The ATPA is funded by an annual assessment as provided for in Section 6107, MCL 500.6107.  Pursuant to Subsection 6107(1), insurers that write specific types of insurance coverage in Michigan are subject to the assessment, which is paid to the ATPA for deposit into the Fund:

[E]ach insurer engaged in writing insurance coverages which provide the security required by section 3101(1) within this state, as a condition of its authority to transact insurance in this state, shall pay to the authority an assessment equal to $1.00 multiplied by the insurer’s total earned car years of insurance providing the security required by section 3101(1) written in this state during the immediately preceding calendar year.  [MCL 500.6107(1).]

The phrase “earned car years” is not defined by statute, but as explained by the ATPA in the annual assessment form sent to insurers, “[a]n ‘Earned Car Year’ equals 12 months of insurance coverage on a vehicle.  For example, if 12 cars are each insured for one month then the total assessment would be one Earned Car Year.  Likewise, if 12 cars are each insured for 12 months then the total would equal 12 Earned Car Years.”[1]  The assessment due is the number of earned car years multiplied by $1.00.  Using the above examples: 1 (earned car year) x $1.00 = $1.00 assessment; 12 (earned car years) x $1.00 = $12.00 assessment.  According to the ATPA’s most recent report, assessments for insurers range from $1.00 to $1 million based on the number of vehicles insured by the particular insurer.  In Fiscal Year 2014, the ATPA received approximately $6.27 million in assessments.[2] 

You ask whether the ATPA is limited to assessing fees on only insured private passenger cars.  Your request and accompanying materials focus on the phrase “earned car years,” and suggest that use of the term “car” in MCL 500.6107(1) limits the type of motor vehicle insurance upon which an assessment may be based to private passenger vehicles. 

As noted above, the phrase “earned car years” is not defined for purposes of Section 6107 of the Code.  Broadening the inquiry reveals that the term “car years” is used in other chapters of the Code.  Subsection 3104(7)(d), MCL 500.3104(7)(d), of Chapter 31, pertaining to the Michigan Catastrophic Claims Association (MCCA), uses the term “written car years” for purposes of calculating premiums charged by the MCCA on insurers.  Likewise Subsection 3303(e)(i), MCL 500.3303(e)(i), of Chapter 33, regarding the Michigan Automobile Insurance Placement Facility, uses the phrase “car years written in this state” for purposes of its calculations.  See also MCL 500.3340(4)(b).  These chapters similarly do not define the term “car years.”   Under these circumstances, the Legislature appears to have used the phrase “car years” as a term of art, rather than assigning it any specific meaning in the Code.  The language of MCL 500.6107 must be reexamined with this understanding.

Looking again at Subsection 6107(1), the focus is properly placed on the language incorporating Section 3101(1) of the Code:

[E]ach insurer engaged in writing insurance coverages which provide the security required by section 3101(1) within this state, as a condition of its authority to transact insurance in this state, shall pay to the authority an assessment equal to $1.00 multiplied by the insurer’s total earned car years of insurance providing the security required by section 3101(1) written in this state during the immediately preceding calendar year.  [MCL 500.6107(1); emphasis added.]

Under the statute, the ATPA is authorized to assess and collect a fee from each insurer writing insurance coverages that “provide the security required by section 3101(1)” of the Code.  Stated another way, if an insurer’s motor vehicle insurance policy provides the insurance coverage mandated by MCL 500.3101(1), the ATPA is authorized to include that policy in its statutory assessment formula.

Subsection 3101(1) of the Code, MCL 500.3101(1), requires an “owner or registrant” of a “motor vehicle” that must be registered in Michigan to “maintain security for payment of benefits under personal protection insurance, property protection insurance, and residual liability insurance.”  MCL 500.3101(2)(h) defines “motor vehicle” as “a vehicle, including a trailer, that is operated or designed for operation upon a public highway by power other than muscular power and has more than 2 wheels.”  The definition of “motor vehicle” excludes motorcycles,[3] mopeds, farm equipment not subject to Michigan registration requirements, off-road vehicles as defined in Subsection 3101(j), golf carts, power-driven mobility devices, and commercial quadricycles.  Thus, under Subsection 3101(1), the majority of vehicles operated on Michigan roadways are required to maintain an insurance policy providing personal protection insurance (i.e., “PIP” or first-party medical benefits), property protection insurance, and residual liability insurance.  These insurance coverages are mandatory, and standard, in both private passenger and commercial insurance policies.

When interpreting statutes, the goal is to “give effect to the Legislature’s intent, focusing first on the statute’s plain language.”  Malpass v Dep’t of Treasury, 494 Mich 237, 247-48; 833 NW2d 272 (2013) (internal quotation omitted).  In focusing on a statute’s plain language, we also must “examine the statute as a whole, reading individual words and phrases in the context of the entire legislative scheme.” Id. 

Considering MCL 500.6107(1) and MCL 500.3101(1) together the statutes do not limit the ATPA to assessing only private passenger insurance policies.  Instead, the ATPA has the statutory authority to assess every insurance policy written in Michigan that “provid[es] the security required by section 3101(1),” according to the statutory formula of $1.00 multiplied by an insurer’s total earned car years of insurance providing this coverage. 

This interpretation is consistent with that accorded similar language by the MCCA.  The MCCA is statutorily created under Section 3104 of the Code, MCL 500.3104, as an unincorporated nonprofit association designed to reimburse catastrophic PIP claims paid by insurers resulting from motor vehicle accidents.[4]  Like the ATPA, the MCCA must operate in compliance with a plan of operation.  See MCL 500.3104(9), (10), and (17).

Employing the same language found in MCL 500.6107(1) regarding the scope of the ATPA’s assessment authority, MCL 500.3104(1) requires “[e]ach insurer engaged in writing insurance coverages that provide the security required by section 3101(1) within this state, as a condition of its authority to transact insurance in this state” to be a member of the MCCA.  (Emphasis added).  The MCCA’s assessment formula then authorizes the MCCA to charge each member “an amount equal to that member’s total written car years of insurance providing the security required by section 3101(1) or 3103(1), or both, written in this state during the period to which the premium applies, multiplied by the average premium per car.”  MCL 500.3104(7)(d) (emphasis added).

Thus, although the MCCA is additionally authorized to assess motorcycle policies (under Subsection 3103(1)) and its assessment formula is slightly different than the ATPA’s (total written car years versus total earned car years, multiplied by the average MCCA premium per car), Subsection 3104(7)(d) similarly authorizes the MCCA to assess every insurance policy written in Michigan that “provid[es] the security required by section 3101(1).”[5]  Consistent with this statutory authority, the MCCA’s plan of operation includes in its assessment calculation insurance policies written in Michigan “providing to any and all vehicles . . . the security required by Sections 3101 and 3103.”  (Emphasis added).[6] 

At this time, the ATPA’s plan of operation assesses insurers “$1 ($1 per car/per year) per private passenger vehicle policy year earned in the previous year.”  (Emphasis added).[7]  Consistent with its statutory mandate, the ATPA Board may amend its plan of operation to include within its assessment other insurance policies that provide the security required by MCL 500.3101(1) of the Code. 

It is my opinion, therefore, that MCL 500.6107(1) authorizes the ATPA to assess fees on all motor vehicles insured under MCL 500.3101 of the Code, not just private passenger vehicles.                                                                                    

  
            BILL SCHUETTE
            Attorney General