HOUSE BILL No. 4727 April 30, 1997, Introduced by Reps. Anthony, Schermesser, Prusi, DeHart, Tesanovich, LaForge, Hale, Hanley and Schauer and referred to the Committee on Insurance. A bill to amend 1956 PA 218, entitled "The insurance code of 1956," by amending section 2103 (MCL 500.2103), as amended by 1990 PA 305, and by adding section 2116a. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 2103. (1) "Eligible person", for automobile insurance, 2 means a person who is an owner or registrant of an automobile 3 registered or to be registered in this state or who holds a valid 4 Michigan license to operate a motor vehicle, but does not include 5 any of the following: 6 (a) A person who is not required to maintain security pursu- 7 ant to section 3101, unless the person intends to reside in this 8 state for 30 days or more and makes a written statement of that 9 intention on a form approved by the commissioner. 02757'97 DKH 2 1 (b) A person whose license to operate a vehicle is under 2 suspension or revocation. 3 (c) A person who has been convicted within the immediately 4 preceding 5-year period of fraud or intent to defraud involving 5 an insurance claim or an application for insurance; or an indi- 6 vidual who has been successfully denied, within the immediately 7 preceding 5-year period, payment by an insurer of a claim in 8 excess of $1,000.00 under an automobile insurance policy, if 9 there is evidence of fraud or intent to defraud involving an 10 insurance claim or application. 11 (d) A person who, during the immediately preceding 3-year 12 period, has been convicted under, or who has been subject to an 13 order of disposition of the probate court for a violation of, any 14 of the following: 15 (i) Section 324 or 325 of the Michigan penal code,Act No.16328 of the Public Acts of 1931, as amended, being sections17750.324 and 750.325 of the Michigan Compiled Laws1931 PA 328, 18 MCL 750.324 AND 750.325; section 1 ofAct No. 214 of the Public19Acts of 1931, being section 752.191 of the Michigan Compiled20Laws1931 PA 214, MCL 752.191; or under any other law of this 21 state the violation of which constitutes a felony resulting from 22 the operation of a motor vehicle. 23 (ii) Section 625 of the Michigan vehicle code,Act No. 30024of the Public Acts of 1949, as amended, being section 257.625 of25the Michigan Compiled Laws1949 PA 300, MCL 257.625. 26 (iii) Section 617, 617a, 618, or 619 ofAct No. 300 of the27Public Acts of 1949, as amended, being sections 257.617,02757'97 3 1257.617a, 257.618, and 257.619 of the Michigan Compiled LawsTHE 2 MICHIGAN VEHICLE CODE, 1949 PA 300, MCL 257.617, 257.617A, 3 257.618, AND 257.619. 4 (iv) Section 626 ofAct No. 300 of the Public Acts of51949, as amended, being section 257.626 of the Michigan Compiled6LawsTHE MICHIGAN VEHICLE CODE, 1949 PA 300, MCL 257.626; or for 7 a similar violation under the laws of any other state or a munic- 8 ipality within or without this state. 9(v) Section 625b of Act No. 300 of the Public Acts of101949, as amended, being section 257.625b of the Michigan Compiled11Laws.12 (e) A person whose vehicle insured or to be insured under 13 the policy fails to meet the motor vehicle safety requirements of 14 sections 683 to 711 ofAct No. 300 of the Public Acts of 1949,15as amended, being sections 257.683 to 257.711 of the Michigan16Compiled LawsTHE MICHIGAN VEHICLE CODE, 1949 PA 300, MCL 17 257.683 TO 257.711. 18 (f) A person whose policy of automobile insurance has been 19 canceled because of nonpayment of premium or financed premium 20 within the immediately preceding 2-year period, unless the pre- 21 mium due on a policy for which application has been made is paid 22 in full before issuance or renewal of the policy. 23 (g) A person who fails to obtain or maintain membership in a 24 club, group, or organization, if membership is a uniform require- 25 ment of the insurer as a condition of providing insurance, and if 26 the dues, charges, or other conditions for membership are applied 27 uniformly throughout this state, are not expressed as a 02757'97 4 1 percentage of premium, and do not vary with respect to the rating 2 classification of the member except for the purpose of offering a 3 membership fee to family units. Membership fees may vary in 4 accordance with the amount or type of coverage if the purchase of 5 additional coverage, either as to type or amount, is not a condi- 6 tion for reduction of dues or fees. 7 (h) A person whose driving record for the 3-year period 8 immediately preceding application for or renewal of a policy, 9 has, pursuant to section 2119a, an accumulation of more thanthe10following: (i) Five6 insurance eligibility points., if the11application or renewal occurs on or before December 31, 1982.12(ii) Six insurance eligibility points, if the application or13renewal occurs on or after January 1, 1983.14 (2) "Eligible person", for home insurance, means a person 15 who is the owner-occupant or tenant of a dwelling of any of the 16 following types: a house, a condominium unit, a cooperative 17 unit, a room, or an apartment; or a person who is the 18 owner-occupant of a multiple unit dwelling of not more than 4 19 residential units.EligibleEXCEPT AS OTHERWISE PROVIDED IN 20 SECTION 2116A, ELIGIBLE person does not include any of the 21 following: 22 (a) A person who has been convicted, in the immediately pre- 23 ceding 5-year period, of 1 or more of the following: 24 (i) Arson, or conspiracy to commit arson. 25 (ii) A crime under sections 72 to 77, 112, 211a, 377a, 377b, 26 or 380 ofAct No. 328 of the Public Acts of 1931, as amended,27being sections 750.72 to 750.77, 750.112, 750.211a, 750.377a,02757'97 5 1750.377b, and 750.380 of the Michigan Compiled LawsTHE MICHIGAN 2 PENAL CODE, 1931 PA 328, MCL 750.72 TO 750.77, 750.112, 750.211A, 3 750.377A, 750.377B, AND 750.380. 4 (iii) A crime under section 92, 151, 157b, or 218 ofAct5No. 328 of the Public Acts of 1931, as amended, being sections6750.92, 750.151, 750.157b, and 750.218 of the Michigan Compiled7LawsTHE MICHIGAN PENAL CODE, 1931 PA 328, MCL 750.92, 750.151, 8 750.157B, AND 750.218, based upon a crime described in subpara- 9 graph (ii) committed by or on behalf of the person. 10 (b) A person who has been successfully denied, within the 11 immediately preceding 5-year period, payment by an insurer of a 12 claim under a home insurance policy in excess of $2,000.00, based 13 on evidence of arson, conspiracy to commit arson, misrepresenta- 14 tion, fraud, or conspiracy to commit fraud, committed by or on 15 behalf of the person, if the amount of the denied claim was 16 greater than any of the following: 17 (i) For a claim under a repair cost policy, 15% of the 18 amount of insurance in force. 19 (ii) For a claim under a replacement cost policy, 10% of the 20 amount of insurance in force. 21 (c) A person who insures or seeks to insure a dwelling which 22 is being used for an illegal or demonstrably hazardous purpose. 23 (d) A person who refuses to purchase an amount of insurance 24 equal to at least 80% of the replacement cost of the property 25 insured or to be insured under a replacement cost policy. 02757'97 6 1 (e) A person who refuses to purchase an amount of insurance 2 equal to at least 100% of the market value of the property 3 insured or to be insured under a repair cost policy. 4 (f) A person who refuses to purchase an amount of insurance 5 equal to at least 100% of the actual cash value of the property 6 insured or to be insured under a tenant or renter's home insur- 7 ance policy. 8 (g) A person whose policy of home insurance has been 9 canceled because of nonpayment of premium within the immediately 10 preceding 2-year period, unless the premium due on the policy is 11 paid in full before issuance or renewal of the policy. 12 (h) A person who insures or seeks to insure a dwelling, if 13 the insured value is not any of the following: 14 (i) For a repair cost policy, at least $7,500.00. 15 (ii) For a replacement policy, at least $15,000.00 or 16 another amountwhichTHAT the commissioner may establish bien- 17 nially on and after January 1, 1983, pursuant to rules promul- 18 gated by the commissioner under the administrative procedures act 19 of 1969,Act No. 306 of the Public Acts of 1969, as amended,20being sections 24.201 to 24.328 of the Michigan Compiled Laws21 1969 PA 306, MCL 24.201 to 24.328, based upon changes in applica- 22 ble construction cost indices. 23 (I)(j)A person who insures or seeks to insure a dwelling 24whichTHAT does not meet minimum standards of insurability as 25 established by rules promulgated by the commissioner pursuant to 26Act No. 306 of the Public Acts of 1969, as amendedTHE 02757'97 7 1 ADMINISTRATIVE PROCEDURES ACT OF 1969, 1969 PA 306, MCL 24.201 TO 2 24.328. 3 (J)(k)A person whose real property taxes with respect to 4 the dwelling insured or to be insured have been and are delin- 5 quent for 2 or more years at the time of renewal of, or applica- 6 tion for, home insurance. 7 (K)(l)A person who has failed to procure or maintain 8 membership in a club, group, or organization, if membership is a 9 uniform requirement of the insurer, and if the dues, charges, or 10 other conditions for membership are applied uniformly throughout 11 this state, are not expressed as a percentage of premium, and do 12 not vary with respect to the rating classification of the member 13 except for the purpose of offering a membership fee to family 14 units. Membership fees may vary in accordance with the amount or 15 type of coverage if the purchase of additional coverage, either 16 as to type or amount, is not a condition for reduction of dues or 17 fees. 18 (3) "Home insurance" means any of the following, but does 19 not include insurance intended to insure commercial, industrial, 20 professional, or business property, obligations, or liabilities: 21 (a) Fire insurance for an insured's dwelling of a type 22 described in subsection (2). 23 (b) If contained in or indorsed to a fire insurance policy 24 providing insurance for the insured's residence, other insurance 25 intended primarily to insure nonbusiness property, obligations, 26 and liabilities. 02757'97 8 1 (c) Other insurance coverages for an insured's residence as 2 prescribed by rule promulgated by the commissioner pursuant to 3Act No. 306 of the Public Acts of 1969, as amendedTHE ADMIN- 4 ISTRATIVE PROCEDURES ACT OF 1969, 1969 PA 306, MCL 24.201 TO 5 24.328. A rule proposed for promulgation by the commissioner 6 pursuant to this section shall be transmitted in advance to each 7 member of the standing committee in the house and in the senate 8whichTHAT has jurisdiction over insurance. 9 (4) "Insurance eligibility points" means all of the 10 following: 11 (a) Points calculated, according to the following schedule, 12 for convictions, determinations of responsibility for civil 13 infractions, or findings of responsibility in probate court: 14 (i) For a violation ofanyA lawful speed limit by more 15 than 15 miles per hour, or careless driving, 4 points. 16 (ii) For a violation ofanyA lawful speed limit by more 17 than 10 miles per hour, but less than 16 miles per hour, 3 18 points. 19 (iii) For a violation ofanyA lawful speed limit by 10 20 miles per hour or less, 2 points. 21 (iv) For a violation ofanyA speed limit by 15 miles per 22 hour or less on a roadwaywhichTHAT had a lawfully posted max- 23 imum speed of 70 miles per hour as of January 1, 1974, 2 points. 24 (v) For all other moving violations pertaining to the opera- 25 tion of motor vehicles, 2 points. 02757'97 9 1 (b) Points calculated, according to the following schedule, 2 for determinations that the person was substantially at-fault, as 3 defined in section 2104(4): 4 (i) For the first substantially at-fault accident, 3 5 points. 6 (ii) For the second and each subsequent substantially 7 at-fault accident, 4 points. 8 (5) "Insurer" means an insurer authorized to transact in 9 this state the kind or combination of kinds of insurance consti- 10 tuting automobile insurance or home insurance, as defined in this 11 chapter. 12 SEC. 2116A. AN INSURER SHALL NOT REFUSE TO INSURE, REFUSE 13 TO CONTINUE TO INSURE, OR LIMIT THE COVERAGE AVAILABLE TO AN OTH- 14 ERWISE ELIGIBLE PERSON FOR HOME INSURANCE BECAUSE THAT PERSON IS 15 A FOSTER PARENT TO A FOSTER CHILD AND THE CHILD HAS BEEN CON- 16 VICTED OF, FOUND RESPONSIBLE FOR, OR PLACED IN A DIVERSION PRO- 17 GRAM FOR, ARSON OR CONSPIRACY TO COMMIT ARSON. 02757'97 Final page. DKH