HOUSE BILL No. 4612

 

April 23, 2013, Introduced by Reps. Lund, Lyons, LaFontaine, Denby, McBroom and Goike 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 102, 3101, 3104, 3107, 3114,

 

3135, 3148, 3157, 3163, 3172, 3301, 3330, 4501, and 6107 (MCL

 

500.102, 500.3101, 500.3104, 500.3107, 500.3114, 500.3135,

 

500.3148, 500.3157, 500.3163, 500.3172, 500.3301, 500.3330,

 

500.4501, and 500.6107), the title as amended by 2002 PA 304,

 

section 102 as amended by 2000 PA 252, section 3101 as amended by

 

2008 PA 241, section 3104 as amended by 2002 PA 662, section 3107

 

as amended by 2012 PA 542, section 3114 as amended by 2002 PA 38,

 

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

 

2002 PA 697, sections 3172 and 3330 as amended by 2012 PA 204,

 

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

 

1992 PA 174, and by adding sections 3104a, 3107c, and 3181 and

 

chapter 63.


 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

TITLE

 

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

 

to the insurance and surety business; to regulate the incorporation

 

or formation of domestic insurance and surety companies and

 

associations and other corporations to provide benefits under this

 

act and the admission of foreign and alien companies and

 

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

 

to prescribe the conditions on which companies and associations

 

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 and fees; 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. 102. As used in this act:

 

     (a) (1) "Commissioner" as used in this act means the

 

commissioner of the office of financial and insurance

 

services.director.

 

     (b) (2) "Department" as used in this act means the office

 

department of insurance and financial and insurance services.

 

     (c) "Director" means the director of the department.

 

     Sec. 3101. (1) The owner or registrant of a motor vehicle

 

required to be registered in this state shall maintain security for

 

payment of benefits under personal protection insurance , as

 

required under section 3107, property protection insurance, and

 

residual liability insurance as required under section 3009.

 

Security shall only be required to be in effect during the period

 

the motor vehicle is driven or moved upon 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 upon 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) "Consumer price index" means the percentage of change in

 

the consumer price index for all urban consumers in the United


 

States city average for all items, as reported by the United States

 

department of labor, bureau of labor statistics, and as certified

 

by the director.

 

     (c) (b) "Highway" means that term as defined in section 20 of

 

the Michigan vehicle code, 1949 PA 300, MCL 257.20.

 

     (d) (c) "Motorcycle" means a vehicle having 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, which and is equipped

 

with a motor that exceeds 50 cubic centimeters piston displacement.

 

The wheels on any attachment to the vehicle shall not be considered

 

as wheels in contact with the ground. Motorcycle does not include a

 

moped, as defined in section 32b of the Michigan vehicle code, 1949

 

PA 300, MCL 257.32b. Motorcycle does not include an ORV.

 

     (e) (d) "Motorcycle accident" means a loss involving the

 

ownership, operation, maintenance, or use of a motorcycle as a

 

motorcycle, but not involving the ownership, operation,

 

maintenance, or use of a motor vehicle as a motor vehicle.

 

     (f) (e) "Motor vehicle" means a vehicle, including a trailer,

 

operated or designed for operation upon a public highway by power

 

other than muscular power which that has more than 2 wheels. Motor

 

vehicle does not include a motorcycle or a moped, as defined in

 

section 32b of the Michigan vehicle code, 1949 PA 300, MCL 257.32b.

 

Motor vehicle does not include a farm tractor or other implement of

 

husbandry which that is not subject to the registration

 

requirements of the Michigan vehicle code pursuant to section 216

 

of the Michigan vehicle code, 1949 PA 300, MCL 257.216. Motor

 

vehicle does not include an ORV.


 

     (g) (f) "Motor vehicle accident" means a loss involving 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.

 

     (h) (g) "ORV" means a motor-driven recreation vehicle designed

 

for off-road use and capable of cross-country travel without

 

benefit of road or trail, on or immediately over land, snow, ice,

 

marsh, swampland, or other natural terrain. ORV includes, but is

 

not limited to, a multitrack or multiwheel drive vehicle, a

 

motorcycle or related 2-wheel, 3-wheel, or 4-wheel vehicle, an

 

amphibious machine, a ground effect air cushion vehicle, an ATV as

 

defined in section 81101 of the natural resources and environmental

 

protection act, 1994 PA 451, MCL 324.81101, or other means of

 

transportation deriving motive power from a source other than

 

muscle or wind. ORV does not include a vehicle described in this

 

subdivision that is registered for use upon a public highway and

 

has the security described in section 3101 required under

 

subsection (1) or section 3103 in effect.

 

     (i) (h) "Owner" means any of the following:

 

     (i) A person renting a motor vehicle or having the use thereof,

 

of a motor vehicle, under a lease or otherwise, for a period that

 

is greater than 30 days.

 

     (ii) A person who holds the legal title to a vehicle, other

 

than a person engaged in the business of leasing motor vehicles who

 

is the lessor of a motor vehicle pursuant to a lease providing for

 

the use of the motor vehicle by the lessee for a period that is


 

greater than 30 days.

 

     (iii) A person who has the immediate right of possession of a

 

motor vehicle under an installment sale contract.

 

     (j) (i) "Registrant" does not include a person engaged in the

 

business of leasing motor vehicles who is the lessor of a motor

 

vehicle pursuant to a lease providing for the use of the motor

 

vehicle by the lessee for a period that is greater than 30 days.

 

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

 

a policy issued by an insurer duly authorized to transact business

 

in this state which 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 upon 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 any person filing the security as provided in this

 

section.

 

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

 

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

 

the catastrophic claims association, hereinafter referred to as the

 

association, is created. Each insurer engaged in writing insurance


 

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

 

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

 

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

 

shall be is bound by the plan of operation of the association until

 

the affairs of the association are wound up under subsection (23).

 

Each insurer engaged in writing insurance coverages that provide

 

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

 

condition of its authority to transact insurance in this state,

 

shall be considered a member of the association until the affairs

 

of the association are wound up under subsection (23), 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 For loss occurrences for which the association has

 

liability under subsection (22), 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.

 

Beginning July 1, 2013, this $500,000.00 amount shall be increased

 

biennially on July 1 of each odd-numbered year, for policies issued

 

or renewed before July 1 of the following odd-numbered year, by the

 

lesser of 6% or the consumer price index, and rounded to the

 

nearest $5,000.00. This biennial adjustment shall be calculated by

 

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

 

date.

 

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

 

during the period July 1, 2013 to the date on which the association

 

has paid its final liability as described in subsection (23),


 

$530,000.00.

 

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

 

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 to be bound by the plan of

 

operation, and upon 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 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 promptly

 

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

 

injuries or damages sustained, may reasonably be anticipated to


 

involve the association if the member is ultimately held legally

 

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

 

reporting claims, the member shall in all instances consider itself

 

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

 

advise the association of subsequent developments likely to

 

materially affect the interest of the association in the claim.

 

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

 

liabilities of the association and require each member to furnish

 

statistics, in connection with liabilities of the association, at

 

the times and in the form and detail as may be required by the plan

 

of operation.

 

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

 

calculate and charge to members of the association a total premium

 

sufficient to cover the expected losses and expenses of the

 

association that the association will likely incur during the

 

period for which the premium is applicable. The premium shall

 

include an amount to cover incurred but not reported losses for the

 

period and may be adjusted, subject to subsection (24), for any

 

excess or deficient premiums from previous periods. Excesses or

 

deficiencies from previous periods may be fully adjusted in a

 

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

 

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

 

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

 

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

 

3103(1), or both, written in this state during the period to which

 

the premium applies, multiplied by the average premium per car. The

 

average premium per car shall be the total premium calculated


 

divided by the total written car years of insurance providing the

 

security required by section 3101(1) or 3103(1) written in this

 

state of all members during the period to which the premium

 

applies. A member shall be charged a premium for a historic vehicle

 

that is insured with the member of 20% of the premium charged for a

 

car insured with the member. As used in this subdivision:

 

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

 

vehicle.

 

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

 

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

 

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

 

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

 

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

 

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.

 

     (h) Provide services to a corporation formed under section

 

3104a as required by law or requested by the corporation.

 

     (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 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 or without 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 provide for all of the

 

following:

 

     (a) The establishment of necessary facilities.

 

     (b) The management and operation of the association.

 

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

 

adjustments from excess or deficient premiums from prior periods.

 

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

 

association.

 

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

 

association for actual and necessary expenses incurred on

 

association business.

 

     (f) The investment policy of the association.

 

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

 

implement this section.

 

     (11) Each board shall include members that would contribute a

 

total of not less than 40% of the total premium calculated pursuant

 

to subsection (7)(d). Each director shall be is entitled to 1 vote.


 

The initial term of office of a director shall be 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, consistent with the membership composition

 

requirements in subsections (11) and (13). Terms of the directors

 

shall be staggered so that the terms of all the directors do not

 

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

 

term of more than 4 years.

 

     (13) The board shall consist of 5 directors, and the

 

commissioner director of the department shall be an ex officio

 

member of the board without vote.

 

     (14) Each director shall be appointed by the commissioner

 

director of the department and shall serve until that member's

 

successor is selected and qualified. The chairperson of the board

 

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

 

filled by the commissioner director of the department consistent

 

with 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. The chairperson shall

 

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

 

board constitute a quorum.

 

     (16) 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 are subject to majority

 

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

 

membership having a vote, with voting rights being apportioned

 

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

 

the members of the association.

 

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

 

the association at any time and examine any and all of the

 

association's affairs.

 

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

 

occurring before July 1, 1978 or for losses under motor vehicle

 

accident policies issued or renewed after December 31, 2013.

 

     (23) The association shall continue in existence until all

 

liabilities due to loss occurrences for which it has liability

 

under subsection (22) are paid. On payment of the final liability,

 

the association shall notify the director of the department and

 

shall wind up the affairs of the association and transmit any


 

remaining money held by the association to a corporation formed

 

under section 3104a.

 

     (24) Within 90 days after the effective date of the amendatory

 

act that added this subsection, the association shall adjust the

 

premium charge to members under subsection (7)(d) by an amount

 

sufficient to reflect changes made to this act by the amendatory

 

act that added this subsection.

 

     (25) As used in this section:

 

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

 

the consumer price index for all urban consumers in the United

 

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

 

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

 

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

 

United States department of labor, bureau of labor statistics, and

 

as certified by the commissioner.

 

     (a) "Association" means the catastrophic claims association

 

created in subsection (1).

 

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

 

created in subsection (9).

 

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

 

providing the coverages required under section 3101(1).

 

     (d) (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. 3104a. (1) Within 60 days after the effective date of the

 

amendatory act that added this section, 2 or more voting members of


 

the association may incorporate a catastrophic claims corporation

 

under this section. Except as otherwise provided in this section, a

 

corporation is subject to the nonprofit corporation act, 1982 PA

 

162, MCL 450.2101 to 450.3192. A corporation is a charitable and

 

benevolent institution for the public benefit, and the

 

corporation's money and property are exempt from taxation by this

 

state or any political subdivision of this state.

 

     (2) A corporation is subject to supervision by the director as

 

provided in this section. Except as otherwise provided in this

 

section, a corporation is not subject to the laws of this state

 

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

 

or fund that an insurer is required to participate in. A

 

corporation is subject to all of the same reporting, loss reserve,

 

and investment requirements as an insurer authorized to transact

 

business in this state that affords insurance for the payment of

 

benefits described in section 3101(1).

 

     (3) To incorporate a corporation, 2 or more voting members of

 

the association shall subscribe to and file with the director

 

articles of incorporation. The articles of incorporation shall

 

include all of the following:

 

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

 

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

 

for the transaction of business in this state.

 

     (c) The name by which the corporation shall be known, which

 

shall include the words catastrophic, claims, and corporation, but

 

shall not include the words association, insurance, casualty,

 

surety, health and accident, mutual, or other words descriptive of


 

the insurance or surety business. The corporation also shall not

 

assume any name likely to mislead the public or any name already in

 

use by another corporation authorized to conduct business in this

 

state.

 

     (d) The purposes of the corporation, which shall be limited to

 

purposes authorized under this section.

 

     (e) A statement that the corporation is organized as a

 

nonprofit corporation on a nonstock, directorship basis under this

 

act and the nonprofit corporation act, 1982 PA 162, MCL 450.2101 to

 

450.3912.

 

     (f) Any other terms and conditions not inconsistent with this

 

section or other applicable law that the incorporators consider to

 

be necessary for the conduct of the affairs of the corporation.

 

     (4) At least 1 of the incorporators of a corporation shall

 

sign the articles of incorporation of the corporation before a

 

notary public appointed under the Michigan notary public act, 2003

 

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

 

form prescribed by the director. If at the time of submission no

 

other catastrophic claims corporation is active, the director may

 

approve the articles of incorporation as authorized under

 

applicable law. The director shall not certify articles of

 

incorporation for more than 1 catastrophic claims corporation to be

 

active and operate at the same time. The director shall retain a

 

certified copy of the articles with the records of the department.

 

     (5) Before a corporation conducts activities authorized under

 

this section and before January 1, 2014, the corporation shall file

 

with the director in the form and manner prescribed by the director


 

an application for a certificate of authority detailing all of the

 

following:

 

     (a) The plan of operation under which the corporation proposes

 

to conduct its affairs.

 

     (b) A copy of the corporation's bylaws.

 

     (c) The name and place of residence of each member of the

 

board of directors of the corporation.

 

     (d) Other information as prescribed by the director.

 

     (6) After reviewing an application for a certificate of

 

authority filed by a corporation under subsection (5), if the

 

director is satisfied that the corporation can comply with the

 

provisions of this section and other applicable law, the director

 

shall issue to the corporation a certificate of authority to

 

commence business.

 

     (7) The director may examine the affairs of a corporation. A

 

dissolution or liquidation of a corporation shall be conducted

 

under the supervision of the director.

 

     (8) A corporation shall provide the director with access to

 

all records of the corporation that relate to the business of the

 

corporation. Except as otherwise provided in this subsection,

 

expenses incurred by the director for the examination of a

 

corporation shall be paid by the corporation. A corporation is

 

subject to fees imposed under section 224(4) to (11) in the same

 

manner as any other type of entity under this act.

 

     (9) Before March 1 of each year after it is incorporated, a

 

corporation shall file with the director, in the form and manner

 

prescribed by the director, an annual report of its activities,


 

finances, and condition during the previous calendar year.

 

     (10) A corporation shall have a board of directors. The board

 

shall operate the corporation in accordance with the plan of

 

operation and this section. All of the following apply to the

 

formation and operation of the board:

 

     (a) The board shall consist of 7 members appointed by the

 

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

 

shall appoint the initial members within 60 days after the

 

corporation is incorporated.

 

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

 

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

 

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

 

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

 

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

 

vacancy on the board, the vacancy shall be filled by the governor

 

in the same manner as the original appointment for the balance of

 

the unexpired term. Within 60 days after the initial members are

 

appointed, the director shall call the first meeting of the board.

 

At the first meeting, the board shall elect a chairperson from

 

among its members. Four members of a board constitute a quorum for

 

the transaction of business at a meeting of the board. An

 

affirmative vote of 4 board members is necessary for official

 

action of the board.

 

     (c) The business of the board shall be conducted at a meeting

 

of the board that is held in this state, is open to the public, and

 

is held in a place that is available to the general public.

 

However, the board may establish reasonable rules and regulations


 

to minimize disruption of a meeting of the board. At least 10 days

 

but not more than 60 days before a meeting, the board shall provide

 

public notice of its meeting at its principal office and on an

 

internet website accessible by the public. 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:

 

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

 

disciplining, or evaluation of officers or employees of the

 

corporation.

 

     (ii) To consult with its attorney.

 

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

 

regarding privacy or confidentiality.

 

     (d) The board shall display information concerning the

 

corporation's operations and activities on an internet website

 

accessible by the public.

 

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

 

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

 

make the minutes available at the address designated on the public

 

notice of its meetings. The board shall make copies of the minutes

 

available to the public at the reasonable estimated cost for

 

printing and copying. The board shall include all of the following

 

in the minutes:

 

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

 

     (ii) Board members who are present and absent.

 

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

 

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


 

     (e) A member of the board is not liable for any lawful action

 

taken by the member in the performance of duties under this

 

section.

 

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

 

accident for a policy issued or renewed after December 31, 2013, or

 

after the director issues the certificate of authority under

 

subsection (6), whichever is later, an injured person is entitled

 

to personal protection insurance benefits of up to the limit in

 

section 3107(1)(a) for medically appropriate products, services,

 

and accommodations, including all deductibles and copays as

 

follows:

 

     (a) The insurer shall provide personal protection insurance

 

benefits up to $530,000.00 for the accident regardless of the

 

number of persons injured. The limit under this subdivision

 

includes all deductibles and copays. By January 1, 2015 and by

 

January 1 of each second year after 2015, a corporation shall

 

calculate an adjusted limit, increasing the existing limit under

 

this subdivision by 6% or the consumer price index for the 24-month

 

period that ends on the preceding September 30, whichever is less,

 

and rounding the result to the nearest $5,000.00. An adjusted limit

 

applies to loss occurrences that occur after July 1, 2015 for the

 

first adjustment or after July 1 of each second year after 2015 for

 

the following adjustments.

 

     (b) A corporation shall provide personal protection insurance

 

benefits in excess of the amount paid by the insurer under

 

subdivision (a) up to the per-person limit in section 3107(1)(a).

 

The limit under this subdivision includes all deductibles and


 

copays.

 

     (12) A corporation shall do all of the following:

 

     (a) Assume liability as provided in subsection (11).

 

     (b) Establish procedures by which an insurer may report to the

 

corporation each claim that on the basis of the injuries sustained

 

may be reasonably anticipated to exceed the limit in subsection

 

(11)(a). An insurer shall report each such claim to the corporation

 

and shall also advise the corporation of subsequent developments

 

that may reasonably be expected to affect the corporation.

 

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

 

liabilities of the corporation. An insurer shall furnish statistics

 

regarding losses and expenses at the times and in the form and

 

detail as required by the plan of operation for the corporation.

 

     (d) Before January 1, 2015 and before January 1 of each year

 

after 2015, determine the annual per-motor-vehicle fee to be

 

imposed under subsection (16). The total fees imposed must be

 

sufficient to cover the expected losses and expenses that the

 

corporation likely will incur during the period for which the fees

 

are applicable. The corporation shall calculate the per-motor-

 

vehicle fee under this subdivision by dividing the total expected

 

losses and expenses of the corporation for the period by the total

 

written car years of insurance providing the security required by

 

section 3101(1) written in this state during the previous period.

 

Total expected losses and expenses shall include an amount to cover

 

incurred but not reported losses for the period. The fee may be

 

adjusted for any excess or deficient amounts from previous periods.

 

Excesses or deficiencies from a previous period may be fully


 

adjusted in a single period or may be adjusted over several periods

 

as provided in the plan of operation. The corporation shall

 

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

 

registrant of an insured historical vehicle equal to 20% of the fee

 

charged for a motor vehicle other than an historic vehicle. As used

 

in this subdivision:

 

     (i) "Car" 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 fees.

 

     (f) Receive and distribute all money required for the

 

operation of the corporation.

 

     (g) Contract with an independent auditor for the preparation

 

of at least 1 audit of the financial statements of the corporation

 

each year and make the audit available to the public.

 

     (13) A corporation also may do all of the following:

 

     (a) Contract for goods and services with another person,

 

whether public or private, including, but not limited to, the

 

association, relating to all or a portion of services necessary for

 

the management and operation of the corporation and implementation

 

of this section, including, but not limited to, independent claims

 

management, actuarial, investment, and legal services.

 

     (b) Sue and be sued in the name of the corporation.

 

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

 

with reinsurers licensed to transact business in this state or

 

approved by the director.


 

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

 

necessary to assure the efficient operation of the corporation.

 

     (e) Hear and determine complaints from interested parties

 

concerning the operation of the corporation.

 

     (f) Borrow money necessary to effect the purposes of the

 

corporation at rates of interest determined by the corporation, and

 

issue notes, bonds, certificates, other evidences of indebtedness,

 

or pledges. Interest and earnings on notes, bonds, certificates, or

 

other obligations of a corporation are exempt from any taxes

 

imposed by this state or a political subdivision of this state.

 

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

 

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

 

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

 

indebtedness issued by or on behalf of the corporation.

 

     (h) Invest and reinvest money of the corporation.

 

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

 

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

 

person.

 

     (k) Perform other acts not specifically enumerated in this

 

section that are necessary or proper to accomplish the purposes of

 

the corporation or to implement this section and that are not

 

inconsistent with this section.

 

     (14) A board shall operate a corporation according to the plan

 

of operation and this section. The plan of operation must provide

 

for all of the following:

 

     (a) The establishment of necessary facilities.

 

     (b) The management and operation of the corporation.


 

     (c) Procedures for charging and refunding fees, including

 

adjustments from excess or deficient assessments from prior

 

periods.

 

     (d) Procedures governing the payment of fees to the

 

corporation.

 

     (e) Reimbursement of a member of the board for actual and

 

necessary expenses incurred on corporation business.

 

     (f) The investment policy of the corporation.

 

     (g) Procedures governing the use of money transmitted from the

 

association under section 3104(23) to offset the corporation's

 

liabilities.

 

     (h) Any other matters necessary to implement this section.

 

     (15) To assure the efficient operation of a corporation, the

 

corporation may seek assistance and support from appropriate state

 

departments, agencies, and officers as required to perform the

 

powers and duties of the corporation. On request of the

 

corporation, a state department, agency, or officer shall provide

 

assistance and support to the corporation.

 

     (16) An annual catastrophic claims fee is imposed on the owner

 

or registrant of each motor vehicle that maintains the security

 

required under section 3101(1). The owner or registrant, not the

 

insurer, is liable for the payment of the fee. The fee imposed by

 

this subsection is a charge imposed by the corporation and is not

 

part of an insurer's premium. Until December 31, 2014, the annual

 

amount of the catastrophic claims fee is the initial fee set under

 

section 3181(1). After December 31, 2014, the annual amount of the

 

catastrophic claims fee is the per-motor-vehicle fee determined by


 

a corporation under subsection (12)(d) plus, subject to subsection

 

(17), a charge of $25.00. The owner or registrant shall pay the

 

per-motor-vehicle fee for each motor vehicle at the time of payment

 

for a motor vehicle policy issued by an insurer authorized to

 

transact business in this state that affords insurance for the

 

payment of benefits described in section 3101(1). The insurer shall

 

collect the catastrophic claims fee on behalf of the corporation.

 

The insurer shall include the catastrophic claims fee on its policy

 

invoice. The insurer shall collect the fee with the insurer's usual

 

cycle for collection of insurance premiums and shall promptly

 

transmit all fees collected to the corporation on forms and in a

 

manner prescribed by the corporation and shall hold fees collected

 

in trust for the corporation until remitted to the corporation. An

 

insurer shall treat the failure to pay a fee imposed under this

 

subsection in the same manner as the failure to pay an insurance

 

premium. An insurer that receives a refund of a portion of a fee

 

paid from the corporation because of the cancellation of a policy

 

shall refund the portion refunded to the owner or registrant.

 

     (17) The $25.00 charge under subsection (16) shall not be

 

added to the annual catastrophic claims fee after December 31,

 

2019. The corporation shall pay all of the $25.00 charges collected

 

under subsection (16) to the department of treasury. The department

 

of treasury shall expend the money paid under this subsection to

 

finance expenditures of medicaid managed care organizations as

 

defined in section 2 of the health insurance claims assessment act,

 

2011 PA 142, MCL 550.1732.

 

     (18) A corporation may propose amendments to its articles of


 

incorporation, bylaws, or the plan of operation. The corporation

 

shall submit a proposed amendment to the director for approval. An

 

amendment is not effective until it has been approved by the

 

director.

 

     (19) At least annually after the corporation has made its

 

first payment of personal protection insurance benefits to or for

 

an injured individual, the corporation shall provide the individual

 

with a notice of the benefit limit and a statement of cumulative

 

benefits paid by the corporation under the maximum for medically

 

appropriate products, services, and accommodations.

 

     (20) A person shall not incorporate a catastrophic claims

 

corporation in this state except under this section. Except as

 

provided in this section, a person shall not incorporate, file,

 

register, or otherwise form in this state using a name that is the

 

same as or deceptively similar to "Michigan catastrophic claims

 

corporation", "state catastrophic claims corporation", or

 

"catastrophic claims corporation".

 

     (21) A corporation is not liable for losses occurring before

 

January 1, 2014.

 

     (22) A person, including, but not limited to, an agent or

 

officer of a corporation, who violates this section or who makes a

 

false statement with respect to a report or statement required by

 

this section is guilty of a misdemeanor punishable by imprisonment

 

for not more than 90 days or a fine of not more than $100.00, or

 

both.

 

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

 

interest in protecting public health and maintaining a viable,


 

orderly, and cost-effective private sector market for automobile

 

insurance in this state and also finds that a corporation created

 

and powers conferred by this section constitute a necessary program

 

and serve a necessary public purpose. The legislature determines

 

that it is essential for the public purposes of this section that

 

revenues received by a corporation be exempt from federal taxation

 

and it is the intent of the legislature that a corporation and

 

activities authorized under this section are for the purpose of

 

protecting and advancing the public interest in maintaining a

 

viable, orderly, and cost-effective private sector market for

 

automobile insurance in this state and protecting public health. It

 

is the intent of the legislature that a corporation is authorized

 

under this section to be established and operate in a manner

 

allowing the corporation to qualify as an entity recognized by the

 

internal revenue service as authorized to issue tax-exempt bonds.

 

This section, being necessary for and to secure the public health,

 

safety, convenience, and welfare of the citizens of this state,

 

shall be liberally construed to effect its public purposes.

 

     (24) As used in this section:

 

     (a) "Association" means the catastrophic claims association

 

created under section 3104.

 

     (b) "Board" means the board of directors of a corporation.

 

     (c) "Corporation" means catastrophic claims corporation

 

created under this section.

 

     (d) "Ultimate loss" means the actual loss amounts that an

 

insurer or the corporation is obligated to pay and that are paid or

 

payable by the insurer or the corporation. Ultimate loss does not


 

include claim expenses.

 

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

 

this section, personal protection insurance benefits are payable

 

for the following:

 

     (a) Allowable For loss occurrences under motor vehicle

 

accident policies issued or renewed before January 1, 2014,

 

allowable expenses consisting of all reasonable charges incurred

 

for reasonably necessary products, services, and accommodations for

 

an injured person's care, recovery, or rehabilitation. For loss

 

occurrences under motor vehicle accident policies issued or renewed

 

after December 31, 2013, personal protection benefits are payable

 

for allowable expenses consisting of all reasonable charges

 

incurred, up to $1,000,000.00 per injured person, for medically

 

appropriate products, services, and accommodations for the injured

 

person's care, recovery, or rehabilitation. Allowable expenses

 

within personal protection insurance coverage shall do not include

 

either of the following:

 

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

 

customary charge for semiprivate accommodations except if unless

 

the injured person requires special or intensive care.

 

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

 

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

 

than $5,000.00.

 

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

 

injured person would have performed during the first 3 years after

 

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

 

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


 

person dies. Because the benefits received from personal protection

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

in the cost of living under rules prescribed by the commissioner

 

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

 

arising out of accidents occurring subsequent to the date of change

 

in the maximum.

 

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

 

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

 

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

 

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

 

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

 

or her dependent.

 

     (2) Both 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 not be required to provide coverage for

 

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

 

use of marihuana.

 

     (3) All of the following apply to allowable expenses under

 

subsection (1)(a):

 

     (a) Coverage limits are provided on a per individual per loss

 

occurrence basis.

 

     (b) Regardless of the number of motor vehicles insured or

 

insurers providing security in accordance with this chapter or any

 

other law providing for direct benefits without regard to fault for

 

motor or any other vehicle accidents, a person is not entitled to

 

recover duplicate benefits for the same expenses or losses

 

incurred.

 

     (c) Personal protection insurance benefits payable to a person

 

injured in a motor vehicle accident while an operator or passenger

 

of a motorcycle are limited to $250,000.00. Personal protection

 

insurance benefits are not payable as described in this subdivision

 

to the extent that benefits covering the same loss are available

 

from other sources, regardless of the nature and number of benefit

 

sources available and regardless of the nature or form of the

 

benefits.


 

     (d) Personal protection insurance benefits payable to a

 

nonresident of this state are limited to $50,000.00 per individual

 

per loss occurrence. Personal protection insurance benefits are not

 

payable as described in this subdivision to the extent that

 

benefits covering the same loss are available from other sources,

 

regardless of the nature and number of benefit sources available

 

and regardless of the nature or form of the benefits.

 

     (e) A charge for a product, service, or accommodation for an

 

injured person's care, recovery, or rehabilitation is reasonable if

 

the charge is in accordance with section 3157.

 

     (f) Medically appropriate products, services, and

 

accommodations rendered or prescribed by a health care facility or

 

agency or health care provider are those that are medically

 

necessary and do not include products, services, and accommodations

 

that would have been needed or used by the injured person or a

 

member of the injured person's household regardless of the loss

 

occurrence. An insurer shall not be required to provide coverage

 

for a product, service, or accommodation that is not medically

 

appropriate and medically necessary for an injured person's care,

 

recovery, or rehabilitation or not reasonably likely to result in

 

meaningful and measurable lasting improvement in the injured

 

person's functional status.

 

     (g) If reimbursement for a product, service, or accommodation

 

rendered or prescribed is initially rejected in whole or in part by

 

an insurer as not being medically appropriate, the insurer, at the

 

provider's request, shall have the decision reexamined by a

 

provider who has the same license, certification, or registration


 

as the provider who provided the product, service, or accommodation

 

or who has a license, registration, or certification with a scope

 

of practice that includes the scope of practice of the license,

 

registration, or certification of the provider who provided the

 

product, service, or accommodation being reexamined. An insurer

 

shall designate a person with whom providers can discuss the

 

insurer's determinations regarding what is medically appropriate

 

and medically necessary.

 

     (h) Allowable expenses do not include experimental treatment

 

or participation in research projects.

 

     (i) Expenses for medically appropriate rehabilitation services

 

that are reasonably likely to produce significant rehabilitation

 

shall be reimbursed for a fixed-duration period of not more than 52

 

weeks. The services may be extended for 1 additional period of not

 

more than 52 weeks if the services are reasonably likely to produce

 

significant rehabilitation. A 52- or 104-week period may be

 

extended if it is reasonably likely that longer treatment may

 

produce significant measurable improvement.

 

     (j) Allowable expenses include charges for home modification

 

accommodations directly necessitated by and related to the injured

 

person's injuries, if the accommodations are functionally necessary

 

to meet the injured person's treatment, rehabilitation,

 

maintenance, and daily living needs. Allowable expenses under this

 

subdivision are only payable up to $50,000.00. The director shall

 

adjust the limit under this subdivision every 2 years to reflect

 

the aggregate percentage change in the United States consumer price

 

index. An increase in the limit applies to injuries that result


 

from loss occurrences that occur after the effective date of the

 

increase.

 

     (k) Expenses for a special motor vehicle or motor vehicle

 

modifications that are directly necessitated by and related to the

 

injured person's injuries are not allowable more frequently than

 

once every 7 years and are limited to a maximum of $50,000.00 every

 

7 years adjusted by the director every 2 years to reflect the

 

aggregate percentage change in the United States consumer price

 

index. An increase in the limit applies to injuries that result

 

from loss occurrences that occur after the effective date of the

 

increase.

 

     (l) A product, service, or accommodation for an injured

 

person's care, recovery, or rehabilitation is an allowable expense

 

if it is provided for medical or rehabilitative reasons rather than

 

primarily for the convenience of the individual, the individual's

 

caregiver, or the health care provider.

 

     (m) A product, service, or accommodation for an injured

 

person's care, recovery, or rehabilitation is an allowable expense

 

if it is provided in the most appropriate location where the

 

service may, for practical purposes, be safely and effectively

 

provided.

 

     (4) At least annually after an insurer has made a payment to

 

or for an injured individual under a claim for personal protection

 

insurance benefits that has been reported to a corporation under

 

section 3104a(12)(b), the insurer shall provide the individual with

 

a statement of cumulative benefits paid and the amount of benefits

 

that remain available for the claim.


 

     (5) This section does not prohibit the continued provision of

 

reasonably necessary products, services, and accommodations for

 

loss occurrences under policies issued or renewed before January 1,

 

2014. However, payment to providers for those products, services,

 

and accommodations are subject to the limits in this section and

 

section 3107c and the limitations on charges in section 3157.

 

     Sec. 3107c. (1) Except as provided in subsections (3) and (4),

 

all of the following apply to allowable expenses under section

 

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

 

household member:

 

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

 

regardless of the level of care provided.

 

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

 

level of care provided. Beginning 3 years after the effective date

 

of the amendatory act that added this section and every 3 years

 

after that date, the director shall adjust this amount to reflect

 

the aggregate percentage change in the United States consumer price

 

index, rounded to the nearest 10 cents.

 

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

 

regardless of whether the family or household member is licensed or

 

otherwise authorized to render the attendant care under article 15

 

of the public health code, 1978 PA 368, MCL 333.16202 to 333.18838,

 

or is employed by, under contract with, or in any way connected

 

with an individual or agency who is licensed or authorized to

 

render the care.

 

     (2) Except as provided in subsections (3) and (4), both of the

 

following apply to allowable expenses under section 3107(1)(a) for


 

attendant care provided in the home by someone other than a family

 

or household member:

 

     (a) Payment is limited to a total of 16 hours per day for

 

services performed by 1 or more individuals.

 

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

 

subject to a copay. After 30 days, payment is subject to a copay of

 

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

 

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

 

attendant care provided by a family or household member and someone

 

other than a family or household member is cumulatively limited to

 

24 hours per day.

 

     (4) Notwithstanding the limitations in this section, an

 

insurer or a corporation formed under section 3104a may contract

 

with a family member to provide attendant care as an allowable

 

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

 

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

 

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

 

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

 

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

 

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

 

accident. A personal injury insurance policy described in section

 

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

 

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

 

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

 

accident. When personal protection insurance benefits described in

 

section 3107(1), 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. The coverage for

 

allowable expenses for 2 or more motor vehicles under 1 policy or

 

for 2 or more policies shall not be added together, combined, or

 

stacked to determine the limit of insurance coverage available for

 

each injured person covered under the policy.

 

     (2) A person suffering accidental bodily injury while an

 

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

 

of transporting passengers shall receive the personal protection

 

insurance benefits to which the person is entitled from the insurer

 

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

 

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

 

protection insurance benefits under any other policy:

 

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

 

providing transportation not prohibited by law.

 

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

 

by the department of transportation.

 

     (c) A bus operating under a government sponsored

 

transportation program.

 

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

 

organization.

 

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

 

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

 

horse livery used only to transport passengers to or from a

 

destination point.


 

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

 

domiciled in the same household , who suffers accidental bodily

 

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

 

the employer , shall receive personal protection insurance benefits

 

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

 

vehicle.

 

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

 

suffering accidental bodily injury arising from a motor vehicle

 

accident while an occupant of a motor vehicle shall claim personal

 

protection insurance benefits from insurers in the following order

 

of priority:

 

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

 

occupied.

 

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

 

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

 

motor vehicle accident which shows evidence of the involvement of a

 

motor vehicle while an operator or passenger of a motorcycle shall

 

claim personal protection insurance benefits from insurers in the

 

following order of priority:

 

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

 

vehicle involved in the accident.

 

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

 

in the accident.

 

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

 

motorcycle involved in the accident.

 

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

 

the motorcycle involved in the accident.


 

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

 

provide personal protection insurance benefits, under subsection

 

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

 

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

 

together with a reasonable amount of partial recoupment of the

 

expense of processing the claim, in order to accomplish equitable

 

distribution of the loss among all of the insurers.

 

     Sec. 3135. (1) A person remains subject to tort liability for

 

noneconomic loss caused by his or her ownership, maintenance, or

 

use of a motor vehicle only if the injured person has suffered

 

death, serious impairment of body function, or permanent serious

 

disfigurement.

 

     (2) For a cause of action for damages pursuant to subsection

 

(1) filed on or after July 26, 1996, all of the following apply:

 

     (a) The issues of whether the injured person has suffered

 

serious impairment of body function or permanent serious

 

disfigurement are questions of law for the court if the court finds

 

either of the following:

 

     (i) There is no factual dispute concerning the nature and

 

extent of the person's injuries.

 

     (ii) There is a factual dispute concerning the nature and

 

extent of the person's injuries, but the dispute is not material to

 

the determination whether the person has suffered a serious

 

impairment of body function or permanent serious disfigurement.

 

However, for a closed-head injury, a question of fact for the jury

 

is created if a licensed allopathic or osteopathic physician who

 

regularly diagnoses or treats closed-head injuries testifies under


 

oath that there may be a serious neurological injury.

 

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

 

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

 

party who is more than 50% at fault.

 

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

 

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

 

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

 

required by section 3101 at the time the injury occurred.

 

     (3) Notwithstanding any other provision of law, tort liability

 

arising from the ownership, maintenance, or use within this state

 

of a motor vehicle with respect to which the security required by

 

section 3101 was in effect is abolished except as to:

 

     (a) Intentionally caused harm to persons or property. Even

 

though a person knows that harm to persons or property is

 

substantially certain to be caused by his or her act or omission,

 

the person does not cause or suffer that harm intentionally if he

 

or she acts or refrains from acting for the purpose of averting

 

injury to any person, including himself or herself, or for the

 

purpose of averting damage to tangible property.

 

     (b) Damages for noneconomic loss as provided and limited in

 

subsections (1) and (2).

 

     (c) Damages for allowable expenses, work loss, and survivor's

 

loss as defined in excess of the personal protection insurance

 

benefits provided 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 for payment of work loss and survivor's loss


 

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) or 3107(3)(d), as applicable. Damages under this

 

subdivision are not recoverable to the extent that benefits

 

covering the same loss are available from other sources, regardless

 

of the nature or number of benefit sources available and regardless

 

of the nature or form of the benefits.

 

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

 

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

 

damages under this subdivision shall be conducted as provided in

 

subsection (4).

 

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

 

subsection (3)(e):

 

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

 

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

 

party who is more than 50% at fault.

 

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

 

prescribed in section 3131, for which maintenance of security is

 

required by this act.

 

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

 

in the small claims division of the district court or the municipal

 

court. If the defendant or plaintiff removes the action to a higher

 

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

 

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


 

proceeding to determine any other liability arising from the same

 

circumstances that gave rise to the action.

 

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

 

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

 

required by section 3101.

 

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

 

function" means an objectively manifested impairment of an

 

important body function that affects the person's general ability

 

to lead his or her normal life.

 

     Sec. 3148. (1) An Subject to subsection (2), an attorney is

 

entitled to 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 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. Evidence of

 

the manner in which an insurer processed a claim for benefits is

 

not admissible at the trial of an action to recover benefits under

 

this chapter.

 

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

 

section 3107(1)(a) for attendant care, attorney fees may only be

 

awarded under subsection (1) for services rendered in the 12-month

 

period immediately preceding the date the insurer is notified of

 

the dispute.

 

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

 

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

 

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


 

against a claim that was in some respect fraudulent or so excessive

 

as to have no reasonable foundation. 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 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.

 

     Sec. 3157. (1) A physician, hospital, clinic, or other person

 

or institution lawfully rendering treatment to an injured person

 

for an accidental bodily injury covered by personal protection

 

insurance, and a person or institution providing rehabilitative

 

occupational training following the injury, may charge a reasonable

 

amount for the products, services, and accommodations rendered. The

 

charge shall not exceed the amount the person or institution

 

customarily charges receives for like products, services, and

 

accommodations in cases not involving that do not involve personal

 

protection insurance, the program for medical assistance for the

 

medically indigent under the social welfare act, 1939 PA 280, MCL

 

400.1 to 400.119b, or the federal medicare program established

 

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

 

1395kkk-1.

 

     (2) Any information needed by an insurer or a corporation

 

formed under section 3104a to determine the appropriate

 

reimbursement under this section shall be provided by the person

 

providing the treatment or rehabilitative or occupational training.


 

     (3) If an insurer or a corporation formed under section 3104a

 

needs information to determine the appropriate reimbursement under

 

this section and the information is unavailable or not provided or

 

the information provided is not sufficient to determine the

 

appropriate reimbursement, the insurer or corporation shall pay the

 

amount that would be paid under R 418.10101 to R 418.101503 of the

 

Michigan administrative code or schedules of maximum fees for

 

worker's disability compensation developed under those rules.

 

     (4) Whether a charge is reasonable or whether a product,

 

service, or accommodation is medically appropriate and medically

 

necessary is a question of law to be decided by the court.

 

     Sec. 3163. (1) An insurer authorized to transact automobile

 

liability insurance and personal and property protection insurance

 

in this state shall file and maintain a written certification that

 

any accidental bodily injury or property damage occurring in this

 

state arising from the ownership, operation, maintenance, or use of

 

a motor vehicle as a motor vehicle by an out-of-state resident who

 

is insured under its automobile liability insurance policies, is

 

subject to the personal and property protection insurance system

 

under this act.

 

     (2) A nonadmitted insurer may voluntarily file the

 

certification described in subsection (1).

 

     (3) Except as otherwise provided in subsection (4), if a

 

certification filed under subsection (1) or (2) applies to

 

accidental bodily injury or property damage, the insurer and its

 

insureds with respect to that injury or damage have the rights and

 

immunities under this act for personal and property protection


 

insureds, and claimants have the rights and benefits of personal

 

and property protection insurance claimants, including the right to

 

receive benefits from the electing insurer as if it were an insurer

 

of personal and property protection insurance applicable to the

 

accidental bodily injury or property damage.

 

     (4) If For loss occurrences that occur before the effective

 

date of section 3107(3)(d), if an insurer of an out-of-state

 

resident is required to provide benefits under subsections (1) to

 

(3) to that out-of-state resident for accidental bodily injury for

 

an accident in which the out-of-state resident was not an occupant

 

of a motor vehicle registered in this state, the insurer is only

 

liable for the amount of ultimate loss sustained up to $500,000.00.

 

Benefits under this subsection are not recoverable to the extent

 

that benefits covering the same loss are available from other

 

sources, regardless of the nature or number of benefit sources

 

available and regardless of the nature or form of the benefits.

 

     Sec. 3172. (1) A person entitled to claim because of

 

accidental bodily injury arising out of the ownership, operation,

 

maintenance, or use of a motor vehicle as a motor vehicle in this

 

state may obtain personal protection insurance benefits through the

 

assigned claims plan if in any of the following situations:

 

     (a) If no personal protection insurance is applicable to the

 

injury. ,

 

     (b) If no personal protection insurance applicable to the

 

injury can be identified. ,

 

     (c) If the personal protection insurance applicable to the

 

injury cannot be ascertained because of a dispute between 2 or more


 

automobile insurers concerning their obligation to provide coverage

 

or the equitable distribution of the loss. , or

 

     (d) If the only identifiable personal protection insurance

 

applicable to the injury is, because of financial inability of 1 or

 

more insurers to fulfill their obligations, inadequate to provide

 

benefits up to the maximum prescribed. In that case,

 

     (2) In any of the situations under subsection (1), unpaid

 

benefits due or coming due may be collected under the assigned

 

claims plan and the insurer to which the claim is assigned is

 

entitled to reimbursement from the defaulting insurers to the

 

extent of their financial responsibility.

 

     (3) (2) Except as otherwise provided in this subsection,

 

personal protection insurance benefits, including benefits arising

 

from accidents occurring before March 29, 1985, payable through the

 

assigned claims plan shall be reduced 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, to a person claiming

 

personal protection insurance benefits through the assigned claims

 

plan. This subsection only applies if the personal protection

 

insurance benefits are payable through the assigned claims plan

 

because no personal protection insurance is applicable to the

 

injury, no personal protection insurance applicable to the injury

 

can be identified, or the only identifiable personal protection

 

insurance applicable to the injury is, because of financial

 

inability of 1 or more insurers to fulfill their obligations,

 

inadequate to provide benefits up to the maximum prescribed. As


 

used in this subsection, "sources" and "benefit sources" do not

 

include the program for medical assistance for the medically

 

indigent under the social welfare act, 1939 PA 280, MCL 400.1 to

 

400.119b, or insurance under the health insurance for the aged act,

 

title XVIII of the social security act, 42 USC 1395 to 1395kkk-1.

 

     (4) (3) If the obligation to provide personal protection

 

insurance benefits cannot be ascertained because of a dispute

 

between 2 or more automobile insurers concerning their obligation

 

to provide coverage or the equitable distribution of the loss, and

 

if a method of voluntary payment of benefits cannot be agreed upon

 

among or between the disputing insurers, all of the following

 

apply:

 

     (a) The insurers who are parties to the dispute shall, or the

 

claimant may, immediately notify the Michigan automobile insurance

 

placement facility of their inability to determine their statutory

 

obligations.

 

     (b) The claim shall be assigned by the Michigan automobile

 

insurance placement facility to an insurer and the insurer shall

 

immediately provide personal protection insurance benefits to the

 

claimant or claimants entitled to benefits.

 

     (c) An action shall be immediately commenced on behalf of the

 

Michigan automobile insurance placement facility by the insurer to

 

whom the claim is assigned in circuit court to declare the rights

 

and duties of any interested party.

 

     (d) The insurer to whom the claim is assigned shall join as

 

parties defendant to the action commenced under subdivision (c)

 

each insurer disputing either the obligation to provide personal


 

protection insurance benefits or the equitable distribution of the

 

loss among the insurers.

 

     (e) The circuit court shall declare the rights and duties of

 

any interested party whether or not other relief is sought or could

 

be granted.

 

     (f) After hearing the action, the circuit court shall

 

determine the insurer or insurers, if any, obligated to provide the

 

applicable personal protection insurance benefits and the equitable

 

distribution, if any, among the insurers obligated, and shall order

 

reimbursement to the Michigan automobile insurance placement

 

facility from the insurer or insurers to the extent of the

 

responsibility as determined by the court. The reimbursement

 

ordered under this subdivision shall include all benefits and costs

 

paid or incurred by the Michigan automobile insurance placement

 

facility and all benefits and costs paid or incurred by insurers

 

determined not to be obligated to provide applicable personal

 

protection insurance benefits, including reasonable, actually

 

incurred attorney fees and interest at the rate prescribed in

 

section 3175 as of December 31 of the year preceding the

 

determination of the circuit court.

 

     (5) An injured person claiming personal protection insurance

 

benefits under the assigned claims plan is limited to reasonable

 

charges incurred up to a maximum of $250,000.00 for medically

 

appropriate products, services, and accommodations for his or her

 

care, recovery, or rehabilitation.

 

     (6) Any reimbursement ordered under this section and any

 

recovery obtained in circumstances where personal protection


 

insurance benefits have been or may be paid through the Michigan

 

automobile insurance placement facility shall include all benefits

 

and costs paid or incurred by insurers determined not to be

 

obligated to provide the applicable personal protection insurance

 

benefits, including actually incurred reasonable attorney fees and

 

interest at the rate prescribed in section 3175 as of December 31

 

of the year preceding the reimbursement order or recovery

 

determination.

 

     Sec. 3181. (1) Within 90 days after the effective date of the

 

amendatory act that added this section, the director shall set an

 

initial annual catastrophic claims fee to be imposed under section

 

3104a(16) for insurance policies that provide the coverage required

 

by section 3101(1) issued after December 31, 2013 and before

 

January 1, 2015.

 

     (2) By December 31, 2013, any insurer engaged in writing

 

insurance coverages that provide the security required by section

 

3101(1) shall file rates for policies issued or renewed after

 

December 31, 2013 that result in a per-vehicle reduction in the

 

annual premium of at least $150.00 to reflect the savings expected

 

as a result of the changes made to this act by the amendatory act

 

that added this section. The reduction under this subsection shall

 

be from rates in effect for the insurer on the date that the

 

amendatory act that added this section is enacted into law.

 

     (3) An insurer described in subsection (2) shall not increase

 

the rates for coverages providing personal protection insurance

 

benefits before January 1, 2015.

 

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


 

insurance in this state shall participate in an organization for

 

the purpose of doing all of the following:

 

     (a) Providing the guarantee that automobile insurance coverage

 

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

 

insurance through ordinary methods.

 

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

 

by encouraging maximum use of the normal private insurance system.

 

     (c) Providing funding for the Michigan automobile insurance

 

fraud authority and the automobile theft prevention authority.

 

     (2) The organization created under this chapter shall be

 

called the "Michigan automobile insurance placement facility".

 

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

 

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

 

to do all of the following:

 

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

 

against the facility shall not create any liabilities in the

 

individual participating members of the facility.

 

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

 

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

 

     (c) To assess participating members on the basis of

 

participation ratios pursuant to section 3303 to cover anticipated

 

costs of operation and administration of the facility, to provide

 

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

 

expenses pursuant to the plan of operation.

 

     (d) To impose limitations on cancellation or nonrenewal by

 

participating members of facility-placed business, in addition to

 

the limitations imposed by chapters 21 and 32.


 

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

 

to receive equitable distribution of applicants; or to provide for

 

a limited number of participating members to service applicants in

 

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

 

and the plan of operation.

 

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

 

participating members designated under subdivision (e).

 

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

 

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

 

reasonable, equitable, and nondiscriminatory manner of

 

administering the facility, including compliance with chapter 21,

 

and to provide for any other matters necessary or advisable to

 

implement this chapter, including matters necessary to comply with

 

the requirements of chapter 21.

 

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

 

chapter 31 and the assigned claims plan approved under section

 

3171.

 

     (i) Until December 31, 2018, to annually assess participating

 

members and self-insurers an aggregate amount not to exceed

 

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

 

administration of the Michigan automobile insurance fraud authority

 

and the automobile theft prevention authority.

 

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

 

instituted by the facility or on its behalf an automatic data

 

processing system for recording and compiling data relative to

 

individuals insured through the facility. An automatic data

 

processing system established under this subsection shall, to the


 

greatest extent possible, be made compatible with the automatic

 

data processing system maintained by the secretary of state, to

 

provide for the identification and review of individuals insured

 

through the facility.

 

     (3) Before January 2, 2014, 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

 

and the automobile theft prevention authority as provided in

 

chapter 63.

 

     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 state, or an

 

unlicensed health care provider whose services are compensated,

 

directly or indirectly, by insurance proceeds, or a licensee

 

similarly licensed in other states and nations, or the practitioner

 

of any nonmedical treatment rendered in accordance with a

 

recognized religious method of healing.

 

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

 

receives a pecuniary or other benefit from a practitioner, whether

 

directly or indirectly, for procuring or attempting to procure a

 

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

 

cooperation with, a practitioner whose intent is to obtain benefits

 

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


 

insured or an insurer for providing services to the client,

 

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

 

practitioner who procures clients, patients, or customers through

 

the use of public media.

 

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

 

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

 

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

 

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

 

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

 

expense.

 

     Sec. 6107. (1) Prior to Subject to section 6307(1), before

 

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

 

coverages which that provide the security required by section

 

3101(1) within in this state, as a condition of its authority to

 

transact insurance in this state, shall pay to the authority an

 

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

 

written car years of insurance providing the security required by

 

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

 

preceding calendar year.

 

     (2) Money received pursuant to under subsection (1), and all

 

other money received by the authority, shall be segregated and

 

placed in a fund to be known as the automobile theft prevention

 

fund. The authority shall administer the automobile theft

 

prevention fund. shall be administered by the authority.

 

     (3) Money in the automobile theft prevention fund shall be

 

expended in the following order of priority:

 

     (a) To pay the costs of administration of the authority.


 

     (b) To achieve the purposes and objectives of this chapter,

 

which may include, but not be limited to, the following:

 

     (i) Provide financial support to the department of state police

 

and local law enforcement agencies for economic automobile theft

 

enforcement teams.

 

     (ii) Provide financial support to state or local law

 

enforcement agencies for programs designed to reduce the incidence

 

of economic automobile theft.

 

     (iii) Provide financial support to local prosecutors for

 

programs designed to reduce the incidence of economic automobile

 

theft.

 

     (iv) Provide financial support to judicial agencies for

 

programs designed to reduce the incidence of economic automobile

 

theft.

 

     (v) Provide financial support for neighborhood or community

 

organizations or business organizations for programs designed to

 

reduce the incidence of automobile theft.

 

     (vi) Conduct educational programs designed to inform automobile

 

owners of methods of preventing automobile theft and to provide

 

equipment, for experimental purposes, to enable automobile owners

 

to prevent automobile theft.

 

     (4) Money in the automobile theft prevention fund shall only

 

be used for automobile theft prevention efforts. and shall be

 

distributed based on need and efficacy as determined by the

 

authority.The 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.

 

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

 

considered state money.

 

CHAPTER 63

 

MICHIGAN AUTOMOBILE INSURANCE FRAUD AUTHORITY

 

     Sec. 6301. As used in this chapter:

 

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

 

authority created in section 6302.

 

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

 

act as described in section 4503 that is committed in connection

 

with automobile insurance, including an application for automobile

 

insurance.

 

     (c) "Board" means the board of directors of the authority.

 

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

 

commercial nonfleet vehicle years of insurance providing the

 

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

 

second previous calendar year as reported to the statistical agent

 

of each insurer.

 

     (e) "Facility" means the Michigan automobile insurance

 

placement facility created under chapter 33.

 

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

 

authority is created within the facility. The facility shall

 

provide staff for the authority and shall carry out the

 

administrative duties and functions as directed by the board.

 

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

 

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


 

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

 

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

 

15.246.

 

     (3) With the discretion to approve or disapprove programs to

 

be supported, the authority shall do both of the following:

 

     (a) Provide financial support to state or local law

 

enforcement agencies for programs designed to reduce the incidence

 

of automobile insurance fraud.

 

     (b) Provide financial support to state or local prosecutorial

 

agencies for programs designed to reduce the incidence of

 

automobile insurance fraud.

 

     (4) The authority may provide financial support to law

 

enforcement, prosecutorial, insurance, education, or training

 

associations for programs designed to reduce the incidence of

 

automobile insurance fraud.

 

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

 

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

 

of directors shall consist of 15 members as follows:

 

     (a) Eight members who represent automobile insurers in this

 

state, including the following:

 

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

 

350,000 or more car years.

 

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

 

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

 

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

 

than 100,000 car years.

 

     (b) The director or his or her designee.


 

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

 

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

 

her designee.

 

     (e) Two members who represent other law enforcement agencies

 

in this state.

 

     (f) One member who represents prosecuting attorneys in this

 

state.

 

     (g) One member who represents the general public.

 

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

 

elected by automobile insurers doing business in this state from a

 

list of nominees proposed by the board of governors of the

 

facility. In preparing the list of nominees for the members, the

 

board of governors of the facility shall solicit nominations from

 

automobile insurers doing business in this state.

 

     (7) The members of the board representing law enforcement

 

agencies other than the department of state police shall be

 

appointed by the governor. In appointing the members, the governor

 

shall solicit input from various law enforcement associations in

 

this state.

 

     (8) The member of the board representing prosecuting attorneys

 

shall be appointed by the governor. In appointing the member, the

 

governor shall solicit input from the prosecuting attorneys

 

association of Michigan.

 

     (9) The member of the board representing the general public

 

shall be appointed by the governor. The governor shall appoint an

 

individual who is a resident of this state and is not employed by

 

or under contract with a state or local unit of government or an


 

insurer.

 

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

 

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

 

successor is elected, designated, or appointed, whichever occurs

 

later. Of the members first elected or appointed under this

 

section, 2 members representing insurers and 1 member representing

 

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

 

members representing insurers, the member representing prosecuting

 

attorneys, and the member representing the general public shall

 

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

 

and 1 member representing law enforcement agencies shall serve for

 

a term of 4 years.

 

     (11) The board is dissolved on January 1, 2019.

 

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

 

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

 

reasonable amount for necessary travel and expenses.

 

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

 

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

 

power or function of the authority, notwithstanding the existence

 

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

 

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

 

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

 

amplified telephonic equipment, if authorized by the bylaws or plan

 

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

 

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

 

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

 

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


 

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

 

accordance with the plan of operation.

 

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

 

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

 

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

 

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

 

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

 

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

 

principal office and on a publicly accessible internet website. The

 

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

 

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

 

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

 

purposes:

 

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

 

disciplining, or evaluation of officers or employees of the

 

authority.

 

     (b) To consult with its attorney.

 

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

 

regarding privacy or confidentiality.

 

     (5) The board shall display information concerning the

 

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

 

to, the annual financial report required under section 6310, on a

 

publicly accessible internet website.

 

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

 

board shall make the minutes open to public inspection and

 

available at the address designated on the public notice of its

 

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


 

the public at the reasonable estimated cost for printing and

 

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

 

minutes:

 

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

 

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

 

members who are absent.

 

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

 

that was open to the public.

 

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

 

     Sec. 6304. (1) Before January 1, 2019, the authority shall

 

transfer all assets of the authority to the department of state

 

police for the benefit of the automobile theft prevention

 

authority.

 

     (2) On January 1, 2019, the authority is dissolved.

 

     Sec. 6305. The board has the powers necessary to carry out its

 

duties under this act, including, but not limited to, the power to

 

do the following:

 

     (a) Sue and be sued in the name of the authority.

 

     (b) Solicit and accept gifts, grants, loans, and other aid

 

from any person, the federal government, this state, a local unit

 

of government, or an agency of the federal government, this state,

 

or a local unit of government.

 

     (c) Make grants and investments.

 

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

 

property, assets, or activities.

 

     (e) Invest at its discretion any money held in reserve or

 

sinking funds or any money not required for immediate use or


 

disbursement and to select and use depositories for its money.

 

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

 

necessary.

 

     (g) Indemnify and procure insurance indemnifying any member of

 

the board for personal loss or accountability resulting from the

 

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

 

     (h) Perform other acts not specifically enumerated in this

 

section that are necessary or proper to accomplish the purposes of

 

the authority and that are not inconsistent with this section or

 

the plan of operation.

 

     Sec. 6307. (1) Section 6107(1) does not apply from January 1,

 

2014 to December 31, 2018.

 

     (2) Before April 1 of each year from 2014 to 2018, an insurer

 

or self-insurer engaged in writing insurance coverages that provide

 

the security required by section 3101(1) in this state, as a

 

condition of its authority to transact insurance in this state,

 

shall pay to the facility, for deposit into the account of the

 

authority, an assessment determined by the facility as provided in

 

the plan of operation. The assessment shall be based on the ratio

 

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

 

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

 

insurers.

 

     (3) The facility shall segregate all money received under

 

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

 

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

 

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

 

board.


 

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

 

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

 

prevention fund created in section 6107.

 

     Sec. 6308. (1) An insurer authorized to transact automobile

 

insurance in this state, as a condition of its authority to

 

transact insurance in this state, shall report automobile insurance

 

fraud data to the authority using the format and procedures adopted

 

by the board.

 

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

 

authority and shall provide available motor vehicle fraud and theft

 

statistics to the authority on request.

 

     (3) The board shall develop performance metrics that are

 

consistent, controllable, measurable, and attainable. The board

 

shall use the metrics each year to evaluate new applications

 

submitted for funding consideration and to renew funding for

 

existing programs.

 

     Sec. 6310. (1) Beginning January 1 of the year after the

 

effective date of the amendatory act that added this section, the

 

authority shall prepare and publish an annual financial report, and

 

beginning July 1 of the year after the effective date of the

 

amendatory act that added this section, the authority shall prepare

 

and publish an annual report to the legislature on the authority's

 

efforts to prevent automobile insurance fraud and cost savings that

 

have resulted from those efforts.

 

     (2) The annual report to the legislature required under

 

subsection (1) shall detail the automobile insurance fraud

 

occurring in this state for the previous year, assess the impact of


 

the fraud on rates charged for automobile insurance, summarize

 

prevention programs, and outline allocations made by the authority.

 

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

 

cooperate in developing the report as requested by the authority

 

and shall make available to the authority records and statistics

 

concerning automobile insurance fraud, including the number of

 

instances of suspected and confirmed insurance fraud, number of

 

prosecutions and convictions involving automobile insurance fraud,

 

and automobile insurance fraud recidivism. The authority shall

 

evaluate the impact automobile insurance fraud has on the citizens

 

of this state and the costs incurred by the citizens through

 

insurance, police enforcement, prosecution, and incarceration

 

because of automobile insurance fraud. The report to the

 

legislature required by this section shall be submitted to the

 

senate and house of representatives standing committees with

 

primary jurisdiction over insurance issues and the director.

 

     Enacting section 1. The title and sections 3301, 3330, 4501,

 

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

 

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

 

act, and sections 6301, 6302, 6303, 6304, 6305, 6307, 6308, and

 

6310 of the insurance code of 1956, 1956 PA 218, as added by this

 

amendatory act, take effect January 1, 2014.