January 24, 2006, Introduced by Reps. Hood, Condino, Espinoza, Lipsey, Williams, Gleason, Brown, Polidori, Meisner, Zelenko, Anderson, Plakas, Donigan, Farrah, Tobocman, Virgil Smith, Kolb, Lemmons, III and Cheeks and referred to the Committee on Insurance.
A bill to amend 1956 PA 218, entitled
"The insurance code of 1956,"
by amending sections 2118 and 2120 (MCL 500.2118 and 500.2120),
section 2118 as amended by 2002 PA 492, and section 2120 as amended
by 1984 PA 350.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 2118. (1) As a condition of maintaining its certificate
of authority, an insurer shall not refuse to insure, refuse to
continue to insure, or limit coverage available to an eligible
person for automobile insurance, except in accordance with
underwriting rules established pursuant to this section and
sections 2119 and 2120.
(2) The underwriting rules that an insurer may establish for
automobile insurance shall be based only on the following:
(a) Criteria identical to the standards set forth in section
2103(1).
(b) The insurance eligibility point accumulation in excess of
the amounts established by section 2103(1) of a member of the
household of the eligible person insured or to be insured, if the
member of the household usually accounts for 10% or more of the use
of a vehicle insured or to be insured. For purposes of this
subdivision, a person who is the principal driver for 1 automobile
insurance policy shall be rebuttably presumed not to usually
account for more than 10% of the use of other vehicles of the
household not insured under the policy of that person.
(c) With respect to a vehicle insured or to be insured,
substantial modifications from the vehicle's original manufactured
state for purposes of increasing the speed or acceleration
capabilities of the vehicle.
(d)
Failure by the person to provide proof that insurance
required
by section 3101 was maintained in force with respect to
any
vehicle which was both owned by the person and driven or moved
by
the person or by a member of the household of the person during
the
6-month period immediately preceding application. Such proof
shall
take the form of a certification by the person on a form
provided
by the insurer that the vehicle was not driven or moved
without
maintaining the insurance required by section 3101 during
the
6-month period immediately preceding application.
(d) (e)
Type of vehicle insured or to be
insured, based on 1
of the following, without regard to the age of the vehicle:
(i) The vehicle is of limited production or of custom
manufacture.
(ii) The insurer does not have a rate lawfully in effect for
the type of vehicle.
(iii) The vehicle represents exposure to extraordinary expense
for repair or replacement under comprehensive or collision
coverage.
(e) (f)
Use of a vehicle insured or to be
insured for
transportation of passengers for hire, for rental purposes, or for
commercial purposes. Rules under this subdivision shall not be
based on the use of a vehicle for volunteer or charitable purposes
or for which reimbursement for normal operating expenses is
received.
(f) (g)
Payment of a minimum deposit at
the time of
application or renewal, not to exceed the smallest deposit required
under an extended payment or premium finance plan customarily used
by the insurer.
(g) (h)
For purposes of requiring
comprehensive deductibles
of not more than $150.00, or of refusing to insure if the person
refuses to accept a required deductible, the claim experience of
the person with respect to comprehensive coverage.
(h) (i)
Total abstinence from the
consumption of alcoholic
beverages
except when if such beverages are consumed as part of a
religious ceremony. However, an insurer shall not utilize an
underwriting rule based on this subdivision unless the insurer has
been authorized to transact automobile insurance in this state
prior to January 1, 1981, and has consistently utilized such an
underwriting rule as part of the insurer's automobile insurance
underwriting since being authorized to transact automobile
insurance in this state.
(i) (j)
One or more incidents involving a
threat,
harassment, or physical assault by the insured or applicant for
insurance on an insurer employee, agent, or agent employee while
acting within the scope of his or her employment so long as a
report of the incident was filed with an appropriate law
enforcement agency.
Sec. 2120. (1) Affiliated insurers may establish underwriting
rules so that each affiliate will provide automobile insurance only
to certain eligible persons. This subsection shall apply only if an
eligible person can obtain automobile insurance from 1 of the
affiliates. The underwriting rules shall be in compliance with this
section
, section and sections 2118 , and section 2119.
(2) An insurer may establish separate rating plans so that
certain eligible persons are provided automobile insurance under 1
rating plan and other eligible persons are provided automobile
insurance under another rating plan. This subsection shall apply
only if all eligible persons can obtain automobile insurance under
a rating plan of the insurer. Underwriting rules consistent with
this
section , section and
sections 2118 , and section
2119
shall be established to define the rating plan applicable to each
eligible person.
(3) Underwriting rules under this section shall be based only
on the following:
(a) With respect to a vehicle insured or to be insured,
substantial modifications from the vehicle's original manufactured
state for purposes of increasing the speed or acceleration
capabilities of the vehicle.
(b)
Failure of the person to provide proof that insurance
required
by section 3101 was maintained in force with respect to
any
vehicle owned and operated by the person or by a member of the
household
of the person during the 6-month period immediately
preceding
application or renewal of the policy. Such proof shall
take
the form of a certification by the person that the required
insurance
was maintained in force for the 6-month period with
respect
to such vehicle.
(b) (c)
For purposes of insuring persons
who have refused a
deductible
lawfully required under section 2118(2)(h) 2118(2)(g),
the claim experience of the person with respect to comprehensive
coverage.
(c) (d)
Refusal of the person to pay a
minimum deposit
required
under section 2118(2)(g) 2118(2)(f).
(d) (e)
A person's insurance eligibility
point accumulation
under section 2103(1)(h), or the total insurance eligibility point
accumulation of all persons who account for 10% or more of the use
of 1 or more vehicles insured or to be insured under the policy.
(e) (f)
The type of vehicle insured or to
be insured as
provided
in section 2118(2)(e) 2118(2)(d).