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Bill

SB 495

Insurance: fraternal benefit societies; liquidation and rehabilitation procedures; modify. Amends sec. 8182 of 1956 PA 218 (MCL 500.8182) & adds secs. 8199b & 8199c.

2023-2024 Regular Session Introduced by Dan Lauwers

Michigan bill updates fraternal benefit society liquidation and rehabilitation procedures to modernize insolvency protections and regulatory oversight of member-owned insurance organizations.

placed on second reading
#insurance:fraternalbenefitsocieties
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Bill Summary · SB 495

Legislative bill overview

SB 495 modifies Michigan's insurance law (the 1956 Insurance Code) to update the liquidation and rehabilitation procedures for fraternal benefit societies. The bill amends existing provisions and adds new sections governing how these organizations are wound down or restored to financial health when facing insolvency.

Why is this important

Fraternal benefit societies—membership organizations that provide insurance and financial benefits to their members—operate throughout Michigan. Clear liquidation and rehabilitation procedures protect member assets, ensure fair distribution of remaining funds, and maintain orderly processes when these societies face financial distress. Updated procedures reflect modern insurance practices and regulatory standards.

Potential points of contention

  • Scope of regulatory authority: Whether the amended procedures give the insurance commissioner sufficient or excessive power over member-owned organizations
  • Member protection vs. operational flexibility: Balancing protections for members' invested funds against allowing societies operational flexibility during financial recovery
  • Implementation complexity: The practical challenges and costs of implementing new rehabilitation procedures for established fraternal organizations

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

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