SB-0420, As Passed Senate, September 4, 2007
April 19, 2007, Introduced by Senators BIRKHOLZ, JANSEN, BROWN, KUIPERS, GILBERT, HARDIMAN, GEORGE, CROPSEY, VAN WOERKOM, GARCIA, PAPPAGEORGE and BISHOP and referred to the Committee on Local, Urban and State Affairs.
A bill to amend 1951 PA 35, entitled
"An act to authorize intergovernmental contracts between municipal
corporations; to authorize any municipal corporation to contract
with any person or any municipal corporation to furnish any lawful
municipal service to property outside the corporate limits of the
first municipal corporation for a consideration; to prescribe
certain penalties; to authorize contracts between municipal
corporations and with certain nonprofit public transportation
corporations to form group self-insurance pools; and to prescribe
conditions for the performance of those contracts,"
by amending section 5 (MCL 124.5), as amended by 1999 PA 83.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 5. (1) Notwithstanding any other provision of law to the
contrary, any 2 or more municipal corporations, by
intergovernmental contract, may form a group self-insurance pool to
provide for joint or cooperative action relative to their financial
and administrative resources for the purpose of providing to the
participating municipal corporations risk management and coverage
for pool members and employees of pool members, for acts or
omissions arising out of the scope of their employment, including
any or all of the following:
(a) Casualty insurance, including general and professional
liability coverage.
(b) Property insurance, including marine insurance and inland
navigation and transportation insurance coverage.
(c) Automobile insurance, including motor vehicle liability
insurance coverage and security for motor vehicles owned or
operated, as required by section 3101 of the insurance code of
1956, 1956 PA 218, MCL 500.3101, and protection against other
liability and loss associated with the ownership of motor vehicles.
(d) Surety and fidelity insurance coverage.
(e) Umbrella and excess insurance coverages.
(2)
Except as otherwise provided in this subsection, a A group
self-insurance pool may not provide for hospital, medical,
surgical, or dental benefits to the employees of the member
municipalities
in the pool except when those benefits as follows:
(a) If the municipal corporation is providing hospital,
medical, surgical, or dental benefits as permitted under the public
employees health benefit act.
(b) If the municipal corporation has formed a multiple
employer welfare arrangement under chapter 70 of the insurance code
of 1956, 1956 PA 218, MCL 500.7001 to 500.7090, for hospital,
medical, surgical, or dental benefits.
(c) If the hospital, medical, surgical, or dental benefits
arise from the obligations and responsibilities of the pool in
providing automobile insurance coverage, including motor vehicle
liability insurance coverage and security for motor vehicles owned
or operated, as required by section 3101 of the insurance code of
1956, 1956 PA 218, MCL 500.3101, and protection against other
liability and loss associated with the ownership of motor vehicles.
This
subsection does not preclude municipal corporations from
forming
a multiple employer welfare arrangement under chapter 70 of
the
insurance code of 1956, 1956 PA 218, MCL 500.7001 to 500.7090,
for
hospital, medical, surgical, or dental benefits.
(3) A group self-insurance pool may assume, cede, and sell
risk for coverages set forth in subsection (1). If a group self-
insurance pool obtains reinsurance, the reinsurance contract shall
be made available to the commissioner upon request. If the
reinsurance contract is not available to the group self-insurance
pool, the group self-insurance pool shall provide the commissioner
with written documentation of coverage as is requested by the
commissioner.
(4) A group self-insurance pool, for the purposes of carrying
on the business of the group self-insurance pool whether or not a
body corporate, shall have the power to sue and be sued; to make
contracts; to hold and dispose of real and personal property; and
to borrow money, contract debts, and pledge assets in the name of
the group self-insurance pool.
(5) In addition to any other powers granted by this act, the
power to enter into intergovernmental contracts under this section
specifically includes the power to establish the pool as a separate
legal or administrative entity for purposes of effectuating group
self-insurance pool agreements.
(6) The legislature hereby finds and determines that insurance
protection is essential to the proper functioning of municipal
corporations; that the resources of municipal corporations are
burdened by the securing of insurance protection through standards
carriers; that proper risk management requires spreading risk to
minimize fluctuation in insurance needs; and that, therefore, all
contributions of financial and administrative resources made by a
municipal corporation pursuant to an intergovernmental contract
authorized under this act are made for a public and governmental
purpose, and that those contributions benefit each contributing
municipal corporation.
(7) Two or more municipal corporations shall not form a group
self-insurance pool to provide the coverages described in
subsection (1) other than pursuant to sections 5 to 12b.
Enacting section 1. This amendatory act does not take effect
unless all of the following bills of the 94th Legislature are
enacted into law:
(a) Senate Bill No. 419.
(b) Senate Bill No. 418.
(c) Senate Bill No. 421.