December 4, 2013, Introduced by Senator KAHN and referred to the Committee on Insurance.
A bill to amend 1956 PA 218, entitled
"The insurance code of 1956,"
by amending section 3020 (MCL 500.3020), as amended by 2006 PA 106,
and by adding section 3009a.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 3009a. An insurer shall not issue an automobile liability
or motor vehicle liability policy that has a term of less than 1
month.
Sec.
3020. (1) A Except for a policy of casualty insurance,
except
worker's compensation and or mortgage
guaranty insurance, an
authorized insurer shall not issue or deliver in this state a
policy of casualty 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 the policy may be canceled at any time after the
first month of the policy term 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) Except as otherwise provided in subdivision (d), 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.
(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.
(d)
That an If the policy is a
malpractice insurance policy,
that
the insurer may refuse to renew a
malpractice insurance the
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
must describe the circumstances under which the retention is
applied
and shall set forth the amount to be retained. ,
which An
amount to be retained under this subsection is subject to the
approval
of the commissionerdirector. The rule shall must include,
but need not be limited to, the following provisions:
(a)
That a minimum retention shall will
be applied only when
if 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 if 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 must be accompanied by a statement that
the
insured shall may 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 set forth the amount or
percentage to be retained.