DEPARTMENT OF INSURANCE AND FINANCIAL SERVICES
INSURANCE BUREAU
SURPLUS LINES INSURANCE FEES
Filed with the secretary of state on
These rules become effective immediately after filing with the secretary of state unless adopted under section 33, 44, or 45a(9) of the administrative procedures act of 1969, 1969 PA 306, MCL 24.233, 24.244, or 24.245a. Rules adopted under these sections become effective 7 days after filing with the secretary of state.
(By authority conferred on the director of
the department of insurance and financial services by sections 210 and 1955 of the insurance code
of 1956,
1956 PA 218, MCL 500.210, and 500.1955, and Executive Reorganization
Order No. 2013-1, MCL 550.991)
R 500.1251, etc
of the Michigan Administrative Code is amended, as follows:
R 500.1251 Surplus lines insurance fee.
Rule 1. (1) A
surplus lines licensee issuing a personal or commercial surplus lines
insurance policy
may charge, in addition to the premium charged by an unauthorized insurer,
a reasonable
fee
to cover underwriting
and other expenses that are unique to surplus lines. the costs
incurred in the placement of the insurance which exceeds $50.00 when the actual
costs incurred for services performed by persons or entities unrelated to the
licensee exceed that amount. The fee allowable under this rule shall be adjusted
annually pursuant to the provisions of section 1915 of the Insurance Code, 1956
PA 218, MCL 500.1915. Expenses unique to surplus lines do not include costs
incurred in maintaining offices and compensating the licensee’s employees.
Subject to the limitations set forth in section 1915(1) of the insurance code
of 1956, 1956 PA 218, MCL 500.1915, expenses unique to surplus lines are
limited to
Costs unrelated to the licensee include the costs incurred in obtaining
any of the following:
(a) Government records.
(b) Inspection records.
(c) Financial ratings.
(d) Consumer
investigation reports. Costs unrelated to the licensee do not include costs
incurred in maintaining offices and compensating the licensee’s employees.
(2) All fees
shall be itemized and the reason for each charge shall be clearly stated on the
invoice issued to the insured. The licensee’s fee disclosure to the
insured under section 1915(2)(b) of the insurance code of 1956, 1956 PA 218, MCL
500.1915, must include the disclosure of any commission.
(3) The licensee shall
provide proof of the itemized fees charged and evidence of the requisite disclosure
of the fees to the director on request. The licensee shall file both of the
following with the commissioner in the form and manner prescribed by the
commissioner:
(a) A report of all fees in excess of the
amount allowable under subrule (1) of this rule charged by the licensee.
(b) An affidavit stating that the licensee
has not received compensation for the cost of these services from the
unauthorized insurer.