September 14, 2004, Introduced by Senator BIRKHOLZ and referred to the Committee on Banking and Financial Institutions.
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:
1 Sec. 5. (1) Notwithstanding any other provision of law to
2 the contrary, any 2 or more municipal corporations, by
3 intergovernmental contract, may form a group self-insurance pool
4 to provide for joint or cooperative action relative to their
5 financial and administrative resources for the purpose of
6 providing to the participating municipal corporations risk
7 management and coverage for pool members and employees of pool
1 members, for acts or omissions arising out of the scope of their
2 employment, including any or all of the following:
3 (a) Casualty insurance, including general and professional
4 liability coverage.
5 (b) Property insurance, including marine insurance and inland
6 navigation and transportation insurance coverage.
7 (c) Automobile insurance, including motor vehicle liability
8 insurance coverage and security for motor vehicles owned or
9 operated, as required by section 3101 of the insurance code of
10 1956, 1956 PA 218, MCL 500.3101, and protection against other
11 liability and loss associated with the ownership of motor
12 vehicles.
13 (d) Surety and fidelity insurance coverage.
14 (e) Umbrella and excess insurance coverages.
15 (f) Hospital, medical, surgical, or dental insurance
16 coverage.
17 (2) Except as
otherwise provided in this subsection, a group
18 self-insurance pool
may not provide for hospital, medical,
19 surgical, or dental
benefits to the employees of the member
20 municipalities in the
pool except when those benefits arise from
21 the obligations and
responsibilities of the pool in providing
22 automobile insurance
coverage, including motor vehicle liability
23 insurance coverage and
security for motor vehicles owned or
24 operated, as required
by section 3101 of the insurance code of
25 1956, 1956 PA 218, MCL
500.3101, and protection against other
26 liability and loss
associated with the ownership of motor
27 vehicles. This
subsection does not preclude municipal
1 corporations from
forming a multiple employer welfare arrangement
2 under chapter 70 of
the insurance code of 1956, 1956 PA 218, MCL
3 500.7001 to 500.7090,
for hospital, medical, surgical, or dental
4 benefits.
5 (2) (3) A
group self-insurance pool may assume, cede, and
6 sell risk for coverages set forth in subsection (1). If a group
7 self-insurance pool obtains reinsurance, the reinsurance contract
8 shall be made available to the commissioner upon request. If the
9 reinsurance contract is not available to the group self-insurance
10 pool, the group self-insurance pool shall provide the
11 commissioner with written documentation of coverage as is
12 requested by the commissioner.
13 (3) (4) A
group self-insurance pool, for the purposes of
14 carrying on the business of the group self-insurance pool whether
15 or not a body corporate, shall have the power to sue and be sued;
16 to make contracts; to hold and dispose of real and personal
17 property; and to borrow money, contract debts, and pledge assets
18 in the name of the group self-insurance pool.
19 (4) (5) In
addition to any other powers granted by this
20 act, the power to enter into intergovernmental contracts under
21 this section specifically includes the power to establish the
22 pool as a separate legal or administrative entity for purposes of
23 effectuating group self-insurance pool agreements.
24 (5) (6) The
legislature hereby finds and determines that
25 insurance protection is essential to the proper functioning of
26 municipal corporations; that the resources of municipal
27 corporations are burdened by the securing of insurance protection
1 through standards carriers; that proper risk management requires
2 spreading risk to minimize fluctuation in insurance needs; and
3 that , therefore, all
contributions of financial and
4 administrative resources made by a municipal corporation
5 pursuant to under an intergovernmental contract authorized
6 under this act are made for a public and governmental purpose,
7 and that those contributions benefit each contributing
municipal
8 corporation.
9 (6) (7) Two
or more municipal corporations shall not form a
10 group self-insurance pool to provide the coverages described in
11 subsection (1) other than
pursuant to under sections 5 to 12b.