November 12, 2014, Introduced by Rep. Poleski and referred to the Committee on Insurance.
A bill to amend 1956 PA 218, entitled
"The insurance code of 1956,"
by amending sections 1617 and 3020 (MCL 500.1617 and 500.3020),
section 1617 as added by 2002 PA 655 and section 3020 as amended by
2006 PA 106, and by adding section 3009a.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1617. (1) Not later than 60 days after the termination of
creditor-placed insurance coverage, and in accordance with sections
2833(1)(h)
and 3020(1)(c), 3020(1)(d),
an insurer shall refund any
unearned premium or other identifiable charges.
(2) Not later than 60 days after the termination date of
creditor-placed insurance coverage, the insurer shall provide to
the debtor a statement of refund disclosing the effective date, the
termination date, the amount of premium being refunded, and the
amount of premium charged for the coverage provided.
(3) If coverage under this chapter is not provided, the entire
amount of premiums, minimum premiums, fees, or charges of any kind
shall be refunded.
Sec. 3009a. An insurer shall not issue an automobile liability
or motor vehicle liability policy that has a term of less than 90
days.
Sec. 3020. (1) A policy of casualty insurance, except worker's
compensation and mortgage guaranty insurance, including all classes
of motor vehicle coverage, shall not be issued or delivered in this
state by an insurer authorized to do business in this state for
which a premium or advance assessment is charged, unless the policy
contains the following provisions:
(a) That, unless the policy provides automobile insurance as
defined in section 2102(2)(a) and (b), the policy may be canceled
at any time at the request of the insured, in which case the
insurer
shall will refund the excess of paid premium or assessment
above the pro rata rates for the expired time, except as otherwise
provided in subsections (2), (3), and (4).
(b) That, if the policy provides automobile insurance as
defined in section 2102(2)(a) and (b), subdivision (a) applies;
however, the policy will not be canceled unless the insured first
provides proof that the insured has obtained a replacement
automobile insurance policy covering the insured motor vehicle from
another insurer.
(c) (b)
Except as otherwise provided in
subdivision (d), (e),
that the policy may be canceled at any time by the insurer by
mailing to the insured at the insured's address last known to the
insurer or an authorized agent of the insurer, with postage fully
prepaid, a not less than 10 days' written notice of cancellation
with or without tender of the excess of paid premium or assessment
above the pro rata premium for the expired time.
(d) (c)
That the minimum earned premium on
any policy canceled
pursuant
to under this subsection, other than automobile insurance
as
defined in section 2102(2)(a) and (b), shall will not
be less
than the pro rata premium for the expired time or $25.00, whichever
is greater.
(e) (d)
That an insurer may refuse to renew
a malpractice
insurance policy only by mailing to the insured at the insured's
address last known to the insurer or an authorized agent of the
insurer, with postage fully prepaid, a not less than 60 days'
written notice of refusal to renew. As used in this subdivision,
"malpractice insurance" means malpractice insurance as described in
section 624(1)(h).
(2)
An insurer may file a rule with the commissioner director
providing for a minimum retention of premium for automobile
insurance as defined in section 2102(2)(a) and (b). The rule shall
describe the circumstances under which the retention is applied and
shall set forth the amount to be retained, which is subject to the
approval
of the commissioner. director.
The rule shall include, but
need not be limited to, the following provisions:
(a) That a minimum retention shall be applied only when the
amount exceeds the amount that would have been retained had the
policy been canceled on a pro rata basis.
(b) That a minimum retention does not apply to renewal
policies.
(c) That a minimum retention does not apply when a policy is
canceled for the following reasons:
(i) The insured is no longer required to maintain security
pursuant
to under section 3101(1).
(ii) The insured has replaced the automobile insurance policy
being canceled with an automobile insurance policy from another
insurer and provides proof of the replacement coverage to the
canceling insurer.
(3) Notwithstanding subsection (1), an insurer may issue a
noncancelable, nonrefundable, 6-month prepaid automobile insurance
policy in order for an insured to meet the registration
requirements of section 227a of the Michigan vehicle code, 1949 PA
300, MCL 257.227a.
(4) An insurer may provide for a short rate premium for
insurance on a motorcycle, watercraft, off-road vehicle, or
snowmobile. As used in this subsection:
(a) "Motorcycle" means that term as defined in section 3101.
(b) "Off-road vehicle" means an ORV as defined in section
81101 of the natural resources and environmental protection act,
1994 PA 451, MCL 324.81101.
(c) "Snowmobile" means that term as defined in section 82101
of the natural resources and environmental protection act, 1994 PA
451, MCL 324.82101.
(d) "Watercraft" means that term as defined in section 80301
of the natural resources and environmental protection act, 1994 PA
451, MCL 324.80301.
(5) Cancellation as prescribed in this section is without
prejudice to any claim originating before the cancellation. The
mailing of notice is prima facie proof of notice. Delivery of
written notice is equivalent to mailing.
(6) A notice of cancellation, including a cancellation notice
under section 3224, shall be accompanied by a statement that the
insured shall not operate or permit the operation of the vehicle to
which notice of cancellation is applicable, or operate any other
vehicle, unless the vehicle is insured as required by law.
(7) An insurer who wishes to provide for a short rate premium
under
subsection (4) shall file with the commissioner pursuant to
director under chapter 24 or 26 a rule establishing a short rate
premium.
The rule shall must describe the circumstances under which
the
short rate is applied and shall must
set forth the amount or
percentage to be retained.
(8) An insurer that issues a policy of automobile insurance as
defined in section 2102(2)(a) and (b) shall not cancel the policy
at the request of the insured unless the insured first provides
proof that the insured has obtained a replacement automobile
insurance policy covering the insured motor vehicle from another
insurer.