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.