June 28, 2007, Introduced by Rep. Virgil Smith and referred to the Committee on Insurance.
A bill to amend 1956 PA 218, entitled
"The insurance code of 1956,"
by amending sections 2106, 2108, 2109, 2110, 2114, 2127, 3009,
3103, 3107, 3109a, 3135, 3141, 3145, and 3177 (MCL 500.2106,
500.2108, 500.2109, 500.2110, 500.2114, 500.2127, 500.3009,
500.3103, 500.3107, 500.3109a, 500.3135, 500.3141, 500.3145, and
500.3177), section 3009 as amended by 1988 PA 43, section 3103 as
amended by 1986 PA 173, section 3107 as amended by 1991 PA 191,
section 3135 as amended by 2002 PA 697, and section 3177 as amended
by 1984 PA 426, and by adding sections 2109a, 3107c, 3136, 3149,
and 3160.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 2106. Except as specifically provided in this chapter,
the
provisions of chapter 24 and chapter 26 shall do not
apply to
automobile
insurance and home insurance. An Until January 1, 2008,
an insurer may use rates for automobile insurance or home insurance
as soon as those rates are filed. Beginning January 1, 2008,
automobile insurance rates are subject to section 2109a. To the
extent
that other provisions of this code act are inconsistent with
the
provisions of this chapter, this chapter shall govern governs
with respect to automobile insurance and home insurance.
Sec.
2108. (1) On the effective date thereof, each Each
insurer shall file with the commissioner every manual of
classification, every manual of rules and rates, every rating plan,
and every modification of a manual of classification, manual of
rules
and rates, or a rating plan which that it proposes to use for
automobile insurance and home insurance. Each filing shall state
the character and extent of the coverage contemplated. Each insurer
subject to this chapter who maintains rates in any part of this
state shall at all times maintain rates in effect for all eligible
persons meeting the underwriting criteria of the insurer.
(2) An insurer may satisfy its obligation to make filings
under subsection (1) by becoming a member of, or a subscriber to, a
rating organization licensed under chapter 24 or chapter 26 which
makes those filings, and by filing with the commissioner a copy of
its authorization of the rating organization to make those filings
on its behalf. Nothing contained in this chapter shall be construed
as requiring any insurer to become a member of or a subscriber to
any rating organization. Insurers may file and use deviations from
filings made on their behalf, which deviations shall be subject to
the provisions of this chapter.
(3) Each filing shall be accompanied by a certification by or
on behalf of the insurer that, to the best of its information and
belief, the filing conforms to the requirements of this chapter.
(4) Each filing shall include information that supports the
filing
with respect to the requirements of section sections 2109
and 2109a. The information may include 1 or more of the following:
(a) The experience or judgment of the insurer or rating
organization making the filing.
(b) The interpretation of the insurer or rating organization
of any statistical data it relies upon.
(c) The experience of other insurers or rating organizations.
(d) Any other relevant information.
(5) A filing and any accompanying information shall be open to
public inspection upon filing.
(6) An insurer shall not make, issue, or renew a contract or
policy
except in accordance with filings which that are in effect
for the insurer pursuant to this chapter.
Sec. 2109. (1) All rates for automobile insurance and home
insurance shall be made in accordance with the following
provisions:
(a) Rates shall not be excessive, inadequate, or unfairly
discriminatory. A rate shall not be held to be excessive unless the
rate is unreasonably high for the insurance coverage provided and a
reasonable degree of competition does not exist for the insurance
to which the rate is applicable. Effective January 1, 2008,
automobile insurance rates are also subject to section 2109a.
(b) A rate shall not be held to be inadequate unless the rate
is unreasonably low for the insurance coverage provided and the
continued use of the rate endangers the solvency of the insurer; or
unless the rate is unreasonably low for the insurance provided and
the use of the rate has or will have the effect of destroying
competition among insurers, creating a monopoly, or causing a kind
of insurance to be unavailable to a significant number of
applicants who are in good faith entitled to procure that insurance
through ordinary methods.
(c) A rate for a coverage is unfairly discriminatory in
relation to another rate for the same coverage if the differential
between the rates is not reasonably justified by differences in
losses, expenses, or both, or by differences in the uncertainty of
loss, for the individuals or risks to which the rates apply. A
reasonable justification shall be supported by a reasonable
classification system; by sound actuarial principles when
applicable; and by actual and credible loss and expense statistics
or, in the case of new coverages and classifications, by reasonably
anticipated loss and expense experience. A rate is not unfairly
discriminatory because it reflects differences in expenses for
individuals or risks with similar anticipated losses, or because it
reflects differences in losses for individuals or risks with
similar expenses.
(2) A determination concerning the existence of a reasonable
degree of competition with respect to subsection (1)(a) shall take
into account a reasonable spectrum of relevant economic tests,
including the number of insurers actively engaged in writing the
insurance in question, the present availability of such insurance
compared to its availability in comparable past periods, the
underwriting return of that insurance over a period of time
sufficient to assure reliability in relation to the risk associated
with that insurance, and the difficulty encountered by new insurers
in entering the market in order to compete for the writing of that
insurance.
Sec. 2109a. (1) Each insurer authorized to transact automobile
insurance in this state shall file with the commissioner annually
on a date to be determined by the commissioner all of the following
information:
(a) The total number of new claims that were submitted to the
insurer within the last 1-year period in each of the following
categories:
(i) Claims for personal protection insurance benefits.
(ii) Claims for property protection insurance benefits.
(iii) Claims for residual bodily injury damages.
(iv) Claims for uninsured motorist benefits.
(v) Claims for underinsured motorist benefits.
(vi) Claims for collision and comprehensive insurance benefits.
(b) For each category of claims under subdivision (a), the
insurer shall also disclose the total amount paid by the insurer.
If any portion of the amount paid by the insurer was reimbursed by
the catastrophic claims association or other sources, those
reimbursements shall be reported by the insurer and then the total
net payments made by the insurer for each category under
subdivision (a) shall be stated.
(c) The total amount paid by the insurer during the last 1-
year period on claims that were submitted to the insurer prior to
the last 1-year period in each of the following categories:
(i) Claims for personal protection insurance benefits.
(ii) Claims for property protection insurance benefits.
(iii) Claims for residual bodily injury damages.
(iv) Claims for uninsured motorist benefits.
(v) Claims for underinsured motorist benefits.
(vi) Claims for collision and comprehensive insurance benefits.
(d) For each category of claims under subdivision (c), the
insurer shall disclose the total number of claims and the total
amount paid by the insurer. If any portion of the amount paid by
the insurer was reimbursed by the catastrophic claims association
or other sources, those reimbursements shall be reported by the
insurer and then the total net payments made by the insurer for
each category under subdivision (c) shall be stated.
(e) The total number of new lawsuits that were filed against
the insurer or the insured within the last 1-year period in each of
the following categories:
(i) Claims for personal protection insurance benefits.
(ii) Claims for property protection insurance benefits.
(iii) Claims for residual bodily injury damages.
(iv) Claims for uninsured motorist benefits.
(v) Claims for underinsured motorist benefits.
(vi) Claims for collision and comprehensive insurance benefits.
(f) For each category of claims under subdivision (e), the
insurer shall also disclose the total amount paid by the insurer to
settle or otherwise resolve those lawsuits as well as the total
amount paid by the insurer to defend those lawsuits. If any portion
of the amount paid by the insurer was reimbursed by the
catastrophic claims association or other sources, those
reimbursements shall be reported by the insurer and then the total
net payments made by the insurer for each category under
subdivision (e) shall be stated.
(g) The total amount paid by the insurer during the last 1-
year period to settle or otherwise resolve lawsuits that were filed
against the insurer or the insured prior to the last 1-year period
in each of the following categories:
(i) Claims for personal protection insurance benefits.
(ii) Claims for property protection insurance benefits.
(iii) Claims for residual bodily injury damages.
(iv) Claims for uninsured motorist benefits.
(v) Claims for underinsured motorist benefits.
(vi) Claims for collision and comprehensive insurance benefits.
(h) For each category of claims under subdivision (g), the
insurer shall also disclose the total number of claims and the
total amount paid by the insurer to settle or otherwise resolve
those lawsuits, as well as the total amount paid by the insurer to
defend those lawsuits. If any portion of the amount paid by the
insurer was reimbursed by the catastrophic claims association or
other sources, those reimbursements shall be reported by the
insurer and then the total net payments made by the insurer for
each category under subdivision (g) shall be stated.
(i) The total premiums collected by the insurer during the
last 1-year period for each of the following coverages:
(i) The total premiums collected for personal protection
insurance benefits.
(ii) The total premiums collected for property protection
insurance benefits.
(iii) The total premiums collected for residual liability
insurance coverage.
(iv) The total premiums collected for collision and
comprehensive coverage.
(v) The total premiums collected for uninsured motorist
coverage.
(vi) The total premiums collected for underinsured motorist
coverage.
(j) The insurer's total net profit for its most recent fiscal
year.
(2) All information disclosed and filed with the commissioner
or required by subsection (1) shall be considered public
information and shall be made available by the commissioner for
inspection or photocopying by any person requesting the
information, subject to reasonable charges and reasonable
conditions established by the commissioner for the release of this
information.
(3) An insurer authorized to transact automobile insurance in
this state shall not increase the base rates the insurer charges
for personal protection insurance benefits, property protection
insurance benefits, or residual liability insurance coverages,
unless the insurer first does each of the following:
(a) The insurer files all disclosures required by subsection
(1) and gives notice to the public of its proposed base rate
increases pursuant to procedures established by the commissioner.
(b) The insurer justifies the rate increase by submitting a
report entitled "Rate Increase Analysis" which sets forth, in plain
language, all reasons for the rate increase, reliable actuarial
support for the rate increase, and any other documentation
justifying the rate increase.
(4) An insurer may, 90 days after submitting the filings,
disclosures, and other information required by subsections (1) and
(3), increase its rates for personal protection insurance benefits,
property protection insurance benefits, and residual liability
insurance, unless, during that 90-day period, 1 or more of the
following events occur:
(a) The commissioner challenges the proposed rate increase.
(b) A challenge to the proposed rate increase has been filed
by an interested person with the commissioner, pursuant to rate
challenge procedures established by the commissioner.
(5) If the commissioner or an interested person files a
challenge to an insurer's proposed rate increase, the commissioner
shall convene a public, contested hearing, pursuant to rules and
procedures promulgated by the commissioner pursuant to the
administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to
24.328, and shall, after the hearing, approve the proposed rate
increase if the commissioner finds that the proposed rate increase
is fair and equitable in light of the compulsory insurance system
established by this act and the constitutional due process
protections that are inherent in and applicable to the compulsory
insurance system established by this act.
Sec. 2110. (1) In developing and evaluating rates pursuant to
the
standards prescribed in section sections 2109
and 2109a, due
consideration shall be given to past and prospective loss
experience within and outside this state, to catastrophe hazards,
if any; to a reasonable margin for underwriting profit and
contingencies; to dividends, savings, or unabsorbed premium
deposits allowed or returned by insurers to their policyholders,
members, or subscribers; to past and prospective expenses, both
countrywide and those specially applicable to this state exclusive
of
assessments under this code act; to assessments under this code
act; to underwriting practice and judgment; and to all other
relevant factors within and outside this state.
(2) The systems of expense provisions included in the rates
for use by any insurer or group of insurers may differ from those
of other insurers or groups of insurers to reflect the requirements
of the operating methods of the insurer or group with respect to
any kind of insurance, or with respect to any subdivision or
combination thereof for which subdivision or combination separate
expense provisions are applicable.
(3) Risks may be grouped by classifications for the
establishment of rates and minimum premiums. The classifications
may measure differences in losses, expenses, or both.
Sec. 2114. (1) A person or organization aggrieved with respect
to
any filing which that is in effect and which that
affects the
person or organization may make written application to the
commissioner for a hearing on the filing. However, the insurer or
rating
organization which that made the filing shall not be
authorized to proceed under this subsection. The application shall
specify the grounds to be relied upon by the applicant. If the
commissioner finds that the application is made in good faith, that
the applicant would be so aggrieved if the grounds specified are
established, or that the grounds specified otherwise justify
holding a hearing, the commissioner, not more than 30 days after
receipt of the application, shall hold a hearing in accordance with
Act
No. 306 of the Public Acts of 1969, as amended the
administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to
24.328, upon not less than 10 days' written notice to the
applicant, the insurer, and the rating organization which made the
filing.
(2) If after hearing initiated under subsection (1) or upon
the
commissioner's own motion pursuant to Act No. 306 of the Public
Acts
of 1969, as amended the
administrative procedures act of 1969,
1969 PA 306, MCL 24.201 to 24.328, the commissioner finds that a
filing does not meet the requirements of sections 2109, 2109a, and
2111, the commissioner shall issue an order stating the specific
reasons for that finding. The order shall state when, within a
reasonable time after issuance of the order, the filing shall be
considered no longer effective. A copy of the order shall be sent
to the applicant, if any, and to each insurer and rating
organization subject to the order. The order shall not affect a
contract or policy made or issued before the date the filing
becomes ineffective, as indicated in the commissioner's order.
Sec. 2127. The commissioner may by rule prospectively require
insurers, rating organizations, and advisory organizations to
collect
and report data only to the extent necessary to monitor and
evaluate the automobile and home insurance markets in this state.
The commissioner shall authorize the use of sampling techniques in
each instance where sampling is practicable and consistent with the
purposes for which the data, by county, are to be collected and
reported. Rules promulgated pursuant to this section are in
addition to, and do not replace, the rule and reporting
requirements in section 2109a.
Sec. 3009. (1) An automobile liability or motor vehicle
liability policy insuring against loss resulting from liability
imposed by law for property damage, bodily injury, or death
suffered by any person arising out of the ownership, operation,
maintenance, or use of a motor vehicle shall not be delivered or
issued for delivery in this state with respect to any motor vehicle
registered or principally garaged in this state unless the
liability coverage is subject to a limit, exclusive of interest and
costs,
of not less than $20,000.00 $100,000.00 because of bodily
injury to or death of 1 person in any 1 accident, and subject to
that
limit for 1 person, to a limit of not less than $40,000.00
$200,000.00 because of bodily injury to or death of 2 or more
persons in any 1 accident, and to a limit of not less than
$10,000.00 because of injury to or destruction of property of
others in any accident. Beginning October 1, 2010, the $100,000.00
and $200,000.00 minimum amounts shall be adjusted every 5 years to
reflect changes in the cost of living under the same rules
prescribed by the commissioner with regard to work loss benefits
under section 3107(1)(b). Any change in the minimum amounts shall
apply only to bodily injury accidents occurring after the date of
the change in the minimum amounts.
(2) If authorized by the insured, automobile liability or
motor vehicle liability coverage may be excluded when a vehicle is
operated
by a named person. Such This exclusion shall is not
be
valid unless the following notice is on the face of the policy or
the declaration page or certificate of the policy and on the
certificate of insurance:
Warning--when a named excluded person operates a vehicle all
liability coverage is void--no one is insured. Owners of the
vehicle and others legally responsible for the acts of the named
excluded person remain fully personally liable.
(3) If an insurer deletes coverages from an automobile
insurance policy pursuant to section 3101, the insurer shall send
documentary evidence of the deletion to the insured.
Sec. 3103. (1) An owner or registrant of a motorcycle shall
provide security against loss resulting from liability imposed by
law for property damage, bodily injury, or death suffered by a
person arising out of the ownership, operation, maintenance, or use
of that motorcycle. The security shall conform with the
requirements of section 3009(1).
(2)
Each insurer transacting insurance in this state which
that affords coverage for a motorcycle as described in subsection
(1) also shall offer, to an owner or registrant of a motorcycle,
security for the payment of first-party medical benefits only, in
increments of $5,000.00, payable in the event the owner or
registrant is involved in a motorcycle accident. An insurer
providing first-party medical benefits may offer, at appropriate
premium rates, deductibles, provisions for the coordination of
these benefits, and provisions for the subtraction of other
benefits provided or required to be provided under the laws of any
state or the federal government, subject to the prior approval of
the commissioner. These deductibles and provisions shall apply only
to benefits payable to the person named in the policy, the spouse
of the insured, and any relative of either domiciled in the same
household.
Sec. 3107. (1) Except as provided in subsection (2), 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 charges for a hospital room in
excess of a reasonable and customary charge for semiprivate
accommodations except if the injured person requires special or
intensive care, or for 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. Allowable expenses include, but
are not limited to, charges for case management services by a case
manager selected or approved by the injured person or a person
authorized to act on the injured person's behalf and charges for
home care services as described in section 3107c. If the injured
person, or a person acting on his or her behalf, submits reasonable
proof that products, services, or accommodations are reasonably
necessary for the injured person's care, recovery, or
rehabilitation and the injured person consents to be provided with
the products, services, or accommodations in question, an insurer
shall issue written notification to both the injured person, or a
person acting on his or her behalf, and to the provider of the
products, services, or accommodations in question, that the insurer
will guarantee payment when the products, services, or
accommodations are provided to the injured person. Charges for
products, services, or accommodations are considered incurred under
this section as follows:
(i) When the products, services, or accommodations are provided
to the injured person.
(ii) When the injured person pays or becomes liable or in some
way obligated or conditionally obligated to pay for the products,
services, or accommodations.
(iii) When an insurer gave or should have given a guarantee of
payment under this subdivision.
(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.
Beginning
March 30, 1973 For the period
beginning October 1, 2006
through September 30, 2007, 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
$1,000.00 $4,589.00, which maximum shall apply pro rata to
any
lesser period of work loss. Beginning October 1, 1974 2007,
the
maximum shall be adjusted annually to reflect changes in the cost
of living under rules prescribed by the commissioner 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. Notwithstanding any other provision in this act, work loss
benefits shall not be reduced by amounts paid by the injured
person's employer or paid under a wage continuation plan
established by a collective bargaining agreement.
(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) A person who is 60 years of age or older and in the event
of an accidental bodily injury would not be eligible to receive
work loss benefits under subsection (1)(b) may waive coverage for
work loss benefits by signing a waiver on a form provided by the
insurer. An insurer shall offer a reduced premium rate to a person
who waives coverage under this subsection for work loss benefits.
Waiver of coverage for work loss benefits applies only to work loss
benefits payable to the person or persons who have signed the
waiver form.
(3) Subject to subsection (1)(a), an insurer shall not issue a
policy or impose any conditions upon the payment of claims that in
any way limits or restricts a person's selection of a provider or
the nature and extent of the treatment or services rendered by a
provider. This prohibition applies regardless of whether an insured
has received a reduced premium rate for deductibles and exclusions
reasonably related to other health and accident coverage on the
insured under section 3109a and regardless of what other health and
accident coverage or benefits cover, or are available to, the
insured.
(4) A provider rendering services to an injured person that
are compensable under subsection (1) is entitled to collect, from
the person's insurer, any balance of the provider's charges that
was not paid by other health and accident coverage or benefits,
even when a portion of the provider's charges were paid to the
provider under a participating agreement or other similar
relationship.
(5) An insurer may review a personal protection insurance
claim to determine the reasonableness of a charge and the
reasonable necessity of a product, service, or accommodation. In
performing a review, an insurer may request or conduct expense
audits provided, however, that an insurer shall not consider or
implement any fee schedules or other reimbursement methodologies
used under any governmental program, private contract, or third
party payor relationship. If an insurer reviews a claim to
determine the reasonableness of a charge or the reasonable
necessity of a product, service, or accommodation, the insurer
shall take into consideration all factors relevant to the
determination, including, but not limited to, all of the following:
(a) The nature, severity, and complexity of the injury and the
treatment or service rendered with respect to the injury.
(b) The skill, training, expertise, and reputation of the
provider rendering the treatment or service.
(c) The charges of other providers rendering similar treatment
or services in the same or similar geographic locality within which
the claimed treatment or service has been rendered.
(d) The facts and circumstances surrounding the treatment or
services rendered.
(6) If an insurer denies all or part of a personal protection
insurance claim based upon the reasonableness of the charge or the
reasonable necessity of the product, service, or accommodation, the
insurer shall fully disclose to the claimant and the claimant's
provider the basis for the denial and all facts, evidence, and data
supporting the insurer's position with respect to the denial and
shall submit this information within 30 days of receiving proof of
the fact and amount of the claim. Failure to provide the disclosure
creates a presumption of an unreasonable delay or refusal of a
claim under section 3148.
(7) If an insurer enters into an agreement with an injured
person or a person authorized to act on his or her behalf
concerning the payment of a personal protection insurance claim,
all of the following apply:
(a) The insurer, prior to paying any agreed upon amount or
undertaking to perform any agreed upon obligation, may seek a full
and final discharge of the insurer's legal obligation to pay the
specific claim that is the subject of the agreement for the period
of time specified in the agreement by obtaining an order from a
court of appropriate jurisdiction finding that the agreement is
fair, reasonable, and appropriate under all the circumstances.
(b) If the claim is one for which the insurer is eligible to
receive indemnification from the catastrophic claims association
because the threshold under section 3104(2) has been exceeded, the
insurer paying the claim or performing an agreed upon obligation
after receiving a court order under subdivision (a) shall receive
full indemnification from the catastrophic claims association for
the total amount paid by the insurer in accordance with the court
order that is in excess of the threshold amounts listed in section
3104(2).
(c) If the agreement involves, in any way, payment for past
services rendered to the injured person by providers whose services
have not yet been fully paid by the injured person or by a person
or entity acting on his or her behalf, then all such providers
shall be given written notice of the agreement before a court order
under subdivision (a) can be entered and shall be given a
reasonable opportunity to appear and protect their respective
interests regarding the agreement.
(d) If the agreement involves, in any way, payment for future
services that may be rendered to the injured person, the insurer
shall send a copy of the court order approving the agreement to all
providers known to the insurer who have rendered services or who
are currently rendering services to the injured person.
(8) All costs of obtaining any order under subsection (7) are
the sole responsibility of the insurer. An insurer's request for an
order under subsection (7) does not limit, qualify, diminish, or
alter the insurer's duty to pay claims under this act, including,
but not limited to, sections 3142 and 3148 concerning the timely
payment of claims. In addition, regardless of whether an insurer
has obtained a court order with respect to an agreement to pay a
claim for allowable expenses under subsection (7), any agreement
negotiated between an insurer and an injured person or his or her
authorized representative concerning the payment of allowable
expenses incurred in the future may periodically be judicially
reviewed in order to ensure that the agreement is fair, reasonable,
and appropriate under all of the circumstances existing at the time
of the review.
Sec. 3107c. (1) As used in section 3107 and this section,
"home care services" includes, but is not limited to, the following
enumerated services or treatment when rendered in a home setting to
an injured person by noncommercial providers for the injured
person's care, recovery, or rehabilitation, regardless of whether
the provider is licensed, certified, or registered or is a relative
or nonrelative of the injured person, except when the services are
otherwise prohibited by law if rendered by persons who are not
licensed, certified, or registered by this state:
(a) Attendant or personal care.
(b) Medical care.
(c) Nursing care.
(d) Assistance with activities of daily living.
(e) Case management.
(f) Physical, occupational, speech, or other therapy.
(g) Monitoring or cuing of the injured person.
(h) On-call assistance.
(i) Nutritional and meal services.
(j) Personal hygiene.
(k) Psychological counseling.
(l) Behavioral management.
(m) Room and board and accommodations if the injured person
would otherwise require institutionalization.
(n) Supervision of others providing services or treatment
described in this subsection.
(2) In determining the reasonableness of charges for home care
services, the following factors may be considered:
(a) The nature and severity of the injury.
(b) The nature and level of disability of the injured person.
(c) The nature and complexity of the service or treatment and
the qualifications and experience of the person rendering the
service or treatment.
(d) The injured person's needs and desires for the service or
treatment.
(e) The benefit and value of the service or treatment to the
injured person.
(f) The commercial rates charged by commercial agencies or
professional providers to render a similar service or treatment.
(g) The wages and fringe benefits paid by commercial agencies
or professional providers to their employees to render a similar
service or treatment.
(h) The actual cost incurred by the provider in rendering the
service or treatment.
(i) The market value of the service or treatment.
(j) The value of the economic opportunity lost by the provider
in rendering the service or treatment, including, but not limited
to, lost business opportunities, lost employment opportunities, and
lost educational opportunities.
(k) Any other relevant factor.
(3) An insurer may require 1 or more of the following in
processing a claim for home care services:
(a) A notarized statement on a form approved by the
commissioner in which the injured person or a person authorized to
act on his or her behalf describes the service for which payment is
sought and affirms, under oath, that the service was provided as
described.
(b) Written verification from a provider knowledgeable about
the claim that the care rendered to the injured person was
reasonably necessary for the injured person's care, recovery, or
rehabilitation.
(c) A written authorization signed by the injured person or a
person authorized to act on his or her behalf permitting the
release, to the insurer, of any medical records relevant to the
claim for home care services.
(4) Neither the making of a request for 1 or more of the
documents described in subsection (3) nor the failure to make a
request for 1 or more of the documents described in subsection (3)
precludes an injured person from seeking judicial enforcement of a
claim for home care services under this act or alters an insurer's
responsibility to pay a claim for home care services under this
act.
Sec. 3109a. (1) An insurer providing personal protection
insurance benefits shall offer, at appropriately reduced premium
rates, deductibles and exclusions reasonably related to other
health and accident coverage on the insured. The deductibles and
exclusions required to be offered by this section shall be subject
to prior approval by the commissioner and shall apply only to
benefits payable to the person named in the policy, the spouse of
the insured, and any relative of either domiciled in the same
household.
(2) An insurer shall not sell a policy offering deductibles
and exclusions approved by the commissioner under subsection (1)
unless the insurer provides to the purchaser of the policy a
disclosure form approved by the commissioner and the purchaser of
the policy acknowledges, in writing, his or her receipt of the
disclosure form. The disclosure form shall detail the benefits and
risks of coordinating the coverage offered by the policy with the
other health and accident coverage including, but not limited to,
any premium savings realized as the result of that coordination.
(3) The coverage provided by a policy offering deductibles and
exclusions approved by the commissioner under subsection (1) is
secondary to other health and accident coverage on the insured
unless the policy or plan providing the other health and accident
coverage specifically provides that its coverage is secondary.
(4) The coverage provided by a policy offering deductibles and
exclusions approved by the commissioner under subsection (1) shall
pay all expenses otherwise compensable under section 3107(1)(a) as
if the insurer were the primary insurer, and after payment, the
insurer may seek reimbursement from the entity that provides the
secondary other health and accident coverage on the insured for any
amounts that would have been payable under that secondary other
health and accident coverage had the insurer not paid the expenses.
Notwithstanding section 3145, an insurer paying benefits under this
subsection may file an action against the entity that provides the
secondary other health and accident coverage at any time within 6
years after the insurer makes payment. If an entity that provides
the secondary other health and accident coverage is required to
reimburse an insurer under this subsection, that entity shall not
seek recoupment of that amount from any other person or entity
unless an insurer would have been entitled to recoupment under
section 3116.
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 an 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 as to whether the person has suffered a serious
impairment
of body function or permanent serious disfigurement.
that there is no genuine issue as to any material fact, and the
moving party is entitled to judgment or partial judgment as a
matter of law. 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.
(b) Economic and noneconomic damages shall be assessed on the
basis of comparative fault, except that noneconomic damages shall
not be assessed in favor of a plaintiff who is more than 50% at
fault or reduced in favor of a defendant who is more than 50% at
fault.
(c) Noneconomic damages shall not be assessed in favor of a
party who was operating a motor vehicle titled or registered in the
name of that party at the time the injury occurred if there was not
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, operation, 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 economic
or noneconomic damages
of any nature or extent 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 and
damages for loss of earning capacity. 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 $500.00 to motor vehicles, to the extent
that the damages are not covered by insurance. An action for
damages pursuant to this subdivision shall be conducted in
compliance with subsection (4).
(4) In an action for damages pursuant to 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 shall not be a component of residual liability,
as prescribed in section 3131, for which maintenance of security is
required by this act.
(5) Actions under subsection (3)(e) 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.
(6) A decision of a court made pursuant to subsection (3)(e)
is not res judicata in any proceeding to determine any other
liability arising from the same circumstances as gave rise to the
action brought pursuant to subsection (3)(e).
(7) As used in this section, "serious impairment of body
function"
means an objectively manifested injury
or impairment of
involving an important body function that has affected, affects, or
may
affect in the future the person's general
ability to lead his
or her normal life. In making this determination, all of the
following apply:
(a) Notwithstanding anything to the contrary, serious
impairment of body function does not require a showing, at any
point in time, of any of the following:
(i) That the injury or impairment, or its effect, altered the
course or trajectory of the person's life, caused the person to be
generally unable or for the most part unable to live his or her
normal life, or caused the person's life after the injury to be
substantially different from the person's life before the injury.
(ii) That the injury or impairment, or its effect, was
permanent, severe, substantial, extensive, or pervasive or lasted
for a significant period of time.
(iii) That there were physician-imposed restrictions.
(b) In determining whether the person's ability to lead his or
her normal life has been affected at any point in time, the trier
of fact or a court deciding this issue as a matter of law under
subsection (2)(a) shall consider all of the following factors,
which factors shall not be exclusive and no individual factor shall
be dispositive:
(i) The nature of the injury or impairment.
(ii) The type of treatment required.
(iii) The duration of the injury, impairment, or treatment.
(iv) The existence of, or the prognosis for, any residual
injury or impairment.
(v) The impact of the injury or impairment on the injured
person's quality of life.
(vi) Any other relevant factors.
(8) An injured person who has sustained serious impairment of
body function and who is otherwise entitled to recover damages for
noneconomic loss in a tort liability claim as a result is entitled
to all damages for noneconomic loss suffered by that person as a
proximate result of the incident giving rise to the tort liability
claim, regardless of whether the injured person has ceased to
suffer, or in the future will cease to suffer, serious impairment
of body function.
(9) If an injured person recovers damages under this section
for noneconomic loss or excess economic loss and is required to pay
all or a portion of that recovery to any person or entity claiming
a lien or right of reimbursement, subrogation, recoupment, or
offset against the recovery, the insurer responsible to pay
personal protection insurance benefits to the injured person shall
reimburse the injured person for the amount he or she is required
to pay the person or entity to the extent that the payment would
have been payable by the insurer if the person or entity had not
paid those amounts. This subsection applies to any case filed on or
after October 1, 1973.
(10) The changes made in subsection (7) by the amendatory act
that added this subsection are curative and intended to correct the
misinterpretation of law and legislative intent that occurred in
the Michigan supreme court decision in Kreiner v Fischer and Straub
v Collette and Heil-Wylie, 471 Mich 109; 683 NW2d 611 (2004), and
subsequent appellate cases implementing that decision. The changes
made in subsection (7) by the amendatory act that added this
subsection apply to cases pending in the trial or appellate court
on the effective date of the amendatory act that added this
subsection and cases filed on or after the effective date of the
amendatory act that added this subsection.
Sec. 3136. If an injured person recovers damages under section
3135 for noneconomic loss or excess economic loss and is required
to pay all or a portion of that recovery to any person or entity
claiming a lien or right of reimbursement, subrogation, recoupment,
or offset against the recovery, the insurer responsible to pay
personal protection insurance benefits to the injured person shall
reimburse the injured person for the amount he or she is required
to pay the person or entity to the extent that the payment would
have been payable by the insurer if the person or entity had not
paid those amounts. This section applies to any case filed on or
after October 1, 1973.
Sec. 3141. An insurer may require written notice to be given
as soon as practicable after an accident involving a motor vehicle
with respect to which the policy affords the security required by
this chapter. However, a notice requirement shall not shorten any
limitations period or notice period established under this act or
applicable to claims made under this act.
Sec. 3145. (1) An action for recovery of personal protection
insurance benefits payable under this chapter for accidental bodily
injury
may shall not be commenced later than 1 year after the date
of the accident causing the injury unless written notice of injury
as
provided herein in this
section has been given to the insurer
within 1 year after the accident or unless the insurer has
previously made a payment of personal protection insurance benefits
for the injury. If the notice has been given or a payment has been
made, the action may be commenced at any time within 1 year after
the most recent allowable expense, work loss, or survivor's loss
has been incurred. However, the claimant may not recover benefits
for any portion of the loss incurred more than 1 year before the
date on which the action was commenced. The notice of injury
required by this subsection may be given to the insurer or any of
its authorized agents by a person claiming to be entitled to
benefits, therefor,
or by someone in a
person acting on his or her
behalf. The notice shall give the name and address of the claimant
and indicate in ordinary language the name of the person injured
and the time, place, and nature of his or her injury as the injury
is reasonably known to the person giving the notice at the time the
notice is given. Notwithstanding any other provision of this act to
the contrary, the 1-year period for bringing a claim or for
recovering benefits on a claim is suspended from the date a
specific claim for benefits is submitted to the insurer until the
date the insurer provides the person making the claim with a formal
written denial of that specific claim.
(2) An action for recovery of property protection insurance
benefits shall not be commenced later than 1 year after the
accident.
(3) Notwithstanding any other provision of law, all time
limitations contained in this section with respect to giving notice
of injury, commencing an action for benefits, or recovering
benefits on a claim are tolled or otherwise suspended as to the
person claiming benefits or others claiming under that person,
including, but not limited to, that person's providers, as follows:
(a) If the person entitled to benefits was under 18 years of
age at the time the claim for benefits accrues, the claim is tolled
until the person reaches 19 years of age, except as otherwise
provided in subdivision (b), regardless of whether a guardian or a
conservator has been appointed for the person.
(b) If the person entitled to benefits suffered from a
condition of mental derangement such as to prevent the person from
comprehending rights he or she is otherwise bound to know at the
time the claim for benefits accrues, the claim is tolled until 1
year after the condition or disability has been unequivocally and
irrevocably removed through death or otherwise, regardless of
whether a guardian or conservator has been appointed for the
person. A judicial declaration of insanity, mental competency, or
mental derangement is not required under this subdivision.
(c) If a person dies before the period of limitations under
subsection (1) has run or within 90 days after the period of
limitations has run, an action surviving by law may be commenced by
the personal representative of the deceased person at any time
within 2 years after letters of authority are issued even if the
period of limitations has run, regardless of whether a guardian or
conservator had ever been appointed for the person. However, an
action shall not be brought under this subdivision unless the
personal representative commences it within 3 years of the time
within which the personal representative was authorized by law to
commence action.
(4) This section applies to any case filed on or after October
1, 1973.
Sec. 3149. An insurer obligated to pay benefits or claims for
personal protection insurance benefits under this act or under an
insurance policy issued under this act has a duty to deal fairly
and in good faith with an injured person claiming benefits and that
person's providers. An insurer that breaches this duty to deal
fairly and in good faith is liable for compensatory, consequential,
economic, noneconomic, and exemplary damages proximately caused by
the breach and the costs of litigation, including actual attorney
fees. A breach of the duty to deal fairly and in good faith
includes, but is not limited to, all of the following:
(a) A threat or act of intimidation against an injured person
or the person's provider with respect to the submission or payment
of a claim under this act.
(b) An act of retaliation against an injured person or the
person's provider for having asserted a right to make a claim under
this act.
(c) A statement or representation with respect to the
submission of a claim, the payment of a claim, or the rights of an
injured person or the person's provider under this act, which
statement or representation is materially false when an insurer or
its agents or representatives knew, or should have known, of the
falsity of the statement or representation.
Sec. 3160. (1) Each insurer authorized to transact automobile
insurance in this state shall offer, as optional coverages,
uninsured motorist benefits and underinsured motorist benefits. All
of the following apply to uninsured motorist benefits and
underinsured motorist benefits:
(a) The insurer shall inform any person purchasing insurance
from the insurer of that person's right to purchase coverage for
uninsured motorist benefits and underinsured motorist benefits and
shall submit to that person a written explanation and summary of
these coverages on a form approved by the commissioner. The insurer
shall also inform that person of the premiums that will be charged
for uninsured motorist benefits and underinsured motorist benefits.
If that person declines the offer to purchase uninsured motorist
benefits or underinsured motorist benefits, the insurer shall
procure, from that person, a written waiver of the option to
purchase uninsured motorist benefits or underinsured motorist
benefits, which waiver form must be approved by the commissioner.
(b) The minimum limits of coverage for uninsured motorist
benefits shall be $100,000.00 per person and $200,000.00 per
occurrence.
(c) The minimum limits of coverage for underinsured motorist
benefits shall be $100,000.00 per person and $200,000.00 per
occurrence.
(d) The coverages for uninsured motorist benefits and
underinsured motorist benefits shall be offered at rates that are
priced in accordance with standard insurance industry practices and
are otherwise reasonable and appropriate for the risk undertaken.
(e) The coverage required for uninsured motorist benefits and
underinsured motorist benefits shall be provided in an insurance
policy endorsement that is approved by the commissioner and is not
inconsistent or in conflict with this section.
(2) Any insurance policy endorsement providing uninsured
motorist benefits and underinsured motorist benefits shall comply
with all of the following:
(a) Coverage for uninsured motorist benefits entitles the
claimant to recover damages arising out of the ownership,
operation, maintenance, or use of a motor vehicle with respect to
which the security required by section 3101 or the security
required under the laws of another state with respect to that
vehicle, was not in effect at the time the damages occurred. The
damages recoverable by the claimant in the uninsured motorist claim
include the same elements of loss the claimant could have recovered
had he or she filed an action directly against the uninsured
tortfeasor. The claimant is entitled to pursue a claim for
uninsured motorist benefits even though a portion of the claimant's
damages or loss was caused by the conduct of other persons or
entities who were not uninsured tortfeasors.
(b) Coverage for underinsured motorist benefits entitles the
claimant to recover damages arising out of the ownership,
operation, maintenance, or use of a motor vehicle with respect to
which the security required by section 3101 or the security
required under the laws of another state with respect to that
vehicle, was in effect at the time the damages occurred but was in
an amount less than the total damages sought by the claimant in the
underinsured motorist claim. The damages recoverable by the
claimant in the underinsured motorist claim include the same
elements of loss the claimant could have recovered had he or she
filed an action directly against the underinsured tortfeasor. The
claimant is entitled to pursue a claim for underinsured motorist
benefits even though a portion of the claimant's damages or loss
was caused by the conduct of other persons or entities who were not
underinsured tortfeasors.
(c) For claims for underinsured motorist benefits, all of the
following apply:
(i) In order for the claimant to be entitled to pursue a claim
for underinsured motorist benefits, the claimant shall first
exhaust, by way of settlement or judgment, the limits of all
liability insurance coverages applicable to the underinsured
tortfeasor. Upon payment of those insurance limits, the claimant is
entitled to proceed with the claim for underinsured motorist
benefits.
(ii) A claimant is not required to obtain the consent of the
underinsured motorist insurer to settle with and fully release the
underinsured tortfeasor from all liability arising out of the
claim.
(iii) A claim for underinsured motorist benefits shall not be
reduced or set off by the amount paid to the claimant by the
underinsured motorist tortfeasor's liability insurers. However, any
amount paid personally by the underinsured tortfeasor to the
claimant may be subtracted or set off from the claimant's
underinsured motorist claim.
(d) A policy shall not contain notice provisions, claim
deadlines, or statutes of limitations that in any way shorten the
time limitations contained in the revised judicature act of 1961,
1961 PA 236, MCL 600.101 to 600.9947, that would be applicable if
the cause of action that gives rise to the claim for uninsured
motorist benefits or underinsured motorist benefits had been
asserted directly against the tortfeasors whose conduct gives rise
to the claim.
(e) The claim for uninsured motorist benefits and underinsured
motorist benefits shall not be reduced by any amounts paid or
payable to the claimant by any other sources, including, but not
limited to, personal protection insurance benefits under this act,
workers' compensation benefits, social security disability
benefits, social security survivor's benefits, health insurance,
disability insurance, benefits under private contract,
governmentally provided benefits, or damages recovered from any
tortfeasor, unless, in the uninsured motorist claim or the
underinsured motorist claim, the claimant seeks to recover damages
that duplicate amounts paid or payable to the claimant from any of
these other sources.
(f) A claim for uninsured motorist benefits or underinsured
motorist benefits shall not be denied or otherwise disallowed on
the basis that there was no physical contact between the claimant
or the claimant's vehicle and a vehicle that was uninsured or
underinsured within the meaning of this section, as long as the
claimant is otherwise able to prove, by a preponderance of the
evidence, that the claimant's damages arose out of the ownership,
operation, maintenance, or use of the uninsured or underinsured
vehicle.
(g) All insurance policies providing for uninsured motorist
benefits and underinsured motorist benefits shall give the claimant
the option of binding arbitration of the claim. If the claimant
selects arbitration, the arbitration shall be conducted in
accordance with chapter 50 of the revised judicature act of 1961,
1961 PA 236, MCL 600.5001 to 600.5035, and MCR 3.602.
Sec. 3177. (1) An insurer obligated to pay personal protection
insurance benefits for accidental bodily injury to a person arising
out of the ownership, operation, maintenance, or use of an
uninsured
motor vehicle as a motor vehicle may recover such
benefits paid and appropriate loss adjustment costs incurred from
the owner or registrant of the uninsured motor vehicle or from his
or
her estate. Failure of such a the
person to make payment within
30 days after judgment is a ground for suspension or revocation of
his or her motor vehicle registration and license as defined in
section
25 of the Michigan vehicle code, Act No. 300 of the Public
Acts
of 1949, being section 257.25 of the Michigan Compiled Laws
1949 PA 300, MCL 257.25. An uninsured motor vehicle for the purpose
of this section is a motor vehicle with respect to which the
security
is required by sections 3101 and 3102 is not in effect at
the time of the accident.
(2) The motor vehicle registration and license shall not be
suspended or revoked and the motor vehicle registration and license
shall be restored if the debtor enters into a written agreement
with the secretary of state permitting the payment of the judgment
in installments, if the payment of any installments is not in
default.
(3) The secretary of state upon receipt of a certified
abstract of court record of a judgment or notice from the insurer
of an acknowledgment of debt shall notify the owner or registrant
of an uninsured vehicle of the provisions of subsection (1) at that
person's last recorded address with the secretary of state and
shall inform that person of the right to enter into a written
agreement with the secretary of state for the payment of the
judgment or debt in installments.
Enacting section 1. (1) The changes made in section 3135(7) of
the insurance code of 1956, 1956 PA 218, MCL 500.3135, by this
amendatory act are curative and intended to correct the
misinterpretation of existing law and legislative intent that
occurred in the Michigan supreme court decision in Kreiner v
Fischer and Straub v Collette and Heil-Wylie, 471 Mich 109; 683
NW2d 611 (2004).
(2) Section 3136 of the insurance code of 1956, 1956 PA 218,
MCL 500.3136, as added by this amendatory act, is curative and
intended to correct the misinterpretation of existing law and
legislative intent that occurred in the Michigan court of appeals
decision in Dunn v DAIIE, 254 Mich App 256; 657 NW2d 153 (2002).
(3) Section 3145(3) of the insurance code of 1956, 1956 PA
218, MCL 500.3145, as added by this amendatory act, is curative and
intended to correct the misinterpretation of existing law and
legislative intent that occurred in the Michigan court of appeals
decision in Cameron v Auto Club Insurance Association, 263 Mich App
95; 687 NW2d 354 (2004).
Enacting section 2. Section 3009 of the insurance code of
1956, 1956 PA 218, MCL 500.3009, as amended by this amendatory act,
takes effect January 1, 2008 and applies to policies issued or
renewed on or after January 1, 2008.