The bill amends the Michigan Insurance Code of 1956, specifically section 4601, to clarify and expand definitions related to captive insurance companies. Key definitions include "affiliated company," "alien captive insurance company," "association captive insurance company," and "industrial insured captive insurance company," among others. The bill introduces new terms such as "participant" and "sponsored captive insurance company," which outline the relationships and structures within captive insurance arrangements. Additionally, it specifies the roles of sponsors and the nature of participant contracts, emphasizing the segregation of liabilities through protected cells.

Notably, the bill modifies existing language to enhance clarity and precision in the definitions. For instance, it replaces "participant" with "participants" in certain contexts and clarifies that a "sponsor" is any entity approved by the director to provide capital for a sponsored captive insurance company. The bill also updates the definition of "control" and "surplus," ensuring that the language aligns with current practices and regulatory standards. Overall, these amendments aim to modernize the legal framework governing captive insurance in Michigan, promoting a clearer understanding of the various entities and their relationships within the insurance landscape.

Statutes affected:
House Introduced Bill: 500.4601
As Passed by the House: 500.4601