What Every Agent Should Know
MAIA 2015-2016 Legislative Session
Policy Priorities
Updated February 2015
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12th Edition - February 2015
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Legislative Issues
Table of Contents
What Every Agent Should Know About Legislative Issues
That Can Impact Your Business
Auto No-Fault ..................................................................................... 3
PIP....................................................................................................... 3
Medical Payments ............................................................................... 3
Catastrophic Victim Attendant Care ...................................................... 4
Fraud Efforts ....................................................................................... 4
Michigan Catastrophic Claims Association (MCCA) .............................. 4
Auto Insurance Reform - Low Cost Auto Insurance Policy .................... 5
Electronic Certification ......................................................................... 5
PAST MAIA POSITIONS - NO LEGISLATION CURRENTLY PENDING........... 6
Sales Tax on Services .......................................................................... 6
Trust Accounts .................................................................................... 6
Compensation Disclosure .................................................................... 6
Fingerprinting of Agents ....................................................................... 6
Motorcycle Helmet Repeal.................................................................... 6
Independent Auto Glass Shops (IAGS).................................................. 6
Kreiner vs. McCormick Decision Thresholds ........................................ 7
Licensing Exemptions........................................................................... 7
Health Care Insurance Reform and Exchange........................................ 7
MAIA Results
What MAIA has delivered for its members and
the consumers they serve .................................................................... 8
Legislative Issues
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Legislative Issues
What Every Agent Should Know About Legislative
Issues That Can Impact Your Business
AUTO NO-FAULT
PIP
MAIA recognizes the unsustainability of the current structure for benefits
provided by PIP and is open to revisions that reflect economic reality with
appropriate attention to consumer protections.
Significant increases in claims costs over the last decade is increasingly
jeopardizing the financial stability of auto insurers in Michigan. Reforms,
are needed, including equitable payments to providers for similar services,
family attendant care reforms, and anti-fraud efforts. MAIA believes recent
proposals for reform maintains the integrity and intent of Michigan’s
No-Fault law, continues to provide great protection and benefits for the
insured, and protects insurers’ financial liability and integrity.
Medical Payments
MAIA supports payments for medical and rehabilitative services for
automobile accident related injuries that are equitable and comparable to
payments received by providers from traditional health insurance carriers
for similar services.
The escalating cost of health care is a major driver for PIP premium and
MCCA assessment increases. Absent comparable payments for similar
service, MAIA strongly supports allowing carriers greater flexibility in
negotiating injury claims with medical providers.
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Catastrophic Victim Attendant Care
MAIA supports attendant care cost containment criteria.
Attendant Care makes up a third of all MCCA related costs. Although
agents recognize the severe stress a catastrophic injury can place on a
family, there should be common sense criteria for hours compensated and
costs per hour for basic care for unlicensed family caretakers.
Fraud Efforts
MAIA supports industry efforts to prevent auto insurance fraud for auto
accidents and injury treatments.
The cost of fraud is borne by all other insurance consumers and the industry. MAIA has joined with industry partners to support legislation that would
create the Auto Fraud Prevention Authority (AFPA) within the Auto Placement Facility. Carriers would be assessed $21 million ($6 million would still
go toward the Auto Theft Prevention Authority) to be used as grants to law
enforcement and prosecutors to combat auto insurance fraud.
Michigan Catastrophic Claims Association (MCCA)
MAIA is supportive of a more transparent entity with public oversight
and creating a new catastrophic claims entity to address carrier liability
concerns if proposed with other auto insurance reforms.
Long term financial liability concerns by ratings institutions have begun
to impact carriers because of the current MCCA structure. A new entity
that would relieve carriers of the long term liability and allow for greater
negotiating leverage with providers is acceptable if combined with other
necessary reforms to the system.
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Legislative Issues
Auto Insurance Reform - Low Cost Auto Insurance Policy
MAIA opposes a low cost auto policy that is based on low limits, and nonverifiable eligibility requirements.
Detroit’s economic barriers to population growth, including the cost of
auto insurance, have prompted the introduction of legislation providing a
trial period for a Low Cost Auto Insurance Policy. Applicants are eligible if
they meet several criteria regarding income and driving record. Low limits
coupled with non-verifiable criteria will not accomplish the intended goal of
price reduction and will put consumers at risk.
Electronic Certification
MAIA is supportive of E-Certification as a means of proof of insurance and
to enhance enforcement of properly insured automobiles.
Changes to require data reporting by carriers and continued upgrades to
the Secretary of State data infrastructure are providing the opportunity for
Michigan to be more aggressive in ensuring motorists have the required
insurance when operating a vehicle. E-Certification or Real Time verification are an important means to ensure vehicles are properly insured.
Legislative Issues
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Past MAIA Positions – No Legislation Currently Pending
Sales Tax on Services
MAIA opposes a sales tax on services (agent commissions) increasing
the cost of coverage to their clients.
Trust Accounts
MAIA is opposed to a mandatory separate trust account for premium
payments but encourages all members to maintain separate physical accounts as a best business practice.
Compensation Disclosure
MAIA is opposed to mandatory producer compensation disclosure.
Fingerprinting of Agents
MAIA is opposed to mandatory fingerprinting in order to be licensed.
Motorcycle Helmet Repeal
MAIA supports reinstatement of Michigan’s Motorcycle Helmet Law.
Independent Auto Glass Shops (IAGS)
MAIA supports the IAGS in their efforts to develop a code of conduct for
“third party billers” – specifically auto glass claims entities for auto insurers who also own glass repair shops.
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Legislative Issues
Kreiner vs. McCormick Decision Thresholds
MAIA supports legislative efforts to clarify language because of Michigan
Supreme Court decisions regarding criteria for “serious impairment of
bodily function.”
Licensing Exemptions
MAIA is opposed to a producer licensing exemption for Self Storage Facility (SSF) operators.
Health Care Insurance Reform and Exchange
MAIA supports health care insurance reform if the agent’s unique role in
the process is not restricted and others are prohibited from performing
agent functions unless held to similar accountability standards.
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MAIA Results
The Michigan Association of Insurance Agents (MAIA) is both Michigan’s
largest and premier association representing independent insurance
agents. According to members, one of the most important reasons they
belong to MAIA is for public policy advocacy. That advocacy effort is measured by the benchmark of what constitutes good public policy, and MAIA
has delivered for its members and the consumers they serve.
2005: MAIA successfully promoted and led the effort to reduce by 20 percent CE requirements, representing a 20 percent reduction in CE expenses
and time lost in classes for all agents.
2007: Governor Granholm proposed a 2 percent tax on services that
included agent commissions. MAIA was the only agents association to
provide testimony in committee to challenge the bill. We made a compelling case and the bill was defeated;
MAIA successfully petitioned the Insurance Commissioner that agencies
be reimbursed for repetitively providing proofs of insurance to requesting
entities;
2008: MAIA alone successfully initiated and shepherded a change to the
Worker’s Compensation Law in response to a Michigan Supreme Court
decision that hampered our members’ sports clients’ ability to collect
worker compensation payments for their injured employees.
MAIA successfully petitioned the Insurance Commissioner to issue a
bulletin regarding misrepresenting policy information and coverage on
Certificates of Insurance.
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MAIA was able to thwart efforts to encumber ALL agents to be fingerprinted for a background check at the expense of the agent.
2009: MAIA objected to an OFIR survey that was overly intrusive and punitive for non-compliance resulting in critical changes made to the survey.
MAIA persuaded legislators to remove the impact to agents of punitive
“Bad Faith” legislation aimed at denial and delay of claims by emphasizing the valuable role agents play on behalf of the insured in the claims
process.
MAIA negotiated with and sought to hold OFIR accountable to original
intent for new licensing renewal dates beginning in 2010. OFIR wanted to
significantly shorten the transition license period for agents.
2010: MAIA and other industry partners stopped the Insurance Consumer
Advocate legislation that significantly increased the regulatory burden and
cost of insurance without addressing underlying factors of premium costs.
2011: MAIA worked repeatedly and diligently to educate policy makers at
the state and federal levels on the unique role independent agents play in
health care insurance. Insurance consumers need the expertise, counsel,
and knowledge agents provide in their decision making process (for reasonable compensation). OFIR Commissioner Clinton’s request to the Feds
for an MLR adjustment and his vote to exclude agent commissions from
the MLR reveal MAIA’s commitment to that end.
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MAIA, along with numerous other business trade groups, successfully:
Passed restrictions on the ability of the Executive branch to implement jobs
killing ergonomics mandatory rules and training more restrictive than the
federal government or without legislative approval.
Advocated for Governor Snyder’s business tax reforms that repealed the
MBT/Surcharge and created a Michigan Corporate Income Tax that cut
taxes on job providers by $1.7 billion and ended the double taxation on
flow-through income for more than 95,000 small business. LLCs and SCorps are no longer subject to a Michigan business income tax.
MAIA, along with another industry partners, successfully amended current law to permit a premium finance company that is majority owned by
producers to distribute profits to share holder producers.
2012: After a decade long battle in the legislature and courts, MAIA and Industry partners finally claimed victory in the use of credit based insurance
scores. Legislation to protect this accurate rating resource offers common
sense regulations and consumer protections.
With the support of MAIA and other industry partners, the mini-tort limit
was increased from $500 to $1,000 October 1, 2012.
MAIA was able to eliminate the lowest quote requirement and the $3 fee
required when agents file a change in mailing address in the final recommendations of the Office of Regulatory Reform Insurance and Finance Advisory Rules Committee (ARC) in June 2011. As a result, MAIA was able
to advocate their passage through the state legislature at the end of 2012.
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2013: MAIA, along with the Department of Insurance and Financial
Services (DIFS) was able to modify objectionable language in one bill that
provides an insurance license exemption for travel agents and in another
that defines service contracts.
2014: MAIA developed, advocated for, and helped pass language that
clarifies the use of Certificates of Insurance and makes it a civil infraction
to demand or pressure a person to alter a Certificate that does not reflect
the policy coverage.
MAIA, along with DIFS, strongly opposed an effort that would exempt Self
Storage Facility operators from insurance licensing requirements leading to
the Governor’s veto of the bill.
MAIA, along with industry friend, NAIFA of Michigan advocated for, negotiated, and helped pass legislation that will provide for DIFS oversight of
Navigators and Certified Application Counselors that work in the federal
exchange or marketplace. The bill overwhelmingly passed the legislature
after MAIA was able to address concerns from the Michigan Hospital Association.
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Michigan Association of Insurance Agents
1141 Centennial Way, Lansing, MI 48917
P: (517) 323-9473 F: (517) 323-1629
http://michagent.org
An online version of this booklet can be found at:
https://bit.ly/maiaissues
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Legislative Issues