SB-0024, As Passed House, June 29, 2011

SUBSTITUTE FOR

SENATE BILL NO. 24

     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.