The bill amends the Michigan Insurance Code of 1956, specifically section 1510, to update regulations regarding insurance premium finance agreements. It establishes that such agreements may include a delinquency charge of $1.00 or up to 5% of the delinquent installment payment if the payment is in default for 10 days or more, but the total delinquency charge cannot exceed $5.00 for certain types of agreements, including those primarily for personal purposes or those issued to nonprofit organizations with annual premiums not exceeding $10,000. Additionally, if a default leads to the cancellation of an insurance contract, a cancellation charge may be applied.

Furthermore, the bill introduces provisions allowing premium finance companies to impose fees for payments made via electronic means, such as credit or debit cards, to cover actual processing costs. These fees must not exceed the actual costs incurred and must be disclosed to the insured prior to transaction completion. The insured must also be given the option to cancel the transaction without incurring a fee and to make payments through traditional methods without additional charges. The bill clarifies that fees for electronic payments are non-refundable and outlines conditions under which fees may not be charged based on payment card network policies.

Statutes affected:
House Introduced Bill: 500.1510