- 8 - Realistically, however, the sale of credit insurance is part of the dealership's function. Dealerships perform a variety of services, including selling cars, arranging financing, and fulfilling warranty obligations as defined in service contracts. Among these services, offering credit insurance is a subservice of arranging financing. Credit insurance is offered on the installment sale purchase agreement filled out by employees of the dealerships. Since the installment agreement offers credit insurance, the dealerships, through their employees, must be able to explain the purpose of credit insurance and calculate its cost. Moreover, the dealers collect payment for credit insurance when the dealer-arranged financing is completed. Although the commissions paid by the insurance companies are paid to the dealer-related agencies, it is clear from the record that the dealerships earn such commissions. And those commissions are paid to the dealer- related agencies only because Michigan law mandates that result. However, the agencies have no employees and take no initiative in selling the credit insurance. The only role the dealer-related agencies play is as repositories of commissions paid by the insurance companies. There is nothing in the record to indicate that the agencies played any part whatsoever in earning the commissions paid to them. The agencies are owned (directly or indirectly, e.g., through a corporation) by relatives of the dealerships' owners with the result that the dealerships'Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
Last modified: May 25, 2011