SB-1014, As Passed Senate, June 7, 2018

SUBSTITUTE FOR

SENATE BILL NO. 1014

     A bill to amend 1956 PA 218, entitled

"The insurance code of 1956,"

by amending the title and sections 3101a, 3107, 3114, 3115, 3163,

3172, 3173, 3173a, 3174, 3175, 3177, and 4501 (MCL 500.3101a,

500.3107, 500.3114, 500.3115, 500.3163, 500.3172, 500.3173,

500.3173a, 500.3174, 500.3175, 500.3177, and 500.4501), the title

as amended by 2002 PA 304, section 3101a as amended by 2014 PA 419,

section 3107 as amended by 2012 PA 542, section 3114 as amended by

2016 PA 347, section 3163 as amended by 2002 PA 697, sections 3172,

3173a, 3174, and 3175 as amended by 2012 PA 204, section 3177 as

amended by 1984 PA 426, and section 4501 as amended by 2012 PA 39,

and by adding section 3107c and chapter 63.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

TITLE

     An act to revise, consolidate, and classify the laws relating

to the insurance and surety business; to regulate the incorporation

or formation of domestic insurance and surety companies and

associations and the admission of foreign and alien companies and

associations; to provide their rights, powers, and immunities and

to prescribe the conditions on which companies and associations

organized, existing, or authorized under this act may exercise

their powers; to provide the rights, powers, and immunities and to

prescribe the conditions on which other persons, firms,

corporations, associations, risk retention groups, and purchasing

groups engaged in an insurance or surety business may exercise

their powers; to provide for the imposition of a privilege fee on

domestic insurance companies and associations; and the state

accident fund; to provide for the imposition of a tax on the

business of foreign and alien companies and associations; to

provide for the imposition of a tax on risk retention groups and

purchasing groups; to provide for the imposition of a tax on the

business of surplus line agents; to provide for the imposition of

regulatory fees on certain insurers; to provide for assessment fees

on certain health maintenance organizations; to modify tort

liability arising out of certain accidents; to provide for limited

actions with respect to that modified tort liability and to

prescribe certain procedures for maintaining those actions; to

require security for losses arising out of certain accidents; to

provide for the continued availability and affordability of

automobile insurance and homeowners insurance in this state and to

facilitate the purchase of that insurance by all residents of this

state at fair and reasonable rates; to provide for certain

reporting with respect to insurance and with respect to certain

claims against uninsured or self-insured persons; to prescribe

duties for certain state departments and officers with respect to

that reporting; to provide for certain assessments; to establish

and continue certain state insurance funds; to modify and clarify

the status, rights, powers, duties, and operations of the nonprofit

malpractice insurance fund; to provide for the departmental

supervision and regulation of the insurance and surety business

within this state; to provide for regulation over of worker's

compensation self-insurers; to provide for the conservation,

rehabilitation, or liquidation of unsound or insolvent insurers; to

provide for the protection of policyholders, claimants, and

creditors of unsound or insolvent insurers; to provide for

associations of insurers to protect policyholders and claimants in

the event of insurer insolvencies; to prescribe educational

requirements for insurance agents and solicitors; to provide for

the regulation of multiple employer welfare arrangements; to create

an automobile theft prevention authority 1 or more authorities to

reduce insurance fraud and the number of automobile thefts in this

state ; and to prescribe the powers and duties of the automobile

theft prevention authority; authorities; to provide certain for the

powers and duties upon of certain officials, departments, and

authorities of this state; to provide for an appropriation; to

repeal acts and parts of acts; and to provide penalties for the

violation of this act.

     Sec. 3101a. (1) Except as otherwise provided in this section,

an insurer, in conjunction with the issuance of an automobile

insurance policy, as defined in section 3303, shall provide 2

certificates of insurance for each insured vehicle. The insurer

shall mark 1 of the certificates as the secretary of state's copy,

which copy, except as otherwise provided in this section, shall be

filed with the secretary of state by the policyholder upon

application for a vehicle registration. The secretary of state

shall not maintain the certificate of insurance received under this

subsection on file.

(1) (2) Beginning December 30, 2011, an An insurer, in

conjunction with the issuance of an automobile insurance policy,

shall provide to the insured 1 certificate of insurance for each

insured vehicle, and for private passenger nonfleet automobiles

listed on the policy shall supply to the secretary of state , in

the format and timeline as required by the secretary of state,

which shall not be required more frequently than every 14 days, the

automobile insurer's name, the name of the named insured, the named

insured's address, the vehicle identification number for each such

private passenger nonfleet vehicle listed on the policy, and the

policy number. The insurer shall supply the information required

under this subsection in the format and on a timeline as required

by the secretary of state. The secretary of state shall not require

the submission of information under this subsection more frequently

than every 14 days. In determining the format under this

subsection, the secretary of state shall consult with insurers. As

used in this subsection, "private passenger nonfleet automobile"

means that term as defined in section 3303.

     (2) The secretary of state shall provide policy information

received under subsection (1) to the Michigan automobile insurance

placement facility as required for the Michigan automobile

insurance placement facility to comply with this act.

     (3) Until December 31, 2018, the secretary of state shall

provide policy information received under this subsection (1) to

the department of community health and human services as required

for the department of community health and human services to comply

with 2006 PA 593, MCL 550.281 to 550.289. In determining the format

under this subsection, the secretary of state shall consult with

insurers. As used in this subsection, "private passenger nonfleet

automobile" means that term as defined in section 3303.

(4) (3) The secretary of state shall accept as proof of

vehicle insurance a transmission of the insured vehicle's vehicle

identification number. Policy information submitted by an insurer

and received by the secretary of state under this section is

confidential, is not subject to the freedom of information act,

1976 PA 442, MCL 15.231 to 15.246, and shall must not be disclosed

to any person except the department of community health and human

services for purposes of 2006 PA 593, MCL 550.281 to 550.289, or

pursuant to an order by a court of competent jurisdiction in

connection with a claim or fraud investigation or prosecution. The

transmission to the secretary of state of a vehicle identification

number is proof of insurance to the secretary of state for motor

vehicle registration purposes only and is not evidence that a

policy of insurance actually exists between an insurer and an

individual.

(5) (4) A person who supplies false information to the

secretary of state under this section or who issues or uses an

altered, fraudulent, or counterfeit certificate of insurance is

guilty of a misdemeanor punishable by imprisonment for not more

than 1 year or a fine of not more than $1,000.00, or both.

(6) (5) The department of community health and human services

shall report to the senate and house of representatives

appropriations committees and standing committees concerning

insurance issues on the number of claims and total dollar amount

recovered from automobile insurers pursuant to under 2006 PA 593,

MCL 550.281 to 550.289. The reports required by this subsection

shall must be given to the appropriations committees and standing

committees concerning insurance issues by December 30 of each year

through December 30, 2018 and shall must cover the preceding 12-

month period.

     Sec. 3107. (1) Except as otherwise provided in subsection (2),

this section, personal protection insurance benefits are payable

for the following:

     (a) Allowable expenses consisting of all reasonable charges,

incurred up to the maximum limit selected under section

3109b(1)(a), if applicable, for reasonably necessary products,

services, and accommodations for an injured person's care,

recovery, or rehabilitation. Allowable expenses within personal

protection insurance coverage shall not include Payment to

providers for those products, services, and accommodations are

subject to the limits in section 3107c. However, personal

protection insurance benefits are not payable for either of the

following:

     (i) Charges for a hospital room in excess of a reasonable and

customary charge for semiprivate accommodations except if unless

the injured person requires special or intensive care.

     (ii) Funeral and burial expenses in excess of the amount set

forth in the policy, which shall must not be less than $1,750.00 or

more than $5,000.00.

     (b) Work loss consisting of loss of income from work an

injured person would have performed during the first 3 years after

the date of the accident if he or she had not been injured. Work

loss does not include any loss after the date on which the injured

person dies. Because the benefits received from personal protection

insurance for loss of income are not taxable income, the benefits

payable for such loss of income shall must be reduced 15% unless

the claimant presents to the insurer in support of his or her claim

reasonable proof of a lower value of the income tax advantage in

his or her case, in which case the lower value shall apply. must be

applied. For the period beginning October 1, 2012 through September

30, 2013, the benefits payable for work loss sustained in a single

30-day period and the income earned by an injured person for work

during the same period together shall must not exceed $5,189.00,

which maximum shall apply must be applied pro rata to any lesser

period of work loss. Beginning October 1, 2013, the maximum shall

must be adjusted annually to reflect changes in the cost of living

under rules prescribed by the commissioner director but any change

in the maximum shall apply applies only to benefits arising out of

accidents occurring subsequent to an accident that occurs after the

date of change in the maximum.

     (c) Expenses not exceeding $20.00 per day, reasonably incurred

in obtaining ordinary and necessary services in lieu place of those

that, if he or she had not been injured, an injured person would

have performed during the first 3 years after the date of the

accident, not for income but for the benefit of himself or herself

or of his or her dependent.

     (2) Both of the following apply to personal protection

insurance benefits payable under subsection (1):

     (a) A person who is 60 years of age or older and in the event

of an accidental bodily injury would not be eligible to receive

work loss benefits under subsection (1)(b) may waive coverage for

work loss benefits by signing a waiver on a form provided by the

insurer. An insurer shall offer a reduced premium rate to a person

who waives coverage under this subsection subdivision for work loss

benefits. Waiver of coverage for work loss benefits applies only to

work loss benefits payable to the person or persons who have signed

the waiver form.

     (b) An insurer shall is not be required to provide coverage

for the medical use of marihuana or for expenses related to the

medical use of marihuana.

     Sec. 3107c. (1) Except as otherwise provided in subsections

(2) and (3), all of the following apply to allowable expenses under

section 3107(1)(a) for attendant care provided in the home by a

family or household member:

     (a) For the first 56 hours of attendant care provided in a

week, payment is limited to a reasonable and customary amount.

     (b) For attendant care in excess of 56 hours provided in a

week, payment is limited to $15.00 per hour. Beginning 3 years

after the effective date of the amendatory act that added this

section and every 3 years after that date, the director shall

adjust this amount to reflect the aggregate percentage change in

the United States Consumer Price Index, rounded to the nearest 10

cents. As used in this subdivision, "Consumer Price Index" means

the percentage of change in the Consumer Price Index for all urban

consumers in the United States city average for all items, as

reported by the United States Department of Labor, Bureau of Labor

Statistics, and as certified by the director.

     (c) The limitations in subdivisions (a) and (b) apply

regardless of the level of care provided and regardless of whether

the family or household member is licensed or otherwise authorized

to render the attendant care under article 15 of the public health

code, 1978 PA 368, MCL 333.16101 to 333.18838, or is employed by,

under contract with, or in any way connected with an individual or

agency who is licensed or authorized to render the care.

     (2) Except as otherwise provided in subsection (3), for

allowable expenses under section 3107(1)(a) for attendant care

provided in the home, whether by a family or household member or by

someone other than a family or household member, payment is limited

to a total of 24 hours per day for services performed by 1 or more

individuals.

     (3) Notwithstanding the limitations in this section, an

insurer may contract to provide attendant care as an allowable

expense at any rate and for any number of hours per week.

     Sec. 3114. (1) Except as provided in subsections (2), (3), and

(5), and (6), a personal protection insurance policy described in

section 3101(1) applies to accidental bodily injury to the person

named in the policy, the person's spouse, and a relative of either

domiciled in the same household, if the injury arises from a motor

vehicle accident. A personal injury insurance policy described in

section 3103(2) applies to accidental bodily injury to the person

named in the policy, the person's spouse, and a relative of either

domiciled in the same household, if the injury arises from a

motorcycle accident. If personal protection insurance benefits or

personal injury benefits described in section 3103(2) are payable

to or for the benefit of an injured person under his or her own

policy and would also be payable under the policy of his or her

spouse, relative, or relative's spouse, the injured person's

insurer shall pay all of the benefits and is not entitled to

recoupment from the other insurer.

     (2) A person suffering accidental bodily injury while an

operator or a passenger of a motor vehicle operated in the business

of transporting passengers shall receive the personal protection

insurance benefits to which the person is entitled from the insurer

of the motor vehicle. This subsection does not apply to a passenger

in any of the following, unless the passenger is not entitled to

personal protection insurance benefits under any other policy:

     (a) A school bus, as defined by the department of education,

providing transportation not prohibited by law.

     (b) A bus operated by a common carrier of passengers certified

by the department of transportation.

     (c) A bus operating under a government sponsored

transportation program.

     (d) A bus operated by or providing service to a nonprofit

organization.

     (e) A taxicab insured as prescribed in section 3101 or 3102.

     (f) A bus operated by a canoe or other watercraft, bicycle, or

horse livery used only to transport passengers to or from a

destination point.

     (g) A transportation network company vehicle.

     (3) An employee, his or her spouse, or a relative of either

domiciled in the same household, who suffers accidental bodily

injury while an occupant of a motor vehicle owned or registered by

the employer, shall receive personal protection insurance benefits

to which the employee is entitled from the insurer of the furnished

vehicle.

     (4) Except as provided in subsections (1) to (2) and (3), a

person suffering who suffers accidental bodily injury arising from

a motor vehicle accident while an occupant of a motor vehicle who

is not covered under a personal protection insurance policy as

provided in subsection (1) shall claim personal protection

insurance benefits from insurers in the following order of

priority:

     (a) The insurer of the owner or registrant of the vehicle

occupied.

     (b) The insurer of the operator of the vehicle occupied.under

the assigned claims plan under sections 3171 to 3175.

     (5) A Except as provided in subsection (6), a person suffering

who suffers accidental bodily injury arising from a motor vehicle

accident that shows evidence of the involvement of a motor vehicle

while an operator or passenger of a motorcycle shall claim personal

protection insurance benefits from insurers in the following order

of priority:

     (a) The insurer of the owner or registrant of the motor

vehicle involved in the accident.

     (b) The insurer of the operator of the motor vehicle involved

in the accident.

     (c) The motor vehicle insurer of the operator of the

motorcycle involved in the accident.

     (d) The motor vehicle insurer of the owner or registrant of

the motorcycle involved in the accident.

     (6) For a personal protection insurance policy as to which the

insured has elected the maximum benefit level under section

3109b(1)(a), both of the following apply:

     (a) An injured person who is a relative of either the person

named in the policy or the person's spouse, who is domiciled in the

same household as the person named in the policy or the person's

spouse, and who would, but for the election of reduced benefits, be

entitled to claim benefits under the policy under subsection (1),

is not entitled to claim benefits under the policy, but is entitled

to claim benefits under the assigned claims plan maintained under

section 3171.

     (b) A person who, while an operator or passenger of a

motorcycle, suffers accidental bodily injury arising from a motor

vehicle accident that shows evidence of the involvement of a motor

vehicle insured under the policy is entitled to claim benefits as

provided under subsection (5)(c) or (d), if applicable, or under

the assigned claims plan maintained under section 3171.

(7) (6) If 2 or more insurers are in the same order of

priority to provide personal protection insurance benefits under

subsection (5), an insurer paying that pays benefits due is

entitled to partial recoupment from the other insurers in the same

order of priority, and a reasonable amount of partial recoupment of

the expense of processing the claim, in order to accomplish

equitable distribution of the loss among all of the insurers.

(8) (7) As used in this section:

     (a) "Personal vehicle", "prearranged ride", and

"transportation network company digital network", and

"transportation network company prearranged ride" mean those terms

as defined in section 2 of the limousine, taxicab, and

transportation network company act, 2016 PA 345, MCL 257.2102.

     (b) "Transportation network company vehicle" means a personal

vehicle while the driver is logged on to the transportation network

company digital network or while the driver is engaged in a

transportation network company prearranged ride.

     Sec. 3115. (1) Except as provided in subsection (1) of section

3114, 3114(1), a person suffering who suffers accidental bodily

injury while not an occupant of a motor vehicle shall claim

personal protection insurance benefits from insurers in the

following order of priority:

     (a) Insurers of owners or registrants of motor vehicles

involved in the accident.

     (b) Insurers of operators of motor vehicles involved in the

accident.under the assigned claims plan under sections 3171 to

3175.

     (2) When If 2 or more insurers are in the same order of

priority to provide personal protection insurance benefits, an

insurer paying that pays benefits due is entitled to partial

recoupment from the other insurers in the same order of priority,

together with and a reasonable amount of partial recoupment of the

expense of processing the claim, in order to accomplish equitable

distribution of the loss among such the insurers.

     (3) A limit upon on the amount of personal protection

insurance benefits available because of accidental bodily injury to

1 person arising from 1 motor vehicle accident shall must be

determined without regard to the number of policies applicable to

the accident.

     Sec. 3163. (1) An insurer authorized to transact automobile

liability insurance and personal and property protection insurance

in this state shall file and maintain a written certification that

any accidental bodily injury or property damage occurring in this

state arising from the ownership, operation, maintenance, or use of

a motor vehicle as a motor vehicle by an out-of-state resident who

is insured under its automobile liability insurance policies , is

subject to the personal and property protection insurance system

under this act.

     (2) A nonadmitted An insurer that is not authorized to

transact automobile liability insurance and personal and property

protection insurance in this state may voluntarily file the

certification described in subsection (1).

     (3) Except as otherwise provided in subsection (4), if a

certification filed under subsection (1) or (2) applies to

accidental bodily injury or property damage, the insurer and its

insureds with respect to that injury or damage have the rights and

immunities under this act for personal and property protection

insureds, and claimants have the rights and benefits of personal

and property protection insurance claimants, including the right to

receive benefits from the electing insurer as if it were an insurer

of personal and property protection insurance applicable to the

accidental bodily injury or property damage.

     (4) If an insurer of an out-of-state resident is required to

provide benefits under subsections (1) to (3) to that any out-of-

state resident for accidental bodily injury for an accident in

which the out-of-state resident was not an occupant of a motor

vehicle registered in this state, arising out of the ownership,

operation, or use of a motor vehicle as a motor vehicle, the

insurer is only liable for the amount of ultimate loss sustained up

to $500,000.00. $400,000.00. If an insurer of an out-of-state

resident is required to provide benefits under subsections (1) to

(3) to any resident of this state who is not covered under a

personal protection insurance policy described in section 3101(1)

for accidental bodily injury arising from the ownership, operation,

or use of a motor vehicle in this state, the insurer is only liable

for the amount of ultimate loss sustained up to the amount of

personal protection insurance benefits an uninsured resident of

this state would be able to receive under the assigned claims plan

under sections 3171 to 3175. Benefits under this subsection are not

recoverable to the extent that benefits covering the same loss are

available from other sources, regardless of the nature or number of

benefit sources available and regardless of the nature or form of

the benefits.

     Sec. 3172. (1) A person entitled to claim because of

accidental bodily injury arising out of the ownership, operation,

maintenance, or use of a motor vehicle as a motor vehicle in this

state may obtain personal protection insurance benefits through the

assigned claims plan if no any of the following exist:

     (a) No personal protection insurance is applicable to the

injury. , no

     (b) No personal protection insurance applicable to the injury

can be identified. , the

     (c) The personal protection insurance applicable to the injury

cannot be ascertained because of a dispute between 2 or more

automobile insurers concerning their obligation to provide coverage

or the equitable distribution of the loss. , or the

     (d) The only identifiable personal protection insurance

applicable to the injury is, because of financial inability of 1 or

more insurers to fulfill their obligations, inadequate to provide

benefits up to the maximum prescribed. In that case, unpaid

     (2) A person making a claim under subsection (1) has the

burden of proving that he or she is entitled to obtain personal

protection insurance benefits through the assigned claims plan.

There is a rebuttable presumption that the person is entitled to

have the claim that is not otherwise disqualified assigned to an

insurer through the assigned claims plan if he or she submits to

the Michigan automobile insurance placement facility in a manner

that complies with the assigned claims plan an application making a

claim for personal protection insurance benefits that includes

satisfactory proof of loss, documentation supporting that due

diligence was exercised, and the amount of loss sustained.

     (3) Unpaid benefits due or coming due as described in

subsection (1) may be collected under the assigned claims plan, and

the insurer to which the claim is assigned is entitled to

reimbursement from the defaulting insurers to the extent of their

financial responsibility.

     (4) The assigned claims plan governs the requirements for an

application for payment of personal protection insurance benefits

through the assigned claims plan.

(5) (2) Except as otherwise provided in this subsection,

personal protection insurance benefits, including benefits arising

from accidents occurring before March 29, 1985, payable through the

assigned claims plan shall must be reduced to the extent that

benefits covering the same loss are available from other sources,

regardless of the nature or number of benefit sources available and

regardless of the nature or form of the benefits, to a person

claiming personal protection insurance benefits through the

assigned claims plan. This subsection only applies if the personal

protection insurance benefits are payable through the assigned

claims plan because no personal protection insurance is applicable

to the injury, no personal protection insurance applicable to the

injury can be identified, or the only identifiable personal

protection insurance applicable to the injury is, because of

financial inability of 1 or more insurers to fulfill their

obligations, inadequate to provide benefits up to the maximum

prescribed. under subsection (1)(a), (b), or (d). As used in this

subsection, "sources" and "benefit sources" do not include the

program for medical assistance for the medically indigent under the

social welfare act, 1939 PA 280, MCL 400.1 to 400.119b, or

insurance under the health insurance for the aged act, title and

disabled under subchapter XVIII of the social security act, 42 USC

1395 to 1395kkk-1.1395lll.

(6) (3) If the obligation to provide personal protection

insurance benefits cannot be ascertained because of a dispute

between 2 or more automobile insurers concerning their obligation

to provide coverage or the equitable distribution of the loss, and

if a method of voluntary payment of benefits cannot be agreed upon

among or between the disputing insurers, all of the following

apply:

     (a) The insurers who are parties to the dispute shall, or the

claimant may, immediately notify the Michigan automobile insurance

placement facility of their inability to determine their statutory

obligations.

     (b) The claim shall be assigned by the Michigan automobile

insurance placement facility shall assign the claim to an insurer

and the insurer shall immediately provide personal protection

insurance benefits to the claimant or claimants entitled to

benefits.

     (c) An action The insurer to whom the claim is assigned shall

be immediately commenced commence an action on behalf of the

Michigan automobile insurance placement facility by the insurer to

whom the claim is assigned in circuit court to declare the rights

and duties of any interested party.

     (d) The insurer to whom the claim is assigned shall join as

parties defendant to the action commenced under subdivision (c)

each insurer disputing either the obligation to provide personal

protection insurance benefits or the equitable distribution of the

loss among the insurers.

     (e) The circuit court shall declare the rights and duties of

any interested party whether or not other relief is sought or could

be granted.

     (f) After hearing the action, the circuit court shall

determine the insurer or insurers, if any, obligated to provide the

applicable personal protection insurance benefits and the equitable

distribution, if any, among the insurers obligated, and shall order

reimbursement to the Michigan automobile insurance placement

facility from the insurer or insurers to the extent of the

responsibility as determined by the court. The reimbursement

ordered under this subdivision shall must include all benefits and

costs paid or incurred by the Michigan automobile insurance

placement facility and all benefits and costs paid or incurred by

insurers determined not to be obligated to provide applicable

personal protection insurance benefits, including reasonable,

actually incurred attorney fees and interest at the rate prescribed

in section 3175 as of applicable on December 31 of the year

preceding the determination of the circuit court.

     (7) Personal protection insurance benefits payable to a person

eligible to receive benefits under the assigned claims plan are

limited to the amount of ultimate loss sustained up to $400,000.00.

     (8) As used in this chapter, "assigned claims plan" means the

assigned claims plan adopted and maintained by the Michigan

automobile insurance placement facility and approved by the

director under section 3171.

     Sec. 3173. A person who because of a limitation or exclusion

in sections 3105 to 3116 is disqualified from receiving personal

protection insurance benefits through the assigned claims plan if

any of the following apply:

     (a) Because of an exclusion in sections 3105 to 3116, the

person is disqualified under a policy otherwise applying to his or

her accidental bodily injury. is also disqualified from receiving

benefits under the assigned claims plan.

     (b) Because of a limitation or exclusion under a policy of

automobile insurance otherwise applying to his or her accidental

bodily injury, the person is disqualified from receiving personal

protection insurance benefits.

     (c) The person is eligible to receive benefits for his or her

accidental bodily injury through the Michigan property and casualty

guaranty association maintained under chapter 79.

     Sec. 3173a. (1) The Michigan automobile insurance placement

facility shall make an initial determination of a claimant's

eligibility review a claim for benefits under the assigned claims

plan and shall deny an obviously ineligible a claim that is

determined to be ineligible in accordance with this chapter or the

assigned claims plan. The Michigan automobile insurance placement

facility shall notify the claimant shall be notified promptly in

writing of the denial and the reasons for the denial. A person who

fails to cooperate with the Michigan automobile insurance placement

facility in accordance with the assigned claims plan is ineligible

for personal protection insurance benefits through the assigned

claims plan unless the Michigan automobile insurance placement

facility determines that the person is eligible for personal

protection insurance benefits through the assigned claims plan.

     (2) If a claim is not determined to be ineligible after the

review under subsection (1), the Michigan automobile insurance

placement facility shall assign the claim to a servicing insurer.

If the claim is assigned to a servicing insurer, the servicing

insurer shall make the final determination regarding a claim for

personal protection insurance benefits. A person who fails to

cooperate with the servicing insurer in its determination regarding

the claim for personal protection insurance benefits is ineligible

for the personal protection insurance benefits unless the servicing

insurer determines that the claim is eligible for personal

protection benefits.

(3) (2) A person who presents or causes to be presented an

oral or written statement, including computer-generated

information, as part of or in support of a claim to the Michigan

automobile insurance placement facility or to an insurer assigned a

claim by the Michigan automobile placement facility for payment or

another benefit knowing that if the statement contains false

information concerning a fact or thing material to the claim

commits a fraudulent insurance act under section 4503 that is

subject to the penalties imposed under section 4511. A claim that

contains or is supported by a fraudulent insurance act as described

in this subsection is ineligible for payment or of benefits under

the assigned claims plan.

     (4) The Michigan automobile insurance placement facility may

contract with other persons for all or a portion of the goods and

services necessary for operating and maintaining the assigned

claims plan.

     Sec. 3174. A person claiming through the assigned claims plan

shall notify the Michigan automobile insurance placement facility

of his or her claim within the time that would have been allowed

for filing an action for personal protection insurance benefits if

identifiable coverage applicable to the claim had been in effect.

The in accordance with section 3145. On an initial determination of

a claimant's eligibility for benefits through the assigned claims

plan, the Michigan automobile insurance placement facility shall

promptly assign the claim in accordance with the plan and notify

the claimant of the identity and address of the insurer to which

the claim is assigned. An action by the a claimant shall not be

commenced more than 30 days after receipt of notice of the

assignment or the last date on which the action could have been

commenced against an insurer of identifiable coverage applicable to

the claim, whichever is later.must be commenced as provided in

section 3145.

     Sec. 3175. (1) The assignment of claims under the assigned

claims plan shall be made according to procedures established in

the assigned claims plan that assure fair allocation of the burden

of assigned claims among insurers doing business in this state on a

basis reasonably related to the volume of automobile liability and

personal protection insurance they write on motor vehicles or the

number of self-insured motor vehicles. An insurer to whom claims

have been assigned shall make prompt payment of loss in accordance

with this act. An insurer is entitled to reimbursement by the

Michigan automobile insurance placement facility for the payments,

the established loss adjustment cost, and an amount determined by

use of the average annual 90-day United States treasury bill yield

rate, as reported by the council of economic advisers as of

December 31 of the year for which reimbursement is sought, as

follows:

     (a) For the calendar year in which claims are paid by the

insurer, the amount shall must be determined by applying the

specified annual yield rate specified in this subsection to 1/2 of

the total claims payments and loss adjustment costs.

     (b) For the period from the end of the calendar year in which

claims are paid by the insurer to the date payments for the

operation of the assigned claims plan are due, the amount shall

must be determined by applying the annual yield rate specified in

this subsection to the total claims payments and loss adjustment

costs multiplied by a fraction, the denominator of which is 365 and

the numerator of which is equal to the number of days that have

elapsed between the end of the calendar year and the date payments

for the operation of the assigned claims plan are due.

     (2) The An insurer assigned a claim by the Michigan automobile

insurance placement facility under the assigned claims plan or a

person authorized to act on behalf of the plan may bring an action

for reimbursement and indemnification of the claim on behalf of the

Michigan automobile insurance placement facility. The insurer to

whom claims have which the claim has been assigned shall preserve

and enforce rights to indemnity or reimbursement against third

parties and account to the Michigan automobile insurance placement

facility for the rights and shall assign the rights to the Michigan

automobile insurance placement facility on reimbursement by the

Michigan automobile insurance placement facility. This section does

not preclude an insurer from entering into reasonable compromises

and settlements with third parties against whom rights to indemnity

or reimbursement exist. The insurer shall account to the Michigan

automobile insurance placement facility for any compromises and

settlements. The procedures established under the assigned claims

plan shall must establish reasonable standards for enforcing rights

to indemnity or reimbursement against third parties, including a

standard establishing an amount below which actions to preserve and

enforce the rights need not be pursued.

     (3) An action to enforce rights to indemnity or reimbursement

against a third party shall must not be commenced after the later

of 2 the following:

     (a) Two years after the assignment of the claim to the

insurer. or 1

     (b) One year after the date of the last payment to the

claimant.

     (c) One year after the date the responsible third party is

identified.

     (4) Payments for the operation of the assigned claims plan not

paid by the due date shall bear interest at the rate of 20% per

annum.

     (5) The Michigan automobile insurance placement facility may

enter into a written agreement with the debtor permitting the

payment of the judgment or acknowledgment of debt in installments

payable to the Michigan automobile insurance placement facility. A

default in payment of installments under a judgment as agreed

subjects the debtor to suspension or revocation of his or her motor

vehicle license or registration in the same manner as for the

failure by an uninsured motorist to pay a judgment by installments

under section 3177, including responsibility for expenses as

provided in section 3177(4).

     Sec. 3177. (1) An The insurer obligated to pay personal

protection insurance benefits for accidental bodily injury to a

person arising out of the ownership, maintenance, or use of an

uninsured motor vehicle as a motor vehicle may recover such all

benefits paid, and appropriate incurred loss adjustment costs and

expenses, and incurred attorney fees from the owner or registrant

of the uninsured motor vehicle or from his or her estate. Failure

of such a person the owner or registrant to make payment within 30

days after a judgment is entered in an action for recovery under

this subsection is a ground for suspension or revocation of his or

her motor vehicle registration and license as defined in section 25

of the Michigan vehicle code, Act No. 300 of the Public Acts of

1949, being section 257.25 of the Michigan Compiled Laws. An 1949

PA 300, MCL 257.25. For purposes of this section, an uninsured

motor vehicle for the purpose of this section is a motor vehicle

with respect to which security as required by sections 3101 and

3102 is not in effect at the time of the accident.

     (2) The Michigan automobile insurance placement facility may

make a written agreement with the owner or registrant of an

uninsured vehicle or his or her estate permitting the payment of a

judgment described in subsection (1) in installments payable to the

Michigan automobile insurance placement facility. The motor vehicle

registration and license shall of an owner or registrant who makes

a written agreement under this subsection must not be suspended or

revoked and, the motor vehicle registration and license shall if

already suspended or revoked under subsection (1), must be restored

if the debtor enters into a written agreement with the secretary of

state permitting the payment of the judgment in installments, if

the payment of any installments is not in default.

     (3) The secretary of state upon receipt of a certified

abstract of court record of a judgment described in subsection (1)

or notice from the an insurer or the Michigan automobile insurance

placement facility or its designee of an acknowledgment of a debt

described in subsection (1) shall notify the owner or registrant of

an uninsured vehicle of the provisions of subsection (1) at that

person's the owner or registrant's last recorded address recorded

with the secretary of state and inform that person the owner or

registrant of the right to enter into a written agreement under

this section with the secretary of state Michigan automobile

insurance placement facility or its designee for the payment of the

judgment or debt in installments.

     (4) Expenses for the suspension, revocation, or reinstatement

of a motor vehicle registration or license under this section are

the responsibility of the owner or registrant or of his or her

estate. An owner or registrant whose registration or license is

suspended under this section shall pay any reinstatement fee as

required under section 320e of the Michigan vehicle code, 1949 PA

300, MCL 257.320e.

     Sec. 4501. As used in this chapter:

     (a) "Authorized agency" means the department of state police;

a city, village, or township police department; a county sheriff's

department; a United States criminal investigative department or

agency; the prosecuting authority of a city, village, township,

county, or state or of the United States; the office of financial

and insurance regulation; department; the Michigan automobile

insurance fraud authority; or the department of state.

     (b) "Financial loss" includes, but is not limited to, loss of

earnings, out-of-pocket and other expenses, repair and replacement

costs, investigative costs, and claims payments.

     (c) "Insurance policy" or "policy" means an insurance policy,

benefit contract of a self-funded plan, health maintenance

organization contract, nonprofit dental care corporation

certificate, or health care corporation certificate.

     (d) "Insurer" means a property-casualty insurer, life insurer,

third party administrator, self-funded plan, health insurer, health

maintenance organization, nonprofit dental care corporation, health

care corporation, reinsurer, or any other entity regulated by the

insurance laws of this state and providing any form of insurance.

     (e) "Michigan automobile insurance fraud authority" means the

Michigan automobile insurance fraud authority created under section

6302.

(f) (e) "Organization" means an organization or internal

department of an insurer established to detect and prevent

insurance fraud.

(g) (f) "Person" includes an individual, insurer, company,

association, organization, Lloyds, society, reciprocal or inter-

insurance exchange, partnership, syndicate, business trust,

corporation, and any other legal entity.

(h) (g) "Practitioner" means a licensee of this state

authorized to practice medicine and surgery, psychology,

chiropractic, or law, any other licensee of the this state, or an

unlicensed health care provider whose services are compensated,

directly or indirectly, by insurance proceeds, or a licensee

similarly licensed in other states and nations, or the practitioner

of any nonmedical treatment rendered in accordance with a

recognized religious method of healing.

(i) (h) "Runner", "capper", or "steerer" means a person who

receives a pecuniary or other benefit from a practitioner, whether

directly or indirectly, for procuring or attempting to procure a

client, patient, or customer at the direction or request of, or in

cooperation with, a practitioner whose intent is to obtain benefits

under a contract of insurance or to assert a claim against an

insured or an insurer for providing services to the client,

patient, or customer. Runner, capper, or steerer does not include a

practitioner who procures clients, patients, or customers through

the use of public media.

(j) (i) "Statement" includes, but is not limited to, any

notice statement, proof of loss, bill of lading, receipt for

payment, invoice, account, estimate of property damages, bill for

services, claim form, diagnosis, prescription, hospital or doctor

record, X-rays, test result, or other evidence of loss, injury, or

expense.

CHAPTER 63

MICHIGAN AUTOMOBILE INSURANCE FRAUD AUTHORITY

     Sec. 6301. As used in this chapter:

     (a) "Authority" means the Michigan automobile insurance fraud

authority created in section 6302.

     (b) "Automobile insurance fraud" means a fraudulent insurance

act as described in section 4503 that is committed in connection

with automobile insurance, including an application for automobile

insurance.

     (c) "Car years" means net direct private passenger and

commercial nonfleet vehicle years of insurance providing the

security required by section 3101(1) written in this state for the

second previous calendar year as reported to the statistical agent

of each insurer.

     Sec. 6302. (1) The Michigan automobile insurance fraud

authority is created within the department of the attorney general.

The department of the attorney general shall provide staff for the

authority.

     (2) With the discretion to approve or disapprove programs to

be supported, the authority shall do both of the following:

     (a) Provide financial support to state or local law

enforcement agencies for programs designed to reduce the incidence

of automobile insurance fraud.

     (b) Provide financial support to state or local prosecutorial

agencies for programs designed to reduce the incidence of

automobile insurance fraud.

     (3) The authority may provide financial support to law

enforcement, prosecutorial, insurance, education, or training

associations for programs designed to reduce the incidence of

automobile insurance fraud.

     Sec. 6304. On January 1, 2024, the authority is dissolved.

     Sec. 6305. The authority has the powers necessary to carry out

its duties under this act, including, but not limited to, the power

to do the following:

     (a) Sue and be sued.

     (b) Solicit and accept gifts, grants, loans, and other aid

from any person, the federal government, this state, a local unit

of government, or an agency of the federal government, this state,

or a local unit of government.

     (c) Make grants and investments.

     (d) Procure insurance against any loss in connection with its

property, assets, or activities.

     (e) Invest at its discretion any money held in reserve or

sinking funds or any money not required for immediate use or

disbursement and to select and use depositories for its money.

     (f) Contract for goods and services and engage personnel as

necessary.

     (g) Perform other acts not specifically enumerated in this

section that are necessary or proper to accomplish the purposes of

the authority and that are not inconsistent with this section or

the plan of operation.

     Sec. 6307. An insurer or self-insurer engaged in writing

insurance coverages that provide the security required by section

3101(1) in this state may pay to the authority, money to be used by

the authority to carry out its duties under this chapter.

     Sec. 6308. (1) An insurer authorized to transact automobile

insurance in this state, as a condition of its authority to

transact insurance in this state, shall report automobile insurance

fraud data to the authority using the format and procedures adopted

by the authority.

     (2) The department of state police shall cooperate with the

authority and shall provide available motor vehicle fraud and theft

statistics to the authority on request.

     (3) The authority shall develop performance metrics that are

consistent, controllable, measurable, and attainable. The authority

shall use the metrics each year to evaluate new applications

submitted for funding consideration and to renew funding for

existing programs.

     Sec. 6310. (1) Beginning January 1 of the year after the

effective date of the amendatory act that added this section, the

authority shall prepare and publish an annual financial report, and

beginning July 1 of the year after the effective date of the

amendatory act that added this section, the authority shall prepare

and publish an annual report to the legislature on the authority's

efforts to prevent automobile insurance fraud and cost savings that

have resulted from those efforts.

(2) The annual report to the legislature required under

subsection (1) must detail the automobile insurance fraud occurring

in this state for the previous year, assess the impact of the fraud

on rates charged for automobile insurance, summarize prevention

programs, and outline allocations made by the authority. Insurers

and the director shall cooperate in developing the report as

requested by the authority and shall make available to the

authority records and statistics concerning automobile insurance

fraud, including the number of instances of suspected and confirmed

insurance fraud, number of prosecutions and convictions involving

automobile insurance fraud, and automobile insurance fraud

recidivism. The authority shall evaluate the impact automobile

insurance fraud has on the citizens of this state and the costs

incurred by the citizens through insurance, police enforcement,

prosecution, and incarceration because of automobile insurance

fraud. The authority shall submit the report to the legislature

required by this section to the senate and house of representatives

standing committees with primary jurisdiction over insurance issues

and the director.

     Enacting section 1. Except as provided in enacting section 2,

this amendatory act takes effect 90 days after the date it is

enacted into law.

     Enacting section 2. The title and section 4501 of the

insurance code of 1956, 1956 PA 218, MCL 500.4501, as amended by

this amendatory act, and chapter 63 of the insurance code of 1956,

1956 PA 218, as added by this amendatory act, take effect January

1, 2019.

     Enacting section 3. This amendatory act does not take effect

unless Senate Bill No. 787 of the 99th Legislature is enacted into

law.