HB-4177, As Passed House, March 8, 2007
(As amended March 7, 2007)
January 30, 2007, Introduced by Reps. Spade, Mayes, Hammel, Gonzales, Clemente, Kathleen Law, Griffin, Dean, Wojno, Farrah, Alma Smith, Valentine, Angerer, Ebli, LeBlanc, Polidori, Bennett, Sak, Lemmons, Miller, Meadows, Accavitti, Byrnes, Sheltrown, McDowell, Tobocman, Hammon, Hopgood, Johnson, Constan and Rick Jones and referred to the Committee on Insurance.
A bill to amend 1956 PA 218, entitled
"The insurance code of 1956,"
by amending sections 2118 and 2120 (MCL 500.2118 and 500.2120),
section 2118 as amended by 2002 PA 492 and section 2120 as amended
by 1984 PA 350, and by adding section 2116a.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 2116a. An automobile insurer shall not refuse to insure,
refuse to continue to insure, limit coverage available to, charge a
reinstatement fee for, or increase the premiums for automobile
insurance solely because a person [failed to maintain insurance required
by section 3101 for A vehicle owned by the person] during the 6-month
period immediately preceding
application if the person certifies on a form provided by the
insurer that the lapse in coverage was because the person was on
active duty in the armed forces of the United States [and that the
vehicle was not driven or moved during the 6-month period immediately preceding application or during the period of time the insurance was not maintained, whichever period is shorter]. This section
applies only to an eligible person.
Sec. 2118. (1) As a condition of maintaining its certificate
of authority, an insurer shall not refuse to insure, refuse to
continue to insure, or limit coverage available to an eligible
person for automobile insurance, except in accordance with
underwriting rules established pursuant to this section and
sections 2119 and 2120.
(2) The underwriting rules that an insurer may establish for
automobile insurance shall be based only on the following:
(a) Criteria identical to the standards set forth in section
2103(1).
(b) The insurance eligibility point accumulation in excess of
the amounts established by section 2103(1) of a member of the
household of the eligible person insured or to be insured, if the
member of the household usually accounts for 10% or more of the use
of a vehicle insured or to be insured. For purposes of this
subdivision, a person who is the principal driver for 1 automobile
insurance policy shall be rebuttably presumed not to usually
account for more than 10% of the use of other vehicles of the
household not insured under the policy of that person.
(c) With respect to a vehicle insured or to be insured,
substantial modifications from the vehicle's original manufactured
state for purposes of increasing the speed or acceleration
capabilities of the vehicle.
(d)
Failure Except as
otherwise provided in section 2116a,
failure by the person to provide proof that insurance required by
section 3101 was maintained in force with respect to any vehicle
which
that was both owned by the person and driven or moved by
the
person or by a member of the household of the person during the 6-
month period immediately preceding application. Such proof shall
take the form of a certification by the person on a form provided
by the insurer that the vehicle was not driven or moved without
maintaining the insurance required by section 3101 during the 6-
month period immediately preceding application.
(e) Type of vehicle insured or to be insured, based on 1 of
the following, without regard to the age of the vehicle:
(i) The vehicle is of limited production or of custom
manufacture.
(ii) The insurer does not have a rate lawfully in effect for
the type of vehicle.
(iii) The vehicle represents exposure to extraordinary expense
for repair or replacement under comprehensive or collision
coverage.
(f) Use of a vehicle insured or to be insured for
transportation of passengers for hire, for rental purposes, or for
commercial purposes. Rules under this subdivision shall not be
based on the use of a vehicle for volunteer or charitable purposes
or for which reimbursement for normal operating expenses is
received.
(g) Payment of a minimum deposit at the time of application or
renewal, not to exceed the smallest deposit required under an
extended payment or premium finance plan customarily used by the
insurer.
(h) For purposes of requiring comprehensive deductibles of not
more than $150.00, or of refusing to insure if the person refuses
to accept a required deductible, the claim experience of the person
with respect to comprehensive coverage.
(i) Total abstinence from the consumption of alcoholic
beverages
except when if such beverages are consumed as part of a
religious ceremony. However, an insurer shall not utilize an
underwriting rule based on this subdivision unless the insurer has
been authorized to transact automobile insurance in this state
prior to January 1, 1981, and has consistently utilized such an
underwriting rule as part of the insurer's automobile insurance
underwriting since being authorized to transact automobile
insurance in this state.
(j) One or more incidents involving a threat, harassment, or
physical assault by the insured or applicant for insurance on an
insurer employee, agent, or agent employee while acting within the
scope of his or her employment so long as a report of the incident
was filed with an appropriate law enforcement agency.
Sec. 2120. (1) Affiliated insurers may establish underwriting
rules so that each affiliate will provide automobile insurance only
to certain eligible persons. This subsection shall apply only if an
eligible person can obtain automobile insurance from 1 of the
affiliates. The underwriting rules shall be in compliance with this
section
, section 2118, and section and
sections 2118 and 2119.
(2) An insurer may establish separate rating plans so that
certain eligible persons are provided automobile insurance under 1
rating plan and other eligible persons are provided automobile
insurance under another rating plan. This subsection shall apply
only if all eligible persons can obtain automobile insurance under
a rating plan of the insurer. Underwriting rules consistent with
this
section , section 2118, and section and sections 2118 and 2119
shall be established to define the rating plan applicable to each
eligible person.
(3) Underwriting rules under this section shall be based only
on the following:
(a) With respect to a vehicle insured or to be insured,
substantial modifications from the vehicle's original manufactured
state for purposes of increasing the speed or acceleration
capabilities of the vehicle.
(b)
Failure Except as
otherwise provided in section 2116a,
failure of the person to provide proof that insurance required by
section 3101 was maintained in force with respect to any vehicle
owned and operated by the person or by a member of the household of
the person during the 6-month period immediately preceding
application or renewal of the policy. Such proof shall take the
form of a certification by the person that the required insurance
was maintained in force for the 6-month period with respect to such
vehicle.
(c) For purposes of insuring persons who have refused a
deductible lawfully required under section 2118(2)(h), the claim
experience of the person with respect to comprehensive coverage.
(d) Refusal of the person to pay a minimum deposit required
under section 2118(2)(g).
(e) A person's insurance eligibility point accumulation under
section 2103(1)(h), or the total insurance eligibility point
accumulation of all persons who account for 10% or more of the use
of 1 or more vehicles insured or to be insured under the policy.
(f) The type of vehicle insured or to be insured as provided
in section 2118(2)(e).