AGENT OF INSURED OBTAINING COVERAGE

FOR CONSUMER THROUGH AGENT OF INSURER

House Bill 6444 as introduced

Sponsor:  Rep. Jason Wentworth

Committee:  Insurance

Complete to 11-28-18

SUMMARY:

House Bill 6444 would amend the Insurance Code to allow an agent of the insured to obtain coverage for a consumer through an agent of the insurer and clarifies the circumstances under which this can happen.

Agent of the insured would mean an insurance producer who is not an appointed insurance producer of the insurer with which the insurance policy is place and who is treated as representing the insured or the insured’s beneficiary and not the insurer.

Agent of the insurer would mean an insurance producer who sells, solicits, or negotiates an application for insurance as a representative of the insurer and not the insured or the insured’s beneficiary.

The bill would revise the Code to allow an agent of the insured to obtain coverage for a consumer through an agent of the insurer if both of the following conditions were met:

·         The agent of the insured is licensed to act as an insurance producer in accordance with the Code.

·         The agent of the insured has a relationship with the agent of the insurer under a written contract that specifies the extent of the agent of the insured’s authority to act and that requires the maintenance of an amount of professional liability insurance, commonly known as errors and omissions insurance.

The bill would also prohibit an insurance producer from binding coverage for an insurer without being an appointed agent of the insurer.

MCL 500.1201 et al.

FISCAL IMPACT:

House Bill 6444 would not have an impact on expenditures or revenues for any unit of state or local government.

                                                                                         Legislative Analyst:   Nick Kelly

                                                                                                 Fiscal Analyst:   Marcus Coffin

■ This analysis was prepared by nonpartisan House Fiscal Agency staff for use by House members in their deliberations and does not constitute an official statement of legislative intent.