SB-1508, As Passed Senate, November 5, 2008
September 18, 2008, Introduced by Senator SANBORN and referred to the Committee on Economic Development and Regulatory Reform.
A bill to amend 1956 PA 218, entitled
"The insurance code of 1956,"
by amending section 4424 (MCL 500.4424), as amended by 1998 PA 457.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 4424. (1) The commissioner may authorize the insuring on
a group insurance basis of groups other than those specifically
defined in sections 4404 to 4420 if conditions or circumstances
indicate that granting permission for discretionary group life
insurance coverages is in the interest of public policy. This
section does not limit the commissioner to only authorize those
groups that are logically analagous in character and composition to
the groups specifically defined in sections 4404 to 4420.
(2) The commissioner may refuse to grant permission in any
instance on the basis of a finding that the requested group plan:
(a) Would not result in economies of acquisition and
administration that justify a group rate.
(b) Would present hazards of voluntary adverse selection to a
degree not usually present in group insurance.
(c) Would be actuarially unsound.
(d) Would fail to preclude individual selection among persons
to be insured under the proposed group plan.
(3) The discretionary group shall consist of not less than 250
persons. The discretionary group may consist of only a portion of
the employees of an employer or of the members of an organization,
if segregation arises out of reasonable grounds, geographical or
otherwise, that make it presently impossible or undesirable to
include in a single group all of the employees or members. The
discretionary group may consist of employees of more than 1
employer, or the members of more than 1 organization or
association, if evidence submitted clearly indicates the
desirability of embracing the proposed assemblage of individuals
under a single group. By way of particular, but not in limitation,
the group may consist of the employees of 1 or more governmental or
quasigovernmental units, federal, state, municipal, or local.
(4) If, for reasons that the commissioner determines to be
adequate, it appears to be impossible or infeasible for the
employer to be the policyholder in any group authorized under this
section, the commissioner may authorize the designation of a
trustee or trustees to be the policyholder, subject to rules the
commissioner approves.
(5) The commissioner may authorize discretionary groups and
plans of group insurance that qualify in all other respects under
this section although there be no contribution to the premium
payment from the employer or organization if the commissioner finds
that circumstances render the contribution inequitable, impossible,
or impracticable.
(6) The percentage of employees or members required to
participate in any group authorized under this section, the types
of insurance coverage to be offered to the members of the group,
and the amounts of insurance to be provided, shall be as the
commissioner
determines. The maximum insurance available to any
member
of a group authorized under this section shall not exceed
$80,000.00.
The maximum shall be adjusted beginning July 1, 1982,
and
annually thereafter, to reflect changes in the cost of living
under
rules prescribed by the commissioner. However, if a group
that
previously operated under authority of any of the sections
4404
to 4420 is continued under the provisions of this section, the
types
of insurance and amounts of coverage already authorized in
the
group may be continued although in excess of the limitations
that
would otherwise be available under this section.
(7) Before any application for permission to qualify under
this section is considered, the applicant shall deposit with the
commissioner a specific fee of $100.00 to defray the costs of
examining into the circumstances and conditions appertaining to the
proposed group and group insurance and shall covenant to compensate
the
insurance bureau office of
financial and insurance regulation
for any additional unusual expenses that it may incur. The
applicant shall furnish such information, documents, and data
pertaining to the proposed group plan as the commissioner requires
to arrive at his or her determination. The commissioner shall, from
time to time, promulgate rules for the enforcement of this section.
(8) The applicant may appeal from the commissioner's refusal
to authorize the discretionary group to the circuit court for the
county of Ingham on the grounds that the refusal is arbitrary or
capricious and devoid of sound underwriting or actuarial grounds;
but
any fees or costs paid to or incurred by the insurance bureau
office of financial and insurance regulation under subsection (7)
is not subject to recovery.