SENATE BILL NO. 1

January 15, 2019, Introduced by Senator NESBITT and referred to the Committee on Insurance and Banking.

"The insurance code of 1956,"

by amending sections 3148 and 3157 (MCL 500.3148 and 500.3157), and by adding sections 3100, 3107c, 3109b, and 3157a.

the people of the state of michigan enact:

Sec. 3100. It is the intent of the legislature in making changes to this act relating to the purchase of automobile insurance in this state to bring much needed cost controls to the no-fault system, thereby providing rate relief for consumers, reducing the number of uninsured drivers in this state, and incentivizing more automobile insurers to write business in this state. The legislature recognizes that drivers in this state pay car insurance rates that are, on average, 83% higher than the national average.

Sec. 3107c. It is the intent of the legislature to allow seniors and other individuals over 62 years of age with lifetime health care benefits to enjoy savings on their automobile insurance premiums by choosing to not carry personal injury protection insurance when they effectively already have coverage for injuries in automobile accidents.

Sec. 3109b. It is the intent of the legislature that an individual who purchases an automobile insurance policy in this state have the ability to choose an amount of personal injury protection coverage that suits the individual's needs, lifestyle, and budget. The legislature further intends when an individual selects a coverage level for personal injury protection benefits from those enumerated in statute, the individual will enjoy a corresponding savings on his or her automobile insurance premium that corresponds with the chosen benefit level.

Sec. 3157. (1) A physician, hospital, clinic or other person or institution lawfully rendering treatment to an injured person for an accidental bodily injury covered by personal protection insurance, and a person or institution providing rehabilitative occupational training following the injury, may charge a reasonable amount for the products, services and accommodations rendered. The charge shall must not exceed the amount the person or institution customarily charges for like products, services and accommodations in cases not involving insurance.

(2) It is the intent of the legislature, in seeking to reduce medical cost inflation in this state related to no-fault insurance claims that is 90% higher than normal health care inflation, that a physician, hospital, clinic, or other person or institution that renders a treatment, training, product, service, or accommodation to an injured person for an accidental bodily injury not be eligible for payment or reimbursement under this chapter of more than a statutorily determined amount that is a reasonable payment for the treatment or service rendered.

Sec. 3157a. It is the intent of the legislature, in seeking to reduce overutilization of medical treatments, products, and services related to no-fault insurance claims in this state, that an annual utilization review be conducted by an independent party to identify utilization above the usual range for the treatment based on medically accepted standards, with consequences for providers that knowingly provide false or misleading information.

Sec. 3148. (1) An attorney is entitled to a reasonable fee for advising and representing a claimant in an action for personal or property protection insurance benefits which are overdue. The attorney's fee shall must be a charge against the insurer in addition to the benefits recovered, if the court finds that the insurer unreasonably refused to pay the claim or unreasonably delayed in making proper payment.

(2) An insurer may be allowed by a court an award of a reasonable sum against a claimant as an attorney's fee for the insurer's attorney in defense against a claim that was in some respect fraudulent or so excessive as to have no reasonable foundation. To the extent that personal or property protection insurance benefits are then due or thereafter come due to the claimant because of loss resulting from the injury on which the claim is based, such a fee may be treated as an offset against such benefits; also, judgment may be entered against the claimant for any amount of a fee awarded against him and not offset in this way or otherwise paid.

(3) It is the intent of the legislature to reduce fraud and conflicts of interest in the no-fault system by providing for restrictions on the common ownership of, and referrals between and among, entities that provide legal, medical, and transportation services.

Enacting section 1. This bill may be known as the "auto insurance rate reduction plan".