INSURERS: SERVICE OF PROCESS - S.B. 496: FLOOR ANALYSIS
Senate Bill 496 (as reported without amendment)
Sponsor: Senator Bill Bullard, Jr.
Committee: Financial Services
CONTENT
The bill would amend the Insurance Code to require insurers not organized under this State's laws to designate a resident agent for the service of process, instead of stipulating to service on the Commissioner of the Office of Financial and Insurance Services. Unauthorized insurers without a resident agent still would have to stipulate to service on the Commissioner. The bill also would increase from $5 to $10 the fee for service on the Commissioner.
Under the bill, every insurance company, association, risk retention group, or purchasing group not organized under this State's statutes would have to file with the Commissioner, as a condition of doing business in the State, the name and address of a resident agent upon which any local process affecting the company, association, or group could be served. The bill specifies that service on the resident agent would be service on the company, association, or group. The designation would remain in force as long as any liability remained within the State.
Under the Code, every insurance company, association, risk retention group, or purchasing group not organized under this State's statutes must file with the Commissioner, as a condition of doing business in the State, its irrevocable written stipulation that any legal process affecting the company or group, served on the Commissioner or his or her deputies, has the same effect as if personally served on the company or group. A copy of the appointment must be filed with the Commissioner. Service on the Commissioner is considered sufficient service upon the company or group. Under the bill, these provisions would apply, as a condition of doing business in the State, to an unauthorized insurer, including an association, that did not have a resident agent.
MCL 500.456 - Legislative Analyst: L. Arasim
FISCAL IMPACT
The bill would increase the process serving fee from $5 to $10, which would be more consistent with a consumer price index increase and more consistent with administrative costs associated with this filing procedure. Additionally, the bill would reduce the number of companies required to pay this fee, to just those without a resident agent, which is only 5% of the companies that are currently required to pay the service fee.
Date Completed: 5-23-01 - Fiscal Analyst: M. TyszkiewiczFloor\sb496 - Bill Analysis @ http://www.senate.state.mi.us/sfa
This analysis was prepared by nonpartisan Senate staff for use by the Senate in its deliberations and does not constitute an official statement of legislative intent.