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HB 6099

AN ACT IN ACCORDANCE WITH RHODE ISLAND GENERAL LAWS SECTION 16-7-44 APPROVING THE ISSUANCE OF $10,400,000 BONDS BY THE TOWN OF NEW SHOREHAM TO FINANCE ADDITIONS, RENOVATIONS, IMPROVEMENTS, ALTERATIONS AND REPAIRS TO SCHOOLS AND SCHOOL FACILITIES IN THE TOWN INCLUDING, BUT NOT LIMITED TO, BONDS AND NOTES ISSUED PURSUANT TO FINANCING AGREEMENTS WITH THE RHODE ISLAND HEALTH AND EDUCATIONAL BUILDING CORPORATION

2025 Regular Session Introduced by Tina Spears

HB6099 lets the DIFS director approve sponsors of sponsored captive insurers beyond categories, expanding regulatory flexibility while keeping cell protections and funding rules.

06/13/2025 Signed by Governor
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Bill Summary · HB 6099

Summary — HB 6099 (Insurance: sponsor of sponsored captive insurance company; modify)

Status: Introduced Nov 13, 2024; Passed House Dec 12, 2024 (immediate effect); referred to Committee on Government Operations Dec 18, 2024; listed as referred to Joint Comm. on Human Services Jan 22, 2025. Amends section 4665 of 1956 PA 218 (MCL 500.4665).

Purpose

HB 6099 revises who may serve as the sponsor of a “sponsored captive insurance company” in Michigan by giving the Department of Insurance and Financial Services (DIFS) director discretion to approve sponsors beyond the currently enumerated categories. The change is intended to provide regulatory flexibility while preserving safeguards for protected cells and policyholders.

Key provisions

  • Sponsor approval by director:
    • The bill allows a sponsor to be a “person approved by the director” in the director’s discretion, provided approval is consistent with the purposes of the Insurance Code.
    • In evaluating a proposed sponsor, the director must consider factors including the sponsor’s type and structure, experience in financial operations, financial stability and strength, business reputation, and other relevant factors.
  • Retains certain prohibitions and safeguards:
    • A risk retention group remains prohibited from being either a sponsor or a participant of a sponsored captive insurance company.
    • The statutory protections for business written by each protected cell are preserved: each protected cell’s business must (at least) be fronted by an authorized insurer (subject to the wholly owned subsidiary condition), be reinsured by a reinsurer authorized/approved by Michigan, or be secured by a U.S.-based trust funded by an irrevocable letter of credit or other asset acceptable to the commissioner/director. Trust funding must be at least equal to reserves for related liabilities; the director may require increased funding and must approve the trust form and instrument.

Who is affected

  • Sponsored captive insurance companies operating in Michigan and their potential sponsors.
  • Entities or persons seeking to act as sponsors (broader pool may be eligible subject to director approval).
  • DIFS (director/commissioner) — increased discretion and ongoing oversight responsibility.
  • Risk retention groups (remains excluded from sponsorship/participation).

Procedural / timeline notes

  • Introduced by Rep. Penelope Tsernoglou (and co-sponsors) Nov 13, 2024.
  • Passed the Michigan House Dec 12, 2024 (96–12), given immediate effect and transmitted.
  • Referred to Committee on Government Operations (and later listed as referred to Joint Committee on Human Services).

Potential impact

  • Regulatory flexibility: DIFS can approve nontraditional sponsors on a case‑by‑case basis, potentially encouraging additional sponsored captive activity or novel sponsor structures in Michigan.
  • Increased regulatory discretion: broad approval authority concentrates decision-making with DIFS and could lead to variable interpretations; statutory criteria in the bill guide but do not strictly limit discretion.
  • Consumer/policyholder safeguards: existing protections for protected cells (fronting, reinsurance, or trust security) and director authority to require adequate trust funding remain in place.

Compiled from official sources — confirm details with the bill’s official record.

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