May 2, 2007, Introduced by Reps. Hune and Virgil Smith and referred to the Committee on Insurance.
A bill to amend 1956 PA 218, entitled
"The insurance code of 1956,"
by amending sections 2111, 3101, 3104, 3107, 3172, and 7911 (MCL
500.2111, 500.3101, 500.3104, 500.3107, 500.3172, and 500.7911),
section 2111 as amended by 2002 PA 492, section 3101 as amended by
1988 PA 126, section 3104 as amended by 2002 PA 662, section 3107
as amended by 1991 PA 191, section 3172 as amended by 1984 PA 426,
and section 7911 as amended by 2006 PA 365, and by adding section
3172a.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 2111. (1) Notwithstanding any provision of this act and
this chapter to the contrary, classifications and territorial base
rates used by any insurer in this state with respect to automobile
insurance or home insurance shall conform to the applicable
requirements of this section.
(2) Classifications established pursuant to this section for
automobile insurance shall be based only upon 1 or more of the
following factors, which shall be applied by an insurer on a
uniform basis throughout the state:
(a) With respect to all automobile insurance coverages:
(i) Either the age of the driver; the length of driving
experience; or the number of years licensed to operate a motor
vehicle.
(ii) Driver primacy, based upon the proportionate use of each
vehicle insured under the policy by individual drivers insured or
to be insured under the policy.
(iii) Average miles driven weekly, annually, or both.
(iv) Type of use, such as business, farm, or pleasure use.
(v) Vehicle characteristics, features, and options, such as
engine displacement, ability of vehicle and its equipment to
protect passengers from injury and other similar items, including
vehicle make and model.
(vi) Daily or weekly commuting mileage.
(vii) Number of cars insured by the insurer or number of
licensed operators in the household. However, number of licensed
operators shall not be used as an indirect measure of marital
status.
(viii) Amount of insurance.
(b) In addition to the factors prescribed in subdivision (a),
with respect to personal protection insurance coverage:
(i) Earned income.
(ii) Number of dependents of income earners insured under the
policy.
(iii) Coordination of benefits.
(iv) Use of a safety belt.
(v) Amount of insurance.
(c) In addition to the factors prescribed in subdivision (a),
with respect to collision and comprehensive coverages:
(i) The anticipated cost of vehicle repairs or replacement,
which may be measured by age, price, cost new, or value of the
insured automobile, and other factors directly relating to that
anticipated cost.
(ii) Vehicle make and model.
(iii) Vehicle design characteristics related to vehicle
damageability.
(iv) Vehicle characteristics relating to automobile theft
prevention devices.
(d) With respect to all automobile insurance coverage other
than comprehensive, successful completion by the individual driver
or drivers insured under the policy of an accident prevention
education course that meets the following criteria:
(i) The course shall include a minimum of 8 hours of classroom
instruction.
(ii) The course shall include, but not be limited to, a review
of all of the following:
(A) The effects of aging on driving behavior.
(B) The shapes, colors, and types of road signs.
(C) The effects of alcohol and medication on driving.
(D) The laws relating to the proper use of a motor vehicle.
(E) Accident prevention measures.
(F) The benefits of safety belts and child restraints.
(G) Major driving hazards.
(H) Interaction with other highway users such as
motorcyclists, bicyclists, and pedestrians.
(3) Each insurer shall establish a secondary or merit rating
plan for automobile insurance, other than comprehensive coverage. A
secondary or merit rating plan required under this subsection shall
provide for premium surcharges for any or all coverages for
automobile insurance, other than comprehensive coverage, based upon
any or all of the following, when that information becomes
available to the insurer:
(a) Substantially at-fault accidents.
(b) Convictions for, determinations of responsibility for
civil infractions for, or findings of responsibility in probate
court for civil infractions for, violations under chapter VI of the
Michigan vehicle code, 1949 PA 300, MCL 257.601 to 257.750.
However,
beginning 90 days after the effective date of this
sentence
May 28, 1996, an insured shall not be merit rated for a
civil infraction under chapter VI of the Michigan vehicle code,
1949 PA 300, MCL 257.601 to 257.750, for a period of time longer
than that which the secretary of state's office carries points for
that infraction on the insured's motor vehicle record.
(4) An insurer shall not establish or maintain rates or rating
classifications for automobile insurance based upon sex or marital
status.
(5) Notwithstanding other provisions of this chapter,
automobile insurance risks may be grouped by territory.
(6) This section shall not be construed as limiting insurers
or rating organizations from establishing and maintaining
statistical reporting territories. This section shall not be
construed to prohibit an insurer from establishing or maintaining,
for automobile insurance, a premium discount plan for senior
citizens in this state who are 65 years of age or older, if the
plan is uniformly applied by the insurer throughout this state. If
an insurer has not established and maintained a premium discount
plan for senior citizens, the insurer shall offer reduced premium
rates to senior citizens in this state who are 65 years of age or
older and who drive less than 3,000 miles per year, regardless of
statistical data.
(7) Classifications established pursuant to this section for
home insurance other than inland marine insurance provided by
policy floaters or endorsements shall be based only upon 1 or more
of the following factors:
(a) Amount and types of coverage.
(b) Security and safety devices, including locks, smoke
detectors, and similar, related devices.
(c) Repairable structural defects reasonably related to risk.
(d) Fire protection class.
(e) Construction of structure, based on structure size,
building material components, and number of units.
(f) Loss experience of the insured, based upon prior claims
attributable to factors under the control of the insured that have
been paid by an insurer. An insured's failure, after written notice
from the insurer, to correct a physical condition that presents a
risk of repeated loss shall be considered a factor under the
control of the insured for purposes of this subdivision.
(g) Use of smoking materials within the structure.
(h) Distance of the structure from a fire hydrant.
(i) Availability of law enforcement or crime prevention
services.
(8) Notwithstanding other provisions of this chapter, home
insurance risks may be grouped by territory.
(9) An insurer may utilize factors in addition to those
specified in this section, if the commissioner finds, after a
hearing held pursuant to the administrative procedures act of 1969,
1969 PA 306, MCL 24.201 to 24.328, that the factors would encourage
innovation, would encourage insureds to minimize the risks of loss
from hazards insured against, and would be consistent with the
purposes of this chapter.
Sec. 3101. (1) The owner or registrant of a motor vehicle
required to be registered in this state shall maintain security for
payment
of benefits under personal protection insurance , in an
amount not less than that required under section 3107(1)(a)(i) and
property
protection insurance , and
residual liability insurance in
an amount not less than that required under section 3009. Security
shall only be required to be in effect during the period the motor
vehicle is driven or moved upon a highway. Notwithstanding any
other provision in this act, an insurer that has issued an
automobile insurance policy on a motor vehicle that is not driven
or moved upon a highway may allow the insured owner or registrant
of the motor vehicle to delete a portion of the coverages under the
policy and maintain the comprehensive coverage portion of the
policy in effect.
(2) As used in this chapter:
(a) "Automobile insurance" means that term as defined in
section 2102.
(b) "Highway" means that term as defined in section 20 of the
Michigan
vehicle code, Act No. 300 of the Public Acts of 1949,
being
section 257.20 of the Michigan Compiled Laws 1949 PA 300, MCL
257.20.
(c) "Motorcycle" means a vehicle having a saddle or seat for
the use of the rider, designed to travel on not more than 3 wheels
in contact with the ground, which is equipped with a motor that
exceeds 50 cubic centimeters piston displacement. The wheels on any
attachment to the vehicle shall not be considered as wheels in
contact with the ground. Motorcycle does not include a moped, as
defined
in section 32b of the Michigan vehicle code, Act No. 300 of
the
Public Acts of 1949, being section 257.32b of the Michigan
Compiled
Laws 1949 PA 300, MCL 257.32b.
(d) "Motorcycle accident" means a loss involving the
ownership, operation, maintenance, or use of a motorcycle as a
motorcycle, but not involving the ownership, operation,
maintenance, or use of a motor vehicle as a motor vehicle.
(e) "Motor vehicle" means a vehicle, including a trailer,
operated or designed for operation upon a public highway by power
other than muscular power which has more than 2 wheels. Motor
vehicle does not include a motorcycle or a moped, as defined in
section
32b of Act No. 300 of the Public Acts of 1949, being
section
257.32b of the Michigan Compiled Laws the Michigan vehicle
code, 1949 PA 300, MCL 257.32b. Motor vehicle does not include a
farm
tractor or other implement of husbandry which that is
not
subject to the registration requirements of the Michigan vehicle
code
pursuant to section 216 of the Michigan vehicle code, Act No.
300
of the Public Acts of 1949, being section 257.216 of the
Michigan
Compiled Laws 1949 PA 300,
MCL 257.216.
(f) "Motor vehicle accident" means a loss involving the
ownership, operation, maintenance, or use of a motor vehicle as a
motor vehicle regardless of whether the accident also involves the
ownership, operation, maintenance, or use of a motorcycle as a
motorcycle.
(g) "Owner" means any of the following:
(i) A person renting a motor vehicle or having the use thereof,
under a lease or otherwise, for a period that is greater than 30
days.
(ii) A person who holds the legal title to a vehicle, other
than a person engaged in the business of leasing motor vehicles who
is the lessor of a motor vehicle pursuant to a lease providing for
the use of the motor vehicle by the lessee for a period that is
greater than 30 days.
(iii) A person who has the immediate right of possession of a
motor vehicle under an installment sale contract.
(h) "Registrant" does not include a person engaged in the
business of leasing motor vehicles who is the lessor of a motor
vehicle pursuant to a lease providing for the use of the motor
vehicle by the lessee for a period that is greater than 30 days.
(3) Security may be provided under a policy issued by an
insurer
duly authorized to transact business in this state which
that affords insurance for the payment of benefits described in
subsection (1). A policy of insurance represented or sold as
providing
security shall be deemed is
considered to provide
insurance for the payment of the benefits.
(4) Security required by subsection (1) may be provided by any
other method approved by the secretary of state as affording
security equivalent to that afforded by a policy of insurance, if
proof of the security is filed and continuously maintained with the
secretary of state throughout the period the motor vehicle is
driven or moved upon a highway. The person filing the security has
all the obligations and rights of an insurer under this chapter.
When the context permits, "insurer" as used in this chapter,
includes any person filing the security as provided in this
section.
Sec. 3104. (1) An unincorporated, nonprofit association to be
known as the catastrophic claims association, hereinafter referred
to as the association, is created. Each insurer engaged in writing
insurance coverages that provide the security required by section
3101(1) within this state, as a condition of its authority to
transact insurance in this state, shall be a member of the
association and shall be bound by the plan of operation of the
association. Each insurer engaged in writing insurance coverages
that provide the security required by section 3103(1) within this
state, as a condition of its authority to transact insurance in
this state, shall be considered a member of the association, but
only for purposes of premiums under subsection (7)(d). Except as
expressly provided in this section, the association is not subject
to any laws of this state with respect to insurers, but in all
other respects the association is subject to the laws of this state
to the extent that the association would be if it were an insurer
organized and subsisting under chapter 50.
(2) The association shall provide and each member shall accept
indemnification for 100% of the amount of ultimate loss sustained
under personal protection insurance coverages in excess of the
following amounts in each loss occurrence:
(a) For a motor vehicle accident policy issued or renewed
before July 1, 2002, $250,000.00.
(b) For a motor vehicle accident policy issued or renewed
during the period July 1, 2002 to June 30, 2003, $300,000.00.
(c) For a motor vehicle accident policy issued or renewed
during the period July 1, 2003 to June 30, 2004, $325,000.00.
(d) For a motor vehicle accident policy issued or renewed
during the period July 1, 2004 to June 30, 2005, $350,000.00.
(e) For a motor vehicle accident policy issued or renewed
during the period July 1, 2005 to June 30, 2006, $375,000.00.
(f) For a motor vehicle accident policy issued or renewed
during the period July 1, 2006 to June 30, 2007, $400,000.00.
(g) For a motor vehicle accident policy issued or renewed
during the period July 1, 2007 to June 30, 2008, $420,000.00.
(h) For a motor vehicle accident policy issued or renewed
during the period July 1, 2008 to June 30, 2009, $440,000.00.
(i) For a motor vehicle accident policy issued or renewed
during the period July 1, 2009 to June 30, 2010, $460,000.00.
(j) For a motor vehicle accident policy issued or renewed
during the period July 1, 2010 to June 30, 2011, $480,000.00.
(k) For a motor vehicle accident policy issued or renewed
during the period July 1, 2011 to June 30, 2013, $500,000.00.
Beginning July 1, 2013, this $500,000.00 amount shall be increased
biennially on July 1 of each odd-numbered year, for policies issued
or renewed before July 1 of the following odd-numbered year, by the
lesser of 6% or the consumer price index, and rounded to the
nearest $5,000.00. This biennial adjustment shall be calculated by
the association by January 1 of the year of its July 1 effective
date.
(3) An insurer may withdraw from the association only upon
ceasing to write insurance that provides the security required by
section 3101(1) in this state.
(4) An insurer whose membership in the association has been
terminated by withdrawal shall continue to be bound by the plan of
operation, and upon withdrawal, all unpaid premiums that have been
charged to the withdrawing member are payable as of the effective
date of the withdrawal.
(5) An unsatisfied net liability to the association of an
insolvent member shall be assumed by and apportioned among the
remaining members of the association as provided in the plan of
operation. The association has all rights allowed by law on behalf
of the remaining members against the estate or funds of the
insolvent member for sums due the association.
(6) If a member has been merged or consolidated into another
insurer or another insurer has reinsured a member's entire business
that provides the security required by section 3101(1) in this
state, the member and successors in interest of the member remain
liable for the member's obligations.
(7) The association shall do all of the following on behalf of
the members of the association:
(a) Assume 100% of all liability as provided in subsection
(2).
(b) Establish procedures by which members shall promptly
report to the association each claim that, on the basis of the
injuries or damages sustained, may reasonably be anticipated to
involve the association if the member is ultimately held legally
liable for the injuries or damages. Solely for the purpose of
reporting claims, the member shall in all instances consider itself
legally liable for the injuries or damages. The member shall also
advise the association of subsequent developments likely to
materially affect the interest of the association in the claim.
(c) Maintain relevant loss and expense data relative to all
liabilities of the association and require each member to furnish
statistics, in connection with liabilities of the association, at
the times and in the form and detail as may be required by the plan
of operation.
(d) In a manner provided for in the plan of operation,
calculate and charge to members of the association a total premium
sufficient to cover the expected losses and expenses of the
association that the association will likely incur during the
period for which the premium is applicable. The premium shall
include an amount to cover incurred but not reported losses for the
period and may be adjusted for any excess or deficient premiums
from previous periods. Excesses or deficiencies from previous
periods may be fully adjusted in a single period or may be adjusted
over several periods in a manner provided for in the plan of
operation. Each member shall be charged an amount equal to that
member's total written car years of insurance providing the
security required by section 3101(1) or 3103(1), or both, written
in this state during the period to which the premium applies,
multiplied by the average premium per car and adjusted to reflect
the amount of coverage selected by each member's insureds under
section 3107. The average premium per car shall be the total
premium calculated divided by the total written car years of
insurance providing the security required by section 3101(1) or
3103(1) written in this state of all members during the period to
which the premium applies. A member shall be charged a premium for
a historic vehicle that is insured with the member of 20% of the
premium charged for a car insured with the member. As used in this
subdivision:
(i) "Car" includes a motorcycle but does not include a historic
vehicle.
(ii) "Historic vehicle" means a vehicle that is a registered
historic vehicle under section 803a or 803p of the Michigan vehicle
code, 1949 PA 300, MCL 257.803a and 257.803p.
(e) Require and accept the payment of premiums from members of
the association as provided for in the plan of operation. The
association shall do either of the following:
(i) Require payment of the premium in full within 45 days after
the premium charge.
(ii) Require payment of the premiums to be made periodically to
cover the actual cash obligations of the association.
(f) Receive and distribute all sums required by the operation
of the association.
(g) Establish procedures for reviewing claims procedures and
practices of members of the association. If the claims procedures
or practices of a member are considered inadequate to properly
service the liabilities of the association, the association may
undertake or may contract with another person, including another
member, to adjust or assist in the adjustment of claims for the
member on claims that create a potential liability to the
association and may charge the cost of the adjustment to the
member.
(8) In addition to other powers granted to it by this section,
the association may do all of the following:
(a) Sue and be sued in the name of the association. A judgment
against the association shall not create any direct liability
against the individual members of the association. The association
may provide for the indemnification of its members, members of the
board of directors of the association, and officers, employees, and
other persons lawfully acting on behalf of the association.
(b) Reinsure all or any portion of its potential liability
with reinsurers licensed to transact insurance in this state or
approved by the commissioner.
(c) Provide for appropriate housing, equipment, and personnel
as may be necessary to assure the efficient operation of the
association.
(d) Pursuant to the plan of operation, adopt reasonable rules
for the administration of the association, enforce those rules, and
delegate authority, as the board considers necessary to assure the
proper administration and operation of the association consistent
with the plan of operation.
(e) Contract for goods and services, including independent
claims management, actuarial, investment, and legal services, from
others within or without this state to assure the efficient
operation of the association.
(f) Hear and determine complaints of a company or other
interested party concerning the operation of the association.
(g) Perform other acts not specifically enumerated in this
section that are necessary or proper to accomplish the purposes of
the association and that are not inconsistent with this section or
the plan of operation.
(9) A board of directors is created, hereinafter referred to
as the board, which shall be responsible for the operation of the
association consistent with the plan of operation and this section.
(10) The plan of operation shall provide for all of the
following:
(a) The establishment of necessary facilities.
(b) The management and operation of the association.
(c) Procedures to be utilized in charging premiums, including
adjustments from excess or deficient premiums from prior periods.
(d) Procedures governing the actual payment of premiums to the
association.
(e) Reimbursement of each member of the board by the
association for actual and necessary expenses incurred on
association business.
(f) The investment policy of the association.
(g) Any other matters required by or necessary to effectively
implement this section.
(11) Each board shall include members that would contribute a
total of not less than 40% of the total premium calculated pursuant
to subsection (7)(d). Each director shall be entitled to 1 vote.
The initial term of office of a director shall be 2 years.
(12) As part of the plan of operation, the board shall adopt
rules providing for the composition and term of successor boards to
the initial board, consistent with the membership composition
requirements in subsections (11) and (13). Terms of the directors
shall be staggered so that the terms of all the directors do not
expire at the same time and so that a director does not serve a
term of more than 4 years.
(13) The board shall consist of 5 directors, and the
commissioner shall be an ex officio member of the board without
vote.
(14) Each director shall be appointed by the commissioner and
shall serve until that member's successor is selected and
qualified. The chairperson of the board shall be elected by the
board. A vacancy on the board shall be filled by the commissioner
consistent with the plan of operation.
(15) After the board is appointed, the board shall meet as
often as the chairperson, the commissioner, or the plan of
operation shall require, or at the request of any 3 members of the
board. The chairperson shall retain the right to vote on all
issues. Four members of the board constitute a quorum.
(16) An annual report of the operations of the association in
a form and detail as may be determined by the board shall be
furnished to each member.
(17) Not more than 60 days after the initial organizational
meeting of the board, the board shall submit to the commissioner
for approval a proposed plan of operation consistent with the
objectives and provisions of this section, which shall provide for
the economical, fair, and nondiscriminatory administration of the
association and for the prompt and efficient provision of
indemnity. If a plan is not submitted within this 60-day period,
then the commissioner, after consultation with the board, shall
formulate and place into effect a plan consistent with this
section.
(18) The plan of operation, unless approved sooner in writing,
shall be considered to meet the requirements of this section if it
is not disapproved by written order of the commissioner within 30
days after the date of its submission. Before disapproval of all or
any part of the proposed plan of operation, the commissioner shall
notify the board in what respect the plan of operation fails to
meet the requirements and objectives of this section. If the board
fails to submit a revised plan of operation that meets the
requirements and objectives of this section within the 30-day
period, the commissioner shall enter an order accordingly and shall
immediately formulate and place into effect a plan consistent with
the requirements and objectives of this section.
(19) The proposed plan of operation or amendments to the plan
of operation are subject to majority approval by the board,
ratified by a majority of the membership having a vote, with voting
rights being apportioned according to the premiums charged in
subsection (7)(d) and are subject to approval by the commissioner.
(20) Upon approval by the commissioner and ratification by the
members of the plan submitted, or upon the promulgation of a plan
by the commissioner, each insurer authorized to write insurance
providing the security required by section 3101(1) in this state,
as provided in this section, is bound by and shall formally
subscribe to and participate in the plan approved as a condition of
maintaining its authority to transact insurance in this state.
(21) The association is subject to all the reporting, loss
reserve, and investment requirements of the commissioner to the
same extent as would a member of the association.
(22) Premiums charged members by the association shall be
recognized in the rate-making procedures for insurance rates in the
same manner that expenses and premium taxes are recognized.
(23) The commissioner or an authorized representative of the
commissioner may visit the association at any time and examine any
and all the association's affairs.
(24) The association does not have liability for losses
occurring before July 1, 1978.
(25) As used in this section:
(a) "Consumer price index" means the percentage of change in
the consumer price index for all urban consumers in the United
States city average for all items for the 24 months prior to
October 1 of the year prior to the July 1 effective date of the
biennial adjustment under subsection (2)(k) as reported by the
United States department of labor, bureau of labor statistics, and
as certified by the commissioner.
(b) "Motor vehicle accident policy" means a policy providing
the coverages required under section 3101(1).
(c) "Ultimate loss" means the actual loss amounts that a
member is obligated to pay and that are paid or payable by the
member, and do not include claim expenses. An ultimate loss is
incurred by the association on the date that the loss occurs.
Sec.
3107. (1) Except as provided in subsection (2), personal
Personal protection insurance benefits are payable for the
following:
(a)
Allowable expenses consisting of all reasonable charges
that are as provided in subparagraphs (i), (ii), (iii), and (iv)
incurred for reasonably necessary products, services and
accommodations for an injured person's care, recovery, or
rehabilitation.
Allowable expenses within personal protection
insurance
coverage shall not include charges for a hospital room in
excess
of a reasonable and customary charge for semiprivate
accommodations
except if the injured person requires special or
intensive
care, or for funeral and burial expenses in the amount
set
forth in the policy which shall not be less than $1,750.00 or
more
than $5,000.00. Any change in
a limit selected under
subparagraph (i), (ii), (iii), or (iv) applies only to benefits arising
out of accidents occurring after the date of the change in the
limit. An insurer shall offer, on forms approved by the
commissioner, the following coverages, and an insured shall select
in writing 1 of the following coverages:
(i) Coverage for allowable expenses consisting of all
reasonable charges incurred up to a maximum of $250,000.00 for
reasonably necessary products, services, and accommodations for an
injured person's care, recovery, or rehabilitation.
(ii) Coverage for allowable expenses consisting of all
reasonable charges incurred up to a maximum of $500,000.00 for
reasonably necessary products, services, and accommodations for an
injured person's care, recovery, or rehabilitation.
(iii) Coverage for allowable expenses consisting of all
reasonable charges incurred up to a maximum of $750,000.00 for
reasonably necessary products, services, and accommodations for an
injured person's care, recovery, or rehabilitation.
(iv) Coverage for allowable expenses consisting of all
reasonable charges incurred up to a maximum of $1,000,000.00 for
reasonably necessary products, services, and accommodations for an
injured person's care, recovery, or rehabilitation.
(v) Coverage for allowable expenses consisting of all
reasonable charges incurred for reasonably necessary products,
services, and accommodations for an injured person's care,
recovery, or rehabilitation.
(b)
Work Except as provided in
subsection (2), work loss
consisting of loss of income from work an injured person would have
performed during the first 3 years after the date of the accident
if he or she had not been injured. Work loss does not include any
loss after the date on which the injured person dies. Because the
benefits received from personal protection insurance for loss of
income are not taxable income, the benefits payable for such loss
of income shall be reduced 15% unless the claimant presents to the
insurer in support of his or her claim reasonable proof of a lower
value of the income tax advantage in his or her case, in which case
the
lower value shall apply. Beginning March 30, 1973 For the
period beginning October 1, 2006 through September 30, 2007, the
benefits payable for work loss sustained in a single 30-day period
and the income earned by an injured person for work during the same
period
together shall not exceed $1,000.00 $4,589.00, which maximum
shall apply pro rata to any lesser period of work loss. Beginning
October
1, 1974 2007, the maximum shall be adjusted annually to
reflect changes in the cost of living under rules prescribed by the
commissioner but any change in the maximum shall apply only to
benefits arising out of accidents occurring subsequent to the date
of change in the maximum.
(c) Expenses not exceeding $20.00 per day, reasonably incurred
in obtaining ordinary and necessary services in lieu of those that,
if he or she had not been injured, an injured person would have
performed during the first 3 years after the date of the accident,
not for income but for the benefit of himself or herself or of his
or her dependent.
(2) A person who is 60 years of age or older and in the event
of an accidental bodily injury would not be eligible to receive
work loss benefits under subsection (1)(b) may waive coverage for
work loss benefits by signing a waiver on a form provided by the
insurer. An insurer shall offer a reduced premium rate to a person
who waives coverage under this subsection for work loss benefits.
Waiver of coverage for work loss benefits applies only to work loss
benefits payable to the person or persons who have signed the
waiver form.
(3) The following apply to subsection (1):
(a) If an insured fails to select in writing on a form
approved by the commissioner 1 of the coverages in subsection
(1)(a), an insurer shall provide coverage in the amount set forth
in subsection (1)(a)(i).
(b) Coverage limits under subsection (1)(a) are provided on a
per individual per loss occurrence basis. Coverage under subsection
(1)(a) applies only to benefits payable to the insured named in the
policy, the insured's spouse, and any relative of either domiciled
in the same household.
(c) A person who is not an insured named in a policy, the
insured's spouse, or a relative of either domiciled in the same
household is entitled only to coverage in the limit set forth in
subsection (1)(a)(i).
(d) Personal protection insurance benefits are limited to the
limit set forth in section 3163 for accidents occurring in the
state of Michigan if the injured person is a nonresident of
Michigan and the injured person's benefits are payable under a
policy delivered outside of Michigan only if eligible under section
3163.
(e) Personal protection insurance benefits are not payable to
a nonresident injured in an accident occurring outside of Michigan
to the extent that benefits covering the same loss are available
from other sources, regardless of the nature and number of benefit
sources available and regardless of the nature or form of the
benefits. If personal protection insurance benefits are payable to
a nonresident under this subdivision, the benefits are limited to
the limit set forth in subsection (1)(a)(i) per individual per loss
occurrence.
(f) Allowable expenses within personal protection insurance
coverage shall not include charges for a hospital room in excess of
a reasonable and customary charge for semiprivate accommodations
except if the injured person requires special or intensive care or
for funeral and burial expenses in excess of the amount set forth
in the policy, which shall not be less than $1,750.00 or more than
$5,000.00.
Sec. 3172. (1) A person entitled to claim because of
accidental bodily injury arising out of the ownership, operation,
maintenance, or use of a motor vehicle as a motor vehicle in this
state may obtain personal protection insurance benefits through an
assigned
claims plan if in any of
the following situations:
(a) If no personal protection insurance is applicable to the
injury. ,
(b) If no personal protection insurance applicable to the
injury
can be identified. ,
(c) If the personal protection insurance applicable to the
injury cannot be ascertained because of a dispute between 2 or more
automobile insurers concerning their obligation to provide coverage
or
the equitable distribution of the loss.
, or
(d) If the only identifiable personal protection insurance
applicable to the injury is, because of financial inability of 1 or
more insurers to fulfill their obligations, inadequate to provide
benefits
up to the maximum prescribed. In such case
(2) In any of the situations under subsection (1), unpaid
benefits due or coming due are subject to being collected under the
assigned claims plan, and the insurer to which the claim is
assigned, or the assigned claims facility if the claim is assigned
to it, is entitled to reimbursement from the defaulting insurers to
the extent of their financial responsibility.
(3) (2)
Except as otherwise provided in
this subsection,
personal protection insurance benefits, including benefits arising
from accidents occurring before the effective date of this
subsection, payable through an assigned claims plan shall be
reduced to the extent that benefits covering the same loss are
available from other sources, regardless of the nature or number of
benefit sources available and regardless of the nature or form of
the benefits, to a person claiming personal protection insurance
benefits
through the assigned claims plan. This subsection shall
only
apply only applies when the personal protection insurance
benefits are payable through the assigned claims plan because no
personal protection insurance is applicable to the injury, no
personal protection insurance applicable to the injury can be
identified, or the only identifiable personal protection insurance
applicable to the injury is, because of financial inability of 1 or
more insurers to fulfill their obligations, inadequate to provide
benefits up to the maximum prescribed. As used in this subsection
"sources" and "benefit sources" do not include the program for
medical assistance for the medically indigent under the social
welfare
act, Act No. 280 of the Public Acts of 1939, being sections
400.1
to 400.121 of the Michigan Compiled Laws, or insurance under
the
health insurance for the aged act, title XVIII of the social
security
amendments of 1965 1939 PA
280, MCL 400.1 to 400.119b, or
the federal medicare program established under title XVIII of the
social security act, 42 USC 1395 to 1395hhh.
(4) (3)
If the obligation to provide
personal protection
insurance benefits cannot be ascertained because of a dispute
between 2 or more automobile insurers concerning their obligation
to provide coverage or the equitable distribution of the loss, and
if a method of voluntary payment of benefits cannot be agreed upon
among or between the disputing insurers, all of the following shall
apply:
(a) The insurers who are parties to the dispute shall, or the
claimant may, immediately notify the assigned claims facility of
their inability to determine their statutory obligations.
(b) The claim shall be assigned by the assigned claims
facility to an insurer which shall immediately provide personal
protection insurance benefits to the claimant or claimants entitled
to benefits in the highest amount applicable among the policies in
dispute.
(c) An action shall be immediately commenced on behalf of the
assigned claims facility by the insurer to whom the claim is
assigned in circuit court for the purpose of declaring the rights
and duties of any interested party.
(d) The insurer to whom the claim is assigned shall join as
parties defendant each insurer disputing either the obligation to
provide personal protection insurance benefits or the equitable
distribution of the loss among the insurers.
(e) The circuit court shall declare the rights and duties of
any interested party whether or not other relief is sought or could
be granted.
(f) After hearing the action, the circuit court shall
determine the insurer or insurers, if any, obligated to provide the
applicable personal protection insurance benefits and the equitable
distribution, if any, among the insurers obligated therefor, and
shall order reimbursement to the assigned claims facility from the
insurer or insurers to the extent of the responsibility as
determined by the court. The reimbursement ordered under this
subdivision shall include all benefits and costs paid or incurred
by the assigned claims facility and all benefits and costs paid or
incurred by insurers determined not to be obligated to provide
applicable personal protection insurance benefits, including
reasonable attorney fees and interest at the rate prescribed in
section 3175 as of December 31 of the year preceding the
determination of the circuit court.
(5) If no personal protection insurance is applicable to the
injury or no personal protection insurance applicable to the injury
can be identified, personal protection insurance benefits shall be
paid only to the limit provided for in section 3107(1)(a)(i). If the
only identifiable personal protection insurance applicable to the
injury is, because of financial inability of 1 or more insurers to
fulfill their obligations, inadequate to provide benefits up to the
maximum prescribed, personal protection insurance benefits shall be
paid to the limit selected by the insured under section 3107(1)(a).
(6) This section does not apply and section 3172a does apply
if applicable personal protection insurance benefits are
unavailable because an insurer otherwise obliged to provide that
coverage under this chapter became an insolvent insurer as defined
in chapter 79.
Sec. 3172a. (1) A person entitled to a claim because of
accidental bodily injury arising out of the ownership, operation,
maintenance, or use of a motor vehicle as a motor vehicle in this
state may obtain the full personal protection insurance benefits
entitled through the Michigan property and casualty guaranty
association established under chapter 79 if all of the following
are satisfied:
(a) Personal protection insurance applicable to the injury is
unavailable because an insurer otherwise obliged to provide that
coverage under this chapter became an insolvent insurer as defined
in chapter 79.
(b) Except as provided in subsection (2), the claim satisfies
the requirements of a covered claim under chapter 79.
(2) Notwithstanding section 7931(3), the obligation of the
Michigan property and casualty guaranty association under this
section shall be in the same priority as that of the insolvent
insurer, but for its insolvency, under sections 3114 and 3115.
Sec. 7911. (1) To implement this chapter, there shall be
maintained within this state, by all insurers authorized to
transact in this state insurance other than life or disability
insurance, except the Michigan basic property insurance association
created pursuant to section 2920, an association of those insurers
to be known as the property and casualty guaranty association,
hereafter referred to as the "association". Each insurer shall be a
member of the association as a condition of its authority to
continue to transact insurance in this state.
(2) An insurer from which insurance has been or may be
procured in this state solely by virtue of chapter 19 shall not be
considered to be an insurer authorized to transact insurance in
this state for the purposes of this chapter.
(3) The association is subject to the requirements of this
chapter and chapter 81, and section 3172a, but is not subject to
the other chapters of this act. The association shall be subject to
other laws of this state to the extent that it would be subject to
those laws if it were an insurer organized and operating under
chapter 50, to the extent that those other laws are consistent with
this chapter.
Enacting section 1. This amendatory act takes effect 120 days
after the date it is enacted and applies to policies issued or
renewed on or after 120 days after the date it is enacted.