Michigan Compiled Laws
218-1956-31 - Chapter 31 Motor Vehicle Personal and Property Protection (500.3101...500.3179)
Section 500.3175 - Rules for Assignment of Claims; Duties of Insurer to Whom Claims Assigned; Compromises and Settlements; Procedures; Limitation on Action to Enforce Rights; Interest on Delinquent Payments; Installment Payments; Default.

Sec. 3175.
(1) The assignment of claims under the assigned claims plan must be made according to procedures established in the assigned claims plan that assure fair allocation of the burden of assigned claims among insurers doing business in this state on a basis reasonably related to the volume of automobile liability and personal protection insurance they write on motor vehicles or the number of self-insured motor vehicles. An insurer to whom claims have been assigned shall make prompt payment of loss in accordance with this act. An insurer is entitled to reimbursement by the Michigan automobile insurance placement facility for the payments, the established loss adjustment cost, and an amount determined by use of the average annual 90-day United States treasury bill yield rate, as reported by the Council of Economic Advisers as of December 31 of the year for which reimbursement is sought, as follows:
(a) For the calendar year in which claims are paid by the insurer, the amount must be determined by applying the specified annual yield rate specified in this subsection to 1/2 of the total claims payments and loss adjustment costs.
(b) For the period from the end of the calendar year in which claims are paid by the insurer to the date payments for the operation of the assigned claims plan are due, the amount must be determined by applying the annual yield rate specified in this subsection to the total claims payments and loss adjustment costs multiplied by a fraction, the denominator of which is 365 and the numerator of which is equal to the number of days that have elapsed between the end of the calendar year and the date payments for the operation of the assigned claims plan are due.
(2) An insurer assigned a claim by the Michigan automobile insurance placement facility under the assigned claims plan or a person authorized to act on behalf of the plan may bring an action for reimbursement and indemnification of the claim on behalf of the Michigan automobile insurance placement facility. The insurer to which the claim has been assigned shall preserve and enforce rights to indemnity or reimbursement against third parties and account to the Michigan automobile insurance placement facility for the rights and shall assign the rights to the Michigan automobile insurance placement facility on reimbursement by the Michigan automobile insurance placement facility. This section does not preclude an insurer from entering into reasonable compromises and settlements with third parties against whom rights to indemnity or reimbursement exist. The insurer shall account to the Michigan automobile insurance placement facility for any compromises and settlements. The procedures established under the assigned claims plan of operation must establish reasonable standards for enforcing rights to indemnity or reimbursement against third parties, including a standard establishing an amount below which actions to preserve and enforce the rights need not be pursued.
(3) An action to enforce rights to indemnity or reimbursement against a third party must not be commenced after the later of the following:
(a) Two years after the assignment of the claim to the insurer.
(b) One year after the date of the last payment to the claimant.
(c) One year after the date the responsible third party is identified.
(4) Payments for the operation of the assigned claims plan not paid by the due date bear interest at the rate of 20% per annum.
(5) The Michigan automobile insurance placement facility may enter into a written agreement with the debtor permitting the payment of the judgment or acknowledgment of debt in installments payable to the Michigan automobile insurance placement facility. A default in payment of installments under a judgment as agreed subjects the debtor to suspension or revocation of his or her motor vehicle license or registration in the same manner as for the failure by an uninsured motorist to pay a judgment by installments under section 3177, including responsibility for expenses as provided in section 3177(4).
History: Add. 1972, Act 294, Eff. Mar. 30, 1973 ;-- Am. 1972, Act 345, Imd. Eff. Jan. 9, 1973 ;-- Am. 1984, Act 426, Eff. Mar. 29, 1985 ;-- Am. 2012, Act 204, Eff. Sept. 1, 2012 ;-- Am. 2019, Act 21, Imd. Eff. June 11, 2019 Compiler's Notes: Enacting section 1 of Act 204 of 2012 provides:"Enacting section 1. Sections 3172, 3173a, 3174, and 3175 of the insurance code of 1956, 1956 PA 218, MCL 500.3172, 500.3173a, 500.3174, and 500.3175, as amended by this amendatory act, take effect on the date the assigned claims plan is approved by the insurance commissioner under section 3171(3) of the insurance code of 1956, 1956 PA 218, MCL 500.3171."Popular Name: Act 218Popular Name: Essential InsurancePopular Name: No-Fault Insurance