Michigan Laws 550.950 – Violation; probable cause; notice; conference; disposition of matter upon agreement of parties; action for damages; hearing; findings and decision; cease and desist order; additional order
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(1) When the commissioner has probable cause to believe that a TPA or manager is violating, or has violated section 40, indicating a persistent tendency to engage in conduct prohibited by that section, or has probable cause to believe that a TPA or manager is violating, or has violated other provisions of this act, he or she shall give written notice to the TPA or manager, pursuant to the administrative procedures act, Act No. 306 of the Public Acts of 1969, being section 24.201 to 24.315 of the Michigan Compiled Laws, setting forth the general nature of the complaint against the TPA or manager and the proceedings contemplated under this section. Before the issuance of a notice of hearing, the staff of the bureau of insurance responsible for the matters which would be at issue in the hearing shall give the TPA or manager an opportunity to confer and discuss the possible complaint and proceedings in person with the commissioner or a representative of the commissioner, and the matter may be disposed of summarily upon agreement of the parties. This subsection shall not be construed to create or diminish any right of a person to bring an action for damages under this section.
(2) A hearing held pursuant to subsection (1) shall be held pursuant to the administrative procedures act, Act No. 306 of the Public Acts of 1969. If, after the hearing, the commissioner determines that the TPA or manager is violating, or has violated section 40, indicating a persistent tendency to engage in conduct prohibited by that section, or has violated or is violating other provisions of this act, the commissioner shall reduce his or her findings and decision to writing, and shall issue and cause to be served upon the TPA or manager a copy of the findings and an order requiring the TPA or manager to cease and desist from engaging in the prohibited activity, and the commissioner may order any of the following:
Terms Used In Michigan Laws 550.950
- Commissioner: means the director. See Michigan Laws 550.902
- Complaint: A written statement by the plaintiff stating the wrongs allegedly committed by the defendant.
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- manager: means an individual responsible for conducting the daily operations of a third party administrator. See Michigan Laws 550.902
- Person: means an individual, sole proprietorship, partnership, corporation, association, or any other legal entity. See Michigan Laws 550.902
- Probable cause: A reasonable ground for belief that the offender violated a specific law.
- Restitution: The court-ordered payment of money by the defendant to the victim for damages caused by the criminal action.
- TPA: means a person that directly or indirectly processes claims under a service contract and that may also provide 1 or more other administrative services under a service contract, other than under a worker's compensation self-insurance program pursuant to section 611 of the worker's disability compensation act of 1969, 1969 PA 317, MCL 418. See Michigan Laws 550.902
(a) Payment of a monetary penalty of not more than $500.00 for each violation but not to exceed an aggregate penalty of $5,000.00, unless the TPA or manager knew or reasonably should have known it was in violation of this act, in which case the penalty shall not be more than $2,500.00 for each violation and shall not exceed an aggregate penalty of $25,000.00 for all violations committed in a 6-month period.
(b) Suspension or revocation of the TPA’s certificate of authority or the manager’s license if the TPA or manager knowingly and persistently violated this act.
(c) Restitution or refund to an aggrieved person.