The national guide covers specialty liability and other casualty coverages: umbrellas, professional liability, surety and fidelity bonds, and terrorism coverage. This guide covers the Michigan rules tied to them. Most involve surplus lines placement, malpractice nonrenewal and terrorism coverage.

Surplus lines (chapter 19)

• Only a person licensed under chapter 19 may solicit or bind surplus lines coverage or act as a surplus lines agent or broker (MCL 500.1905(1)).
• A risk may be placed with an unauthorized insurer only if the coverage isn't available from an authorized insurer (1910(1)).
  • Coverage the licensee can't get after a diligent search among authorized insurers is presumed unavailable.
  • No-fault auto coverage required by section 3101 is presumed available in the admitted market. That presumption can be rebutted.
• The insured must be told that the insurer isn't licensed in Michigan and that claim payment may not be guaranteed if it becomes insolvent (1905(5)). The policy carries a red-ink notice saying so (1922).
• The licensee pays a 2% premium tax and a 0.5% regulatory fee with semiannual statements (1905(3)).
• Surplus lines insurers aren't members of the P&C Guaranty Association (7911).

Professional liability

Nonrenewal of malpractice insurance requires at least 60 days' written notice (MCL 500.3020(1)(d)).

Legal expense insurance

A licensed casualty solicitor may also act as a solicitor for legal expense insurance without extra authorization (MCL 500.1214(6)).

Terrorism

• A Michigan commercial fire policy may exclude fire and other losses caused directly or indirectly by terrorism (MCL 500.2834).
• The federal Terrorism Risk Insurance Program is a temporary program in which government and private insurers share compensation for insured losses from a certified act of terrorism. Treasury runs it with the Federal Insurance Office. The 2019 reauthorization extended it through December 31, 2027.

Common exam traps

• Surplus lines only when admitted coverage isn't available. No-fault auto is presumed available in the admitted market.
• Surplus lines notices: the insurer isn't licensed and claim payment may not be guaranteed. A red-ink notice is required.
• Surplus lines premium tax: 2% plus a 0.5% fee.
• Malpractice nonrenewal: 60 days.
• TRIP runs through 2027.