HOUSE BILL No. 5013

September 26, 2017, Introduced by Rep. Theis 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 2111, 3101, 3104, 3107, 3109a,

3113, 3114, 3135, 3142, 3148, 3157, 3163, 3301, 3330, 4501, and

4503 (MCL 500.2111, 500.3101, 500.3104, 500.3107, 500.3109a,

500.3113, 500.3114, 500.3135, 500.3142, 500.3148, 500.3157,

500.3163, 500.3301, 500.3330, 500.4501, and 500.4503), the title as

amended by 2002 PA 304, section 2111 as amended by 2012 PA 441,

sections 3101 and 3113 as amended by 2016 PA 346, section 3104 as

amended by 2002 PA 662, section 3107 as amended by 2012 PA 542,

section 3109a as amended by 2012 PA 454, section 3114 as amended by

2016 PA 347, section 3135 as amended by 2012 PA 158, section 3163

as amended by 2002 PA 697, section 3330 as amended by 2012 PA 204,

and sections 4501 and 4503 as amended by 2012 PA 39, and by adding

sections 1245, 3107c, 3157a, 3180, and 4505 and chapter 63.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

TITLE

     An act to revise, consolidate, and classify the laws relating

to the insurance and surety business; to regulate the incorporation

or formation of domestic insurance and surety companies and

associations and the admission of foreign and alien companies and

associations; to provide their rights, powers, and immunities and

to prescribe the conditions on which companies and associations

organized, existing, or authorized under this act may exercise

their powers; to provide the rights, powers, and immunities and to

prescribe the conditions on which other persons, firms,

corporations, associations, risk retention groups, and purchasing

groups engaged in an insurance or surety business may exercise

their powers; to provide for the imposition of a privilege fee on

domestic insurance companies and associations; and the state

accident fund; to provide for the imposition of a tax on the

business of foreign and alien companies and associations; to

provide for the imposition of a tax on risk retention groups and

purchasing groups; to provide for the imposition of a tax on the

business of surplus line agents; to provide for the imposition of

regulatory fees on certain insurers; to provide for assessment fees

on certain health maintenance organizations; to modify tort

liability arising out of certain accidents; to provide for limited

actions with respect to that modified tort liability and to

prescribe certain procedures for maintaining those actions; to

require security for losses arising out of certain accidents; to

provide for the continued availability and affordability of

automobile insurance and homeowners insurance in this state and to

facilitate the purchase of that insurance by all residents of this

state at fair and reasonable rates; to provide for certain

reporting with respect to insurance and with respect to certain

claims against uninsured or self-insured persons; to prescribe

duties for certain state departments and officers with respect to

that reporting; to provide for certain assessments; to establish

and continue certain state insurance funds; to modify and clarify

the status, rights, powers, duties, and operations of the nonprofit

malpractice insurance fund; to provide for the departmental

supervision and regulation of the insurance and surety business

within this state; to provide for regulation over of worker's

compensation self-insurers; to provide for the conservation,

rehabilitation, or liquidation of unsound or insolvent insurers; to

provide for the protection of policyholders, claimants, and

creditors of unsound or insolvent insurers; to provide for

associations of insurers to protect policyholders and claimants in

the event of insurer insolvencies; to prescribe educational

requirements for insurance agents and solicitors; to provide for

the regulation of multiple employer welfare arrangements; to create

an automobile theft prevention authority 1 or more authorities to

reduce insurance fraud and the number of automobile thefts in this

state ; and to prescribe the powers and duties of the automobile

theft prevention authority; authorities; to provide certain for the

powers and duties upon of certain officials, departments, and

authorities of this state; to provide for an appropriation; to

repeal acts and parts of acts; and to provide penalties for the

violation of this act.

     Sec. 1245. (1) An insurance producer, including, but not

limited to, a producing agency, or an employee or agent of an

insurance producer is not liable for damages caused by the conduct

of the producer, employee, or agent related to obtaining or

providing information, or the choice of personal protection

insurance benefits by an insured, under section 3107c or 3109a.

     (2) This section does not apply with respect to a policy

issued or renewed after 3 years after the effective date of the

amendatory act that added this section.

     Sec. 2111. (1) Notwithstanding any provision of this act or

this chapter to the contrary, classifications and territorial base

rates used by an insurer in this state with respect to automobile

insurance or home insurance shall must conform to the applicable

requirements of this section.

     (2) Classifications established under this section for

automobile insurance shall must be based only on 1 or more of the

following factors, which the insurer shall be applied by an insurer

apply on a uniform basis throughout this state:

     (a) With respect to all automobile insurance coverages:

     (i) Either the age of the driver; the length of driving

experience; or the number of years licensed to operate a motor

vehicle.

     (ii) Driver primacy, based on the proportionate use of each

vehicle insured under the policy by individual drivers insured or

to be insured under the policy.

     (iii) Average miles driven weekly, annually, or both.

     (iv) Type of use, such as business, farm, or pleasure use.

     (v) Vehicle characteristics, features, and options, such as

engine displacement, ability of the vehicle and its equipment to

protect passengers from injury, and other similar items, including

vehicle make and model.

     (vi) Daily or weekly commuting mileage.

     (vii) Number of cars insured by the insurer or number of

licensed operators in the household. However, the insurer shall not

use the number of licensed operators shall not be used as an

indirect measure of marital status.

     (viii) Amount of insurance.

     (b) In addition to the factors prescribed in subdivision (a),

with respect to personal protection insurance coverage:

     (i) Earned income.

     (ii) Number of dependents of income earners insured under the

policy.

     (iii) Coordination of benefits.

     (iv) Use of a safety belt.

     (c) In addition to the factors prescribed in subdivision (a),

with respect to collision and comprehensive coverages:

     (i) The anticipated cost of vehicle repairs or replacement,

which may be measured by age, price, cost new, or value of the

insured automobile, and other factors directly relating to that

anticipated cost.

     (ii) Vehicle make and model.

     (iii) Vehicle design characteristics related to vehicle

damageability.

     (iv) Vehicle characteristics relating to automobile theft

prevention devices.

     (d) With respect to all automobile insurance coverage other

than comprehensive, successful completion by the individual driver

or drivers insured under the policy of an accident prevention

education course that meets the following criteria:

     (i) The course shall must include a minimum of 8 hours of

classroom instruction.

     (ii) The course shall must include, but not be limited to, a

review of all of the following:

     (A) The effects of aging on driving behavior.

     (B) The shapes, colors, and types of road signs.

     (C) The effects of alcohol and medication on driving.

     (D) The laws relating to the proper use of a motor vehicle.

     (E) Accident prevention measures.

     (F) The benefits of safety belts and child restraints.

     (G) Major driving hazards.

     (H) Interaction with other highway users, such as

motorcyclists, bicyclists, and pedestrians.

     (3) Each An insurer shall establish a secondary or merit

rating plan for automobile insurance, other than comprehensive

coverage. A secondary or merit rating plan required under this

subsection shall must provide for premium surcharges for any or all

coverages for automobile insurance, other than comprehensive

coverage, based upon on any or all of the following, when that

information becomes available to the insurer:

     (a) Substantially at-fault accidents.

     (b) Convictions for, determinations of responsibility for

civil infractions for, or findings of responsibility in probate

court for civil infractions for violations under chapter VI of the

Michigan vehicle code, 1949 PA 300, MCL 257.601 to 257.750.

However, an insured shall not be merit rated for a civil infraction

under chapter VI of the Michigan vehicle code, 1949 PA 300, MCL

257.601 to 257.750, for a period of time longer than that which the

secretary of state's office carries points for that infraction on

the insured's motor vehicle record.

     (4) An insurer shall not establish or maintain rates or rating

classifications for automobile insurance based on sex or marital

status. This subsection applies regardless of anything in this act

to the contrary, including, but not limited to, anything in

sections 2109 to 2110a or subsection (9).

     (5) Notwithstanding other provisions of this chapter,

automobile insurance risks may be grouped by territory.

     (6) This section does not limit insurers or rating

organizations from establishing and maintaining statistical

reporting territories. This section does not prohibit an insurer

from establishing or maintaining, for automobile insurance, a

premium discount plan for senior citizens in this state who are 65

years of age or older, if the plan is uniformly applied by the

insurer throughout this state. If an insurer has not established

and maintained a premium discount plan for senior citizens, the

insurer shall offer reduced premium rates to senior citizens in

this state who are 65 years of age or older and who drive less than

3,000 miles per year, regardless of statistical data.

     (7) Classifications established under this section for home

insurance other than inland marine insurance provided by policy

floaters or endorsements shall must be based only on 1 or more of

the following factors:

     (a) Amount and types of coverage.

     (b) Security and safety devices, including locks, smoke

detectors, and similar, related devices.

     (c) Repairable structural defects reasonably related to risk.

     (d) Fire protection class.

     (e) Construction of structure, based on structure size,

building material components, and number of units.

     (f) Loss experience of the insured, based on prior claims

attributable to factors under the control of the insured that have

been paid by an insurer. An insured's failure, after written notice

from the insurer, to correct a physical condition that presents a

risk of repeated loss shall be considered is a factor under the

control of the insured for purposes of this subdivision.

     (g) Use of smoking materials within the structure.

     (h) Distance of the structure from a fire hydrant.

     (i) Availability of law enforcement or crime prevention

services.

     (8) Notwithstanding other provisions of this chapter, home

insurance risks may be grouped by territory.

     (9) An insurer may use factors in addition to those permitted

by this section for insurance if the plan is consistent with the

purposes of this act and reflects reasonably anticipated reductions

or increases in losses or expenses.

     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 benefits

payable under section 3107 up to any limit on benefits applicable

under section 3109a and subject to any exclusion of a qualified

person under section 3107c, property protection insurance, and

residual liability insurance coverage 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) "Emergency medical condition" means that term as defined

in section 1395dd of the social security act, 42 USC 1395dd, as

determined and documented by a qualified medical professional.

(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) "Household" means a house, an apartment, a mobile home, or

any other structure or part of a structure intended for residential

occupancy as separate living quarters.

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

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

(h) (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.

(i) (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.

(j) (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.

(k) (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.

(l) (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 on a public highway and has

the security required under subsection (1) or section 3103 in

effect.

(m) (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.

(n) (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.

     (o) "Qualified medical professional" means any of the

following:

     (i) A physician as that term is defined in sections 17001 and

17501 of the public health code, 1978 PA 368, MCL 333.17001 and

333.17501.

     (ii) A physician's assistant licensed under article 15 of the

public health code, 1978 PA 368, MCL 333.16101 to 333.18838, under

that health profession subfield of the practice of medicine or the

practice of osteopathic medicine and surgery.

     (iii) A dentist as that term is defined in section 16601 of

the public health code, 1978 PA 368, MCL 333.16601.

     (iv) An advanced practice registered nurse as that term is

defined in section 17201 of the public health code, 1978 PA 368,

MCL 333.17201.

(p) (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.

     (q) "Related emergency care" means a reasonably necessary in-

patient treatment, product, service, or accommodation related to,

immediately following, and necessitated by an emergency medical

condition as determined and documented by a qualified medical

professional.

     (r) "Related person" means the spouse, a child, or a relative

who is related to the person within the seventh degree of

consanguinity, as computed by the civil law method.

     (s) "Ultimate loss" means the actual loss amounts paid or

payable by a member of the association created under section 3104.

Ultimate loss does not include claim expenses.

     (3) Security required by subsection (1) may be provided under

a policy issued by an authorized insurer that affords insurance for

the payment of benefits described in subsection (1). A policy of

insurance represented or sold as providing security is considered

to provide insurance for the payment of the benefits.

     (4) Security required by subsection (1) may be provided by any

other method approved by the secretary of state as affording

security equivalent to that afforded by a policy of insurance, if

proof of the security is filed and continuously maintained with the

secretary of state throughout the period the motor vehicle is

driven or moved on a highway. The person filing the security has

all the obligations and rights of an insurer under this chapter.

When the context permits, "insurer" as used in this chapter,

includes a person that files the security as provided in this

section.

     (5) An insurer that issues a policy that provides the security

required under subsection (1) may exclude coverage under the policy

as provided in section 3017.

     Sec. 3104. (1) An The catastrophic claims association is

created as an unincorporated, nonprofit association. to be known as

the catastrophic claims association, hereinafter referred to as the

association, is created. Each insurer engaged in writing insurance

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

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

insurance in this state, shall be a member of the association and

shall be is bound by the plan of operation of the association. Each

An insurer engaged in writing insurance coverages that provide the

security required by section 3103(1) within in this state, as a

condition of its authority to transact insurance in this state,

shall be is considered to be a member of the association, but only

for purposes of premiums under subsection (7)(d). Except as

expressly provided in this section, the association is not subject

to any laws of this state with respect to insurers, but in all

other respects the association is subject to the laws of this state

to the extent that the association would be if it were an insurer

organized and subsisting under chapter 50.

     (2) The association shall provide and each member shall accept

indemnification for 100% of the amount of ultimate loss sustained

under personal protection insurance coverages in excess of the

following amounts in each loss occurrence:

     (a) For a motor vehicle accident policy issued or renewed

before July 1, 2002, $250,000.00.

     (b) For a motor vehicle accident policy issued or renewed

during the period July 1, 2002 to June 30, 2003, $300,000.00.

     (c) For a motor vehicle accident policy issued or renewed

during the period July 1, 2003 to June 30, 2004, $325,000.00.

     (d) For a motor vehicle accident policy issued or renewed

during the period July 1, 2004 to June 30, 2005, $350,000.00.

     (e) For a motor vehicle accident policy issued or renewed

during the period July 1, 2005 to June 30, 2006, $375,000.00.

     (f) For a motor vehicle accident policy issued or renewed

during the period July 1, 2006 to June 30, 2007, $400,000.00.

     (g) For a motor vehicle accident policy issued or renewed

during the period July 1, 2007 to June 30, 2008, $420,000.00.

     (h) For a motor vehicle accident policy issued or renewed

during the period July 1, 2008 to June 30, 2009, $440,000.00.

     (i) For a motor vehicle accident policy issued or renewed

during the period July 1, 2009 to June 30, 2010, $460,000.00.

     (j) For a motor vehicle accident policy issued or renewed

during the period July 1, 2010 to June 30, 2011, $480,000.00.

     (k) For a motor vehicle accident policy issued or renewed

during the period July 1, 2011 to June 30, 2013, $500,000.00.

     (l) For a motor vehicle accident policy issued or renewed

during the period July 1, 2013 to June 30, 2015, $530,000.00.

     (m) For a motor vehicle accident policy issued or renewed

during the period July 1, 2015 to June 30, 2017, $545,000.00.

     (n) For a motor vehicle accident policy issued or renewed

during the period July 1, 2017 to June 30, 2019, $555,000.00.

Beginning July 1, 2013, 2019, this $500,000.00 $555,000.00 amount

shall must be increased biennially on July 1 of each odd-numbered

year, for policies issued or renewed before July 1 of the following

odd-numbered year, by the lesser of 6% or the consumer price index,

and rounded to the nearest $5,000.00. This The association shall

calculate the biennial adjustment shall be calculated by the

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

     (3) An insurer may withdraw from the association only upon on

ceasing to write insurance that provides the security required by

section 3101(1) in this state.

     (4) An insurer whose membership in the association has been

terminated by withdrawal shall continue continues to be bound by

the plan of operation, and upon on withdrawal, all unpaid premiums

that have been charged to the withdrawing member are payable as of

the effective date of the withdrawal.

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

insolvent member shall must be assumed by and apportioned among the

remaining members of the association as provided in the plan of

operation. The association has all rights allowed by law on behalf

of the remaining members against the estate or funds of the

insolvent member for sums money due the association.

     (6) If a member has been merged or consolidated into another

insurer or another insurer has reinsured a member's entire business

that provides the security required by section 3101(1) in this

state, the member and successors in interest of the member remain

liable for the member's obligations.

     (7) The association shall do all of the following on behalf of

the members of the association:

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

(2).

     (b) Establish procedures by which members shall must promptly

report to the association each claim that, on the basis of the

injuries or damages sustained, may reasonably be anticipated to

involve the association if the member is ultimately held legally

liable for the injuries or damages. Solely for the purpose of

reporting claims, the member shall in all instances consider itself

legally liable for the injuries or damages. The member shall also

advise the association of subsequent developments likely to

materially affect the interest of the association in the claim.

     (c) Maintain relevant loss and expense data relative relating

to all liabilities of the association and require each member to

furnish statistics, in connection with liabilities of the

association, at the times and in the form and detail as may be

required by the plan of operation.

     (d) In a manner provided for in the plan of operation,

calculate and charge to members of the association a total premium

sufficient to cover the expected losses and expenses of the

association that the association will likely incur during the

period for which the premium is applicable. The total premium shall

must include an amount to cover incurred but not reported losses

for the period and may must be adjusted for any excess or deficient

premiums from previous periods. Excesses or deficiencies from

previous periods may must either be fully adjusted in a single

period or may be adjusted over several periods in a manner provided

for in the plan of operation. Each member shall must be charged an

amount equal to that member's total written car years of insurance

providing the security required by section 3101(1) or 3103(1), or

both, written in this state during the period to which the premium

applies, with the total written car years of insurance multiplied

by the applicable average premium per car. The average premium per

car shall be is the total premium, calculated as adjusted for any

excesses or deficiencies, divided by the total written car years of

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

3103(1), or both, written in this state of all members during the

period to which the premium applies, excluding cars insured under a

policy with a coverage limit under section 3109a(2)(a) or (b)

except for any portion of total premium that is an adjustment for a

deficiency in a previous period. A member may not be charged a

premium for a car insured under a policy with a coverage limit

under section 3109a(2)(a) or (b) other than for the portion of the

total premium attributable to an adjustment for a deficiency in a

previous period. A member shall must be charged a premium for a

historic vehicle that is insured with the member of 20% of the

premium charged for a car insured with the member. Not less than 60

days before a change in the total premium is effective, the

association shall provide the director of the department with a

written report on the new premium amount, the change in the premium

amount from the previous period, and an explanation detailing the

reasons for the change, including a justification of any adjustment

for any excesses or deficiencies from previous periods. As used in

this subdivision:

     (i) "Car" includes a motorcycle but does not include a

historic vehicle.

     (ii) "Historic vehicle" means a vehicle that is a registered

historic vehicle under section 803a or 803p of the Michigan vehicle

code, 1949 PA 300, MCL 257.803a and 257.803p.

     (e) Require and accept the payment of premiums from members of

the association as provided for in the plan of operation. The

association shall do either of the following:

     (i) Require payment of the premium in full within 45 days

after the premium charge.

     (ii) Require payment of the premiums to be made periodically

to cover the actual cash obligations of the association.

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

operation of the association.

     (g) Establish procedures for reviewing claims procedures and

practices of members of the association. If the claims procedures

or practices of a member are considered inadequate to properly

service the liabilities of the association, the association may

undertake or may contract with another person, including another

member, to adjust or assist in the adjustment of claims for the

member on claims that create a potential liability to the

association and may charge the cost of the adjustment to the

member.

     (8) In addition to other powers granted to it by this section,

the association may do all of the following:

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

against the association shall does not create any direct liability

against the individual members of the association. The association

may provide for the indemnification of its members, members of the

board of directors of the association, and officers, employees, and

other persons lawfully acting on behalf of the association.

     (b) Reinsure all or any portion of its potential liability

with reinsurers licensed to transact insurance in this state or

approved by the commissioner.director of the department.

     (c) Provide for appropriate housing, equipment, and personnel

as may be necessary to assure the efficient operation of the

association.

     (d) Pursuant to the plan of operation, adopt reasonable rules

for the administration of the association, enforce those rules, and

delegate authority, as the board considers necessary to assure the

proper administration and operation of the association consistent

with the plan of operation.

     (e) Contract for goods and services, including independent

claims management, actuarial, investment, and legal services, from

others within in or without outside of this state to assure the

efficient operation of the association.

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

interested party concerning the operation of the association.

     (g) Perform other acts not specifically enumerated in this

section that are necessary or proper to accomplish the purposes of

the association and that are not inconsistent with this section or

the plan of operation.

     (9) A board of directors is created , hereinafter referred to

as the board, which shall be responsible for the operation of and

shall operate the association consistent with the plan of operation

and this section.

     (10) The plan of operation shall must provide for all of the

following:

     (a) The establishment of necessary facilities.

     (b) The management and operation of the association.

     (c) Procedures to be utilized in charging premiums, including

adjustments from excess or deficient premiums from prior periods.

     (d) Procedures requiring that any portion of the premium

payable by a member of the association passed on to an insured for

a car equal the portion of the premium payable by the member

attributable to that car under this section, including any

adjustments for excesses or deficiencies from previous periods. As

used in this subdivision and subdivision (e), "car" means that term

as defined in subsection (7)(d).

     (e) Procedures for a rebate of a surplus to members of the

association, for distribution to insureds as provided in subsection

(24), as ordered by the director of the department under subsection

(22) or as directed by the association during any period in which

the association charges no premium because of excesses from

previous periods, if the rebate directed by the association will

not threaten the association's ongoing ability to provide an

effective reinsurance mechanism for personal protection insurance

benefits based on generally accepted and reasonable actuarial

techniques. As used in this subdivision, "surplus" means any

excesses from previous periods not reserved by the association to

cover the expected losses and expenses of the association that the

association likely will incur during the period for which a premium

is applicable under subsection (7)(d). Surplus does not include

excesses from previous periods adjusted over 5 or more years in the

manner provided in the plan of operation under subsection (7)(d).

(f) (d) Procedures governing the actual payment of premiums to

the association.

(g) (e) Reimbursement of each member of the board by the

association for actual and necessary expenses incurred on

association business.

(h) (f) The investment policy of the association.

(i) (g) Any other matters required by or necessary to

effectively implement this section.

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

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

calculated pursuant to under subsection (7)(d). Each director shall

be board member is entitled to 1 vote. The initial term of office

of a director shall be board member is 2 years.

     (12) As part of the plan of operation, the board shall adopt

rules providing for the composition and term of successor boards to

the initial board and the terms of board members, consistent with

the membership composition requirements in subsections (11) and

(13). Terms of the directors shall board members must be staggered

so that the terms of all the directors board members do not expire

at the same time and so that a director board member does not serve

a term of more than 4 years.

     (13) The board shall must consist of 5 directors, board

members and the commissioner director of the department, who shall

be serve as an ex officio member of the board without vote.

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

appointed by the commissioner and appoint the board members. A

board member shall serve until that member's his or her successor

is selected and qualified. The board shall elect the chairperson of

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

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

the commissioner consistent with as provided in the plan of

operation.

     (15) After the board is appointed, the The board shall meet as

often as the chairperson, the commissioner, director of the

department, or the plan of operation shall require, requires, or at

the request of any 3 members of the board. board members. The

chairperson shall retain the right to may vote on all issues. Four

members of the board board members constitute a quorum.

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

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

may be determined by the board. shall be furnished to each member.

     (17) Not more than 60 days after the initial organizational

meeting of the board, the board shall submit to the commissioner

for approval a proposed plan of operation consistent with the

objectives and provisions of this section, which shall provide for

the economical, fair, and nondiscriminatory administration of the

association and for the prompt and efficient provision of

indemnity. If a plan is not submitted within this 60-day period,

then the commissioner, after consultation with the board, shall

formulate and place into effect a plan consistent with this

section.

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

shall be considered to meet the requirements of this section if it

is not disapproved by written order of the commissioner within 30

days after the date of its submission. Before disapproval of all or

any part of the proposed plan of operation, the commissioner shall

notify the board in what respect the plan of operation fails to

meet the requirements and objectives of this section. If the board

fails to submit a revised plan of operation that meets the

requirements and objectives of this section within the 30-day

period, the commissioner shall enter an order accordingly and shall

immediately formulate and place into effect a plan consistent with

the requirements and objectives of this section.

(17) (19) The proposed plan of operation or Any amendments to

the plan of operation of the association, including, but not

limited to, any change relating to adjustments for excesses or

deficiencies under subsection (7)(d) or a procedure under

subsection (10)(d) or (10)(e), are subject to majority approval by

the board, ratified ratification by a majority of the membership of

the association having a vote, with voting rights being apportioned

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

subject to approval by the commissioner.director of the department.

(18) (20) Upon approval by the commissioner and ratification

by the members of the plan submitted, or upon the promulgation of a

plan by the commissioner, each An insurer authorized to write

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

this state, as provided in this section, is bound by and shall

formally subscribe to and participate in the plan approved of

operation as a condition of maintaining its authority to transact

insurance in this state.

(19) (21) The association is subject to all the reporting,

loss reserve, and investment requirements of the commissioner

director of the department to the same extent as would is a member

of the association.

(20) (22) Premiums charged members by the association shall

must be recognized in the rate-making procedures for insurance

rates in the same manner that expenses and premium taxes are

recognized.

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

authorized representative of the commissioner director of the

department may visit the association at any time and examine any

and all of the association's affairs. Beginning July 1, 2018, and

every fifth year after 2018, the director of the department shall

engage 1 or more independent actuaries to examine the affairs and

records of the association relating to premiums charged to members

of the association under subsection (7)(d), adjustments to premiums

for any excesses or deficiencies under subsection (7)(d), and any

rebates under subsection (10)(e), during the previous 5 years. By

December 31, 2018 and by December 31 of every fifth year after

2018, the director of the department shall report to the governor

and the standing committees of the senate and house of

representatives with primary jurisdiction over insurance issues on

all of the following relating to the 5-year period ending on the

previous June 30:

     (a) The association's compliance with the requirements of this

section and its plan of operation relating to the association's

calculation of premiums charged under subsection (7)(d), including

any adjustments for excesses or deficiencies from previous periods.

     (b) The expectations used by the association for medical cost

inflation, economic conditions, investment return, and the number

of claims presented to the association.

     (c) The association's compliance with subsection (10)(d) and

(e).

     (d) The association's compliance with generally accepted and

reasonable actuarial techniques in determining premium charges and

any adjustments for excesses or deficiencies from prior periods

under subsection (7)(d).

     (e) The effect of any rebate under subsection (10)(e) and

distribution under subsection (24) on the association's ongoing

ability to provide an effective reinsurance mechanism for personal

protection insurance benefits.

     (22) If the actuarial examination under subsection (21) shows

that the assets of the association exceed 120% of its liabilities,

including incurred but not reported liabilities, the director of

the department shall order the association to rebate the excess

under subsection (10)(e) and the members of the association to

distribute the rebates under subsection (24).

     (23) Within 30 days after receiving an order from the director

of the department under subsection (22), the association may

request a hearing to review the order by filing a written request

with the director of the department. The department shall conduct

the review as a contested case under the administrative procedures

act of 1969, 1969 PA 306, MCL 24.201 to 24.328.

     (24) A member of the association shall distribute any rebate

it receives under subsection (10)(e) to the person that it insures

under policies that provide the security required under section

3101(1) or 3103(1), or both, on a uniform basis per car in a manner

and on the date or dates provided by the director of the department

in accordance with an order issued by the director. As used in this

subsection, "car" means that term as defined in subsection (7)(d).

(25) (24) The association does not have liability for losses

occurring before July 1, 1978. After June 30, 2018, the association

does not have liability for an ultimate loss under personal

protection insurance coverage for a motor vehicle accident policy

if a coverage limit under section 3109a(2)(a) or (b) is effective

for the policy at the time of the ultimate loss. An ultimate loss

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

occurs.

     (26) For purposes of this section, the date that a motor

vehicle accident policy is issued or renewed is the effective date

of personal protection insurance coverage under the policy.

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

     (a) "Association" means the catastrophic claims association

created in subsection (1).

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

created in subsection (9).

(c) (a) "Consumer price index" means the percentage of change

in the consumer price index for all urban consumers in the United

States city average for all items for the 24 months prior to before

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

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

by the United States department of labor, bureau of labor

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

certified by the commissioner.director of the department.

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

providing the coverages required under section 3101(1).

     (c) "Ultimate loss" means the actual loss amounts that a

member is obligated to pay and that are paid or payable by the

member, and do not include claim expenses. An ultimate loss is

incurred by the association on the date that the loss occurs.

     Sec. 3107. (1) Except as provided in subsection (2), this

section and sections 3107a to 3107c, personal protection insurance

benefits are payable for the following:

     (a) Allowable expenses consisting of all reasonable charges

incurred, up to any coverage limit applicable under this section or

section 3109a, for reasonably necessary products, services and

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

rehabilitation. Allowable expenses within personal protection

insurance coverage shall do not include either any 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 must not be less than $1,750.00 or

more than $5,000.00.

     (iii) A charge that is not related to or necessitated by the

injury covered by the personal protection benefits.

     (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 must 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. must be

applied. 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 must not exceed $5,189.00,

which maximum shall apply must be applied pro rata to any lesser

period of work loss. Beginning October 1, 2013, the maximum shall

must 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 applies only to benefits arising out of

accidents occurring subsequent to an accident that occurs after the

date of change in the maximum.

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

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

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

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

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

or her dependent.

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

insurance benefits payable under subsection (1):

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

of an accidental bodily injury would not be eligible to receive

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

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

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

who waives coverage under this subsection for work loss benefits.

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

benefits payable to the person or persons who have signed the

waiver form.

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

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

medical use of marihuana.

     (c) An insurer is not required to provide coverage for more

than a cumulative 56 hours per injured person per week of attendant

care in the home if the attendant care is provided directly, or

indirectly through another person, by any of the following:

     (i) A related person of the injured person.

     (ii) A person domiciled in the household of the injured

person.

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

social relationship before the injury.

     (d) An insurer is not required to provide coverage for ground

transportation services other than ambulance services described in

subdivision (e) in an amount that exceeds 300% of the optional

standard mileage rate provided by the Internal Revenue Service for

use in calculating the deductible cost of operating an automobile

for medical care described in section 213 of the internal revenue

code of 1986, 26 USC 213. Every second year after December 31,

2020, the director shall review any changes to the optional

standard mileage rate provided by the Internal Revenue Service for

use in calculating the deductible cost of operating an automobile

for medical care described in section 213 of the internal revenue

code, 26 USC 213. If the director determines that the changes to

the optimal standard mileage rate provided by the Internal Revenue

Service are reasonable and appropriate for purposes of assuring

affordable automobile insurance in this state, the changes apply

for purposes of this subdivision and the director shall issue an

order to that effect.

     (e) An insurer is not required to provide coverage for

ambulance services, including, but not limited to, air ambulance

services, in an amount that exceeds the amount that would be

allowable for the ambulance services under the ambulance fee

schedule applicable to ambulance services under part B of the

federal Medicare program established under title XVIII of the

social security act, 42 USC 1395 to 1395lll. Every second year

after December 31, 2020, the director shall review any changes to

amounts payable under the ambulance fee schedule applicable to

ambulance services under part B of the federal Medicare program

established under subchapter XVIII of the social security act, 42

USC 1395 to 1395lll. If the director determines that the changes to

amounts payable under the ambulance fee schedule applicable to

ambulance services under part B are reasonable and appropriate for

purposes of assuring affordable automobile insurance in this state,

the changes apply for purposes of this subdivision and the director

shall issue an order to that effect.

     (f) A claim for ground transportation services or ambulance

services must identify the provider of the services, each location

at which the injured person was picked up by the provider, each

location at which the injured person was dropped off by the

provider, the mileage between each location, and the total mileage

for each day in which a claim for transportation or ambulance

services is made.

     (3) With respect to personal protection insurance benefits for

attendant care in the home, ground transportation services

described in subsection (2)(d), and ambulance services described in

subsection (2)(e), an insurer is only required to pay reasonable

charges incurred for reasonably necessary products, services, and

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

rehabilitation related to and necessitated by the injury covered by

the personal protection insurance benefits, up to any coverage

limit applicable under subsection (2) or section 3109a.

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

personal protection insurance benefits for more than 56 hours per

week of attendant care provided in the home by a person described

in subsection (2)(c)(i) to (iii).

     Sec. 3107c. (1) For insurance policies issued or renewed after

June 30, 2018, a qualified person who is an insured person under

the policy is not entitled to personal protection insurance

benefits under section 3107(1)(a) unless the qualified person

affirmatively elects to purchase personal protection insurance

benefits coverage under this section.

     (2) For automobile insurance policies issued or renewed after

June 30, 2018, each person who is 62 years of age or older shall

complete a form, approved by the director, to certify whether he or

she is a qualified person. The form also must provide a qualified

person the option to purchase personal protection insurance

benefits for the qualified person notwithstanding his or her status

as a qualified person and disclose in a conspicuous manner that a

qualified person is not obligated to purchase personal protection

insurance coverage for the qualified person.

     (3) A qualified person who opts to purchase personal

protection insurance under this section shall select a coverage

level under section 3109a(2). If a qualified person does not opt to

purchase personal protection insurance benefits for the qualified

person, the automobile insurance policy must include personal

protection insurance payable under the policy only for other

persons who have a right to claim personal protection insurance

benefits under the policy up to the coverage limits under section

3109a(2)(a) and not for the qualified person.

     (4) An insurer shall offer a reduced automobile insurance

premium rate for any automobile insurance policy that excludes

personal protection insurance coverage for a qualified person under

this section.

     (5) If an insured is 62 years of age or older and does not

provide an insurer with the form required by this section, the

insured shall purchase automobile insurance with personal

protection insurance coverage as otherwise provided under this

chapter.

     (6) If a qualified person provides the certification required

under this section to an insurer and does not opt to purchase

personal protection insurance benefits in compliance with this

section, the insurer is discharged from any liability for personal

protection insurance benefits under this chapter for the qualified

person.

     (7) As used in this section:

     (a) "Qualified health coverage" means health insurance or

health benefits that satisfy both of the following requirements:

     (i) The health insurance or health benefits are provided under

a private or public retirement program for the remainder of the

qualified person's life.

     (ii) Coverage is included for accidental bodily injury arising

out of the ownership, operation, maintenance, or use of a motor

vehicle as a motor vehicle.

     (b) "Qualified person" means a person who is 62 years of age

or older who has qualified health coverage.

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

insurance benefits under this chapter may offer, at appropriately

reduced premium rates, deductibles and exclusions reasonably

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

deductibles and exclusions offered under this section are subject

to prior approval by the commissioner director and shall must apply

only to benefits payable to the insured person named in the policy,

the spouse of the insured person, and any relative of either

domiciled in the same household.

     (2) For an insurance policy that provides personal protection

insurance benefits and is issued or renewed after June 30, 2018,

the insured person named in the policy shall select 1 of the

following coverage levels for the personal protection insurance

benefits:

     (a) A limit of $250,000.00 per individual per loss occurrence,

consisting of both of the following:

     (i) Up to $225,000.00 per individual per loss occurrence for

an emergency medical condition and related emergency care only.

     (ii) Up to $25,000.00 per individual for all other personal

protection insurance benefits under this chapter.

     (b) A limit of $500,000.00 per individual per loss occurrence

on personal protection insurance benefits under this chapter.

     (c) No maximum limit per individual per loss occurrence on

personal protection insurance benefits under this chapter.

     (3) All of the following apply to subsection (2):

     (a) If an insured person named in the policy does not select

in writing on a form approved by the director 1 of the coverage

levels under subsection (2), no maximum limit on personal

protection insurance benefits under this chapter applies under the

policy. However, if an insured person named in the policy has

previously selected as provided in this subdivision 1 of the 2

coverage levels under subsection (2) and does not, before renewal

of the policy, select a different coverage level in writing on a

form approved by the director, the coverage level applicable before

the renewal applies under the policy.

     (b) If the insured person named in the policy selects a

coverage limit under subsection (2)(a) or (b), the coverage limit

under subsection (2)(a) or (b) applies to personal protection

insurance benefits payable under the policy to the insured person,

the insured person's spouse, a relative of either domiciled in the

same household, and any other person with a right to claim personal

protection insurance benefits under the policy.

     (c) If the insured person named in the policy does not select

a coverage limit under subsection (2)(a) or (b) for a policy, no

maximum limit applies to personal protection insurance benefits

payable under the policy to the insured person, the insured

person's spouse, a relative of either domiciled in the same

household, or any other resident of this state with a right to

claim personal protection benefits under the policy. The coverage

limit under section 3163(4) applies to a nonresident of this state

with a right to claim personal protection benefits under the policy

if the nonresident is not the insured named in the policy, the

insured person's spouse, or a relative of either domiciled in the

same household.

     (d) If the coverage limit under subsection (2)(a) or (b) or

section 3163(4) applies to a person claiming personal protection

insurance benefits, the coverage limit applies on a per occurrence

per loss basis notwithstanding the number of policies applicable to

the occurrence or the loss.

     (e) Other limits on personal protection insurance benefits

provided in this chapter, including, but not limited to, limits

under section 3163, continue to apply to personal protection

insurance benefits coverage notwithstanding the applicability of a

coverage limit under this section.

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

issued or renewed is the effective date of both the personal

protection insurance coverage under the policy and the coverage

level applicable under this section.

     Sec. 3113. A person is not entitled to be paid personal

protection insurance benefits for accidental bodily injury if at

the time of the accident any of the following circumstances

existed:

     (a) The person was willingly operating or willingly using a

motor vehicle or motorcycle that was taken unlawfully, and the

person knew or should have known that the motor vehicle or

motorcycle was taken unlawfully.

     (b) The person was the owner or registrant of a motor vehicle

or motorcycle involved in the accident with respect to which the

security required by section 3101 or 3103 was not in effect.

     (c) The person was not a resident of this state, was an

occupant of a motor vehicle or motorcycle not registered in this

state, and the motor vehicle or motorcycle was not insured by an

insurer that has filed a certification in compliance with section

3163.

     (d) The person was operating a motor vehicle or motorcycle as

to which he or she was named as an excluded operator as allowed

under section 3009(2).

     (e) The person was the owner or operator of a motor vehicle

for which coverage was excluded under a policy exclusion authorized

under section 3017.

     (f) The person was a qualified person who did not purchase

personal protection insurance benefits under section 3107c.

     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. If 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. Except as provided in section 3107c, a coverage

limit applicable to a personal protection insurance policy under

section 3109a(2) applies to personal protection insurance benefits

payable for 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.

     (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 any of the following, unless the 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.

     (g) A transportation network company vehicle.

     (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 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, subject to the applicable

coverage level for personal protection insurance benefits under

section 3109a(2).

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

in the accident, subject to the applicable coverage level for

personal protection insurance benefits under section 3109a(2).

     (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,

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, subject to the applicable

coverage level for personal protection insurance benefits under

section 3109a(2).

     (7) Notwithstanding anything in this chapter to the contrary,

a coverage limit under section 3109a(2) or section 3163(4) applies

on a per occurrence per loss basis notwithstanding the number of

policies applicable to the occurrence or the loss.

(8) (7) As used in this section:

     (a) "Personal vehicle", "prearranged ride", and

"transportation network company digital network" mean those terms

as defined in section 2 of the limousine, taxicab, and

transportation network company act, 2016 PA 345, MCL 257.2102.

     (b) "Transportation network company vehicle" means a personal

vehicle while the driver is logged on to the transportation network

company digital network or while the driver is engaged in a

prearranged ride.

     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 must be assessed on the basis of comparative

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

party who is more than 50% at fault.

     (c) Damages shall must not be assessed in favor of a party who

was operating his or her own vehicle at the time the injury

occurred and did not have in effect for that motor vehicle the

security required by section 3101 at the time the injury occurred.

     (d) The issue of whether the injured person has sustained a

serious impairment of bodily function is fact-specific and must be

determined on a case-by-case basis.

     (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 under sections 3107 to 3110 in excess of the

daily, monthly, and 3-year limitations contained in those sections.

The party liable for damages is entitled to an exemption reducing

his or her liability by the amount of taxes that would have been

payable on account of income the injured person would have received

if he or she had not been injured.

     (d) Damages for economic loss by a nonresident in excess of

the personal protection insurance benefits provided under section

3163(4). Damages under this subdivision are not recoverable to the

extent that benefits covering the same loss are available from

other sources, regardless of the nature or number of benefit

sources available and regardless of the nature or form of the

benefits.

     (e) Damages up to $1,000.00 to a motor vehicle, to the extent

that the damages are not covered by insurance. An action for

damages under this subdivision shall must be conducted as provided

in subsection (4).

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

subsection (3)(e):

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

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

party who is more than 50% at fault.

     (b) Liability is not a component of residual liability, as

prescribed in section 3131, for which maintenance of security is

required by this act.

     (c) The action shall must be commenced, whenever legally

possible, in the small claims division of the district court or the

municipal court. If the defendant or plaintiff removes the action

to a higher court and does not prevail, the judge may assess costs.

     (d) A decision of the court is not res judicata in any

proceeding to determine any other liability arising from the same

circumstances that gave rise to the action.

     (e) Damages shall must not be assessed if the damaged motor

vehicle was being operated at the time of the damage without the

security required by section 3101.

     (5) As used in this section, "serious impairment of body

function" means an impairment that satisfies all of the following

requirements:

     (a) It is objectively manifested, meaning it is observable or

perceivable from actual symptoms or conditions.

     (b) It is an impairment of an important body function, that

which is a body function of value, significance, or consequence to

the injured person.

     (c) It affects the injured person's general ability to lead

his or her normal life, meaning it influences the injured person's

capacity to live in his or her normal manner of living.

     Sec. 3142. (1) Personal Subject to subsection 3157, personal

protection insurance benefits are payable as loss accrues.

     (2) Personal protection insurance benefits are overdue if not

paid within 30 days after an insurer receives reasonable proof of

the fact and of the amount of loss sustained and any applicable

requirement under section 3157 is satisfied. If any applicable

requirement under section 3157 is satisfied but reasonable proof is

not supplied as to the entire claim, the amount supported by

reasonable proof is overdue if not paid within 30 days after the

proof is received by the insurer. Any part of the remainder of the

claim that is later supported by reasonable proof is overdue if not

paid within 30 days after the proof is received by the insurer. For

the purpose of calculating the extent to which benefits are

overdue, payment shall must be treated as made on the date a draft

or other valid instrument was placed in the United States mail in a

properly addressed, postpaid envelope, or, if not so posted, on the

date of delivery.

     (3) An overdue payment bears simple interest at the rate of

12% per annum.

     (4) A payment is not overdue if the insurer has reasonable

proof that the insurer is not responsible for the payment.

     Sec. 3148. (1) An Subject to subsections (5) and (6), an

attorney is entitled to may be awarded a reasonable fee for

advising and representing a claimant in an action for personal or

property protection insurance benefits which that are overdue. The

attorney's fee shall be is a charge against the insurer in addition

to the benefits recovered, if the court finds that the insurer

unreasonably refused to pay the claim or unreasonably delayed in

making proper payment. An attorney advising or representing an

injured person concerning a claim for payment of personal

protection insurance benefits from an insurer shall not claim,

file, or serve a lien for payment of a fee or fees until all of the

following apply:

     (a) A payment for the claim is authorized under this chapter.

     (b) A payment for the claim is overdue under this chapter.

     (c) The attorney notifies the resident agent of the insurer in

writing that the payment for the claim is overdue under this

chapter.

     (d) Within 30 days after the insurer receives the notice under

subdivision (c), the insurer does not either provide reasonable

proof that the insurer is not responsible for the payment or take

remedial action.

     (2) If an attorney claims, files, serves, or enforces a lien

in a manner prohibited by subsection (1), an insurer or other

person aggrieved by the lien is entitled to court costs and

reasonable attorney fees related to opposition of the imposition of

the lien.

(3) (2) An A court may award an insurer may be allowed by a

court an award of a reasonable sum amount against a claimant as an

attorney's attorney fee for the insurer's attorney in defense

defending against a any of the following:

     (a) A claim that was in some respect fraudulent or so

excessive as to have no reasonable foundation.

     (b) A claim for benefits for a treatment, product, service,

rehabilitative occupational training, or accommodation that was not

medically necessary or that was for an excessive amount.

     (c) A claim for which the client was solicited by the attorney

in violation of the law of this state or the Michigan rules of

professional conduct.

     (4) To the extent that personal or property protection

insurance benefits are then due or thereafter come due to the

claimant because of loss resulting from the injury on which the

claim is based, such a an attorney fee awarded in favor of the

insurer may be treated taken as an offset against such the

benefits. ; also, judgment Judgment may also be entered against the

claimant for any amount of a an attorney fee awarded against him

and that is not offset in this way against benefits or otherwise

paid.

     (5) For a dispute over payment for allowable expenses under

section 3107(1)(a) for attendant care or nursing services, attorney

fees may be awarded in relation to expenses recovered for the 12

months preceding the date the insurer is notified of the dispute.

Attorney fees must not be awarded in relation to expenses paid

after the date the insurer is notified of the dispute, including

any future payments ordered after the judgment is entered.

     (6) A court shall not award a fee to an attorney for advising

or representing a claimant in an action for personal or property

protection insurance benefits for a treatment, product, service,

rehabilitative occupational training, or accommodation provided to

the claimant if the attorney or a related person of the attorney

has, or had at the time the treatment, product, service,

rehabilitative occupational training, or accommodation was

provided, a direct or indirect financial interest in the person

that provided the treatment, product, service, rehabilitative

occupational training, or accommodation. For purposes of this

subsection, a direct or indirect financial interest exists if the

person that provided the treatment, product, service,

rehabilitative occupational training, or accommodation makes a

direct or indirect payment or grants a financial incentive to the

attorney or a related person of the attorney relating to the

treatment, product, service, rehabilitative occupational training,

or accommodation within 24 months before or after the treatment,

product, service, rehabilitative occupational training, or

accommodation is provided.

     Sec. 3157. (1) A Subject to subsections (2) to (5), a

physician, hospital, clinic, or other person or institution

lawfully rendering treatment, products, services, or accommodations

to an injured person for an accidental bodily injury covered by

personal protection insurance, and a person or institution

providing rehabilitative occupational training to the injured

person following the injury, may charge a reasonable amount for the

treatment, training, products, services, and accommodations

rendered. The charge shall must not exceed the amount the person or

institution customarily charges for like treatment, training,

products, services, and accommodations in cases not involving that

do not involve personal protection insurance. A physician,

hospital, clinic, or other person or institution that received

payment or reimbursement of the amount authorized under this

chapter for a treatment, training, product, service, or

accommodation of an injured person for an accidental bodily injury

covered by personal protection insurance shall not charge or bill

the injured person any remaining balance or other additional amount

for the treatment, training, product, service, or accommodation.

     (2) A physician, hospital, clinic, or other person or

institution that renders a treatment, training, product, service,

or accommodation to an injured person for an accidental bodily

injury that is an emergency medical condition or rendering related

emergency care is not eligible for payment or reimbursement under

this chapter of more than 125% of the amount payable for the

treatment, training, product, service, or accommodation under part

A, B, or D of the federal Medicare program established under

subchapter XVIII of the social security act, 42 USC 1395 to

1395lll. Except as provided in subsection (3), in all other

circumstances a physician, hospital, clinic, or other person or

institution rendering a treatment, product, service, or

accommodation to an injured person for accidental bodily injury

covered by personal protection insurance, and a person or

institution providing rehabilitative occupational training to the

injured person following the injury, is not eligible for payment or

reimbursement under this chapter for more than the amount payable

for the treatment, training, product, service, or accommodation

under part A, B, or D of the federal Medicare program established

under subchapter XVIII of the social security act, 42 USC 1395 to

1395lll. Every year after December 31, 2020, the director shall

review any changes to amounts payable under part A, B, or D of the

federal Medicare program established under subchapter XVIII of the

social security act, 42 USC 1395 to 1395lll. If the director

determines that the changes are reasonable and appropriate for

purposes of assuring affordable automobile insurance in this state,

the changes apply for purposes of this subsection and the director

shall issue an order to that effect.

     (3) If part A, B, or D of the federal Medicare program

established under subchapter XVIII of the social security act, 42

USC 1395 to 1395lll, does not provide an amount payable for

treatment, training, product, service, or accommodation rendered to

an injured person for accidental bodily injury covered by personal

protection insurance or rehabilitative occupational training to the

injured person following the injury, the physician, hospital,

clinic, or other person or institution that renders the treatment,

product, service, or accommodation is not eligible for payment or

reimbursement under this chapter of more than the average amount

accepted by the physician, hospital, clinic, or other person or

institution as payment or reimbursement in full for the treatment,

training, product, service, or accommodation during the preceding

calendar year.

     (4) By rendering any treatment, products, services, or

accommodations to 1 or more injured persons for an accidental

bodily injury covered by personal protection insurance benefits

coverage under this chapter after the effective date of the

amendatory act that added this subsection, a physician, hospital,

clinic, or other person or institution is considered to have agreed

to timely submit to an insurer, the association created under

section 3104, or the department all information relating to a

treatment, product, service, or accommodation provided to an

injured person for accidental bodily injury covered by personal

protection insurance and relating to an average amount accepted for

the treatment, training, product, service, or accommodation under

subsection (3), including, but not limited to, all of the

following:

     (a) Diagnoses.

     (b) Scans and X-rays.

     (c) Notes of physicians, nurses, and other providers.

     (d) Progress, psychiatric, or other notes.

     (e) Patient history and physical reports.

     (f) Reports and records relating to consultations, autopsies,

operations, laboratory work, surgeries, recovery room activities,

and electroencephalograms.

     (g) Incident, triage, and pharmacy reports and records.

     (h) Documentation relating to therapy, including, but not

limited to, intravenous therapy, occupational or physical therapy,

respiratory therapy, and speech therapy.

     (i) Documents relating to billing and forms and documents

relating to the computation of charges and billing, including, but

not limited to, form CMS-1450, form CMS-1500, and form UB-04.

     (j) A determination of an emergency medical condition or

related emergency care.

     (5) A physician, hospital, clinic, or other person or

institution that renders a treatment, product, service, or

accommodation to an injured person for accidental bodily injury

covered by personal protection insurance, and a person or

institution that provides rehabilitative occupational training to

the injured person following the injury, is not eligible for

payment or reimbursement under this chapter for any of the

following:

     (a) A request for payment for a treatment, training, product,

service, or accommodation rendered if the request for payment is

based on the use of false or misleading records or information.

     (b) A treatment, training, product, service, or accommodation

that is not usually associated with, is materially longer in

duration than, is materially more frequent than, or extends over a

materially greater number of days than that treatment, training,

product, service, or accommodation usually required for a patient

with the diagnosis or condition of the injured person if no

specific written justification of the medical necessity of that

treatment, training, product, service, or accommodation is included

in the patient record for the injured person.

     (c) A treatment as to which evidence provided to the

physician, hospital, clinic, or other person or institution that

renders the treatment, product, service, or accommodation to an

injured person for accidental bodily injury covered by personal

protection insurance, or to the person or institution that provides

rehabilitative occupational training to the injured person,

indicates that the treatment, product, service, or accommodation

was not medically necessary given the physical capabilities of the

injured person.

     (6) If a person pays for or reimburses an amount not

authorized under subsection (5), the person may request a refund of

the amount paid. If the unauthorized amount is not refunded within

30 days, interest on the amount refundable must be paid to the

person at the rate of 1% of the amount of the refund owed per

month. In a proceeding to recover money owed under this subsection,

the person may recover court costs and attorney fees incurred in

seeking payment of the money owed.

     (7) If after a hearing conducted under rules promulgated under

this subsection the department determines that a physician,

hospital, clinic, or other person or institution that renders a

treatment, product, service, or accommodation to an injured person

for accidental bodily injury covered by personal protection

insurance, or a person or institution that provides rehabilitative

occupational training to the injured person following the injury,

has engaged in a pattern or practice of conduct in violation of

this section, the department may prohibit the physician, hospital,

clinic, or other person or institution from charging and receiving

a payment for any treatment, training, product, service, or

accommodation under this chapter for a period of time and also may

order a refund of amounts received in violation of this section.

The department shall promulgate rules to implement this section

under the administrative procedures act of 1969, 1969 PA 306, MCL

24.201 to 24.328.

     Sec. 3157a. (1) By rendering any treatment, products,

services, or accommodations to 1 or more injured persons for an

accidental bodily injury covered by personal protection insurance

under this chapter after the effective date of the amendatory act

that added this section, a physician, hospital, clinic, or other

person is considered to have agreed to do both of the following:

     (a) Submit necessary records and other information concerning

treatment, products, services, or accommodations provided for

utilization review under this section.

     (b) Comply with any decision of the department under this

section.

     (2) A physician, hospital, clinic, or other person or

institution that knowingly submits false or misleading records or

other information to an insurer, the association created under

section 3104, or the department under this section is guilty of a

misdemeanor punishable by imprisonment for not more than 1 year or

a fine of not more than $1,000.00, or both.

     (3) The department shall promulgate rules under the

administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to

24.328, to do both of the following:

     (a) Establish criteria or standards for utilization review

that identify utilization of treatment, products, services, or

accommodations under this chapter above the usual range of

utilization for the treatment, products, services, or

accommodations based on medically accepted standards.

     (b) Provide procedures related to utilization review,

including procedures for all of the following:

     (i) Acquiring necessary records, medical bills, and other

information concerning the treatment, products, services, or

accommodations provided.

     (ii) Allowing an insurer to request an explanation for and

requiring a physician, hospital, clinic, or other person to explain

the necessity or indication for treatment, products, services, or

accommodations provided.

     (iii) Appealing determinations.

     (4) If a physician, hospital, clinic, or other person provides

treatment, products, services, or accommodations under this chapter

that are not usually associated with, are longer in duration than,

are more frequent than, or extend over a greater number of days

than the treatment, products, services, or accommodations usually

require for the diagnosis or condition for which the patient is

being treated, the insurer or the association created under section

3104 may require the physician, hospital, clinic, or other person

to explain the necessity or indication for the treatment, products,

services, or accommodations in writing under the procedures

provided under subsection (3).

     (5) If an insurer or the association created under section

3104 determines that a physician, hospital, clinic, or other person

improperly overutilized or otherwise rendered or ordered

inappropriate treatment, products, services, or accommodations, or

that the cost of the treatment, products, services, or

accommodations was inappropriate under this chapter, the physician,

hospital, clinic, or other person may appeal the determination to

the department under the procedures provided under subsection (3).

     (6) If the department determines that an insurer complies with

the criteria or standards for utilization review established under

subsection (3), the department shall certify the insurer.

     (7) As used in this section, "utilization review" means the

initial evaluation by an insurer or the association created under

section 3104 of the appropriateness in terms of both the level and

the quality of treatment, products, services, or accommodations

provided under this chapter based on medically accepted standards.

     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 An insurer that is not authorized to

transact automobile insurance in this state 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 an 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, unless the

coverage limits under section 3109a(2)(a) apply. If the coverage

limits under section 3109a(2)(a) apply, the insurer is only liable

for the amount of ultimate loss sustained up to the coverage limits

under section 3109a(2)(a). Benefits under this subsection are not

recoverable to the extent that benefits covering the same loss are

available from other sources, regardless of the nature or number of

benefit sources available and regardless of the nature or form of

the benefits.

     Sec. 3180. (1) By June 30, 2018, an insurer that offers

automobile insurance in this state shall file premium rates for

personal protection insurance coverage that is subject to the

coverage limits under section 3109a(2)(a) or (b) under an

automobile insurance policy effective after June 30, 2018 and

before July 1, 2019. The premium rates filed, and any subsequent

premium rates filed by the insurer for personal protection

insurance coverage that is subject to the coverage limits under

section 3109a(2)(a) or (b) under an automobile insurance policy

effective before July 1, 2023, must reflect savings expected from

the provisions of the amendatory act that added this section that

affect automobile insurance policies that are subject to the

personal protection insurance coverage limits under section

3109a(2)(a) or (b), consistent with the requirements of sections

2109 to 2111a.

     (2) If premium rates filed by an insurer under subsection (1)

for personal protection insurance coverage that is subject to the

coverage limits under section 3109a(2)(a) do not result in an

average 40% reduction per vehicle from the premium rates for

personal protection insurance coverage that were in effect for the

insurer on October 1, 2017, the insurer shall include with the

filing both of the following:

     (a) Premium rates for personal protection insurance coverage

that is subject to the coverage limits under section 3109a(2)(a) as

near as practicable to that reduction recognizing the

justifications described in this subsection.

     (b) A detailed explanation of the reasons for the insurer's

failure to achieve the required reduction and a demonstration using

generally accepted and reasonable actuarial techniques that the

required reduction is not justified because of 1 or more of the

following:

     (i) Expected losses of the insurer.

     (ii) Inflation, as shown by the Consumer Price Index

calculated and published by the United States Department of Labor,

Bureau of Labor Statistics.

     (iii) A change in an assessment imposed on an insurer under

section 3104 or 3330.

     (3) The director shall review a filing submitted by an insurer

under subsection (1) for compliance with subsections (1) and (2).

The director shall disapprove a filing if after review the director

determines both of the following:

     (a) That the filing does not result in the premium rate

reduction required by subsections (1) and (2).

     (b) That the failure to achieve the reduction is not justified

using generally accepted and reasonable actuarial techniques

because of 1 or more of the factors listed in subsection (2)(b).

     (4) If the director disapproves a filing under subsection (3),

the director shall do both of the following:

     (a) Determine what rate reduction the insurer could achieve

that is as near as practicable to an average 40% reduction per

vehicle recognizing the factors listed in subsection (2)(b).

     (b) Provide the insurer with a written explanation of the

reasons for the disapproval and the director's determination under

subdivision (a).

     (5) If the director disapproves a filing under subsection (3),

the insurer shall submit a revised filing to the director within 15

days of the disapproval that complies with the director's

determination under subsection (4)(a). The filing is subject to

review in the same manner as an original filing under subsection

(3).

     (6) A premium rate filing under this section that is not

disapproved by the director within 30 days of its submission is

considered approved. However, the director may extend the time

under this subsection by an additional 30 days by giving the

insurer written notice before the initial 30-day period expires of

the extended time period and the reasons for the extension.

     (7) After June 30, 2018 and before July 1, 2023, an insurer

shall not issue or renew an automobile insurance policy in this

state unless the premium rates filed by the insurer for personal

protection insurance coverage subject to the coverage limits under

section 3109a(2)(a) or (b) are approved under this section.

     (8) For purposes of calculating a personal protection

insurance premium or premium rate under this section, the premium

includes the catastrophic claims assessment imposed under section

3104.

     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 created under section 6302.

     (2) The organization created under this chapter shall be

called is the "Michigan automobile insurance placement facility".

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

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

to do all of the following:

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

against the facility shall does 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.

     (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 that

relates 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) The board of governors shall assess and collect from

participating members and self-insurers money based on

participation ratios to cover anticipated costs of operation and

administration of the Michigan automobile insurance fraud authority

created under section 6302. The amount and duration of the

assessment must be approved by at least 5 of the 7 governors

elected as provided in the facility's plan of operation.

     (4) Before January 2, 2018, 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

created under section 6302.

     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. 4503. A fraudulent insurance act includes, but is not

limited to, acts or omissions committed by any person who

knowingly, and with an intent to injure, defraud, or deceive:

     (a) Presents, causes to be presented, assists or abets another

in presenting, solicits or conspires with another to present, or

prepares, with knowledge or belief that it will be presented to or

by an insurer or any agent of an insurer, or any an agent of an

insurer, reinsurer, or broker, any oral or written statement

knowing that the statement contains any false information

concerning any a fact that is material to an any of the following:

     (i) An application for the issuance of an insurance policy.

     (b) Prepares or assists, abets, solicits, or conspires with

another to prepare or make an oral or written statement that is

intended to be presented to or by any insurer in connection with,

or in support of, any application for the issuance of an insurance

policy, knowing that the statement contains any false information

concerning any fact or thing material to the application.

     (ii) The rating of an insurance policy or reinsurance

contract.

     (iii) The premiums paid on an insurance policy or reinsurance

contract.

     (iv) Payments made in accordance with the terms of an

insurance policy or reinsurance contract.

     (v) A document filed with the director or the chief insurance

regulatory official of another jurisdiction.

     (vi) The financial condition of an insurer or reinsurer.

     (vii) The formation, acquisition, merger, reconsolidation,

dissolution, or withdrawal from 1 or more lines of insurance or

reinsurance in all or part of this state by an insurer or

reinsurer.

     (vii) The issuance of written evidence of insurance.

     (ix) The reinstatement of an insurance policy.

(b) (c) Presents, or causes to be presented, assists or abets

another in presenting, solicits or conspires with another to

present, or prepares, with knowledge or belief that it will be

presented to or by any an insurer, any oral or written statement

including computer-generated information as part of, or in support

of, a claim for payment or other benefit pursuant to an insurance

policy or reinsurance contract, knowing that the statement contains

false information concerning any fact or thing material to the

claim for payment or other benefit.

     (d) Assists, abets, solicits, or conspires with another to

prepare or make any oral or written statement including computer-

generated documents that is intended to be presented to or by any

insurer in connection with, or in support of, any claim for payment

or other benefit pursuant to an insurance policy, knowing that the

statement contains any false information concerning any fact or

thing material to the claim.

(c) (e) Solicits or accepts new or renewal insurance risks by

or for an insolvent insurer, reinsurer, or person engaged in the

business of insurance.

(d) (f) Removes, conceals, alters, or destroys or attempts to

remove, conceal, alter, or destroy the assets or records of assets,

transactions, and affairs, or a material part of the assets or

records, from the home office or other place of business of the an

insurer. or from the place of safekeeping of the insurer, or who

conceals or attempts to conceal the assets or record of assets,

transactions, and affairs, or a material part of the assets or

records, from the commissioner.

(e) (g) Diverts, attempts to divert, or conspires to divert

funds money of an insurer or of other persons in connection with

any of the following:

     (i) The transaction of insurance or reinsurance.

     (ii) The conduct of business activities by an insurer.

     (iii) The formation, acquisition, or dissolution of an

insurer.

(f) (h) Employs, uses, or acts as a runner, capper, or steerer

with the intent to falsely or fraudulently obtain benefits under a

contract of insurance or to falsely or fraudulently assert a claim

against an insured or an insurer for providing services to the

client, patient, or customer.

(g) (i) Knowingly and willfully assists, conspires with, or

urges any person to fraudulently violate this act, or any person

who due to because of that assistance, conspiracy, or urging

knowingly and willfully benefits from the proceeds derived from the

fraud.

     (h) Transacts the business of insurance in violation of laws

requiring a license, certificate of authority, or legal authority

for the transaction of the business of insurance.

     (i) Attempts to commit, aids in or abets the commission of, or

conspires to commit the acts or omissions specified in this

section.

     Sec. 4505. (1) The director may investigate suspected

fraudulent insurance acts and persons engaged in suspected

fraudulent insurance acts.

     (2) The department of attorney general shall provide the

department with technical assistance relating to this chapter.

     (3) The director may allocate resources of the department for

the purpose of prosecuting alleged fraudulent insurance acts.

     (4) An insurer or an agent authorized by the insurer to act on

its behalf who has knowledge or a reasonable belief that a

fraudulent insurance act is being, will be, or has been committed

shall provide to the director the information relating to the

fraudulent insurance act required by, and in a manner prescribed

by, the director.

     (5) Any person other than an insurer or agent of an insurer

who has knowledge or a reasonable belief that a fraudulent

insurance act is being, will be, or has been committed may provide

the director with information relating to the fraudulent insurance

act in the form and manner prescribed by the director.

     (6) This section does not preempt the authority or relieve the

duty of other authorized governmental officers or entities to

investigate, examine, and prosecute suspected violations of law.

     (7) If an insurer or an officer, employee, or authorized agent

of an insurer provides the department with information in good

faith under this section, the insurer, officer, employee, or agent

is immune from civil or criminal liability for providing the

information.

CHAPTER 63

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) or 3103(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, state authority, or

political subdivision of this state. The money of the authority is

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

disclosure under section 13 of the freedom of information act, 1976

PA 442, MCL 15.243.

     (3) The authority shall do all of the following:

     (a) Provide financial support to state or local law

enforcement agencies for programs designed to reduce the incidence

of automobile insurance fraud and theft.

     (b) Provide financial support to state or local prosecutorial

agencies for programs designed to reduce the incidence of

automobile insurance fraud and theft.

     (c) Approve or disapprove programs for subdivision (a) or (b),

or both.

     (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, including, but not limited to,

financial support for an active fraud prevention program within the

city in this state with the largest population and joint fraud

prevention task forces that include local, state, and federal law

enforcement and prosecutorial officials and agencies.

     (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 shall consist of 15 members as follows:

     (a) Eight members who represent automobile insurers in this

state, subject to the following:

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

350,000 or more car years.

     (ii) At least 2 members must represent insurer groups with

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

     (iii) At least 1 member must represent insurer groups with

fewer than 100,000 car years.

     (b) The director or his or her designee from within the

department.

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

her designee from within the department of state police.

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

state other than the department of state police.

     (e) One member who represents prosecuting attorneys in this

state.

     (f) A resident of the city in this state with the largest

population, determined on the basis of the latest federal decennial

census before the member is appointed.

     (g) One member of the general public.

     (6) Automobile insurers that are authorized to do business in

this state shall elect the members of the board representing

insurers 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 the automobile insurers that are authorized to do business in

this state.

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

represents 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 that

represents 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 under subsection

(5)(f) from a list of 3 or more nominees submitted to the governor

by the mayor of the identified city.

     (10) The governor shall appoint the member of 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.

     (11) 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 of the general public shall serve for a

term of 3 years, and 3 members representing insurers, 1 member

representing law enforcement agencies, and the member appointed

under subsection (5)(e) shall serve for a term of 4 years.

     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) The board shall select a chairperson from among its

members. A majority of the members of the board constitute a quorum

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

power or function of the authority, notwithstanding the existence

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

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

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

amplified telephonic equipment, if authorized by the bylaws or plan

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

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

Meetings of the authority may be held anywhere 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 6308, 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. 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. 6305. (1) The board may examine in person, by writing,

and, if appropriate, under oath all persons considered by the board

to have material information regarding automobile insurance fraud.

The board may compel the attendance and testimony of witnesses and

the production of any books, accounts, papers, records, documents,

and files relating to automobile insurance fraud, and may authorize

subpoenas, the administration of oaths and affirmations, and the

examination of witnesses, and may receive evidence for this

purpose. The board may request the Ingham County circuit court to

issue an order requiring compliance with an order or subpoena of

the board under this subsection.

     (2) This chapter does not preempt the authority or relieve the

duty of other authorized governmental officers or entities to

investigate, examine, and prosecute suspected violations of law.

     Sec. 6306. (1) An insurer or self-insurer engaged in writing

insurance coverages that provide the security required by section

3101(1) and 3103(1) in this state shall pay to the facility any

assessment imposed under section 3330(3) for deposit into the

account of the authority to be used by the authority to carry out

its duties under this chapter.

     (2) The facility shall segregate all money received under

subsection (1), and all other money received by the authority for

the purpose, from other money of the facility, if applicable. The

facility shall only expend the money received under subsection (1)

as directed by the board.

     Sec. 6307. (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 and local law enforcement

agencies 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. 6308. (1) Beginning January 1, 2019, the authority shall

prepare and publish an annual financial report, and beginning July

1, 2019, 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, automobile

insurance fraud recidivism, wrongful or fraudulent solicitation of

clients by attorneys in matters relating to automobile insurance,

and fraud related to medical services not reasonably necessary or

otherwise excessive. 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 to the director.