Bill Text: MI HB4488 | 2017-2018 | 99th Legislature | Introduced

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Bill Title: Insurance; no-fault; levels of personal protection benefits; allow insured to select, provide limitations for the payment of allowable expenses for attendant care, and create an automobile insurance fraud and theft prevention authority. Amends title, heading of ch. 61 & secs. 3104, 3107, 3109a, 3301, 3330, 4501, 6101, 6105, 6110 & 6111 of 1956 PA 218 (MCL 500.3104 et seq.) & adds secs. 6104, 6104a, 6104b, 6107a & 6108.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2017-04-20 - Bill Electronically Reproduced 04/19/2017 [HB4488 Detail]

Download: Michigan-2017-HB4488-Introduced.html

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HOUSE BILL No. 4488

 

 

April 19, 2017, Introduced by Rep. Sheppard and referred to the Committee on Insurance.

 

     A bill to amend 1956 PA 218, entitled

 

"The insurance code of 1956,"

 

by amending the title, the heading of chapter 61, and sections

 

3104, 3107, 3109a, 3301, 3330, 4501, 6101, 6105, 6110, and 6111

 

(MCL 500.3104, 500.3107, 500.3109a, 500.3301, 500.3330, 500.4501,

 

500.6101, 500.6105, 500.6110, and 500.6111), the title as amended

 

by 2002 PA 304, section 3104 as amended by 2002 PA 662, section

 

3107 as amended by 2012 PA 542, section 3109a as amended by 2012 PA

 

454, section 3330 as amended by 2012 PA 204, section 4501 as

 

amended by 2012 PA 39, sections 6101, 6105, and 6110 as added by

 

1992 PA 174, and section 6111 as amended by 2004 PA 316, and by

 

adding sections 6104, 6104a, 6104b, 6107a, and 6108.

 

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. 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 insurer engaged in writing insurance

 

coverages that provide the security required by section 3101(1)

 

within 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

 

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). (8)(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 Subject to subsection (3), 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.

 

     (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.

 

Beginning July 1, 2013, 2017, this $500,000.00 $545,000.00 amount

 

shall must 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 The association shall

calculate this biennial adjustment shall be calculated by the

 

association by January 1 of the year of its July 1 effective date.

 

     (3) The association does not have liability for any amount of

 

ultimate loss that exceeds an applicable maximum limit selected

 

under section 3109a(2).

 

     (4) (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.

 

     (5) (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.

 

     (6) (5) An unsatisfied net liability to the association of an

 

insolvent member shall must 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.

 

     (7) (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.

 

     (8) (7) 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 must 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 total 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, with

 

the total car years of insurance multiplied by the applicable

 

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.

 

     (9) (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.

 

     (10) (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.

 

     (11) (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.

     (12) (11) Each The board shall must include members that would

 

contribute a total of not less than 40% of the total premium

 

calculated pursuant to subsection (7)(d). (8)(d). Each director

 

shall be is entitled to 1 vote. The initial term of office of a

 

director shall be is 2 years.

 

     (13) (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 and the terms of board members,

 

consistent with the membership composition requirements in

 

subsections (11) and (13). (12) and (14). 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.

 

     (14) (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.

 

     (15) (14) Each director The director of the department shall

 

be appointed by the commissioner and appoint the directors. A

 

director shall serve until that member's his or her successor is

 

selected and qualified. The board shall elect the chairperson of

 

the board. shall be elected by the board. A 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.

 

     (16) (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.

 

     (17) (16) An The board shall furnish to each member an annual

 

report of the operations of the association in a form and detail as

 

may be determined by the board. shall 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.

 

     (18) (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) (8)(d), and

 

are subject to approval by the commissioner.director of the

 

department.

 

     (19) (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 An insurer authorized to write

 

insurance providing the security required by section 3101(1) in

 

this state, as provided in this section, 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.

 

     (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.

 

     (24) (25) As used in this section:

 

     (a) "Association" means the catastrophic claims association

 

created in subsection (1).

 

     (b) "Board" means the board of directors of the association

 

created in subsection (10).

 

     (c) (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 before

 

October 1 of the year prior to before the July 1 effective date of

 

the biennial adjustment under subsection (2)(k) (2)(m) as reported

 

by the United States department of labor, bureau of labor

 

statistics, Department of Labor, Bureau of Labor Statistics, and as

 

certified by the commissioner.director of the department.

 

     (d) (b) "Motor vehicle accident policy" means a policy

 

providing the coverages required under section 3101(1).

 

     (e) (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. 3107. (1) Except as otherwise provided in subsection (2),

 

this section, personal protection insurance benefits are payable

 

for the following:

 

     (a) Allowable expenses consisting of all reasonable charges

 

incurred, up to any applicable maximum limit selected under section

3109a, for reasonably necessary products, services, and

 

accommodations for an injured person's care, recovery, or

 

rehabilitation. Allowable expenses within personal protection

 

insurance coverage shall do not include either of the following:

 

     (i) Charges for a hospital room in excess of a reasonable and

 

customary charge for semiprivate accommodations except if unless

 

the injured person requires special or intensive care.

 

     (ii) Funeral and burial expenses in excess of the amount set

 

forth in the policy, which shall not be less than $1,750.00 or more

 

than $5,000.00.

 

     (b) Work loss consisting of loss of income from work an

 

injured person would have performed during the first 3 years after

 

the date of the accident if he or she had not been injured. Work

 

loss does not include any loss after the date on which the injured

 

person dies. Because the benefits received from personal protection

 

insurance for loss of income are not taxable income, the benefits

 

payable for such loss of income shall be reduced 15% unless the

 

claimant presents to the insurer in support of his or her claim

 

reasonable proof of a lower value of the income tax advantage in

 

his or her case, in which case the lower value shall apply. For the

 

period beginning October 1, 2012 through September 30, 2013, the

 

benefits payable for work loss sustained in a single 30-day period

 

and the income earned by an injured person for work during the same

 

period together shall not exceed $5,189.00, which maximum shall

 

apply pro rata to any lesser period of work loss. Beginning October

 

1, 2013, the maximum shall be adjusted annually to reflect changes

 

in the cost of living under rules prescribed by the commissioner

director but any change in the maximum shall apply only to benefits

 

arising out of accidents occurring subsequent to the date of change

 

in the maximum.

 

     (c) Expenses not exceeding $20.00 per day, reasonably incurred

 

in obtaining ordinary and necessary services in lieu of those that,

 

if he or she had not been injured, an injured person would have

 

performed during the first 3 years after the date of the accident,

 

not for income but for the benefit of himself or herself or of his

 

or her dependent.

 

     (2) Both All of the following apply to personal protection

 

insurance benefits payable under subsection (1):

 

     (a) A person who is 60 years of age or older and in the event

 

of an accidental bodily injury would not be eligible to receive

 

work loss benefits under subsection (1)(b) may waive coverage for

 

work loss benefits by signing a waiver on a form provided by the

 

insurer. An insurer shall offer a reduced premium rate to a person

 

who waives coverage under this subsection for work loss benefits.

 

Waiver of coverage for work loss benefits applies only to work loss

 

benefits payable to the person or persons who have signed the

 

waiver form.

 

     (b) An insurer shall is not be required to provide coverage

 

for the medical use of marihuana or for expenses related to the

 

medical use of marihuana.

 

     (c) For injuries resulting from an automobile accident, an

 

insurer is not required to provide coverage for more than a

 

cumulative 56 hours per week of attendant care in the home if the

 

attendant care is provided directly, or indirectly through another

person or entity, by any of the following:

 

     (i) A family member of the injured person.

 

     (ii) A member of the household of the injured person.

 

     (iii) A person with whom the injured person had a business or

 

social relationship before the automobile accident.

 

     (3) Subsection (2)(c) does not prohibit an insurer from paying

 

personal protection insurance benefits for attendant care in the

 

home provided by a person described in subsection (2)(c)(i) to

 

(iii) for more than 56 hours per week.

 

     (4) Subsection (2)(c) only limits attendant care provided in

 

the home by a person described in subsection (2)(c)(i) to (iii).

 

     Sec. 3109a. (1) An insurer providing personal protection

 

insurance benefits under this chapter may offer, at appropriately

 

reduced premium rates, deductibles and exclusions reasonably

 

related to other health and accident coverage on the insured. Any

 

deductibles and exclusions offered under this section are subject

 

to prior approval by the commissioner director and shall must apply

 

only to benefits payable to the person individual named in the

 

policy, the spouse of the insured individual, and any relative of

 

either domiciled in the same household.

 

     (2) When an individual applies for or renews an insurance

 

policy that provides benefits under this chapter, the individual

 

shall select 1 of the following levels of maximum personal

 

protection insurance benefits:

 

     (a) A $250,000.00 limit.

 

     (b) A $500,000.00 limit.

 

     (c) A $1,000,000.00 limit.

     (d) No maximum limit.

 

     (3) A maximum limit selected under subsection (2) applies to

 

allowable expenses as described under section 3107(1)(a). The

 

maximum limit selected applies only to benefits payable because of

 

an accidental bodily injury to the insured named in the policy, the

 

insured's spouse, and any relative of either domiciled in the same

 

household. The maximum limit available because of accidental bodily

 

injury to 1 person arising from 1 motor vehicle accident is

 

determined without regard to the number of policies applicable to

 

the accident.

 

     Sec. 3301. (1) Every insurer authorized to write automobile

 

insurance in this state shall participate in an organization for

 

the purpose of doing all of the following:

 

     (a) Providing the guarantee that automobile insurance coverage

 

will be available to any person who is unable to procure that

 

insurance through ordinary methods.

 

     (b) Preserving to the public the benefits of price competition

 

by encouraging maximum use of the normal private insurance system.

 

     (c) Providing funding for the Michigan automobile insurance

 

fraud and theft prevention authority created in section 6104.

 

     (2) The organization created under this chapter shall be

 

called the "Michigan automobile insurance placement facility".

 

     Sec. 3330. (1) The board of governors has the power to direct

 

the operation of the facility, including, at a minimum, the power

 

to do all of the following:

 

     (a) To sue and be sued in the name of the facility. A judgment

 

against the facility shall not create any liabilities in the

individual participating members of the facility.

 

     (b) To delegate ministerial duties, to hire a manager, to hire

 

legal counsel, and to contract for goods and services from others.

 

     (c) To assess participating members on the basis of

 

participation ratios pursuant to section 3303 to cover anticipated

 

costs of operation and administration of the facility, to provide

 

for equitable servicing fees, and to share losses, profits, and

 

expenses pursuant to the plan of operation.

 

     (d) To impose limitations on cancellation or nonrenewal by

 

participating members of facility-placed business, in addition to

 

the limitations imposed by chapters 21 and 32.

 

     (e) To provide for a limited number of participating members

 

to receive equitable distribution of applicants; or to provide for

 

a limited number of participating members to service applicants in

 

a plan of sharing of losses in accordance with section 3320(1)(c)

 

and the plan of operation.

 

     (f) To provide for standards of performance of service for the

 

participating members designated under subdivision (e).

 

     (g) To adopt a plan of operation and any amendments to the

 

plan, consistent with this chapter, necessary to assure the fair,

 

reasonable, equitable, and nondiscriminatory manner of

 

administering the facility, including compliance with chapter 21,

 

and to provide for any other matters necessary or advisable to

 

implement this chapter, including matters necessary to comply with

 

the requirements of chapter 21.

 

     (h) To assess self-insurers and insurers consistent with

 

chapter 31 and the assigned claims plan approved under section

3171.

 

     (i) Until December 31, 2022, to annually assess participating

 

members and self-insurers an aggregate amount not to exceed

 

$21,000,000.00 to cover anticipated costs of operation and

 

administration of the Michigan automobile insurance fraud and theft

 

prevention authority.

 

     (2) The board of governors shall institute or cause to be

 

instituted by the facility or on its behalf an automatic data

 

processing system for recording and compiling data relative to

 

individuals insured through the facility. An automatic data

 

processing system established under this subsection shall, to the

 

greatest extent possible, be made compatible with the automatic

 

data processing system maintained by the secretary of state, to

 

provide for the identification and review of individuals insured

 

through the facility.

 

     (3) Before January 2, 2018, the board of governors shall amend

 

the plan of operation to establish appropriate procedures necessary

 

to make assessments for and carry out the administrative duties and

 

functions of the Michigan automobile insurance fraud and theft

 

prevention authority as provided in chapter 61.

 

     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 and theft prevention 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 and theft prevention

 

authority" means the Michigan automobile insurance fraud and theft

 

prevention authority created under section 6104.

 

     (f) (e) "Organization" means an organization or internal

 

department of an insurer established to detect and prevent

 

insurance fraud.

 

     (g) (f) "Person" includes an individual, insurer, company,

 

association, organization, Lloyds, society, reciprocal or inter-

 

insurance exchange, partnership, syndicate, business trust,

 

corporation, and any other legal entity.

 

     (h) (g) "Practitioner" means a licensee of this state

 

authorized to practice medicine and surgery, psychology,

 

chiropractic, or law, any other licensee of the this state, or an

unlicensed health care provider whose services are compensated,

 

directly or indirectly, by insurance proceeds, or a licensee

 

similarly licensed in other states and nations, or the practitioner

 

of any nonmedical treatment rendered in accordance with a

 

recognized religious method of healing.

 

     (i) (h) "Runner", "capper", or "steerer" means a person who

 

receives a pecuniary or other benefit from a practitioner, whether

 

directly or indirectly, for procuring or attempting to procure a

 

client, patient, or customer at the direction or request of, or in

 

cooperation with, a practitioner whose intent is to obtain benefits

 

under a contract of insurance or to assert a claim against an

 

insured or an insurer for providing services to the client,

 

patient, or customer. Runner, capper, or steerer does not include a

 

practitioner who procures clients, patients, or customers through

 

the use of public media.

 

     (j) (i) "Statement" includes, but is not limited to, any

 

notice statement, proof of loss, bill of lading, receipt for

 

payment, invoice, account, estimate of property damages, bill for

 

services, claim form, diagnosis, prescription, hospital or doctor

 

record, X-rays, test result, or other evidence of loss, injury, or

 

expense.

 

CHAPTER 61

 

AUTOMOBILE INSURANCE FRAUD AND THEFT PREVENTION

 

AUTHORITYAUTHORITIES

 

     Sec. 6101. As used in this chapter:

 

     (a) "Authority" means the Michigan automobile insurance fraud

 

and theft prevention authority created under section 6104 or,

before the Michigan automobile insurance fraud and theft prevention

 

authority is created and after it is dissolved, the automobile

 

theft prevention authority.

 

     (b) "Automobile insurance fraud" means a fraudulent insurance

 

act as described in section 4503 that is committed in connection

 

with an application for or a policy of automobile insurance.

 

     (c) (b) "Board" means the board of directors of the Michigan

 

automobile insurance fraud and theft prevention authority created

 

under section 6104 or, before the Michigan automobile insurance

 

fraud and theft prevention authority is created and after it is

 

dissolved, the board of directors of the automobile theft

 

prevention authority.

 

     (d) "Car years" means net direct private passenger and

 

commercial nonfleet vehicle years of insurance providing the

 

security required by section 3101(1) written in this state for the

 

calendar year ending the December 31 of the second prior year as

 

reported to the statistical agent of each insurer.

 

     (e) (c) "Economic automobile theft" means automobile theft

 

perpetrated for financial gain.

 

     (f) "Facility" means the Michigan automobile insurance

 

placement facility created under chapter 33.

 

     Sec. 6104. (1) Beginning January 1, 2018, the Michigan

 

automobile insurance fraud and theft prevention authority is

 

created within the facility. The facility shall provide staff for

 

the authority and shall carry out the administrative duties and

 

functions as directed by the board of directors.

 

     (2) The Michigan automobile insurance fraud and theft

prevention authority is not a state agency, and the money of the

 

authority is not state money. A record of the authority is exempt

 

from disclosure under section 13 of the freedom of information act,

 

1976 PA 442, MCL 15.243.

 

     (3) The Michigan automobile insurance fraud and theft

 

prevention authority shall do all of the following:

 

     (a) Provide financial support to state or local law

 

enforcement agencies for programs designed to reduce the incidence

 

of automobile insurance fraud and theft.

 

     (b) Provide financial support to state or local prosecutorial

 

agencies for programs designed to reduce the incidence of

 

automobile insurance fraud and theft.

 

     (4) The Michigan automobile insurance fraud and theft

 

prevention 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 and theft.

 

     (5) The purposes, powers, and duties of the Michigan

 

automobile insurance fraud and theft prevention authority are

 

vested in and exercised by a board of directors. The board of

 

directors consists of 15 members as follows:

 

     (a) Nine members who represent automobile insurers in this

 

state subject to the following:

 

     (i) At least 2 members who represent insurer groups with

 

350,000 or more car years.

 

     (ii) At least 2 members who represent insurer groups with less

 

than 350,000 but 100,000 or more car years.

     (iii) At least 1 member who represents insurer groups with

 

less than 100,000 car years.

 

     (b) The director of the department or his or her designee.

 

     (c) The attorney general or his or her designee.

 

     (d) Two members who represent law enforcement agencies in this

 

state.

 

     (e) One member who represents prosecuting attorneys in this

 

state.

 

     (f) One member who represents the general public.

 

     (6) The insurer members on the board under subsection (5)

 

shall be elected by automobile insurers doing business in this

 

state from a list of nominees proposed by the board of governors of

 

the facility. In preparing the list of nominees for the insurer

 

members, the board of governors of the facility shall solicit

 

nominations from automobile insurers doing business in this state.

 

     (7) The governor shall appoint the law enforcement members on

 

the board under subsection (5) with the advice and consent of the

 

senate. In appointing the law enforcement members, the governor

 

shall comply with all of the following:

 

     (a) He or she shall solicit input from various law enforcement

 

associations in this state.

 

     (b) He or she shall not appoint a member who represents the

 

same type of law enforcement agency as the other member who

 

represents law enforcement agencies on the board.

 

     (c) He or she shall not appoint a member representing the same

 

law enforcement agency to the board for more than 2 consecutive

 

terms.

     (8) The governor shall appoint the prosecuting attorney member

 

on the board under subsection (5) with the advice and consent of

 

the senate. In appointing the prosecuting attorney member, the

 

governor shall solicit input from various prosecuting attorney

 

associations in this state.

 

     (9) The governor shall appoint the public member on the board

 

under subsection (5) with the advice and consent of the senate. The

 

public member must be a resident of this state and must not be

 

employed by or under contract with a state or local unit of

 

government or an insurer.

 

     (10) Except as otherwise provided in this subsection, a member

 

of the board shall serve for a term of 4 years and until his or her

 

successor is appointed and qualified. For the members first elected

 

or appointed under this section, 3 insurer members and 1 law

 

enforcement member shall serve for a term of 2 years; 3 insurer

 

members, the prosecuting attorney member, and the general public

 

member shall serve for a term of 3 years; and 3 insurer members and

 

1 law enforcement member shall serve for a term of 4 years.

 

     (11) The board is dissolved on January 1, 2023.

 

     Sec. 6104a. (1) Members of the board shall serve without

 

compensation for their membership on the board, except that members

 

of the board shall receive reasonable reimbursement for necessary

 

travel and expenses.

 

     (2) A majority of the members of the board constitute a quorum

 

for the transaction of business at a meeting, or the exercise of a

 

power or function of the authority, notwithstanding the existence

 

of 1 or more vacancies. Notwithstanding any other provision of law,

action may be taken by the authority at a meeting on a vote of the

 

majority of its members present in person or through the use of

 

amplified telephonic equipment, if authorized by the bylaws or plan

 

of operation of the board. The authority shall meet at the call of

 

the chair or as may be provided in the bylaws of the authority.

 

Meetings of the authority may be held anywhere within this state.

 

     (3) The board shall adopt a plan of operation by a majority

 

vote of the board. Vacancies on the board must be filled in

 

accordance with the plan of operation.

 

     (4) The board shall conduct its business at meetings that are

 

held in this state, open to the public, and held in a place that is

 

available to the general public. However, the board may establish

 

reasonable rules to minimize disruption of a meeting of the board.

 

At least 10 days but not more than 60 days before a meeting, the

 

board shall provide public notice of the meeting at the board's

 

principal office and on a publicly accessible internet website. The

 

board shall include in the public notice of its meeting the address

 

where minutes of the board may be inspected by the public. The

 

board may meet in a closed session for any of the following

 

purposes:

 

     (a) To consider the hiring, dismissal, suspension, or

 

disciplining of officers or employees of the authority.

 

     (b) To consult with its attorney.

 

     (c) To comply with state or federal law, rules, or regulations

 

regarding privacy or confidentiality.

 

`    (5) The board shall display information concerning the

 

authority's operations and activities, including, but not limited

to, the annual financial report required under section 6110, on a

 

publicly accessible internet website.

 

     (6) The board shall keep minutes of each board meeting. The

 

board shall make the minutes open to public inspection and

 

available at the address designated on the public notice of its

 

meetings. The board shall make copies of the minutes available to

 

the public at the reasonable estimated cost for printing and

 

copying. The board shall include all of the following in the

 

minutes:

 

     (a) The date, time, and place of the meeting.

 

     (b) The names of board members who are present and board

 

members who are absent.

 

     (c) Board decisions made during any portion of the meeting

 

that was open to the public.

 

     (d) All roll call votes taken at the meeting.

 

     (7) This section does not apply before the authority is

 

created under section 6104(1) or after the board is dissolved under

 

section 6104(11).

 

     Sec. 6104b. (1) Before January 2, 2018, the department of

 

state police shall transfer all assets of the automobile theft

 

prevention authority to the facility for the benefit of the

 

Michigan automobile insurance fraud and theft prevention authority.

 

     (2) Before January 1, 2023, the authority shall transfer all

 

assets of the authority to the department of state police for the

 

benefit of the automobile theft prevention authority.

 

     (3) After December 31, 2022, the automobile theft prevention

 

authority board of directors shall reinstate and operate the

automobile theft prevention authority in the same manner that it

 

was operated before January 1, 2018.

 

     (4) On January 1, 2023, the Michigan automobile insurance

 

fraud and theft prevention authority, as housed in the facility, is

 

dissolved.

 

     Sec. 6105. The authority shall have board has the powers

 

necessary or convenient to carry out and effectuate the purposes

 

and provisions of this chapter and the purposes of the authority

 

and the powers delegated by other laws its duties under this act,

 

including, but not limited to, the power to do the following:

 

     (a) Sue and be sued ; to have a seal and alter the same at

 

pleasure; to have perpetual succession; to make, execute, and

 

deliver contracts, conveyances, and other instruments necessary or

 

convenient to the exercise of its powers; and to make and amend

 

bylaws in the name of the authority.

 

     (b) Solicit and accept gifts, grants, loans, funds collected

 

and placed in the automobile theft prevention fund, and other aids

 

from any person or the federal, state, or a local government or any

 

agency thereof.

 

     (c) Make grants and investments.

 

     (d) Procure insurance against any loss in connection with its

 

property, assets, or activities.

 

     (e) Invest any money held in reserve or sinking funds, or any

 

money not required for immediate use or disbursement, at its

 

discretion and to name and use depositories for its money.

 

     (f) Contract for goods and services and engage personnel as is

 

necessary. , including the services of private consultants,

managers, counsel, auditors, and others for rendering professional,

 

management, and technical assistance and advice, payable out of any

 

money of the fund legally available for this purpose.

 

     (g) Indemnify and procure insurance indemnifying any member of

 

the board from personal loss or accountability from liability

 

resulting from a member's action or inaction as a member of the

 

board.

 

     (h) Do all other things necessary or convenient to achieve the

 

objectives and purposes of the authority, this chapter, or other

 

laws 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. 6107a. (1) Section 6107 does not apply from January 1,

 

2018 to December 31, 2022.

 

     (2) Before April 1 of 2018, 2019, 2020, 2021, and 2022, each

 

insurer and each self-insurer engaged in writing insurance

 

coverages that provide the security required by section 3101(1)

 

within this state, as a condition of its authority to transact

 

insurance in this state, shall pay to the facility, for deposit

 

into the account of the authority, an assessment determined by the

 

facility as provided in the plan of operation. The assessment to

 

each insurer and self-insurer must be based on the ratio of its car

 

years written to the statewide total car years for all insurers and

 

self-insurers.

 

     (3) The facility shall segregated money received under

 

subsection (2), and all other money received by the authority, from

other money of the facility, if applicable. The money must only be

 

expended as directed by the board.

 

     (4) From the money received annually under subsection (2), the

 

board shall not reduce the amount of money available to provide

 

financial support for programs designed to reduce the incidence of

 

automobile theft below $6,250,000.00.

 

     Sec. 6108. (1) Each 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 set

 

forth by the board.

 

     (2) The department of state police shall cooperate with the

 

authority and shall provide available motor vehicle fraud and theft

 

statistics to the authority on request.

 

     (3) This section only applies after the Michigan automobile

 

insurance fraud and theft prevention authority is created and

 

before it is dissolved.

 

     Sec. 6110. (1) The authority shall develop and implement a

 

plan of operation.

 

     (1) (2) The plan of operation shall of the automobile theft

 

prevention authority must include an assessment of the scope of the

 

problem of automobile theft, including particular areas of the

 

state where the problem is greatest; an analysis of various methods

 

of combating the problem of automobile theft and economic

 

automobile theft; a plan for providing financial support to combat

 

automobile theft and economic automobile theft; and an estimate of

 

the funds money required to implement the plan.

     (2) (3) The Before the Michigan automobile insurance fraud and

 

theft prevention authority is created and after it is dissolved,

 

the automobile theft prevention authority shall report annually on

 

or before February 1 to the governor and the legislature on its

 

activities in the preceding year.

 

     (3) Beginning January 1 of the year after the effective date

 

of the amendatory act that added section 6104 and until it is

 

dissolved, the Michigan automobile insurance fraud and theft

 

prevention authority shall prepare and publish an annual financial

 

report and an annual report to the legislature on its efforts to

 

prevent automobile insurance fraud and cost savings that have

 

resulted from its efforts.

 

     Sec. 6111. By July 1 of every odd even numbered year, the

 

automobile theft prevention authority shall prepare a report that

 

details the theft of automobiles and, after the Michigan automobile

 

insurance fraud and theft prevention authority is created and

 

before it is dissolved, automobile insurance fraud occurring in

 

this state for the previous 2 years, assesses the impact of the

 

thefts and fraud on rates charged for automobile insurance,

 

summarizes prevention programs, and outlines allocations made by

 

the authority. The director of the department of state police,

 

members of the board, insurers, and the commissioner director shall

 

cooperate in the development of the report as requested by the

 

automobile theft prevention authority and shall make available

 

records and statistics concerning automobile thefts, including the

 

number of automobile thefts, number of prosecutions and convictions

 

involving automobile thefts, and automobile theft recidivism, and,

as applicable, 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 automobile theft

 

prevention authority shall evaluate the impact automobile theft

 

and, as applicable, automobile insurance fraud has on the citizens

 

of this state and the costs incurred by the citizens through

 

insurance, police enforcement, prosecution, and incarceration due

 

to automobile thefts and automobile insurance fraud. The report

 

required by this section shall be submitted to the senate and house

 

of representatives standing committees on insurance issues and the

 

commissioner.director.

 

     Enacting section 1. Except as provided in enacting section 2,

 

this amendatory act takes effect 90 days after the date it is

 

enacted into law.

 

     Enacting section 2. The title, the heading of chapter 61, and

 

sections 3301, 3330, 4501, 6101, 6105, 6110, and 6111 of the

 

insurance code of 1956, 1956 PA 218, MCL 500.3301, 500.3330,

 

500.4501, 500.6101, 500.6105, 500.6110, and 500.6111, as amended by

 

this amendatory act, and sections 6104, 6104a, 6104b, 6107a, and

 

6108 of the insurance code of 1956, 1956 PA 218, as added by this

 

amendatory act, take effect January 1, 2018.