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 of the Michigan Administrative Code is amended, as follows:
R 500.1251 Surplus lines insurance fee.
Rule 1. (1) Subject to the
limitations set forth in section 1915 of the insurance code of 1956, 1956 PA
218, MCL 500.1915, A 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 may
include, but are not limited to, issuing, processing, or auditing the surplus
lines policy, but only to the extent the service is provided by the licensee,
or the expense is incurred by the licensee, and it is documented and
verifiable. Expenses unique to surplus lines do not include costs incurred in
maintaining offices and compensating the licensee’s employees. 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 whether the fee was charged in addition to a 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.