December 18, 2018
Your PAC Donations at Work!

PAC dollars are as necessary as ever as your association fights to support legislative issues favorable to member agencies and those who support the Independent Agent. Now is the time to join the fight and to make a financial investment in both AgentPAC (state) and InsurPac (national). 

Your voice in Michigan!

Questions Contact:

Matt Wesolek
517-327-8038
No-Fault Auto Reform Proposal Resurfaces in Lame Duck

Once again, no-fault auto insurance has surfaced as the topic of debate in the closing days of the lame duck session. Detroit business executive Dan Gilbert is reportedly behind the late push to reform auto insurance. If you recall, he has floated a ballot proposal in 2020 if the legislature does not choose to make changes to Michigan’s unique no-fault law. 

As of now, no vote has been scheduled in the House. MAIA is at the Capitol and closely monitoring legislative activity on your behalf. If any movement takes place, we will update you as soon as possible.

In the interim, here is what we know. The new proposed changes come as a substitute to SB 1014 that passed the Senate in June. MAIA has access to the proposed House substitute, which is similar to HB 5013 that failed to pass the House last fall. A few highlights from the substitute to Senate Bill 1014 are below. 


Choice of Coverage Options (PIP Choice) with Guaranteed Rate Reductions
Similar to HB 5013, the substitute to SB 1014 includes PIP coverage options. Insureds will choose between three options with guaranteed rate reductions included.  

  • $250,000 ($225,000 allocated for hospital care; $25,000 allocated for post-hospital care. 40% rate reduction] 
  • $500,000 (20% rate reduction)
  • Unlimited (10% rate reduction)

The newest version includes an additional $250,000 option that is not split between hospital and post-hospital care. Also, seniors 62 and older would have to opt-in to medical coverage under no-fault, otherwise Medicare or their health insurance program would become the primary coverage option for medical benefits.

Past proposals included limited agent immunity language; such language is not included in the current proposal.  
MAIA has once again advocated for inclusion of this important language to protect agents if PIP choice becomes an option.  


Fee Schedule  
A fee schedule is included that is based on the Worker’s Compensation Schedule, except for trauma care and emergency ambulance services, which would be exempt.


Family-Provided Attendant Care 
The proposal would limit required coverage to 84 hours per week of family-provided attendant care (12 hours per day) and additional hours may be covered but are not required. This is up from the 56 hours in HB 5013.


Prohibit Use of Certain Non-Driving Factors in Underwriting or Establishing Rates
This was not included in HB 5013. It is proposed that the following be prohibited in underwriting or establishing rates: gender; marital status; occupation (with the exception of bona fide affinity groups); education (with the exception of bona fide affinity groups like alumni associations) and “good student” discount programs; and use of FICO scores (insurers may still use a credit-based insurance score that has actuarial foundation as a predictor of claim loss).  

 
Michigan Catastrophic Claims Association (MCCA) Audit and Rebate 
The proposed bill would require independent audit of the MCCA every two years, with a rebate to consumers if the audit determines the MCCA is overfunded. 


What's Next?
We will keep you updated as developments occur during lame duck. 
Producer Appointment Bill Headed to the Governor

Legislation to modernize the producer appointment language is headed to the governor’s desk. The producer appointment bill ( HB 6444) cleared the House of Representatives overwhelmingly late this afternoon. Your association identified the producer appointment issue, convened a workgroup, testified in committee, and pushed to get HB 6444 to the governor’s desk. In case you missed it, click here for details of the bill, highlighted in our November 29 News Now.