Bill Text: MI HB5723 | 2011-2012 | 96th Legislature | Introduced

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Bill Title: Worker's compensation; insurers; appointments by the board of governors of the workers' compensation placement facility; authorize inclusion of direct assignment carriers. Amends sec. 2312 of 1956 PA 218 (MCL 500.2312).

Spectrum: Bipartisan Bill

Status: (Introduced - Dead) 2012-06-05 - Printed Bill Filed 06/05/2012 [HB5723 Detail]

Download: Michigan-2011-HB5723-Introduced.html

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HOUSE BILL No. 5723

 

 

Introduced by Reps. Nesbitt, Wayne Schmidt, MacGregor, Pscholka, Foster, Greimel, Kandrevas, Townsend, Ananich, Irwin and Horn.

 

     A bill to amend 1956 PA 218, entitled

 

"The insurance code of 1956,"

 

by amending section 2312 (MCL 500.2312), as amended by 1993 PA 200.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 2312. (1) A The board of governors shall prepare a plan

 

of operation of the facility, shall be prepared by the board of

 

governors and shall be which is subject to the approval of the

 

commissioner. The commissioner shall review the plan of operation

 

on an ongoing basis, and the plan shall be is subject to revision

 

at the request of the commissioner at any time.

 

     (2) The plan of operation shall provide for all of the

 

following:

 

     (a) Appointment by the board of governors of 1 or more

 

servicing or direct assignment carriers, subject to the approval of

 

the commissioner. Appointments may be rescinded for cause by either

 

the board, subject to the approval of the commissioner, or by the

 

commissioner.

 

     (b) Creation of servicing and direct assignment carrier

 

performance standards including all of the following:

 

     (i) Sufficient personnel to provide support for safety

 

management services offered by the plan.

 

     (ii) Providing for sufficient personnel for claims adjustment.

 

     (c) Agreements among all insurers authorized to write worker's

 

compensation insurance in this state with respect to the equitable

 

apportionment among them of worker's compensation insurance which

 

may be that is afforded applicants who are in good faith entitled

 

to, but who are unable to procure such that insurance through

 

ordinary methods.

 

     (d) Payment of commissions to producing agents not to exceed

 

5% of a total premium.

 

     (e) Creation of 3 rating plans as follows:

 

     (i) Rating plan "A", which shall provide coverage for insureds

 

who have a demonstrated accident frequency problem, who have a

 

measurably adverse loss ratio over a period of years, or who have

 

demonstrated an attitude of noncompliance with safety requirements.

 

The commissioner shall approve rates for rating plan A which shall

 

be that are adequate to cover losses and which shall not be are not

 

excessive, inadequate, or unfairly discriminatory. This plan shall

 

contain a system of surcharges established by the board of

 

governors and approved by the commissioner.

 

     (ii) Rating plan "B", which shall provide coverage to those

 

employers who apply for worker's compensation insurance in the

 

facility and are either self-insured or a member of a self-

 

insurance group. This plan shall be established by the board of

 

governors of the facility and approved by the commissioner. The

 

commissioner shall convene and consult with an advisory

 

organization including representatives of self-insureds and group

 

self-insureds prior to before approving rating plan "B". The

 

commissioner shall give the recommendations of the advisory

 

organization shall be given reasonable consideration. by the

 

commissioner. The commissioner shall approve rates for rating plan

 

B which shall be that are adequate to cover losses and which shall

 

not be are not excessive, inadequate, or unfairly discriminatory.

 

     (iii) Rating plan "C", which shall provide coverage to all other

 

insureds of the facility. Rating plan "C" shall not contain any

 

surcharge system. The commissioner shall approve rates for rating

 

plan C that are set through the lower of either of the following

 

methods:

 

     (A) By using 20% of the loss experience of insurers from

 

employers while participants in rating plan C and 80% of the

 

statewide loss experience of all insurers writing worker's

 

compensation insurance in this state.

 

     (B) Through the use of rates adequate to cover losses and

 

which shall not be that are not excessive, inadequate, or unfairly

 

discriminatory.

 

     (f) Prompt and fair hearings for purposes of under section

 

2350.

 

     (3) The commissioner shall determine the application of the

 

plans created under subsection (2)(e) to insureds. shall be as

 

determined by the commissioner. The plans shall be applied to

 

insureds regardless of the number of employees or amount of payroll

 

of the insured.

 

     (4) Retrospective The board of governors shall perform

 

retrospective evaluation of premiums and loss and expense

 

experience of insureds within each rating plan under subsection

 

(2)(e) shall be performed by the board of governors, in a manner

 

approved by the commissioner. If this evaluation indicates that a

 

return of a portion of premiums is in order, then such a the return

 

shall be accomplished, subject to the approval of the commissioner.