January 13, 2016, Introduced by Senators KNOLLENBERG, HANSEN and MARLEAU 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
must be refunded.
Sec. 3009a. An insurer shall not issue an insurance policy
that provides the security required under section 3101(1) that has
a term of less than 30 days.
Sec.
3020. (1) A An authorized
insurer shall not issue or
deliver in this state 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 Except as provided in
subdivision (b), that the
policy may be canceled at any time at the request of the insured,
in which case the insurer shall 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) For a policy that provides the security required by
section 3101(1), that the policy may be canceled at any time after
the first 30 days at the request of the insured, in which case the
insurer shall refund the excess of paid premium or assessment above
the pro rata rates for the expired time, except as otherwise
provided in subsection (2) or (3).
(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 must 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
must 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
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 a policy is
canceled for 1 or more of 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.
Enacting section 1. This amendatory act takes effect 90 days
after the date it is enacted into law.