SB-0715, As Passed Senate, June 12, 2014

HOUSE SUBSTITUTE FOR

SENATE BILL NO. 715

     A bill to amend 1956 PA 218, entitled

"The insurance code of 1956,"

(MCL 500.100 to 500.8302) by adding chapter 22A.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

CHAPTER 22A

     Sec. 2270. As used in this chapter:

     (a) "Certificate of insurance" means a document, regardless of

how titled or described, that is prepared by an insurer or

insurance producer that is a statement or summary of an insured's

property or casualty insurance coverage. Certificate of insurance

does not include a policy of insurance, insurance binder, or policy

endorsement.

     (b) "Director" means the director of the department of

insurance and financial services.

     (c) "Insurance" means any of the lines of authority in chapter

6.

     (d) "Insurance producer" means that term as defined in section

1201.

     Sec. 2271. A person shall not do any of the following:

     (a) Issue or deliver a certificate of insurance that purports

to affirmatively or negatively alter, amend, or extend the coverage

provided by an insurance policy referenced in the certificate of

insurance.

     (b) Prepare or issue a certificate of insurance that contains

any false or misleading information concerning an insurance policy

referenced in the certificate of insurance.

     (c) Demand or require the issuance of a certificate of

insurance from an insurer, insurance producer, or policyholder that

contains any false or misleading information concerning an

insurance policy referenced in the certificate of insurance.

     Sec. 2273. Except as otherwise provided in an insurance

policy, a certificate of insurance does not represent an insurer's

obligation to give notice of cancellation or nonrenewal to a

person.

     Sec. 2275. A person is entitled to notice of cancellation,

nonrenewal, and any similar notice concerning a policy of insurance

only if the person has notice rights under the terms of a policy of

insurance or an endorsement to a policy of insurance. The terms and

conditions of a notice described in this section are governed by

the policy of insurance or endorsement. A certificate of insurance

does not alter the terms and conditions of the notice.

     Sec. 2277. If the director finds that a person has violated

this chapter, after an opportunity for a hearing under the

administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to

24.328, the director shall reduce the findings and decision to

writing and shall issue and cause to be served upon the person

charged with the violation a copy of the findings and an order

requiring the person to cease and desist from the violation. In

addition, the director may order any of the following:

     (a) Payment of a civil fine of not more than $500.00 for each

violation. However, if the person knew or reasonably should have

known that he or she was in violation of this chapter, the director

may order the payment of a civil fine of not more than $2,500.00

for each violation. An order of the director under this section

shall not require the payment of civil fines exceeding $25,000.00.

A fine collected under this subdivision shall be turned over to the

state treasurer and credited to the general fund of this state.

     (b) The director may apply to the circuit court of Ingham

county for an order of the court enjoining a violation of this

chapter.