This bill amends the Michigan Insurance Code of 1956, specifically section 4665, to update the requirements for sponsors of sponsored captive insurance companies. The bill stipulates that a sponsor must be a person approved by the director, rather than being limited to insurers or insurance holding companies authorized in a state or the District of Columbia. The director's approval will be based on a determination that the sponsor's qualifications align with the purposes of the chapter, taking into account factors such as financial operations experience, financial stability, and business reputation.

Additionally, the bill clarifies that a risk retention group cannot serve as a sponsor or participant in a sponsored captive insurance company. It removes previous requirements regarding the business written by a sponsored captive insurance company, which included stipulations about fronting by authorized insurance companies, reinsurance by approved reinsurers, and securing business through trust funds. These deletions streamline the criteria for business operations within sponsored captive insurance companies, allowing for greater flexibility in compliance with regulatory standards.

Statutes affected:
House Introduced Bill: 500.4665