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SENATE BILL NO. 944
A bill to amend 1956 PA 218, entitled
"The insurance code of 1956,"
by amending section 1510 (MCL 500.1510), as amended by 1994 PA 6.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1510. (1) An insurance premium finance agreement may 1
provide for the payment by the insured of a delinquency charge of 2
$1.00 to a maximum of 5% of the amount of the delinquent 3
installment payment on any installment payment that is in default 4
for a period of 10 days or more. However, an insurance premium 5
finance agreement shall must not provide for the payment by the 6
May 07, 2026, Introduced by Senator BELLINO and referred to Committee on Finance, Insurance,
and Consumer Protection.
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insured of a delinquency charge that exceeds $5.00 on any 1
installment that is in default for a period of 10 days or more for 2
either of the following: 3
(a) An insurance premium finance agreement that finances an 4
insurance contract primarily for a personal, family, or household 5
purpose. 6
(b) An insurance premium finance agreement, the annual premium 7
of which does not exceed $10,000.00, that is issued to a nonprofit 8
organization exempt from taxation under section 501 of the internal 9
revenue code of 1986, 26 U.S.C. USC 501. 10
(2) If a default under subsection (1) results in the 11
cancellation of any insurance contract listed in the agreement, the 12
agreement may provide for the payment by the insured of a 13
cancellation charge equal to the difference between any delinquency 14
charge imposed in respect to the installment in default and $5.00. 15
(3) A finance company may impose or pass along a fee for an 16
insured making payment by credit card, debit card, electronic funds 17
transfer, electronic check, or other electronic means to offset 18
actual costs incurred by the premium finance company for accepting 19
and processing payments made by electronic means subject to the 20
following: 21
(a) Any fee collected by the premium finance company under 22
this subsection must not exceed the actual costs incurred by the 23
premium finance company. However, the premium finance company may 24
impose a fee instead of the actual cost of the individual payment 25
type that does not exceed the average of the actual cost incurred 26
for the various types of electronic payments for which the premium 27
finance company imposes a fee. 28
(b) The premium finance company charging, collecting, or 29
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passing through a fee under this subsection shall notify the 1
insured of the amount of the fee before completing a transaction, 2
provide an opportunity for the insured to cancel the transaction 3
without incurring a fee, and make available the option to make a 4
payment on a loan by check, cash, or money order directly to the 5
premium finance company without the imposition of a fee for a card 6
payment or electronic payment. 7
(c) If an insured elects to make a payment to the premium 8
finance company by credit card, debit card, electronic funds 9
transfer, electronic check, or other electronic means and a fee is 10
imposed and collected under this subsection, the payment of the fee 11
must not be refundable. 12
(d) The fee may be charged in addition to all other interest 13
and fees allowed by law. 14
(e) The premium finance company shall not charge a fee on any 15
debit card or prepaid card transaction if the payment card network 16
on which the transaction is initiated or processed prohibits the 17
fee by contract, rule, or policy. 18
(4) As used in this section, "actual costs" means actual 19
third-party costs incurred or charged for the processing of 20
payments made by electronic means. If a premium finance company is 21
an affiliate of an entity that processes payments made by 22
electronic means, the payment processing affiliate is considered a 23
third party. 24