The bill amends section 640 of the Michigan Insurance Code of 1956, specifically addressing the limitations on the amount of risk an insurer can expose itself to in relation to its paid-up capital and surplus. The amendment clarifies that an insurer must not expose itself to any loss on a single risk or hazard exceeding 10% of its paid-up capital and surplus, with the stipulation that any portion of a risk that has been reinsured by a licensed insurer must not be included in this calculation. Additionally, the bill introduces a new provision that allows for the waiver of the 10% limitation for specific risks upon application by a title insurer, provided that the net retained liability does not exceed 50% of the insurer's paid-up capital and surplus.

The bill also modifies the definitions and conditions related to title insurance. It removes previous provisions that set different risk exposure limits for title insurers based on their licensing date and financial ratings, consolidating the risk exposure limit to 10% for new title insurers unless they meet certain financial criteria. The language clarifies that the section does not apply to insurers transacting title insurance, ensuring that the definitions of "title insurance" and "title insurer" are consistent with existing law. Overall, the bill aims to streamline regulations while maintaining financial safeguards for insurers operating in Michigan.

Statutes affected:
House Introduced Bill: 500.640