January 19, 2011, Introduced by Senator SCHUITMAKER and referred to the Committee on Insurance.
A bill to amend 1956 PA 218, entitled
"The insurance code of 1956,"
by amending section 1505 (MCL 500.1505).
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1505. (1) The commissioner may revoke or suspend the
license
of any a premium finance company when and if after
investigation it appears to the commissioner that any of the
following has occurred:
(a)
Any license issued to such the
company was obtained by
fraud.
(b) There was any misrepresentation in the application for the
license.
(c) The holder of the license has otherwise shown himself or
herself untrustworthy or incompetent to act as a premium finance
company.
(d) The company has violated any of the provisions of this
chapter , or the rules and regulations promulgated hereunder
under
this chapter.
(e)
The Except as otherwise
provided in subsection (4), the
company
has remunerated any insurance agent producer or any
employee
of an insurance agent producer
or to any other person as
an inducement to the financing of any insurance policy with the
premium
finance company. Except, that if the insurance agent
producer prepares the premium finance agreement, the premium
finance company may pay him or her a service fee not to exceed
$2.00.
(2) Before the commissioner revokes, suspends, or refuses to
renew
the license of any a premium finance company, he or she shall
give to the person an opportunity to be fully heard and to
introduce
evidence in his on its behalf. In lieu Instead of
revoking
or suspending the license for any of the causes enumerated
in
this section reasons listed
in subsection (1), after a hearing,
the commissioner may subject the company to a penalty of not more
than
$200.00 for each offense but the with a total not to exceed
$1,000.00
when in his or her judgment he the commissioner finds
that the public interest would not be harmed by the continued
operation of the company. The amount of any penalty shall be paid
by
the company through the office of the commissioner financial and
insurance regulation to the state treasury. At any hearing provided
by this section, the commissioner shall have authority to
administer oaths to witnesses. Anyone testifying falsely, after
having
been administered such an oath, shall be is subject to the
penalty of perjury.
(3)
If the commissioner refuses to issue or renew any a
license
or if any an applicant or licensee is aggrieved by any
action of the commissioner, the applicant or licensee shall have
the right to a hearing and court proceeding as provided for in
section 244.
(4) Subsection (1)(e) does not prohibit a premium finance
company that is majority owned by insurance producers from
remunerating any of its insurance producer owners. This subsection
does not apply to a premium finance company that is involved in any
manner in financing life insurance or annuity policies or
contracts.
(5) A premium finance company that is majority owned by
insurance producers shall require compliance by an insurance
producer that is an owner of the premium finance company with all
of the following:
(a) The insurance producer shall disclose to an applicant for
a premium finance agreement all of the following:
(i) That the applicant is not required to enter into a premium
finance agreement with a particular finance company.
(ii) Except as otherwise provided by law, that the applicant is
not required to enter into a premium finance agreement with the
insurance producer or an affiliate as a condition of the contract
of insurance.
(iii) That entering into a premium finance agreement with the
insurance producer is optional and will not in any way affect
current or future policy decisions.
(iv) That the insurance producer has an ownership interest in
the premium finance company and entering into a premium finance
agreement may provide the insurance producer with a financial
benefit.
(b) The insurance producer shall obtain from the applicant a
dated and signed acknowledgment of receipt of the disclosure
described in subdivision (a) prior to the execution of the premium
finance agreement. The disclosure document described in subdivision
(a) may be a separate, clearly written document that includes a
dated and signed acknowledgment of receipt or may be part of the
premium finance agreement if it is conspicuously displayed in the
agreement, clearly written, and if it contains a dedicated date and
signature line acknowledging receipt.
(c) The insurance producer shall not require a consumer to
enter into a premium finance agreement through a particular
producer or agency or with a particular premium finance company or
fix or vary the terms or conditions of a contract of insurance as
an inducement to execute a premium finance agreement.
(d) The insurance producer shall not, except as otherwise
provided by law, require a consumer to enter into a premium finance
agreement with the insurance producer or an affiliate as a
condition of a contract of insurance.
(e) An officer or employee of an insurance producer shall not
directly or indirectly delay or impede the completion of a
transaction for the purpose of influencing a consumer's selection
or purchase of a premium finance agreement from a producer,
solicitor, agency, or insurer that is not affiliated with the
insurance producer.