February 22, 2006, Introduced by Reps. Hildenbrand, Hune, Gaffney and Mortimer and referred to the Committee on Insurance.
A bill to amend 1956 PA 218, entitled
"The insurance code of 1956,"
by amending section 1950 (MCL 500.1950), as added by 1980 PA 341.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1950. Notwithstanding section 1920(1), a resident of this
state may obtain insurance from an unauthorized insurer in this
state
through a licensee under this chapter.
Unless the resident
insists
that the insurance be placed with an unauthorized insurer
which
is not recognized by the commissioner as eligible, the The
licensee shall first attempt to place the insurance with authorized
insurers or, if that is not possible, with eligible unauthorized
insurers before placing the insurance with an unauthorized insurer
not recognized as eligible, and shall certify to the commissioner
on a form prescribed by the commissioner that these attempts were
made. If the insurance is placed with an insurer which is neither
an authorized insurer nor an eligible unauthorized insurer, upon
obtaining coverage, the licensee shall do all of the following:
(a) Mail or deliver to the resident the following notice:
"This insurance has been placed with an insurer not licensed by the
state of Michigan nor recognized by the insurance commissioner as
an eligible unauthorized insurer. In case of any dispute relative
to the terms or conditions of the policy or the practices of the
insurer, the insurance commissioner may not be able to assist in
the dispute. In case of insolvency, payment of claims is not
guaranteed." A copy of the notice shall be filed with the
commissioner.
(b) Collect from the resident insured appropriate premium
taxes and report the transaction to the commissioner on a form
prescribed by the commissioner. If the resident insured fails to
pay the taxes when due, the insured shall be subject to a civil
fine of not more than $1,000.00, plus accrued interest from the
inception of the insurance.