SENATE BILL No. 248

 

 

March 26, 2015, Introduced by Senator HUNE 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 3101, 3104, 3107, 3107a, 3114,

 

3135, 3157, 3163, 3301, 3310, 3330, 4501, and 6107 (MCL 500.3101,

 

500.3104, 500.3107, 500.3107a, 500.3114, 500.3135, 500.3157,

 

500.3163, 500.3301, 500.3310, 500.3330, 500.4501, and 500.6107),

 

the title as amended by 2002 PA 304, section 3101 as amended by

 

2014 PA 492, section 3104 as amended by 2002 PA 662, section 3107

 

as amended by 2012 PA 542, section 3107a as amended by 1991 PA 191,

 

section 3114 as amended by 2002 PA 38, section 3135 as amended by

 

2012 PA 158, section 3163 as amended by 2002 PA 697, section 3310

 

as amended by 2001 PA 228, section 3330 as amended by 2012 PA 204,

 

section 4501 as amended by 2012 PA 39, and section 6107 as added by

 

1992 PA 174, and by adding section 3107c 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 other corporations to provide benefits under this

 

act 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,

 

and other corporations 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. 3101. (1) 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 as required

 

under section 3107, property protection insurance, and residual

 

liability insurance as required under section 3009. Security 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 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) "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.

 

     (d) (c) "Golf cart" means a vehicle designed for

 

transportation while playing the game of golf.

 

     (e) (d) "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) (e) "Moped" means that term as defined in section 32b of

 

the Michigan vehicle code, 1949 PA 300, MCL 257.32b.

 

     (g) (f) "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) (g) "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) (h) "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.

 

     (j) (i) "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) (j) "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 upon on a public highway and

 

has the security described in section 3101 required under

 

subsection (1) or section 3103 in effect.

 

     (l) (k) "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) (l) "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) (m) "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.

 

     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 If an incorporated association is

 

issued a certificate of authority under subsection (5), the

 

unincorporated association shall be known as the Michigan Legacy


Claims Association. Until the unincorporated association is

 

dissolved, an 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 unincorporated association.

 

Each Until the unincorporated association is dissolved, 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 unincorporated association, but

 

only for purposes of accepting indemnification under subsection (8)

 

and the calculation and charging of premiums under subsection

 

(7)(d). (14). Except as expressly provided in this section, the an

 

unincorporated or incorporated association is not an insurer and 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) Two or more voting directors of the board of the

 

unincorporated association may form an incorporated association by

 

subscribing to and filing with the director of the department

 

articles of incorporation. If the unincorporated association has

 

been dissolved, 2 or more individuals may form an incorporated

 

association by subscribing to and filing with the director of the

 

department articles of incorporation. Articles of incorporation

 

filed under this subsection must include all of the following:


     (a) The names and places of residence of the incorporators.

 

     (b) The location of the principal office of the incorporated

 

association for the transaction of business in this state.

 

     (c) The name by which the incorporated association will be

 

known, which must include the words "Michigan", "catastrophic",

 

"claims", and "association", but may not include the words

 

"legacy", "insurance", "casualty", "surety", "health and accident",

 

"mutual", or other words descriptive of the insurance or surety

 

business.

 

     (d) The purposes of the incorporated association, which must

 

be limited to purposes authorized for an incorporated association

 

under this section.

 

     (e) A statement that the incorporated association is organized

 

on a nonstock, directorship basis under this act and the nonprofit

 

corporation act, 1982 PA 162, MCL 450.2101 to 450.3192.

 

     (f) Any other terms and conditions that are not inconsistent

 

with this section or other applicable law and that the

 

incorporators consider to be necessary for the conduct of the

 

affairs of the incorporated association.

 

     (3) At least 1 of the incorporators of an incorporated

 

association shall sign the articles of incorporation before a

 

notary public appointed under the Michigan notary public act, 2003

 

PA 238, MCL 55.261 to 55.315. The articles must be filed in the

 

form prescribed by the director of the department. If at the time

 

of submission no other incorporated association is active, the

 

director of the department may approve and certify the articles of

 

incorporation as authorized under applicable law. The director of


the department shall not certify articles of incorporation for more

 

than 1 incorporated association to be active and operate in this

 

state at the same time. If the director of the department approves

 

the articles of incorporation, the director of the department shall

 

certify the articles and transmit 2 certified copies of the

 

articles to the incorporators. The incorporators shall file 1

 

certified copy with the bureau of commercial services of the

 

department of licensing and regulatory affairs and retain 1

 

certified copy with the records of the incorporated association.

 

The director of the department shall retain a certified copy of the

 

articles of incorporation with the records of the department. The

 

board of an incorporated association, with the approval of the

 

director of the department and in the manner provided in the

 

articles of incorporation, may do both of the following:

 

     (a) Amend the articles of incorporation in any manner not

 

inconsistent with this section and other applicable law.

 

     (b) Integrate into a single instrument as restated articles of

 

incorporation the provisions of the incorporated association's

 

articles of incorporation then in effect, including prior

 

amendments.

 

     (4) Before an incorporated association conducts claims

 

activities authorized under this section and within 90 days after

 

the director of the department certifies the articles of

 

incorporation of the incorporated association under subsection (3),

 

the incorporated association shall file with the director of the

 

department in the form and manner prescribed by the director of the

 

department an application for a certificate of authority detailing


all of the following:

 

     (a) The plan of operation under which the incorporated

 

association proposes to conduct its affairs.

 

     (b) A copy of the incorporated association's bylaws.

 

     (c) Other information as prescribed by the director of the

 

department.

 

     (5) After reviewing an application for a certificate of

 

authority filed by an incorporated association under subsection

 

(4), if the director of the department is satisfied that the

 

incorporated association can comply with this section and other

 

applicable law, the director of the department shall issue to the

 

incorporated association a certificate of authority to commence

 

claims activities authorized under this section. When issuing a

 

certificate of authority to an incorporated association, the

 

director of the department shall establish the initial catastrophic

 

claims assessment to be assessed as provided in subsection (31).

 

     (6) Except as otherwise provided in this section, an

 

incorporated association is subject to the nonprofit corporation

 

act, 1982 PA 162, MCL 450.2101 to 450.3192. An incorporated

 

association is a charitable and benevolent institution for the

 

public benefit and the incorporated association's money and

 

property are exempt from taxation by this state or any political

 

subdivision of this state. An incorporated association may not be

 

incorporated in this state except under this section.

 

     (7) Except as otherwise provided in this section, an

 

incorporated association is not subject to the laws of this state

 

applicable to insurers and is not required to participate in a pool


or fund in which an insurer is required to participate. An

 

incorporated association is subject to supervision by the director

 

of the department as provided in this section. A dissolution or

 

liquidation of an incorporated association must be conducted under

 

the supervision of the director of the department, who has the same

 

power relating to the dissolution or liquidation as is granted to

 

the director of the department under this act for dissolution or

 

liquidation of other types of entities.

 

     (8) (2) The unincorporated 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 the first June 30 after the

 

director of the department issues a certificate of authority under

 

subsection (5), $500,000.00. The unincorporated association is not

 

liable or responsible for a loss occurrence attributable to a motor

 

vehicle accident for a policy issued or renewed after the first

 

June 30 after the director of the department issues a certificate

 

of authority under subsection (5).

 

     (9) For a loss occurrence attributable to a motor vehicle

 

accident for a policy issued or renewed after the first June 30

 

after the director of the department issues a certificate of

 

authority under subsection (5), the responsible insurer shall


retain 100% of the amount of ultimate loss sustained under personal

 

protection insurance coverages up to $500,000.00. The incorporated

 

association is responsible for 100% of all liability for ultimate

 

loss sustained within the scope of personal protection insurance

 

coverages and claims expenses in excess of $500,000.00.

 

     (10) (3) An insurer may withdraw from the unincorporated

 

association only upon on ceasing to write insurance that provides

 

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

 

     (11) (4) An insurer whose membership in the unincorporated

 

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 on the effective date of the

 

withdrawal.

 

     (12) (5) An unsatisfied net liability to the unincorporated

 

association of an insolvent member shall be assumed by and

 

apportioned among the remaining members of the unincorporated

 

association as provided in the plan of operation. The

 

unincorporated 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 to the unincorporated

 

association.

 

     (13) (6) If a member of the unincorporated association 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 to the unincorporated association.

 

     (14) (7) The unincorporated association shall do all of the

 

following on behalf of the members of the unincorporated

 

association:

 

     (a) Assume 100% of all liability as provided in subsection

 

(2).(8) for a loss occurrence attributable to a motor vehicle

 

accident for a policy issued or renewed before the first July 1

 

after the director of the department issues a certificate of

 

authority under subsection (5).

 

     (b) Establish procedures by which members shall promptly

 

report to the unincorporated association each claim that, on the

 

basis of the injuries or damages sustained, may reasonably be

 

anticipated to involve the unincorporated 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 unincorporated

 

association of subsequent developments likely to materially affect

 

the interest of the unincorporated association in the claim.

 

     (c) Maintain relevant loss and expense data relative to all

 

liabilities of the unincorporated association and require each

 

member to furnish statistics, in connection with liabilities of the

 

unincorporated 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


unincorporated association that the unincorporated 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. A premium may not be

 

charged under this section for policies issued or renewed after the

 

first June 30 after the director of the department issues a

 

certificate of authority under subsection (5). 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 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 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

 

unincorporated 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 unincorporated

 

association.

 

     (f) Receive and distribute all sums money required by the

 

operation of the unincorporated 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 unincorporated association, the

 

unincorporated 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 unincorporated association and may

 

charge the cost of the adjustment to the member.

 

     (15) An incorporated association shall do all of the

 

following:

 

     (a) Assume liability for claims as provided in subsection (9).

 

     (b) Establish procedures for the owner or registrant of a

 

motor vehicle that maintains the security required under section

 

3101(1), an agent of the owner or registrant, a claimant, or an

 

insurer, to report to the incorporated association each claim under

 

the security that on the basis of the injuries or damages sustained


reasonably may be anticipated to involve the incorporated

 

association.

 

     (c) Maintain relevant loss and expense data relative to all

 

liabilities of the incorporated association and require insurers to

 

furnish statistics at the times and in the form and detail as

 

required by the plan of operation of the incorporated association.

 

     (d) Before the second July 1 after the director of the

 

department issues a certificate of authority under subsection (5)

 

and before July 1 of each following year, determine the annual per-

 

motor-vehicle assessment to be imposed under subsection (31). The

 

total of all assessments imposed under subsection (31) must be

 

sufficient to cover the expected losses and expenses that the

 

incorporated association likely will incur in the period for which

 

the assessments are applicable. The incorporated association shall

 

calculate the assessment under this subdivision by dividing the

 

total expected losses and expenses of the incorporated association

 

for the period by the total written car years of insurance

 

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

 

state during the previous period. Total expected losses and

 

expenses must include an amount to cover incurred but not reported

 

losses for the period. The assessment calculated under this

 

subdivision may be adjusted for any excess or deficient amounts

 

from previous periods. Excesses or deficiencies from a previous

 

period may be fully adjusted in a single period or may be adjusted

 

over several periods as provided in the plan of operation of the

 

incorporated association. The incorporated association shall

 

determine a separate assessment amount to be charged to an owner or


registrant of an insured historic vehicle equal to 20% of the

 

assessment charged for a motor vehicle other than a historic

 

vehicle. 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 assessments to the

 

incorporated association authorized under this section.

 

     (16) (8) In addition to other powers granted to it by under

 

this section, the unincorporated association or an incorporated

 

association may do all of the following:

 

     (a) Sue and be sued in the name of the association. A judgment

 

against the unincorporated association shall does not create any

 

direct liability against the individual members of the

 

unincorporated association. The unincorporated association may

 

provide for the indemnification of its members, and the

 

unincorporated association or an incorporated association may

 

provide for the indemnification of the members of the its board of

 

directors, of the association, and officers, and 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 of the association,

 

adopt reasonable rules for the administration of the association,

 

enforce those rules, and delegate authority, as the board of the

 

association considers necessary, to assure the proper

 

administration and operation of the association consistent with the

 

plan of operation.

 

     (e) Contract for goods and services with other persons

 

relating to all or a portion of the goods and services necessary

 

for the management and operation of the association, including, but

 

not limited to, independent claims management, actuarial,

 

investment, and legal services. , from others within or without

 

this state to assure the efficient operation of the association.All

 

of the following apply to a contract for goods or services between

 

the unincorporated association and an incorporated association:

 

     (i) The terms must be fair and reasonable.

 

     (ii) The charges or fees for services performed must be

 

reasonable.

 

     (iii) The expenses incurred and payment received must be

 

allocated in conformity with customary accounting practices

 

consistently applied.

 

     (iv) The books, accounts, and records of each association must

 

be maintained to clearly and accurately disclose the precise nature

 

and details of the transactions, including accounting information

 

as necessary to support the reasonableness of the charges or fees.

 

     (f) Hear and determine complaints of a company or other an

 

interested party concerning the operation of the association.


     (g) Borrow money to accomplish the purposes of the association

 

or implement this section at rates of interest determined by the

 

association, and issue notes, bonds, certificates, other evidences

 

of indebtedness, or pledges. Interest and earnings on notes, bonds,

 

certificates, or other obligations of the association are exempt

 

from any taxes imposed by this state or a political subdivision of

 

this state. An association shall not borrow money from another

 

association.

 

     (h) Take action necessary to facilitate and maintain the tax-

 

exempt status of the association and its income and operation, and

 

to facilitate the tax-exempt status of any bonds or other

 

indebtedness issued by or on behalf of the association.

 

     (i) Invest and reinvest money of the association.

 

     (j) Take, hold, and convey interests in property.

 

     (k) Accept gifts, grants, loans, or other aid from another

 

person.

 

     (l) (g) Perform other acts not specifically enumerated in this

 

section that are necessary or proper to accomplish the purposes of

 

the association or to implement this section and that are not

 

inconsistent with this section or the plan of operation of the

 

association.

 

     (17) (9) A board of directors of the unincorporated

 

association is created, hereinafter referred to as the board, which

 

shall to be responsible for the operation of the unincorporated

 

association consistent with the plan of operation of the

 

unincorporated association and this section.

 

     (18) (10) The board of the unincorporated association or an


incorporated association shall operate the association according to

 

the plan of operation of the association and this section. The plan

 

of operation of an association shall provide for all of the

 

following:

 

     (a) The establishment of necessary facilities.

 

     (b) The management and operation of the association.

 

     (c) Procedures For the unincorporated association, provisions

 

to be utilized used in charging premiums, including adjustments

 

from excess or deficient premiums from prior periods. For an

 

incorporated association, procedures for charging assessments,

 

including adjustments from excess or deficient assessments from

 

prior periods.

 

     (d) Procedures For the unincorporated association, procedures

 

governing the actual payment of premiums to the unincorporated

 

association. For an incorporated association, procedures governing

 

the payment of assessments to the incorporated association.

 

     (e) Reimbursement by the association of each member of

 

individual serving on the board by the of 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.

 

     (19) (11) Each The board shall of the unincorporated

 

association must include individuals from members of the

 

unincorporated association that would contribute a total of not

 

less than 40% of the total premium calculated pursuant to under

 

subsection (7)(d). (14). Each director shall be of the


unincorporated association is entitled to 1 vote. The initial term

 

of office of a director shall be of the unincorporated association

 

is 2 years.

 

     (20) (12) As part of the plan of operation of the

 

unincorporated association, the board of the unincorporated

 

association 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) (19) and

 

(13). (21). 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 is not appointed for a term of

 

more than 4 years.

 

     (21) (13) The board shall of the unincorporated association

 

must consist of 5 directors , and the commissioner shall be

 

director of the department, who is an ex officio member of the

 

board without vote.

 

     (22) (14) Each director shall be appointed by the commissioner

 

and The director of the department shall appoint the directors of

 

the unincorporated association. A director of the unincorporated

 

association shall serve until that member's director's successor is

 

selected and qualified. The directors of the unincorporated

 

association shall elect from the directors a chairperson of the

 

board. shall be elected by the board. A The director of the

 

department shall fill a vacancy on the board shall be filled by the

 

commissioner of the unincorporated association consistent with the

 

plan of operation.

 

     (23) (15) After the board is appointed, the The board of the


unincorporated association shall meet as often as the chairperson,

 

the commissioner, director of the department, or the plan of

 

operation shall require, of the unincorporated association

 

requires, or at the request of any 3 members directors of the

 

board. unincorporated association. The chairperson shall retain the

 

right to may vote on all issues. Four members of the board

 

directors of the unincorporated association constitute a quorum.

 

     (24) The board of directors of an incorporated association

 

shall operate the incorporated association in accordance with the

 

plan of operation of the incorporated association and this section.

 

All of the following apply to the formation and operation of the

 

board of an incorporated association:

 

     (a) The board must consist of 7 directors appointed by the

 

governor with the advice and consent of the senate. The governor

 

shall appoint the initial directors within 45 days after the

 

incorporated association is incorporated. An employee or officer of

 

an insurer is not eligible to serve as a director. The governor

 

shall appoint directors as follows:

 

     (i) Two of the directors must represent insurers that provide

 

coverages required under section 3101(1).

 

     (ii) One of the directors must represent health facilities or

 

agencies, as that term is defined in section 20106 of the public

 

health code, 1978 PA 368, MCL 333.20106.

 

     (iii) One of the directors must represent individuals licensed

 

under article 15 of the public health code, 1978 PA 368, MCL

 

333.16101 to 333.18838.

 

     (iv) Three of the directors must represent individuals who are


insured under policies that provide the security required under

 

section 3101(1). Of these 3 individuals:

 

     (A) One must be an individual recommended by the senate

 

majority leader.

 

     (B) One must be an individual recommended by the speaker of

 

the house of representatives.

 

     (b) Of the directors initially appointed, 2 shall be appointed

 

for a term of 4 years, 2 shall be appointed for a term of 3 years,

 

2 shall be appointed for a term of 2 years, and 1 shall be

 

appointed for a term of 1 year. After the initial appointments, a

 

director shall be appointed for a term of 4 years. If there is a

 

vacancy on the board, the governor shall fill the vacancy in the

 

same manner as the original appointment for the balance of the

 

unexpired term. Within 60 days after the initial directors are

 

appointed, the director of the department shall call the first

 

meeting of the board. At the first meeting, the board shall elect a

 

chairperson from the directors of the incorporated association.

 

Four directors of the incorporated association constitute a quorum

 

for the transaction of business at a meeting. An affirmative vote

 

of 4 directors of the incorporated association is necessary for

 

official action of the board.

 

     (c) The board shall conduct its business at a meeting that is

 

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

 

that is available to the general public. However, the board may

 

establish reasonable rules and regulations to minimize disruption

 

of a meeting. At least 10 days but not more than 60 days before a

 

meeting, the board shall provide public notice of the meeting at


its principal office and on an internet website accessible by the

 

public. The board shall include in the public notice of the 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:

 

     (i) To consider the hiring, dismissal, suspension,

 

disciplining, or evaluation of officers or employees of the

 

incorporated association.

 

     (ii) To consult with its attorney.

 

     (iii) To comply with state or federal law, rules, or

 

regulations regarding privacy or confidentiality.

 

     (d) The board shall display information concerning the

 

incorporated association's operations and activities on an internet

 

website accessible by the public.

 

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

 

minutes shall be open to public inspection, and the board shall

 

make the minutes 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:

 

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

 

     (ii) Directors who are present and absent.

 

     (iii) Board decisions made at a meeting open to the public.

 

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

 

     (f) A director is not liable for any lawful action taken by

 

the director in the performance of duties under this section.


     (25) (16) An annual report of the operations of the

 

unincorporated association in a form and detail as may be

 

determined by the board of the unincorporated association shall be

 

furnished to each member of the unincorporated association.

 

     (26) An incorporated association shall have its finances

 

audited annually by an independent public accountant. The

 

incorporated association shall make the audit available to the

 

public and post the audit on a publicly accessible Internet website

 

maintained by the incorporated association. An incorporated

 

association shall make an annual report of the operations of the

 

incorporated association available to the public and post the

 

report on a publicly accessible Internet website maintained by the

 

incorporated association. By June 30 of each year after the year in

 

which the director of the department issues a certificate of

 

authority under subsection (5) to the incorporated association, the

 

incorporated association shall prepare a statement of the finances

 

of the incorporated association for the preceding calendar year to

 

accompany the annual report. The financial statement must contain

 

all of the following:

 

     (a) The number of claims opened and closed in the year, the

 

amount expended on the claims, and the anticipated future costs of

 

the claims, with the assumptions, methodology, and data used to

 

make the future projections.

 

     (b) The total number of open claims and their anticipated

 

future costs, the assumptions, methodology, and data used to make

 

the future projections, a categorical summary of claims paid, both

 

open and closed, and the expected future costs of claims grouped by


numeric range.

 

     (c) The number of new claims projected for the upcoming year,

 

if any, their anticipated future costs, and the assumptions,

 

methodology, and data used to make the future projections.

 

     (d) The current ratio of claims opened to claims closed.

 

     (e) The average length of a claim.

 

     (f) A statement of the current financial condition of the

 

incorporated association and the reasons for any deficit or surplus

 

in collected assessments compared to losses.

 

     (g) A statement of the assumptions, methodology, and data used

 

to make revenue projections.

 

     (h) A statement of the assumptions, methodology, and data used

 

to determine the incorporated association's annual assessments.

 

     (i) A list of assets of the incorporated association listed by

 

category or type of asset, such as, for example, stocks, bonds, or

 

mutual funds, and the expected return on each asset.

 

     (j) The total amount of the incorporated association's

 

discounted and undiscounted liabilities and a description and

 

explanation of the liabilities, including an explanation of the

 

association's definition of the terms "discounted" and

 

"undiscounted".

 

     (k) A summary of services for which claims were paid and the

 

average cost for the services.

 

     (l) Measures taken by the incorporated association, if any, to

 

contain costs.

 

     (m) Measures taken by the incorporated association, if any, to

 

reduce any deficit reported under subdivision (f).


     (27) (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 An association shall operate

 

under a plan of operation of the association that is approved by

 

the director of the department, that is consistent with the

 

objectives and provisions of this section, which shall provide and

 

that provides for the economical, fair, and nondiscriminatory

 

administration of the association and, for the unincorporated

 

association, for the prompt and efficient provision of indemnity .

 

If a plan is not submitted within this 60-day period, then the

 

commissioner, to members of the unincorporated association. If an

 

association does not have an approved plan of operation, the

 

director of the department, after consultation with the board of

 

the association, shall formulate and place into effect a plan

 

consistent with this section.

 

     (28) (18) The A plan of operation , unless approved sooner in

 

writing, shall be of an association or an amendment to a plan of

 

operation of an association that has been submitted to the director

 

of the department for approval is considered to meet the

 

requirements of this section if it is not approved or disapproved

 

by written order of the commissioner director of the department

 

within 30 days after the date of its submission. Before disapproval

 

of all or any part of the proposed plan of operation, the

 

commissioner director of the department shall notify the board

 

association in what respect the plan of operation fails to meet the

 

requirements and objectives of this section. If the board

 

association fails to submit a revised plan of operation that meets


the requirements and objectives of this section within the 30-day

 

period, the commissioner director of the department shall enter an

 

order accordingly and shall immediately formulate and place into

 

effect a plan of operation for the association consistent with the

 

requirements and objectives of this section.

 

     (29) (19) The For the unincorporated association, a proposed

 

plan of operation or amendments to the plan of operation of the

 

unincorporated association are subject to majority approval by the

 

board, ratified ratification of the unincorporated association by a

 

majority of the membership having members of the unincorporated

 

association that have a vote, with voting rights being apportioned

 

according to the premiums charged in subsection (7)(d) (14)(d), and

 

are subject to approval by the commissioner.director of the

 

department as provided in this section. For an incorporated

 

association, a proposed plan of operation or amendments to the plan

 

of operation of the incorporated association are subject to

 

approval by the board of the incorporated association and by the

 

director of the department as provided in this section. This state

 

is not liable for an obligation of an association, and any debt of

 

an association is not a debt of this state. The credit of this

 

state may not be loaned to an association.

 

     (30) (20) Upon For the unincorporated association, on approval

 

by the commissioner director of the department and ratification by

 

the members of the unincorporated association of the plan of

 

operation submitted, or upon on the promulgation of a plan by the

 

commissioner, director of the department, each 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 as

 

a condition of maintaining its authority to transact insurance in

 

this state.

 

     (31) For a policy issued or renewed after the first June 30

 

after the director of the department issues a certificate of

 

authority under subsection (5), an annual catastrophic claims

 

assessment is imposed on the owner or registrant of a motor vehicle

 

that maintains the security required under section 3101(1). The

 

owner or registrant, not the insurer, is liable for the payment of

 

the assessment. The assessment imposed under this subsection is a

 

charge imposed by an incorporated association and is not part of an

 

insurer's premium. Until the second June 30 after a certificate of

 

authority is issued under subsection (5), the annual amount of the

 

catastrophic claims assessment is the initial assessment set by the

 

director of the department under subsection (5). After the second

 

June 30 after a certificate of authority is issued under subsection

 

(5), the annual amount of the catastrophic claims assessment shall

 

be equal to the per-motor-vehicle assessment determined by the

 

incorporated association under subsection (15)(d). The owner or

 

registrant shall pay the per-motor-vehicle assessment for each

 

motor vehicle at the time of payment for a motor vehicle policy

 

issued by an insurer authorized to transact business in this state

 

that affords insurance for the payment of benefits required under

 

section 3101(1). The insurer shall collect the catastrophic claims

 

assessment on behalf of the incorporated association. The insurer

 

shall include the catastrophic claims assessment as a separate


identified charge on its policy invoice. The insurer shall collect

 

the assessment with the insurer's usual cycle for collection of

 

insurance premiums and shall promptly transmit all assessments

 

collected to the incorporated association on forms and in a manner

 

prescribed by the incorporated association and shall hold

 

assessments collected in trust for the incorporated association

 

until remitted to the association. An insurer shall treat the

 

failure to pay an assessment under this subsection in the same

 

manner as the failure to pay an insurance premium. An insurer that

 

receives from an incorporated association a refund of a portion of

 

an assessment paid because of the cancellation of the policy shall

 

refund that portion to the owner or registrant.

 

     (32) (21) The An 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 of

 

the association.is an insurer.

 

     (33) (22) Premiums charged members by the unincorporated

 

association shall be recognized in the rate-making procedures for

 

insurance rates in the same manner that expenses and premium taxes

 

are recognized.

 

     (34) (23) The commissioner director of the department or an

 

authorized representative of the commissioner director of the

 

department may visit the an association at any time and examine any

 

and all of the association's affairs and records relating to the

 

business of the association. An association shall pay expenses

 

incurred by the director of the department for the examination of

 

the association. An association is subject to fees imposed under


section 224(4) to (11) in the same manner as any other type of

 

entity under this act.

 

     (35) (24) The unincorporated association does not have

 

liability is not liable for losses occurring before July 1, 1978.

 

The unincorporated association is not liable for losses occurring

 

under policies issued or renewed after the first June 30 after the

 

director of the department issues a certificate of authority under

 

subsection (5).

 

     (36) An incorporated association shall comply with the freedom

 

of information act, 1976 PA 442, MCL 15.231 to 15.246, as if the

 

incorporated association were a public body. A record or portion of

 

a record, material, data, or other information received, prepared,

 

used, or retained by the incorporated association in connection

 

with the investment of assets or of an insurer that relates to

 

financial or proprietary information and is considered by the

 

person or insurer providing the incorporated association with the

 

record, material, data, or information as confidential and

 

acknowledged by the incorporated association as confidential is not

 

subject to disclosure by the incorporated association. As used in

 

this subsection:

 

     (a) "Financial or proprietary information" means information

 

that has not been publicly disseminated or that is unavailable from

 

other sources, the release of which might cause the person

 

providing the information to the incorporated association

 

significant competitive harm. Financial or proprietary information

 

includes, but is not limited to, financial performance data and

 

projections, financial statements, and product and market data.


     (b) "Public body" means that term as defined in section 2 of

 

the freedom of information act, 1976 PA 442, MCL 15.232.

 

     (37) The unincorporated association shall continue in

 

existence until all liabilities due to loss occurrences for which

 

the unincorporated association has liability under this section are

 

paid. On payment of the unincorporated association's final

 

liability under this section, the unincorporated association shall

 

notify the director of the department, wind up the affairs of the

 

unincorporated association, transmit any remaining money of the

 

unincorporated association to an incorporated association, and

 

dissolve the unincorporated association.

 

     (38) The legislature finds that there is a compelling state

 

interest in protecting public health and maintaining a viable,

 

orderly, and cost-effective private sector market for automobile

 

insurance in this state, and also finds that an association created

 

and powers conferred on an association by this section constitute a

 

necessary program and serve a necessary public purpose. The

 

legislature determines that it is essential for the public purposes

 

of this section that revenues received by an association be exempt

 

from federal taxation, and it is the intent of the legislature that

 

an association and activities of an association authorized under

 

this section are for the purpose of protecting and advancing the

 

public interest in maintaining a viable, orderly, and cost-

 

effective private sector market for automobile insurance in this

 

state and protecting public health. It is the intent of the

 

legislature that an association is authorized under this section to

 

be established and operate in a manner allowing an association to


qualify as an entity recognized by the internal revenue service as

 

authorized to issue tax-exempt bonds. This section, being necessary

 

for and to secure the public health, safety, convenience, and

 

welfare of the citizens of this state, shall be liberally construed

 

to effect its public purposes.

 

     (39) For purposes of this section, the date that a policy is

 

issued or renewed is the effective date of coverage under the

 

policy.

 

     (40) (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 unincorporated association created

 

under subsection (1) or an incorporated association formed under

 

subsections (2) to (7).

 

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

 

association or of an incorporated association.

 

     (c) "Incorporated association" means an incorporated

 

association formed as a nonprofit association under subsections (2)

 

to (7).

 

     (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 an insurer is obligated to pay and that are paid or payable

 

by the member, insurer, and do does not include claim expenses. An

 

ultimate loss is incurred by the an association on the date that

 

the loss occurs.

 

     (f) "Unincorporated association" means the unincorporated

 

nonprofit association created under subsection (1) and includes the

 

unincorporated nonprofit association when it is known as the

 

Catastrophic Claims Association and the unincorporated nonprofit

 

association when it is known as the Michigan Legacy Claims

 

Association.

 

     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 for reasonably necessary products, services, and

 

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

 

rehabilitation. Allowable expenses within personal protection

 

insurance coverage shall not include Payment to providers for those

 

products, services, and accommodations are subject to the limits in

 

section 3107c.

 

     (b) Personal protection insurance benefits are not payable for

 

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.

 

     (c) (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.

 

     (d) (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 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) (1)(c) 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.

 

     Sec. 3107a. Subject to the provisions of section 3107(1)(b),

 

3107(1)(c), work loss for an injured person who is temporarily

 

unemployed at the time of the accident or during the period of

 

disability shall be based on earned income for the last month

 

employed full time preceding the accident.

 

     Sec. 3107c. (1) Except as otherwise provided in subsections

 

(3) and (4), all of the following apply to allowable expenses under

 

section 3107(1)(a) for attendant care provided in the home by a

 

family or household member:

 

     (a) Payment is limited to a total of 56 hours per week,

 

regardless of the level of care provided.

 

     (b) Payment is limited to $15.00 per hour, regardless of the

 

level of care provided. 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.

 

     (c) The limitations in subdivisions (a) and (b) apply

 

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 subsections (3) and (4),

 

both of the following apply to allowable expenses under section

 

3107(1)(a) for attendant care provided in the home by someone other

 

than a family or household member:

 

     (a) Payment is limited to a total of 24 hours per day for

 

services performed by 1 or more individuals.

 

     (b) Payment for the first 30 days of attendant care is not

 

subject to a copayment. After 30 days, payment is subject to a

 

copayment of 20% up to a maximum of $200.00 per month.

 

     (3) Except as otherwise provided in subsection (4), payment

 

for attendant care provided by a family or household member and

 

someone other than a family or household member is cumulatively

 

limited to 24 hours per day.

 

     (4) Notwithstanding the limitations in this section, an

 

insurer or an incorporated association incorporated under section

 

3104 may contract to provide attendant care as an allowable expense


at any rate and for any number of hours per week.

 

     Sec. 3114. (1) Except as provided in subsections (2), (3), and

 

(5), a personal protection insurance policy described in section

 

3101(1) applies to accidental bodily injury to the person named in

 

the policy, the person's spouse, and a relative of either domiciled

 

in the same household, if the injury arises from a motor vehicle

 

accident. A personal injury insurance policy described in section

 

3103(2) applies to accidental bodily injury to the person named in

 

the policy, the person's spouse, and a relative of either domiciled

 

in the same household, if the injury arises from a motorcycle

 

accident. When personal protection insurance benefits or personal

 

injury benefits described in section 3103(2) are payable to or for

 

the benefit of an injured person under his or her own policy and

 

would also be payable under the policy of his or her spouse,

 

relative, or relative's spouse, the injured person's insurer shall

 

pay all of the benefits and is not entitled to recoupment from the

 

other insurer.

 

     (2) A person suffering accidental bodily injury while an

 

operator or a passenger of a motor vehicle operated in the business

 

of transporting passengers shall receive the personal protection

 

insurance benefits to which the person is entitled from the insurer

 

of the motor vehicle. This subsection does not apply to a passenger

 

in the following, unless that passenger is not entitled to personal

 

protection insurance benefits under any other policy:

 

     (a) A school bus, as defined by the department of education,

 

providing transportation not prohibited by law.

 

     (b) A bus operated by a common carrier of passengers certified


by the department of transportation.

 

     (c) A bus operating under a government sponsored

 

transportation program.

 

     (d) A bus operated by or providing service to a nonprofit

 

organization.

 

     (e) A taxicab insured as prescribed in section 3101 or 3102.

 

     (f) A bus operated by a canoe or other watercraft, bicycle, or

 

horse livery used only to transport passengers to or from a

 

destination point.

 

     (3) An employee, his or her spouse, or a relative of either

 

domiciled in the same household , who suffers accidental bodily

 

injury while an occupant of a motor vehicle owned or registered by

 

the employer, shall receive personal protection insurance benefits

 

to which the employee is entitled from the insurer of the furnished

 

vehicle.

 

     (4) Except as provided in subsections (1) to (3), a person

 

suffering accidental bodily injury arising from a motor vehicle

 

accident while an occupant of a motor vehicle shall claim personal

 

protection insurance benefits from insurers in the following order

 

of priority:

 

     (a) The insurer of the owner or registrant of the vehicle

 

occupied.

 

     (b) The insurer of the operator of the vehicle occupied.

 

     (5) A person suffering accidental bodily injury arising from a

 

motor vehicle accident which that shows evidence of the involvement

 

of a motor vehicle while an operator or passenger of a motorcycle

 

shall claim personal protection insurance benefits from insurers in


the following order of priority:

 

     (a) The insurer of the owner or registrant of the motor

 

vehicle involved in the accident.

 

     (b) The insurer of the operator of the motor vehicle involved

 

in the accident.

 

     (c) The motor vehicle insurer of the operator of the

 

motorcycle involved in the accident.

 

     (d) The motor vehicle insurer of the owner or registrant of

 

the motorcycle involved in the accident.

 

     (6) If 2 or more insurers are in the same order of priority to

 

provide personal protection insurance benefits under subsection

 

(5), an insurer paying benefits due is entitled to partial

 

recoupment from the other insurers in the same order of priority,

 

together with and a reasonable amount of partial recoupment of the

 

expense of processing the claim, in order to accomplish equitable

 

distribution of the loss among all of the insurers.

 

     Sec. 3135. (1) A person 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 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 be assessed on the basis of comparative

 

fault, except that damages shall not be assessed in favor of a

 

party who is more than 50% at fault.

 

     (c) Damages shall 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:

 

     (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 be conducted as provided in

 

subsection (4).

 

     (4) All of the following shall apply to an action for damages

 

under subsection (3)(e):

 

     (a) Damages shall be assessed on the basis of comparative

 

fault, except that damages shall 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 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 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. 3157. A physician, hospital, clinic or other person or

 

institution lawfully rendering treatment to an injured person for

 

an accidental bodily injury covered by personal protection

 

insurance, and a person or institution providing rehabilitative

 

occupational training following the injury, may charge a reasonable

 

amount for the products, services and accommodations rendered. The

 

charge shall not exceed the amount the person or institution

 

customarily charges for like products, services, and accommodations

 

in cases not involving insurance.

 

     Sec. 3163. (1) 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.

 

     (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 available.

 

     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 authority and the automobile theft prevention authority.

 

     (2) The organization created under this chapter shall be

 

called the "Michigan automobile insurance placement facility".

 

     Sec. 3310. (1) The board of governors of the facility shall

 

consist of 11 governors. Seven of the governors shall be elected as

 

provided in the plan of operation. Four governors shall be

 

appointed by the commissioner, director, of which 2 shall represent

 

insurance agents subject to section 1209(1) and 2 shall represent

 

the general public. Each governor appointed by the commissioner

 

pursuant to director under this subsection shall serve an annual

 

term. The 7 elected members of the board of governors of the

 

facility shall be elected to serve annual terms commencing within

 

45 days after the annual determination of participation ratios.

 

Vacancies shall be filled as provided for in the plan of operation.

 

     (2) Amendments to the plan of operation for the facility are

 

subject to majority approval by the board of governors and


ratification by a majority of the membership. The membership vote

 

shall be determined by participation ratio as defined in section

 

3303(e)(iii). The facility committee shall adopt a plan of

 

operation by majority vote of the committee and approved and

 

ratified amendments shall submit it be submitted to the

 

commissioner director for his or her approval. If the commissioner

 

director finds that the amendments to the plan meets meet the

 

requirements of this chapter, he or she shall approve it. them. If

 

the commissioner director finds that the amendments to the plan

 

fails fail to meet the requirements of this chapter, he or she

 

shall state in what respects the plan is amendments are deficient

 

and shall afford the facility committee board of governors 10 days

 

within which to correct the deficiency. If the commissioner

 

director and the facility committee board of governors fail to

 

agree that the provisions of corrected amendments to the plan so

 

submitted meet 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 amendments to

 

the plan of operation within 30 days after receipt of the plan,

 

amendments, the plan amendments shall be considered approved.

 

     (3) Amendments to the plan of operation shall be subject to

 

majority approval by the board of governors and ratified by

 

majority of the membership vote. The membership vote shall be

 

determined as defined in section 3303(e)(iii). Amendments to the

 

plan of operation shall be subject to the approval of the

 

commissioner, as provided in subsection (2).


     (3) (4) Every insurer authorized to write automobile insurance

 

in this state shall adhere to the plan of operation.

 

     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, 2020, 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 authority

 

and the automobile 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 March 1, 2016, the board of governors shall amend

 

the plan of operation to establish appropriate procedures necessary

 

to make assessments for and to carry out the administrative duties

 

and functions of the Michigan automobile insurance fraud authority.

 

     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) Prior to Subject to section 6307(1), before


April 1 of each year, each insurer engaged in writing insurance

 

coverages which 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 pay to the authority an

 

assessment equal to $1.00 multiplied by the insurer's total earned

 

written car years of insurance providing the security required by

 

section 3101(1) written in this state during the immediately

 

preceding calendar year.

 

     (2) Money The authority shall segregate money received

 

pursuant to under subsection (1), and all other money received by

 

the authority, shall be segregated and placed place the money in a

 

fund to be known as the automobile theft prevention fund. The

 

authority shall administer the automobile theft prevention fund.

 

shall be administered by the authority.

 

     (3) Money The authority shall expend money in the automobile

 

theft prevention fund shall be expended 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) Provide financial support to the department of state

 

police and local law enforcement agencies for economic automobile

 

theft enforcement teams.

 

     (ii) Provide financial support to state or local law

 

enforcement agencies for programs designed to reduce the incidence

 

of economic automobile theft.

 

     (iii) Provide financial support to local prosecutors for


programs designed to reduce the incidence of economic automobile

 

theft.

 

     (iv) Provide financial support to judicial agencies for

 

programs designed to reduce the incidence of economic automobile

 

theft.

 

     (v) Provide financial support for neighborhood or community

 

organizations or business organizations for programs designed to

 

reduce the incidence of automobile theft.

 

     (vi) Conduct 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 The authority shall use money in the automobile

 

theft prevention fund shall only be used for automobile theft

 

prevention efforts. and shall be distributed based on need and

 

efficacy as determined by the authority.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.

 

     (5) Money in the automobile theft prevention fund shall is not

 

be considered state money.

 

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) "Board" means the board of directors of the 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

 

second previous calendar year as reported to the statistical agent

 

of each insurer.

 

     (e) "Facility" means the Michigan automobile insurance

 

placement facility created under chapter 33.

 

     Sec. 6302. (1) The Michigan automobile insurance fraud

 

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.

 

     (2) The authority is not a state agency, and the money of the

 

authority is not state money. The authority is not a public body

 

under, and a record of the authority is not subject to disclosure

 

under, the freedom of information act, 1976 PA 442, MCL 15.231 to

 

15.246.

 

     (3) 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.

 

     (4) 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.

 

     (5) The purposes, powers, and duties of the authority are

 

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

 

of directors consists of 15 members as follows:

 

     (a) Eight members who represent automobile insurers in this

 

state, including 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

 

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

 

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

 

fewer than 100,000 car years.

 

     (b) The director or his or her designee.

 

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

 

     (d) The director of the department of state police or his or

 

her designee.

 

     (e) Two members who represent other law enforcement agencies

 

in this state.

 

     (f) One member who represents prosecuting attorneys in this

 

state.

 

     (g) One member who represents the general public.

 

     (6) The members of the board representing insurers shall be


elected by authorized insurers that provide automobile insurance 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 members, the board of governors of the facility shall solicit

 

nominations from authorized insurers that provide automobile

 

insurance in this state.

 

     (7) The governor shall appoint the members of the board

 

representing law enforcement agencies other than the department of

 

state police. In appointing the members, the governor shall solicit

 

input from various law enforcement associations in this state.

 

     (8) The governor shall appoint the member of the board

 

representing prosecuting attorneys. In appointing the member, the

 

governor shall solicit input from the Prosecuting Attorneys

 

Association of Michigan.

 

     (9) The governor shall appoint the member of the board

 

representing the general public. The governor shall appoint an

 

individual who is a resident of this state and is not 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 or until his or her

 

successor is elected, designated, or appointed, whichever occurs

 

later. Of the members first elected or appointed under this

 

section, 2 members representing insurers and 1 member representing

 

law enforcement agencies shall serve for a term of 2 years, 3

 

members representing insurers, the member representing prosecuting

 

attorneys, and the member representing the general public shall


serve for a term of 3 years, and 3 members representing insurers

 

and 1 member representing law enforcement agencies shall serve for

 

a term of 4 years.

 

     (11) The board is dissolved on January 1, 2021.

 

     Sec. 6303. (1) A member of the board shall serve without

 

compensation, except that the board shall reimburse a member in a

 

reasonable amount 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

 

to the contrary, 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 in

 

this state.

 

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

 

vote of the board. Vacancies on the board shall 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,

 

disciplining, or evaluation 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 6310, 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.

 

     Sec. 6304. (1) Before January 1, 2021, the authority shall

 

transfer all assets of the authority to the department of state

 

police for the benefit of the automobile theft prevention

 

authority.

 

     (2) On January 1, 2021, the authority is dissolved.

 

     Sec. 6305. The board 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 in the name of the authority.

 

     (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) Indemnify and procure insurance indemnifying any member of

 

the board for personal loss or accountability resulting from the

 

member's action or inaction as a member of the board.

 

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

 

2016 to December 31, 2020.

 

     (2) Before April 1 of each year from 2016 to 2020, an insurer

 

or self-insurer engaged in writing insurance coverages that provide

 

the security required by section 3101(1) in 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 shall be based on the ratio

 

of the car years written by the insurer or self-insurer to the

 

total car years written in this state by all insurers and self-

 

insurers.

 

     (3) The facility shall segregate all money received under

 

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

 

other money of the facility, if applicable. The facility shall only

 

expend the money received under subsection (2) as directed by the

 

board.

 

     (4) From the money received each year under subsection (2),

 

the board shall pay at least $6,250,000.00 to the automobile theft

 

prevention fund established under section 6107.

 

     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 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) The board shall develop performance metrics that are

 

consistent, controllable, measurable, and attainable. The board

 

shall use the metrics each year to evaluate new applications

 

submitted for funding consideration and to renew funding for

 

existing programs.

 

     Sec. 6310. (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. The

 

members of the board, 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. 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 and sections 3301, 3330, 4501,

 

and 6107 of the insurance code of 1956, 1956 PA 218, MCL 500.3301,

 

500.3330, 500.4501, and 500.6107, as amended by this amendatory

 

act, and chapter 63 of the insurance code of 1956, 1956 PA 218, as

 

added by this amendatory act, take effect January 1, 2016.

 

     Enacting section 3. This amendatory act does not take effect

 

unless Senate Bill No. 249                                    

 

               of the 98th Legislature is enacted into law.