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The Facility became effective on August 12, 1943, under the name of
the Michigan Automobile Assigned Risk Plan. In 1968 the name was changed to the
Michigan Automobile Insurance Plan; and in 1970, it was given its current name,
the Michigan Automobile Insurance Placement Facility. Effective January 1,
1981, the Essential Insurance Act of 1979 converted the Facility from an
assigned risk plan to a joint underwriting association (JUA).
A JUA is a pooling mechanism under which a limited
number of companies act as servicing carriers. JUA administrative costs and
operating results are shared among the member companies in proportion to their
competitive market business. Member companies are all companies writing auto
casualty insurance in the state of Michigan.
A Board of Governors
consisting of seven representatives from participating member companies, two
insurance agent representatives, and two public representatives administers the
Facility. The company representatives are elected annually by the member
companies. The Commissioner of Insurance appoints the agent and public
Applicants. The Facility is available to persons who (a) own a
motor vehicle registered or to be registered in Michigan, or (b) have a valid
driver’s license, or (c) are eligible for the restoration of their Michigan
driver’s license upon the filing of proof of financial responsibility.
Commercial applicants must have their operating headquarters
(the chief or usual place of business) in the state of Michigan or vehicles to
be insured must be required to maintain security by Section 3102 of the
Michigan Insurance Code.
Applicants may apply for coverage in the Facility through any licensed
Michigan agent and may choose the servicing carrier to issue the policy.
Assignments are made in accordance with the applicant’s preference whenever
possible. However, placement of applications is subject to the Facility's
contract with its servicing carriers.
The Servicing Carriers accept a minimum percentage of applications
equal to their voluntary market share from the second prior year. Their maximum
share may be three times its voluntary market share or as requested, whichever
is less. For related information, see How
Do I Get Auto Insurance? and
Facility Audits. The Facility schedules financial audits on
each servicing carrier every three years. Underwriting and claim audits are
alternated every other year. In addition, each servicing carrier is responsible
for performing an annual internal audit.
Facility Staff. The Facility has a staff of eight, headed by
the General Manager. Staff members include a Finance/Budget Manager, Processing
Manager, Product Manager, and Financial Administrator. The Processing and Mail
Departments handle the daily application flow.
Additional Information. For additional automobile insurance
information, see Related Links.
Five members currently act as JUA
servicing carriers, four
for private passenger business and one for commercial business. The four
private passenger carriers are mandated by Section 3320 of the Michigan
Insurance Code; the commercial carrier has made a voluntary commitment:
Private Passenger: Auto Club Insurance Association | Auto-Owners Insurance Company | Citizens
Insurance Company of America | State Farm Mutual Auto Insurance Company
Commercial: Amerisure Mutual Insurance Company
Agents. Chapter 12 of the Insurance Code permits licensed
agents who are appointed by an insurance company writing auto casualty
insurance in Michigan to submit applications to the Facility for placement. The
Facility employs no insurance agents and does not authorize insurance agents to
act on its behalf. The Facility has no contractual relationship with any agent
and cannot appoint agents.
Insurance agents placing business through the Facility are recognized
as producers of record. Facility applications contain a statement
indicating that the producer of record is not acting on behalf of the Facility
or any insurance company, but is acting on behalf of the applicant.
Producers of Record. Producers of record submit completed
applications on forms provided to them by the Facility. Applications received
in the Facility office are reviewed, sorted, and mailed to the appropriate
servicing carrier. The producer of record is sent a notice of placement
indicating the carrier to which the applicant was placed and the date
processed. For related information, see
Producers of Record and
Newsletters & Special Mailings.
Servicing Carrier. The servicing carrier is responsible for
policy issuance, premium billings, mid-term endorsements, and claims handling.
All servicing carriers for JUA business utilize Facility rules and rates. Prior
to use, these rules and rates must receive written approval by the Insurance
Commissioner. The methodology to determine private passenger base rates is
found in Section 3340 of the Michigan Insurance Code. For related information,
see Servicing Carriers.
AIPSO. The Automobile Insurance Plans Service Office (AIPSO)
in Johnston, Rhode Island, serves as the Facility’s central processor by
providing accounting functions, ratemaking services, manual revisions, and
statistical data. Producers may order a Facility manual, Symbol Pages, and
subscribe to a manual update service through AIPSO. For ordering information,
contact AIPSO .
HEAT® Program . The Facility also administers the HEAT®
program. HEAT® is an acronym for Help Eliminate Auto Thefts. HEAT® will reward
citizens for information leading to the arrest and warrant of suspected car
thieves, carjackers, and the arrest and binding over for trial of suspected
theft ring or chop shop members. For more information on the HEAT® program, see