in a motorcycle accident. An insurer
providing first-party medical benefits under this subsection may
offer, at appropriate premium rates, deductibles, provisions for
the coordination of these benefits, and provisions for the
subtraction of other benefits provided or required to be provided
under the laws of any state or the federal government, subject to
the
prior approval of the commissioner. director. These deductibles
and
provisions shall must apply only to benefits payable to the
person named in the policy, the spouse of the insured, and any
relative of either domiciled in the same household.
(3) This section does not apply after June 30, 2020.
Sec.
3104. (1) An The
catastrophic claims association is
created
as an unincorporated, nonprofit
association. to be known as
the
catastrophic claims association, hereinafter referred to as the
association,
is created. Each Before July
1, 2020, each insurer
engaged in writing insurance coverages that provide the security
required
by section 3101(1) within in
this state, as a condition of
its authority to transact insurance in this state, shall be a
member
of the association and shall be is bound by the plan of
operation
of the association. Each Before
July 1, 2020, an insurer
engaged in writing insurance coverages that provide the security
required
by section 3103(1) within in
this state, as a condition of
its
authority to transact insurance in this state, shall be is
considered to be a member of the association, but only for purposes
of premiums under subsection (7)(d). Except as expressly provided
in this section, the association is not subject to any laws of this
state with respect to insurers, but in all other respects the
association is subject to the laws of this state to the extent that
the association would be if it were an insurer organized and
subsisting under chapter 50.
(2)
The Before July 1, 2020,
the association shall provide and
each member shall accept indemnification for 100% of the amount of
ultimate loss sustained under personal protection insurance
coverages in excess of the following amounts in each loss
occurrence:
(a) For a motor vehicle accident policy issued or renewed
before July 1, 2002, $250,000.00.
(b) For a motor vehicle accident policy issued or renewed
during the period July 1, 2002 to June 30, 2003, $300,000.00.
(c) For a motor vehicle accident policy issued or renewed
during the period July 1, 2003 to June 30, 2004, $325,000.00.
(d) For a motor vehicle accident policy issued or renewed
during the period July 1, 2004 to June 30, 2005, $350,000.00.
(e) For a motor vehicle accident policy issued or renewed
during the period July 1, 2005 to June 30, 2006, $375,000.00.
(f) For a motor vehicle accident policy issued or renewed
during the period July 1, 2006 to June 30, 2007, $400,000.00.
(g) For a motor vehicle accident policy issued or renewed
during the period July 1, 2007 to June 30, 2008, $420,000.00.
(h) For a motor vehicle accident policy issued or renewed
during the period July 1, 2008 to June 30, 2009, $440,000.00.
(i) For a motor vehicle accident policy issued or renewed
during the period July 1, 2009 to June 30, 2010, $460,000.00.
(j) For a motor vehicle accident policy issued or renewed
during the period July 1, 2010 to June 30, 2011, $480,000.00.
(k) For a motor vehicle accident policy issued or renewed
during the period July 1, 2011 to June 30, 2013, $500,000.00.
Beginning
July 1, 2013, this $500,000.00 amount shall be increased
biennially
on July 1 of each odd-numbered year, for policies issued
or
renewed before July 1 of the following odd-numbered year, by the
lesser
of 6% or the consumer price index, and rounded to the
nearest
$5,000.00. This biennial adjustment shall be calculated by
the
association by January 1 of the year of its July 1 effective
date.
(l) For a motor vehicle accident policy issued or renewed
during the period July 1, 2013 to June 30, 2015, $530,000.00.
(m) For a motor vehicle accident policy issued or renewed
during the period July 1, 2015 to June 30, 2017, $545,000.00.
(n) For a motor vehicle accident policy issued or renewed
during the period July 1, 2017 to June 30, 2020, $555,000.00.
(3)
An insurer may withdraw from the association only upon on
ceasing to write insurance that provides the security required by
section 3101(1) in this state.
(4) An insurer whose membership in the association has been
terminated
by withdrawal shall continue continues
to be bound by
the
plan of operation, and upon on
withdrawal, all unpaid premiums
that have been charged to the withdrawing member are payable as of
the effective date of the withdrawal.
(5) An unsatisfied net liability to the association of an
insolvent member shall be assumed by and apportioned among the
remaining members of the association as provided in the plan of
operation. The association has all rights allowed by law on behalf
of the remaining members against the estate or funds of the
insolvent
member for sums money due the association.
(6) If a member has been merged or consolidated into another
insurer or another insurer has reinsured a member's entire business
that provides the security required by section 3101(1) in this
state, the member and successors in interest of the member remain
liable for the member's obligations.
(7)
The Before July 1, 2020,
the association shall do all of
the following on behalf of the members of the association:
(a) Assume 100% of all liability as provided in subsection
(2).
(b)
Establish procedures by which members shall promptly
report to the association each claim that, on the basis of the
injuries or damages sustained, may reasonably be anticipated to
involve the association if the member is ultimately held legally
liable for the injuries or damages. Solely for the purpose of
reporting claims, the member shall in all instances consider itself
legally liable for the injuries or damages. The member shall also
advise the association of subsequent developments likely to
materially affect the interest of the association in the claim.
(c) Maintain relevant loss and expense data relative to all
liabilities of the association and require each member to furnish
statistics, in connection with liabilities of the association, at
the
times and in the form and detail as may be required by the plan
of operation.
(d) In a manner provided for in the plan of operation,
calculate and charge to members of the association a total premium
sufficient to cover the expected losses and expenses of the
association that the association will likely incur during the
period
for which the premium is applicable. The premium shall must
include an amount to cover incurred but not reported losses for the
period and may be adjusted for any excess or deficient premiums
from previous periods. Excesses or deficiencies from previous
periods may be fully adjusted in a single period or may be adjusted
over several periods in a manner provided for in the plan of
operation.
Each member shall must be charged an amount equal to
that member's total written car years of insurance providing the
security required by section 3101(1) or 3103(1), or both, written
in this state during the period to which the premium applies,
multiplied by the average premium per car. The average premium per
car
shall be is the total premium calculated divided by the total
written car years of insurance providing the security required by
section 3101(1) or 3103(1), written in this state of all members
during
the period to which the premium applies. A member shall must
be charged a premium for a historic vehicle that is insured with
the member of 20% of the premium charged for a car insured with the
member. As used in this subdivision:
(i) "Car" includes a motorcycle but does not include a
historic vehicle.
(ii) "Historic vehicle" means a vehicle that is a registered
historic vehicle under section 803a or 803p of the Michigan vehicle
code, 1949 PA 300, MCL 257.803a and 257.803p.
(e) Require and accept the payment of premiums from members of
the association as provided for in the plan of operation. The
association shall do either of the following:
(i) Require payment of the premium in full within 45 days
after the premium charge.
(ii) Require payment of the premiums to be made periodically
to cover the actual cash obligations of the association.
(f)
Receive and distribute all sums money
required by the
operation of the association.
(g) Establish procedures for reviewing claims procedures and
practices of members of the association. If the claims procedures
or practices of a member are considered inadequate to properly
service the liabilities of the association, the association may
undertake or may contract with another person, including another
member, to adjust or assist in the adjustment of claims for the
member on claims that create a potential liability to the
association and may charge the cost of the adjustment to the
member.
(h) Do anything necessary, as required by the board or the
director of the department, to prepare for and complete the
assumption of obligations of the association by the department as
provided by section 3104a.
(8) In addition to other powers granted to it by this section,
the association may do all of the following:
(a) Sue and be sued in the name of the association. A judgment
against
the association shall does
not create any direct liability
against the individual members of the association. The association
may provide for the indemnification of its members, members of the
board of directors of the association, and officers, employees, and
other persons lawfully acting on behalf of the association.
(b) Reinsure all or any portion of its potential liability
with reinsurers licensed to transact insurance in this state or
approved
by the commissioner.director
of the department.
(c) Provide for appropriate housing, equipment, and personnel
as
may be necessary to assure the efficient operation of the
association.
(d) Pursuant to the plan of operation, adopt reasonable rules
for the administration of the association, enforce those rules, and
delegate authority, as the board considers necessary to assure the
proper administration and operation of the association consistent
with the plan of operation.
(e) Contract for goods and services, including independent
claims management, actuarial, investment, and legal services, from
others
within in or without outside of this state to
assure the
efficient operation of the association.
(f) Hear and determine complaints of a company or other
interested party concerning the operation of the association.
(g) Perform other acts not specifically enumerated in this
section that are necessary or proper to accomplish the purposes of
the association and that are not inconsistent with this section or
the plan of operation.
(9)
A board of directors is created , hereinafter referred to
as
the board, which shall be responsible for the operation of and
shall operate the association consistent with the plan of operation
and this section.
(10)
The plan of operation shall must
provide for all of the
following:
(a) The establishment of necessary facilities.
(b) The management and operation of the association.
(c) Procedures to be utilized in charging premiums, including
adjustments from excess or deficient premiums from prior periods.
(d) Procedures governing the actual payment of premiums to the
association.
(e) Reimbursement of each member of the board by the
association for actual and necessary expenses incurred on
association business.
(f) The investment policy of the association.
(g) Any other matters required by or necessary to effectively
implement this section.
(11)
Each board shall include members that would contribute a
total
of not less than 40% of the total premium calculated pursuant
to
subsection (7)(d). Each director shall
be is entitled to 1 vote.
The
initial term of office of a director shall be is 2
years.
(12) As part of the plan of operation, the board shall adopt
rules providing for the composition and term of successor boards to
the initial board, consistent with the membership composition
requirements in subsections (11) and (13). Terms of the directors
shall
must be staggered so that the terms of all the directors
do
not expire at the same time and so that a director does not serve a
term of more than 4 years.
(13)
The board shall must consist of 5 directors , and the
commissioner
director of the department,
who shall be serve as an
ex officio member of the board without vote. At least 1 of the
members of the board must represent each of the following groups or
organizations:
(a) Claimants receiving benefits from the association.
(b) Insurance actuaries.
(c) The state court administrative office.
(d) Insurance fraud experts.
(e) Consumer fraud experts.
(14)
Each director shall be appointed by the commissioner and
The director of the department shall appoint the directors. A
director
shall serve until that member's his or her successor is
selected
and qualified. The chairperson of the board shall be
elected
by the board. A elect a
chairperson. The director of the
department
shall fill any vacancy on the board shall
be filled by
the
commissioner consistent with as
provided in the plan of
operation.
(15)
After the board is appointed, the The board shall meet as
often
as the chairperson, the commissioner, director of the
department,
or the plan of operation shall
require, requires, or at
the
request of any 3 members of the board. The chairperson shall
retain
the right to may vote on all issues. Four members of the
board constitute a quorum.
(16) An annual report of the operations of the association in
a
form and detail as may be determined by the board shall must be
furnished to each member.
(17)
Not more than 60 days after the initial organizational
meeting
of the board, the board shall submit to the commissioner
for
approval a proposed plan of operation consistent with the
objectives
and provisions of this section, which shall provide for
the
economical, fair, and nondiscriminatory administration of the
association
and for the prompt and efficient provision of
indemnity.
If a plan is not submitted within this 60-day period,
then
the commissioner, after consultation with the board, shall
formulate
and place into effect a plan consistent with this
section.
(18)
The plan of operation, unless approved sooner in writing,
shall
be considered to meet the requirements of this section if it
is
not disapproved by written order of the commissioner within 30
days
after the date of its submission. Before disapproval of all or
any
part of the proposed plan of operation, the commissioner shall
notify
the board in what respect the plan of operation fails to
meet
the requirements and objectives of this section. If the board
fails
to submit a revised plan of operation that meets the
requirements
and objectives of this section within the 30-day
period,
the commissioner shall enter an order accordingly and shall
immediately
formulate and place into effect a plan consistent with
the
requirements and objectives of this section.
(17) (19)
The proposed plan of operation or Any
amendments to
the plan of operation of the association are subject to majority
approval
by the board, ratified ratification
by a majority of the
membership having a vote, with voting rights being apportioned
according
to the premiums charged in subsection (7)(d), and are
subject
to approval by the commissioner.director of the department.
(18) (20)
Upon approval by the commissioner and ratification
by
the members of the plan submitted, or upon the promulgation of a
plan
by the commissioner, each insurer authorized to write
insurance
providing the security required by section 3101(1) in
this
state, as provided in this section, A member of the
association is bound by and shall formally subscribe to and
participate
in the plan approved of
operation as a condition of
maintaining its authority to transact insurance in this state.
(19) Notwithstanding anything in this section or the plan of
operation to the contrary, the board, the association, and the
members of the association shall do all of the following:
(a) As required by the director of the department or otherwise
under section 3104a, transfer any records or copies of records for
the implementation and administration of section 3104a.
(b) Cooperate with the director of the department or any
agency in the department in the implementation and administration
of section 3104a.
(c) In the time and manner required by the director of the
department, transfer any money in the possession or control of the
board, association, or member that belongs or is attributable to
the association to implement and administer section 3104a.
(20) (21)
The association is subject to all
the reporting,
loss
reserve, and investment requirements of the commissioner
director
of the department to the same extent as
would a member are
the members of the association.
(21) (22)
Premiums charged members by the
association shall
must be recognized in the rate-making procedures for insurance
rates in the same manner that expenses and premium taxes are
recognized.
(22) (23)
The commissioner director of the department or an
authorized
representative of the commissioner director of the
department may visit the association at any time and examine any
and all of the association's affairs.
(23) (24)
The association does not have
liability for losses
occurring before July 1, 1978 or after June 30, 2020.
(24) (25)
As used in this section:
(a)
"Consumer price index" means the percentage of change in
the
consumer price index for all urban consumers in the United
States
city average for all items for the 24 months prior to
October
1 of the year prior to the July 1 effective date of the
biennial
adjustment under subsection (2)(k) as reported by the
United
States department of labor, bureau of labor statistics, and
as
certified by the commissioner.
(a) "Association" means the catastrophic claims association
created in subsection (1).
(b) "Board" means the board of directors of the association
created in subsection (9).
(c) (b)
"Motor vehicle accident
policy" means a policy
providing the coverages required under section 3101(1).
(d) (c)
"Ultimate loss" means the
actual loss amounts that a
member is obligated to pay and that are paid or payable by the
member, and do not include claim expenses. An ultimate loss is
incurred by the association on the date that the loss occurs.
Sec. 3104a. (1) Before July 1, 2020, the director shall
organize a catastrophic claims bureau in the department. The bureau
must be organized to do all of the following:
(a) After June 30, 2020, pay, to or on behalf of an
individual, any amount to which the individual is entitled as
personal protection insurance benefits under this chapter because
of an ultimate loss that has exceeded the applicable amount under
section 3104(2).
(b) Receive, from the association and members or former
members of the association, and maintain records relating to claims
as to which the ultimate loss has exceeded the applicable amount
under section 3104(2) or that, on the basis of the injuries or
damages sustained, may reasonably be anticipated to exceed the
applicable amount.
(c) Establish procedures for reviewing claim records received
under subdivision (b) and claims for payment under subdivision (a)
so as to properly pay benefits under this chapter.
(d) Subject to subsection (3), calculate and charge to
insurers that issue automobile insurance policies in this state a
total premium sufficient to cover the expected payments of amounts
under this section by the bureau during the period for which the
premium is applicable. The premium must include an amount to cover
incurred but not reported losses for the period and may be adjusted
for any excess or deficient premiums from previous periods.
Excesses or deficiencies from previous periods may be fully
adjusted in a single period or may be adjusted over several
periods. The bureau shall charge an automobile insurer an amount
equal to the insurer's total written car years of insurance written
in this state during the period to which the premium applies,
multiplied by the average premium per car. The average premium per
car is the total premium under this subdivision divided by the
total written car years of insurance written in this state by all
insurers during the period to which the premium applies. The bureau
shall charge an insurer a premium for a historic vehicle that is
insured with the insurer of 20% of the premium charged for a car
insured with the member. The bureau shall do either of the
following:
(i) Require payment of the premiums in full within 45 days
after the premiums are charged.
(ii) Require payment of the premiums to be made periodically
to cover the actual cash obligations of the bureau.
(e) Accept the payment of premiums charged under subdivision
(d) from insurers.
(f) Establish procedures for reviewing information from former
members of the association about claims as to which the injuries or
damages sustained may reasonably be anticipated to exceed the
applicable amount under section 3104(2). The bureau may contract
with another person, including, but not limited to, another
insurer, to adjust or assist in the adjustment of such a claim for
the former member and may charge the cost of the adjustment to the
former member.
(g) Anything else necessary or convenient to implementing or
applying this section.
(2) A former member of the association or an insurer that
issues automobile insurance in this state shall do all of the
following:
(a) Transfer to the bureau, in the time and manner required by
the bureau or the director, all records relating to claims as to
which the ultimate loss has exceeded the applicable amount under
section 3104(2), including, but not limited to, records requested
by the bureau or the director.
(b) Provide to the bureau, in the time and manner required by
the bureau or the director, copies of all records relating to
claims that, on the basis of the injuries or damages sustained, may
reasonably be anticipated to exceed the applicable amount under
section 3104(2), including, but not limited to, records requested
by the bureau or the director.
(c) Cooperate with the bureau with respect to claims described
in subdivision (b), including, but not limited to, providing any
requested information to the bureau and cooperating with any person
with whom the bureau contracts under subsection (1)(f).
(d) Provide the bureau with all information requested by the
bureau and any other information necessary to allow the bureau to
calculate premiums under subsection (1)(d).
(e) Pay any premium charged by the bureau under subsection
(1)(d) as required by the bureau.
(f) Pay any other money in the former member's or insurer's
possession that is attributable to the association.
(g) Do anything else required by the bureau or the director
that is necessary or convenient to the implementation or
administration of this section.
(3) The bureau shall not charge premiums under subsection
(1)(d) unless money received under subsections (1)(b) and (e) and
(2) and held by the bureau, with interest and other earnings from
the money held, are insufficient to cover the expected payments of
amounts under this section for the applicable period.
(4) Premiums that the bureau charges to insurers under
subsection (1)(d) must be recognized in the rate-making procedures
for insurance rates in the same manner that expenses and premium
taxes are recognized.
(5) The bureau shall annually disclose to the public on the
department website money held by the bureau, interest and other
earnings of the bureau, and all data used in computing the expected
losses and expenses of administering this section and determining
any premiums charged under subsection (1)(d), including the amount
that covers incurred but not reported losses for the period and any
adjustment for any excess or deficient premiums from previous
periods and the actuarial computation used in making these
determinations, including estimates and assumptions. The disclosure
must include, but not be limited to, all of the following:
(a) The actuarial computation used in making determinations of
unpaid losses and loss adjustment expenses.
(b) All documents used in establishing the following:
(i) The calculation of the present value of disbursements
expected to be made in the ultimate settlement of the claims
reported.
(ii) The actuarial tables used to reflect the probabilities of
each claimant surviving to incur the costs projected.
(iii) The calculation of incurred but not reported losses.
(iv) The actuarial assumptions and calculations used in
producing the short-term discount rate and the long-term discount
rate.
(v) The forecasts producing the economic assumptions for claim
cost inflation and investment returns used.
(vi) The current economic data and historical long-term
Consumer Price Index data for any cost component categories used in
producing inflation assumptions.
(vii) The loss development analysis undertaken in connection
with the provision for unpaid losses and loss adjustment expenses.
(viii) The trend analysis for both frequency and severity
undertaken in connection with the provision for unpaid losses and
loss adjustment expenses.
(c) The annual actuarial evaluation used in establishing any
premium.
(d) Annual assessment reports used in establishing any
premium.
(e) The annuity model used by the opining actuary in his or
her actuarial opinion projecting future payment streams at the
claimant level and the mortality adjustment applied.
(f) Any explanatory memorandum explaining the various
components of the premium and the judgments made to produce the
premium.
(g) The impact of expense reduction initiatives for the prior
reporting period, including at a minimum amount estimates for the
following initiatives:
(i) Insurer fraud reduction.
(ii) Consumer fraud reduction.
(iii) Healthcare cost reduction.
(iv) Court cost reduction.
(h) The breakdown of payments into legacy and safety net
coverage.
(6) The director shall annually appoint an independent
certified public accountant to conduct and deliver to the director
and the senate and house of representatives standing committees on
insurance issues an audit of money held by and income of the bureau
and expenses of administering this section. In conducting the
audit, the appointed certified public accountant must be given
access to all records of the bureau. Each audit required by this
subsection must include a determination of whether the bureau is
likely to be able to continue to meet its obligations.
(7) As required by the director, the bureau shall administer
this section and do anything related to the administration of this
section.
(8) The director shall do all of the following:
(a) All things necessary to ensure that the bureau is properly
administering this section.
(b) All things necessary to ensure that insurers, including
former members of the association and insurers that issue
automobile insurance policies in this state, are complying with
this section.
(c) As necessary, promulgate rules to implement this section
under the administrative procedures act of 1969, 1969 PA 306, MCL
24.201 to 24.328.
(9) As used in this section:
(a) "Association" means the catastrophic claims association
created under section 3104.
(b) "Bureau" means the catastrophic claims bureau created
under this section.
(c) "Car" includes a motorcycle but does not include a
historic vehicle.
(d) "Historic vehicle" means a vehicle that is a registered
historic vehicle under section 803a or 803p of the Michigan vehicle
code, 1949 PA 300, MCL 257.803a and 257.803p.
(e) "Ultimate loss" means that term as defined in section
3104.
Sec. 3104b. (1) The Michigan accident liability safety net
fund is created within the state treasury.
(2) The bureau shall pay into the fund money received by the
bureau under section 3104a(1)(b) and (e) and (2). The state
treasurer may receive money or other assets from the bureau or any
other source for deposit into the fund.
(3) The bureau shall direct the investment of the fund. The
bureau shall invest money held in the fund in low- to marginally
low-risk investments that maximize returns while safeguarding
against significant losses. The bureau shall credit to the fund
interest and earnings from fund investments.
(4) Money in the fund at the close of the fiscal year must
remain in the fund and not lapse to the general fund.
(5) The department of insurance and financial services is the
administrator of the fund for auditing purposes.
(6) The bureau shall expend money from the fund, on
appropriation, only for 1 or more of the following purposes:
(a) The payment of claims under section 3104a(1)(a).
(b) Operation of the bureau.
(7) As used in this section:
(a) "Bureau" means the catastrophic claims bureau organized
under section 3104a.
(b) "Fund" means the Michigan accident liability safety net
fund created under subsection (1).
Sec. 3104c. (1) All of the following apply to allowable
expenses payable by the catastrophic claims bureau under section
3104a for attendant care provided in the home by a family or
household member:
(a) For the first 56 hours of attendant care provided in a
week, payment is limited to a reasonable and customary amount.
(b) For attendant care in excess of 56 hours provided in a
week, payment is limited to $15.00 per hour. Beginning 3 years
after the effective date of the amendatory act that added this
section and every 3 years after that date, the director shall
adjust this amount to reflect the aggregate percentage change in
the United States Consumer Price Index, rounded to the nearest 10
cents. As used in this subdivision, "Consumer Price Index" means
the percentage of change in the Consumer Price Index for all urban
consumers in the United States city average for all items, as
reported by the United States Department of Labor, Bureau of Labor
Statistics, and as certified by the director.
(c) The limitations in subdivisions (a) and (b) apply
regardless of the level of care provided and regardless of whether
the family or household member is licensed or otherwise authorized
to render the attendant care under article 15 of the public health
code, 1978 PA 368, MCL 333.16101 to 333.18838, or is employed by,
under contract with, or in any way connected with an individual or
agency who is licensed or authorized to render the care.
(2) Except as otherwise provided in subsection (3), for
allowable expenses under section 3107(1)(a) for attendant care
provided in the home, whether by a family or household member or by
someone other than a family or household member, payment is limited
to a total of 24 hours per day for services performed by 1 or more
individuals.
(3) Notwithstanding the limitations in this section, the
bureau may contract to provide attendant care as an allowable
expense at any rate and for any number of hours per week.
Sec.
3131. (1) Residual liability insurance shall must cover
bodily
injury and property damage which that occurs within in the
United States, its territories and possessions, or in Canada. This
insurance
shall must afford coverage equivalent to that required as
evidence of automobile liability insurance under the financial
responsibility laws of the place in which the injury or damage
occurs.
In this state, this insurance shall must afford
coverage
for automobile liability retained by section 3135.
(2)
This section shall does not require coverage in this state
other
than that required by section 3009(1). This section shall
apply
applies to all insurance contracts in force as of October 1,
1973,
or entered into after that date.October
1, 1973 and before
July 1, 2020.
Sec. 3135. (1) A person whose tort liability is abolished
under subsection (3) remains subject to tort liability for
noneconomic loss caused by his or her ownership, maintenance, or
use of a motor vehicle only if the injured person has suffered
death, serious impairment of body function, or permanent serious
disfigurement.
(2)
For a cause of action for damages pursuant to as to which
tort liability remains under subsection (1) filed on or after July
26, 1996, all of the following apply:
(a) The issues of whether the injured person has suffered
serious impairment of body function or permanent serious
disfigurement are questions of law for the court if the court finds
either of the following:
(i) There is no factual dispute concerning the nature and
extent of the person's injuries.
(ii) There is a factual dispute concerning the nature and
extent of the person's injuries, but the dispute is not material to
the determination whether the person has suffered a serious
impairment of body function or permanent serious disfigurement.
However, for a closed-head injury, a question of fact for the jury
is created if a licensed allopathic or osteopathic physician who
regularly diagnoses or treats closed-head injuries testifies under
oath that there may be a serious neurological injury.
(b)
Damages shall must be assessed on the basis of comparative
fault,
except that damages shall must
not be assessed in favor of a
party who is more than 50% at fault.
(c)
Damages shall must not be assessed in favor of a party who
was operating his or her own vehicle at the time the injury
occurred and did not have in effect for that motor vehicle the
security required by section 3101 at the time the injury occurred.
(3) Notwithstanding any other provision of law, tort liability
arising from the ownership, maintenance, or use within this state
of a motor vehicle with respect to which the security required by
section
3101 was in effect is abolished. except as to:This
subsection does not apply to:
(a) Intentionally caused harm to persons or property. Even
though a person knows that harm to persons or property is
substantially certain to be caused by his or her act or omission,
the person does not cause or suffer that harm intentionally if he
or she acts or refrains from acting for the purpose of averting
injury to any person, including himself or herself, or for the
purpose of averting damage to tangible property.
(b) Damages for noneconomic loss as provided and limited in
subsections (1) and (2).
(c) Damages for allowable expenses, work loss, and survivor's
loss as defined in sections 3107 to 3110 in excess of the daily,
monthly, and 3-year limitations contained in those sections. The
party liable for damages is entitled to an exemption reducing his
or her liability by the amount of taxes that would have been
payable on account of income the injured person would have received
if he or she had not been injured.
(d) Damages for economic loss by a nonresident in excess of
the personal protection insurance benefits provided under section
3163(4). Damages under this subdivision are not recoverable 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.
(e) Damages up to $1,000.00 to a motor vehicle, to the extent
that the damages are not covered by insurance. An action for
damages
under this subdivision shall must
be conducted as provided
in subsection (4).
(4) All of the following apply to an action for damages under
subsection (3)(e):
(a)
Damages shall must be assessed on the basis of comparative
fault,
except that damages shall must
not be assessed in favor of a
party who is more than 50% at fault.
(b) Liability is not a component of residual liability, as
prescribed in section 3131, for which maintenance of security is
required by this act.
(c)
The action shall must be commenced, whenever legally
possible, in the small claims division of the district court or the
municipal court. If the defendant or plaintiff removes the action
to a higher court and does not prevail, the judge may assess costs.
(d) A decision of the court is not res judicata in any
proceeding to determine any other liability arising from the same
circumstances that gave rise to the action.
(e)
Damages shall must not be assessed if the damaged motor
vehicle was being operated at the time of the damage without the
security required by section 3101.
(5) As used in this section, "serious impairment of body
function" means an objectively manifested impairment of an
important body function that affects the person's general ability
to lead his or her normal life.
Sec.
3163. (1) An Before July
1, 2020, an insurer authorized
to transact automobile liability insurance and personal and
property protection insurance in this state shall file and maintain
a written certification that any accidental bodily injury or
property damage occurring in this state arising from the ownership,
operation, maintenance, or use of a motor vehicle as a motor
vehicle by an out-of-state resident who is insured under its
automobile liability insurance policies, is subject to the personal
and
property protection insurance system under this act.chapter.
(2) A nonadmitted insurer may voluntarily file the
certification described in subsection (1).
(3) Except as otherwise provided in subsection (4), if a
certification filed under subsection (1) or (2) applies to
accidental bodily injury or property damage, the insurer and its
insureds with respect to that injury or damage have the rights and
immunities under this act for personal and property protection
insureds, and claimants have the rights and benefits of personal
and property protection insurance claimants, including the right to
receive benefits from the electing insurer as if it were an insurer
of personal and property protection insurance applicable to the
accidental bodily injury or property damage.
(4) If an insurer of an out-of-state resident is required to
provide benefits under subsections (1) to (3) to that out-of-state
resident for accidental bodily injury for an accident in which the
out-of-state resident was not an occupant of a motor vehicle
registered in this state, the insurer is only liable for the amount
of ultimate loss sustained up to $500,000.00. Benefits under this
subsection are not recoverable 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.
Sec.
3171. (1) 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 shall
promulgate
rules to implement the facility and plan in accordance
with
and subject to 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, that was writing insurance provided by this chapter on June
30, 2020, or that writes automobile insurance in this state after
June 30, 2020, shall participate in the assigned claims plan. Costs
incurred
in the administration of the assigned claims plan shall
must
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.
(2) (3)
By August 1, 2012, the 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
director for his or her approval. The commissioner
director shall review the plan within 30 days and respond in
writing
as provided in this subsection. If the commissioner
director finds that the plan meets the requirements of this
chapter,
he or she shall approve it. If the commissioner director
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 placement facility
board of governors 10 days within which to correct the deficiency.
If
the commissioner director 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 County
for a determination. If
the
commissioner director fails to render a written decision on the
assigned claims plan within 30 days after receipt of the plan, the
plan
shall be is 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.director.
(3) (4)
Amendments to the assigned claims
plan approved under
subsection
(3) shall (2) must be adopted by the board of governors
and
approved by the commissioner director
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.(2).
(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
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.
(4) (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 the
assigned claims plan under 1 or more of the following
circumstances:
(a) For accidental bodily injury that occurs before July 1,
2020, if no personal protection insurance is applicable to the
injury.
(b) For accidental bodily injury that occurs before July 1,
2020, if no personal protection insurance applicable to the injury
can be identified.
(c) For accidental bodily injury regardless of when it occurs,
if 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
(d) For accidental bodily injury regardless of when it occurs,
if 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 that case, If this
subdivision applies, unpaid benefits due or coming due may be
collected under the assigned claims plan and the insurer to which
the claim is assigned 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 March 29, 1985, payable through the
assigned
claims plan shall must 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 only 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, 1939 PA 280, MCL
400.1 to 400.119b, or insurance under the health insurance for the
aged
act, title subchapter XVIII of the social security act, 42 USC
1395
to 1395kkk-1.1395lll.
(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 apply:
(a) The insurers who are parties to the dispute shall, or the
claimant may, immediately notify the Michigan automobile insurance
placement facility of their inability to determine their statutory
obligations.
(b)
The claim shall must be assigned by the Michigan
automobile insurance placement facility to an insurer and the
insurer shall immediately provide personal protection insurance
benefits to the claimant or claimants entitled to benefits.
(c)
An action shall must be immediately commenced on behalf of
the Michigan automobile insurance placement facility by the insurer
to whom the claim is assigned in circuit court 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, and shall order
reimbursement to the 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 must
include all benefits and
costs paid or incurred by the 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.
(4) If a person sustains accidental bodily injury after June
30, 2020 and obtains a civil judgment for damages for the bodily
injury, and if an abstract is certified because the judgment has
not been satisfied as provided in section 511 of the Michigan
vehicle code, 1949 PA 300, MCL 257.511, the person is entitled to
benefits through the assigned claims plan. The person may claim
personal protection insurance benefits that would have been payable
under this chapter for accidental bodily injury before July 1,
2020.
Sec.
3179. (1) This act Subject to subsection (2), this
chapter applies to motor vehicle accidents occurring on or after
October 1, 1973.
(2) Unless expressly provided otherwise in this chapter, this
chapter does not apply to a motor vehicle accident that occurs
after June 30, 2020.
Sec. 3303. As used in this chapter:
(a) "Automobile insurance" means insurance for automobiles
which provides any of the following:
(i) Security required pursuant to under section
3101.
(ii) Personal protection, property protection, and residual
liability insurance for amounts in excess of the amounts required
under chapter 31.
(iii) Automobile liability or motor vehicle liability
insurance.
(iv) (iii) Insurance
coverage customarily known as
comprehensive and collision.
(v) (iv) Other
insurance coverages for a private passenger
nonfleet automobile as prescribed by rule promulgated by the
commissioner.director.
(b) "Qualified applicant", for automobile insurance, means a
person who is an owner or registrant of an automobile registered or
to be registered in this state or who holds a valid license to
operate a motor vehicle, but does not include any of the following:
(i) A person who is not required to maintain security pursuant
to
under section 3101
or maintain insurance described in section
3009, unless the person intends to reside in this state for 30 days
or more and makes a written statement of that intention on a form
approved
by the commissioner.director.
(ii) A person whose license to operate a vehicle is under
suspension
or revocation, unless the suspension was made 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.
(iii) A person whose policy of automobile insurance has been
cancelled because of nonpayment of premium or finance premium
within the immediately preceding 2-year period, unless the
applicant or insured pays in full a premium installment developed
under section 3350(a) before issuance, continuation, or renewal of
the policy.
(c) "Facility" means the automobile insurance placement
facility
created pursuant to under this chapter.
(d) "Participating member" means an insurer who is required by
this
chapter to be a member of the facility and who in any given a
calendar year has a participation ratio greater than zero in the
facility for that year.
(e) "Participation ratio" means the ratio of the participating
member's Michigan premiums or exposure units to the comparable
statewide totals for all participating members, as follows:
(i) For private passenger nonfleet automobile insurance, for
distribution
of risk or distribution of loss, the ratio shall must
be based on voluntary net direct automobile insurance car years
written in this state for the calendar year ending December 31 of
the second prior year as reported to the statistical agent of each
participating member as private passenger nonfleet exposure.
(ii) For all other automobile insurance, including insurance
for fleets, commercial vehicles, public vehicles, and garages, the
ratio
for distribution of risks or distribution of loss shall must
be based on the total Michigan automobile insurance gross direct
premiums written, including policy and membership fees, less return
premiums and premiums on policies not taken, without including
reinsurance assumed and without deducting reinsurance ceded,
reduced by the amount of premiums reported as private passenger
nonfleet for the calendar year ending December 31 of the second
prior year.
(iii) For expenses of operation of the facility and for voting
rights,
the ratio shall must be based on the total Michigan
automobile insurance gross direct premiums written, including
policy and membership fees, less return premiums and premiums on
policies not taken, without including reinsurance assumed and
without deducting reinsurance ceded for the calendar year ending
December 31 of the second prior year.
(f) "Private passenger nonfleet automobile" means a motorized
vehicle designed for transporting passengers or goods, subject to
specific contemporary definitions for insurance purposes as
provided in the plan of operation.
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.
Sec.
6107. (1) Before April 1 of each year, each an insurer
engaged in writing insurance coverages that provide the security
required by section 3101(1) or automobile insurance policies in
this state, as a condition of its authority to transact insurance
in this state, shall pay to the authority an assessment equal to
$1.00 multiplied by the insurer's total written car years of
insurance
providing that provide the security required by section
3101(1) or under automobile insurance policies written in this
state during the preceding year.
(2) The authority shall segregate and deposit money received
under subsection (1), and all other money received by the
authority, in a fund to be known as the automobile theft prevention
fund. The authority shall administer the automobile theft
prevention fund.
(3) The authority shall expend money in the automobile theft
prevention fund in the following order of priority:
(a) To pay the costs of administration of the authority.
(b) To achieve the purposes and objectives of this chapter,
which may include, but not be limited to, the following:
(i) Providing financial support to the department of state
police and local law enforcement agencies for economic automobile
theft enforcement teams.
(ii) Providing financial support to state or local law
enforcement agencies for programs designed to reduce the incidence
of economic automobile theft.
(iii) Providing financial support to local prosecutors for
programs designed to reduce the incidence of economic automobile
theft.
(iv) Providing financial support to judicial agencies for
programs designed to reduce the incidence of economic automobile
theft.
(v) Providing financial support for neighborhood or community
organizations or business organizations for programs designed to
reduce the incidence of automobile theft.
(vi) Conducting educational programs designed to inform
automobile owners of methods of preventing automobile theft and to
provide equipment, for experimental purposes, to enable automobile
owners to prevent automobile theft.
(4) Money in the automobile theft prevention fund must only be
used for automobile theft prevention efforts and must be
distributed based on need and efficacy as determined by the
authority.
(5) Money in the automobile theft prevention fund is not state
money.
(6) As used in this section, "written car year" means the
portion of a year during which a vehicle is insured as determined
by the catastrophic claims association and used to calculate
premium charges under section 3104.
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) "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.
Sec. 6302. (1) The Michigan automobile insurance fraud
authority is created within the department of the attorney general.
The department of the attorney general shall provide staff for the
authority.
(2) With the discretion to approve or disapprove programs to
be supported, the authority shall do both 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.
(3) 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.
Sec. 6305. The authority 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.
(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) 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. An insurer or self-insurer engaged in writing
insurance coverages that provide the security required by section
3101(1) in this state may pay to the authority, money to be used by
the authority to carry out its duties under this chapter.
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 to the authority using the format and procedures adopted
by the authority. Data required to be reported under this section
includes, at a minimum, all of the following information:
(a) The number of denied claims and the amount of each claim
denied.
(b) The time between submission of claims and the receipt of
benefits.
(c) The difference between applicable rates as recommended by
an independent third-party organization, as described in section
623b of the Michigan vehicle code, 1949 PA 300, MCL 257.623b, and
the benefits provided.
(d) Premium rating errors.
(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 authority shall develop performance metrics that are
consistent, controllable, measurable, and attainable. The authority
shall use the metrics each year to evaluate new applications
submitted for funding consideration and to renew funding for
existing programs.
Sec. 6309. A claimant for benefits to be paid from the
catastrophic claims association created under section 3104 or the
catastrophic claims bureau created under section 3104a, as a
condition of receiving the benefits, shall report claimant data as
required by the authority, including, but not limited to, the
claimant's health status before the accident and health status
after the accident.
Sec. 6310. (1) The authority may impose a civil fine on an
individual who engages in fraud in connection with the receipt of
benefits under an automobile insurance policy. A fine under this
subsection must be proportional to the benefits received.
(2) The authority may impose a civil fine on an insurer that
engages in fraud in connection with a claim for benefits under an
automobile insurance policy. A fine under this subsection must be
proportional to the benefits claimed but not paid.
(3) A fine imposed under this section may be enforced in a
civil action brought by the attorney general. Fines imposed under
this section must be deposited in the Michigan accident liability
safety net fund created under section 3104b.
Sec. 6311. (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 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 occurring
in this state for the previous year, assess the impact of the fraud
on rates charged for automobile insurance, summarize prevention
programs, and outline allocations made by the authority. 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, including the number of instances of suspected and confirmed
insurance fraud, number of prosecutions and convictions involving
automobile insurance fraud, and automobile insurance fraud
recidivism. 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 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. This amendatory act does not take effect
unless all of the following bills of the 99th Legislature are
enacted into law:
(a) Senate Bill No. 1217
(b) Senate Bill No. 1212
(c) Senate Bill No. 1213
(d) Senate Bill No. 1214
(e) Senate Bill No. 1215
(f) Senate Bill No. 1216
