October 24, 2013, Introduced by Senator KAHN 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, 3301, 3330, and 4501 (MCL
500.102, 500.3301, 500.3330, and 500.4501), the title as amended by
2002 PA 304, section 102 as amended by 2000 PA 252, section 3330 as
amended by 2012 PA 204, and section 4501 as amended by 2012 PA 39,
and by adding section 6104 and chapter 63.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
TITLE
An act to revise, consolidate, and classify the laws relating
to the insurance and surety business; to regulate the incorporation
or formation of domestic insurance and surety companies and
associations and the admission of foreign and alien companies and
associations; to provide their rights, powers, and immunities and
to prescribe the conditions on which companies and associations
organized, existing, or authorized under this act may exercise
their powers; to provide the rights, powers, and immunities and to
prescribe the conditions on which other persons, firms,
corporations, associations, risk retention groups, and purchasing
groups engaged in an insurance or surety business may exercise
their powers; to provide for the imposition of a privilege fee on
domestic
insurance companies and associations; and the state
accident
fund; to provide for the imposition
of a tax on the
business of foreign and alien companies and associations; to
provide for the imposition of a tax on risk retention groups and
purchasing groups; to provide for the imposition of a tax on the
business of surplus line agents; to provide for the imposition of
regulatory fees on certain insurers; to provide for assessment fees
on certain health maintenance organizations; to modify tort
liability arising out of certain accidents; to provide for limited
actions with respect to that modified tort liability and to
prescribe certain procedures for maintaining those actions; to
require security for losses arising out of certain accidents; to
provide for the continued availability and affordability of
automobile insurance and homeowners insurance in this state and to
facilitate the purchase of that insurance by all residents of this
state at fair and reasonable rates; to provide for certain
reporting with respect to insurance and with respect to certain
claims against uninsured or self-insured persons; to prescribe
duties for certain state departments and officers with respect to
that reporting; to provide for certain assessments; to establish
and
continue certain state insurance funds; to modify and clarify
the
status, rights, powers, duties, and operations of the nonprofit
malpractice
insurance fund; to provide for the
departmental
supervision and regulation of the insurance and surety business
within
this state; to provide for regulation over of worker's
compensation self-insurers; to provide for the conservation,
rehabilitation, or liquidation of unsound or insolvent insurers; to
provide for the protection of policyholders, claimants, and
creditors of unsound or insolvent insurers; to provide for
associations of insurers to protect policyholders and claimants in
the event of insurer insolvencies; to prescribe educational
requirements for insurance agents and solicitors; to provide for
the regulation of multiple employer welfare arrangements; to create
an
automobile theft prevention authority 1 or more authorities to
reduce insurance fraud and the number of automobile thefts in this
state ; and to
prescribe the powers and duties of the automobile
theft
prevention authority; authorities;
to provide certain for the
powers
and duties upon of certain officials, departments, and
authorities of this state; to provide for an appropriation; to
repeal acts and parts of acts; and to provide penalties for the
violation of this act.
Sec. 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. 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 and theft prevention authority created under chapter 63.
(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 and theft
prevention authority created under chapter 63.
(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 and 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 and theft prevention 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 and theft prevention
authority" means the Michigan automobile insurance fraud and theft
prevention 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. 6104. (1) By January 1, 2014, the authority shall
transfer all assets of the authority to the Michigan automobile
insurance placement facility for the benefit of the Michigan
automobile insurance fraud and theft prevention authority created
under chapter 63.
(2) This chapter does not apply after December 31, 2013 and
before January 1, 2019.
(3) After December 31, 2018, the board shall reinstate and
operate the authority in the same manner that it was operated
before January 1, 2014.
CHAPTER 63
MICHIGAN AUTOMOBILE INSURANCE FRAUD AND THEFT PREVENTION AUTHORITY
Sec. 6301. As used in this chapter:
(a) "Authority" means the Michigan automobile insurance fraud
and theft prevention 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 and
theft prevention 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) 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 and theft.
(b) Provide financial support to state or local prosecutorial
agencies for programs designed to reduce the incidence of
automobile insurance fraud and theft.
(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 and theft.
(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) Nine 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) Two members who represent law enforcement agencies in this
state.
(e) One member who represents prosecuting attorneys in this
state.
(f) 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 shall be appointed by the governor with the advice and
consent of the senate. In appointing the members, the governor
shall comply with all of the following:
(a) He or she shall solicit input from various law enforcement
associations in this state.
(b) He or she shall not appoint a member who represents the
same type of law enforcement agency as the other member who
represents law enforcement agencies on the board.
(c) He or she shall not appoint a member representing the same
law enforcement agency to the board for more than 2 consecutive
terms.
(8) The member of the board representing prosecuting attorneys
shall be appointed by the governor with the advice and consent of
the senate. In appointing the member, the governor shall solicit
input from various prosecuting attorneys associations in this
state.
(9) The member of the board representing the general public
shall be appointed by the governor with the advice and consent of
the senate. 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, 3 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 that relate to automobile
theft 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) 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.
(2) The facility shall segregate all money received under
subsection (1), 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 (1) as directed by the
board and as provided in subsection (3).
(3) By May 1 of each year, the facility shall pay 10% of the
money received under subsection (1) to the brain and traumatic
injury fund created in section 6312.
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 and theft 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.
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 theft 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 and
theft occurring in this state for the previous year, assess the
impact of automobile insurance fraud and theft 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 and theft, including the number of instances of suspected and
confirmed insurance fraud or theft, number of prosecutions and
convictions involving automobile insurance fraud or theft, and
automobile insurance fraud and theft recidivism. The authority
shall evaluate the impact automobile insurance fraud and theft 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 and theft. 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.
Sec. 6312. (1) The brain and traumatic injury study commission
is created.
(2) The brain and traumatic injury study commission consists
of the following members, appointed by the governor:
(a) Two representatives of insurers that write automobile
insurance.
(b) A representative of the Michigan state medical society.
(c) A representative of the Michigan health and hospital
association.
(d) Two individuals who have suffered severe injuries in an
auto accident.
(e) Two individuals who give care to individuals who have
suffered severe injuries in an auto accident.
(f) Two experts in the field of evidence-based care for
catastrophically injured patients.
(3) Members of the brain and traumatic injury study commission
shall serve for terms of 3 years or until a successor is appointed.
The governor shall not reappoint a member who has already served 3
terms on the commission.
(4) If a vacancy occurs on the brain and traumatic injury
study commission, the governor shall make an appointment for the
unexpired term in the same manner as the original appointment.
(5) The first meeting of the brain and traumatic injury study
commission shall be called by the member who is the representative
of the Michigan health and hospital association. At the first
meeting, the commission shall elect from among its members a
chairperson and other officers as it considers necessary or
appropriate. After the first meeting, the commission shall meet at
least quarterly, or more frequently at the call of the chairperson
or if requested by 5 or more members.
(6) A majority of the members of the brain and traumatic
injury study commission constitute a quorum for the transaction of
business at a meeting of the commission. A majority of the members
present and serving are required for official action of the
commission.
(7) The business that the brain and traumatic injury study
commission may perform shall be conducted at a public meeting of
the commission held in compliance with the open meetings act, 1976
PA 267, MCL 15.261 to 15.275.
(8) A writing prepared, owned, used, in the possession of, or
retained by the brain and traumatic injury study commission in the
performance of an official function is subject to the freedom of
information act, 1976 PA 442, MCL 15.231 to 15.246.
(9) Members of the brain and traumatic injury study commission
shall serve without compensation. However, members of the
commission may be reimbursed for their actual and necessary
expenses incurred in the performance of their official duties as
members of the commission.
(10) The brain and traumatic injury study commission shall do
all of the following:
(a) Make recommendations for appropriate care for individuals
who have suffered brain and other traumatic injury as a result of
an auto accident.
(b) Evaluate existing research on evidence-based care
protocols and direct necessary additional evidence-based research
related to all of the following:
(i) Trauma care.
(ii) Acute inpatient care including intensive care, step-down
care, inpatient rehabilitation, and use of long-term acute care.
(iii) Occupational therapy, including appropriate care required
to recover and maintain functionality.
(iv) Physical therapy, including appropriate care required to
recover and maintain functionality.
(v) Nutritional instruction and monitoring.
(vi) The most appropriate settings for long-term care depending
on the degree of injury, age of the injured individual, and
preservation of existing family and other social support networks.
(vii) Appropriate care related to activities of daily living
that allow for the highest degree of independence while supporting
the injured person in a dignified manner related to personal care
needs.
(viii) The effectiveness of complementary and alternative care
methods to enhance and maintain executive functioning, appropriate
social behaviors, physical functionality, speech, and other skills
impaired or destroyed in the accident.
(c) Add other areas of study as determined necessary by the
commission.
(d) Within 1 year after the effective date of the amendatory
act that added this section, complete an initial evaluation of the
standards of care in auto accident cases that have occurred in this
state.
(e) Three years after the effective date of the amendatory act
that added this section and, subject to subsection (12), every 5
years after that 3-year report, the brain and traumatic injury
study commission shall issue a report on its findings with respect
to the best and most appropriate care for individuals who have been
catastrophically injured.
(f) Work with the appropriate hospital, physician, long-term
care, and other organizations to achieve effective dissemination of
information developed by the commission and implementation at the
bedside.
(11) The brain and traumatic injury study commission may hire
staff or contract with other persons to achieve the
responsibilities of the commission under this section.
(12) Unless section 6307 is amended to extend the assessments
under that section beyond 2018, the brain and traumatic injury
study commission is dissolved on January 1, 2019.