SENATE BILL No. 851

 

 

March 9, 2016, Introduced by Senator YOUNG and referred to the Committee on Government Operations.

 

 

 

     A bill to amend 1956 PA 218, entitled

 

"The insurance code of 1956,"

 

(MCL 500.100 to 500.8302) by adding chapter 49.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

CHAPTER 49

 

     Sec. 4901. An owner of a firearm shall provide security

 

against loss resulting from liability imposed by law for bodily

 

injury or death suffered by a person arising out of the discharge

 

of that firearm. This section does not apply to a governmental

 

agency. As used in this section, "firearm" means that term as

 

defined in section 1 of 1927 PA 372, MCL 28.421. However, firearm

 

does not mean an antique firearm as that term is defined in section

 

231a of the Michigan penal code, 1931 PA 328, MCL 750.231a.

 

     Sec. 4903. (1) A person who violates section 4901 may be

 

ordered to pay a civil fine as follows:


     (a) For the first violation, $25.00.

 

     (b) For the second and each subsequent violation, the civil

 

fine is double the amount of the civil fine of the immediately

 

previous violation.

 

     (c) The person shall pay the civil fine within 60 days of the

 

order to pay. After 60 days, unpaid civil fines accrue interest at

 

a rate of 10% per month until paid.

 

     (2) A civil fine collected under subsection (1) must be turned

 

over to the illegal firearm authority created under section 4925.

 

     Sec. 4904. (1) The firearms claims association is created as

 

an unincorporated, nonprofit association. An insurer engaged in

 

writing insurance coverages that provide the security required by

 

section 4901 in this state, as a condition of its authority to

 

transact insurance in this state, shall be a member of and is bound

 

by the plan of operation of the association. Except as expressly

 

provided in this section, the association is not subject to any

 

laws of this state with respect to insurers, but in all other

 

respects the association is subject to the laws of this state to

 

the extent that the association would be if it were an insurer

 

organized and subsisting under chapter 50.

 

     (2) The association shall provide and each member shall accept

 

indemnification for 100% of the amount of ultimate loss sustained

 

under firearm insurance coverages in excess of the amount of

 

$100,000.00 in each loss occurrence. For a firearm policy issued or

 

renewed during the period July 1, 2016 to June 30, 2018, the amount

 

is $105,000.00. Beginning July 1, 2018, this $105,000.00 amount

 

must be increased biennially on July 1 of each even-numbered year,

 


for policies issued or renewed before July 1 of the following even-

 

numbered year, by the lesser of 6% or the consumer price index, and

 

rounded to the nearest $5,000.00. The association shall calculate

 

this biennial adjustment by January 1 of the year of its July 1

 

effective date.

 

     (3) An insurer may withdraw from the association only on

 

ceasing to write insurance that provides the security required by

 

section 4901 in this state.

 

     (4) An insurer whose membership in the association has been

 

terminated by withdrawal continues to be bound by the plan of

 

operation and, on withdrawal, all unpaid premiums that have been

 

charged to the withdrawing member are payable on the effective date

 

of the withdrawal.

 

     (5) An unsatisfied net liability to the association of an

 

insolvent member shall be assumed by and apportioned among the

 

remaining members of the association as provided in the plan of

 

operation. The association has all rights allowed by law on behalf

 

of the remaining members against the estate or funds of the

 

insolvent member for money due to the association.

 

     (6) If a member has been merged or consolidated into another

 

insurer or another insurer has reinsured a member's entire business

 

that provides the security required by section 4901 in this state,

 

the member and successors in interest of the member remain liable

 

for the member's obligations.

 

     (7) The association shall do all of the following on behalf of

 

the members of the association:

 

     (a) Assume 100% of all liability as provided in subsection

 


(2).

 

     (b) Establish procedures by which members shall promptly

 

report to the association each claim that, on the basis of the

 

injuries, may reasonably be anticipated to involve the association

 

if the member is ultimately held legally liable for the injuries.

 

Solely for the purpose of reporting claims, the member shall in all

 

instances consider itself legally liable for the injuries. The

 

member shall also advise the association of subsequent developments

 

likely to materially affect the interest of the association in the

 

claim.

 

     (c) Maintain relevant loss and expense data relative to all

 

liabilities of the association and require each member to furnish

 

statistics, in connection with liabilities of the association, at

 

the times and in the form and detail as may be required by the plan

 

of operation.

 

     (d) In a manner provided for in the plan of operation,

 

calculate and charge to members of the association a total premium

 

sufficient to cover the expected losses and expenses of the

 

association that the association will likely incur during the

 

period for which the premium is applicable. The premium must

 

include an amount to cover incurred but not reported losses for the

 

period and may be adjusted for any excess or deficient premiums

 

from previous periods. Excesses or deficiencies from previous

 

periods may be fully adjusted in a single period or may be adjusted

 

over several periods in a manner provided for in the plan of

 

operation. Each member must be charged an amount equal to that

 

member's total written firearm years of insurance providing the

 


security required by section 4901, written in this state during the

 

period to which the premium applies, multiplied by the average

 

premium per firearm. The average premium per firearm is the total

 

premium calculated divided by the total written firearm years of

 

insurance providing the security required by section 4901 written

 

in this state of all members during the period to which the premium

 

applies.

 

     Sec. 4907. Firearm insurance benefits are payable for expenses

 

consisting of all reasonable charges incurred for reasonably

 

necessary products, services, and accommodations for an injured

 

person's care, recovery, or rehabilitation.

 

     Sec. 4909. An insurer providing firearm insurance benefits may

 

establish a premium discount plan based on any of the following

 

factors:

 

     (a) Keeping the firearm in a gun safe.

 

     (b) Having a trigger lock on the firearm.

 

     (c) The policy holder completing a firearm safety course.

 

     Sec. 4913. A person is not entitled to be paid firearm

 

insurance benefits for bodily injury if at the time of the

 

discharge of the firearm any of the following circumstances

 

existed:

 

     (a) The person was using the firearm during the commission of

 

a crime.

 

     (b) The person was attempting to commit suicide.

 

     Sec. 4916. A subtraction from firearm insurance benefits shall

 

not be made because of the value of a claim in tort based on a

 

bodily injury caused by the discharge of a firearm. Firearm

 


insurance benefits are also payable for the noneconomic loss of the

 

injured person.

 

     Sec. 4925. The illegal firearm authority is created within the

 

firearms claims association.

 

     Sec. 4927. (1) Before April 1 of each year, each insurer

 

engaged in writing insurance coverages that provide the security

 

required by section 4901 within this state, as a condition of its

 

authority to transact insurance in this state, shall pay to the

 

illegal firearm authority an assessment equal to 5% of the

 

insurer's firearm claims association assessment under section 4904

 

for the preceding calendar year.

 

     (2) The authority shall segregate money received under

 

subsection (1), and all other money received by the authority, and

 

place the money in a fund to be known as the illegal firearm

 

prevention fund. The authority shall administer the illegal firearm

 

prevention fund.

 

     (3) The authority shall expend money in the illegal firearm

 

prevention fund in the following order of priority:

 

     (a) To pay the costs of administration of the authority.

 

     (b) To achieve the purposes and objectives of this chapter,

 

which may include, but not be limited to, the following:

 

     (i) Provide financial support to the department of state

 

police and local law enforcement agencies for illegal firearm

 

enforcement teams.

 

     (ii) Provide financial support to state or local law

 

enforcement agencies for programs designed to reduce illegal

 

firearms.

 


     (iii) Provide financial support to local prosecutors for

 

programs designed to reduce illegal firearms.

 

     (iv) Provide financial support to judicial agencies for

 

programs designed to reduce illegal firearms.

 

     (v) Provide financial support for neighborhood or community

 

organizations or business organizations for programs designed to

 

reduce illegal firearms.

 

     (vi) Conduct educational programs about firearms safety and

 

firearm insurance.

 

     (4) Money in the illegal firearm prevention fund is not state

 

money.

 

     (5) As used in this section, "illegal firearm" means a weapon

 

described in section 224 of the Michigan penal code, 1931 PA 328,

 

MCL 750.224.

 

     Enacting section 1. This amendatory act does not take effect

 

unless Senate Bill No. ____ or House Bill No. ____ (request no.

 

02976'15) of the 98th Legislature is enacted into law.