February 10, 2005, Introduced by Senators BIRKHOLZ, GOSCHKA, HAMMERSTROM, GARCIA and HARDIMAN 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:
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.
(f) Hospital, medical, surgical, or dental insurance coverage.
(2)
Except as otherwise provided in this subsection, 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 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.
(2) (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.
(3) (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.
(4) (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.
(5) (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 under
an
intergovernmental contract authorized under this act are made for a
public
and governmental purpose, and that those contributions
benefit each contributing municipal corporation.
(6) (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 under sections 5 to 12b.