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HB 6102

Insurance: other; limited certificate of authority to transact insurance or reinsurance; modify. Amends sec. 4705 of 1956 PA 218 (MCL 500.4705).

2023-2024 Regular Session Introduced by Felicia Brabec and 13 co-sponsors

Lowers SPFC limited certificate fee from $10,000 to $5,000 and shifts renewal payments to within 90 days after the SPFC’s fiscal year end.

REFERRED TO COMMITTEE ON GOVERNMENT OPERATIONS
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Bill Summary · HB 6102

Summary — HB 6102 (amends MCL 500.4705)

Subject: Insurance — limited certificate of authority for special purpose financial captives (SPFCs) and other captive entities

Purpose

HB 6102 amends section 4705 of the Michigan Insurance Code (MCL 500.4705) to revise procedures governing applications, operation, and fees for entities that seek a limited certificate of authority to transact insurance or reinsurance in Michigan — in particular special purpose financial captives (SPFCs), captive insurance companies, and captive LLCs. The bill clarifies existing operational and filing requirements for SPFCs and reduces certain fees.

Key provisions

  • Lowers the nonrefundable application fee for a limited certificate of authority for an SPFC from $10,000 to $5,000.
  • Changes the timing for payment of renewal fees for SPFCs (and related certificate timing) so the renewal/fee payment is due within 90 days after the end of the SPFC’s fiscal year (replacing the prior March 1 annual deadline).

  • Reiterates and codifies application, organizational, and operational requirements for SPFCs, including (but not limited to):

    • SPFCs may only insure or reinsure the risks of their counterparty (with limited reinsurance allowed as approved by the director).
    • Must obtain a limited certificate of authority from the Department of Insurance and Financial Services (DIFS).
    • Must hold at least one management meeting each year in Michigan and maintain principal place of business in Michigan.
    • Must designate and maintain a resident registered agent in Michigan.
    • Must provide documentation related to the insurance securitization transaction (including counsel opinion and sworn financial statements) at and shortly after closing.
    • Organizational documents must be submitted to the Michigan Attorney General for review and certification before they are effective for the purposes of the chapter.
    • DIFS director’s pre-approval review includes capitalization, liquidity, managers’ expertise, plan of operation, biographical affidavits for officers/directors, pro forma financials and stress scenarios, and other factors demonstrating ability to meet policy obligations.

  • Maintains other director/commissioner discretion and review standards for granting a limited certificate.

Who is affected

  • SPFCs and entities seeking to form/operate a captive insurer or captive LLC in Michigan.
  • Parent companies/counterparties that participate in insurance securitizations involving an SPFC.
  • Department of Insurance and Financial Services (DIFS) and the Michigan Attorney General (for organizational-document reviews).
  • Resident registered agents and service providers that support SPFC operations.

Fiscal/operational impact

  • Direct: reduced up-front application cost for applicants ($10,000 → $5,000). Timing change for renewal payments shifts administrative schedule to align with each SPFC’s fiscal year (may simplify accounting).
  • Indirect: preserves detailed filing, documentation, and in‑state meeting requirements that continue to impose compliance and administrative obligations on SPFCs and service providers.

Legislative status & timeline

  • Introduced: November 13, 2024 (Rep. Jerry Neyer and co-sponsors).
  • Passed Michigan House: December 12, 2024 (immediate effect provision; Roll Call 456 — Yeas 99, Nays 10).
  • Referred to Committee on Government Operations: December 18, 2024.
  • Subsequent referral: to Joint Committee on Human Services (recorded January 22, 2025).
  • Current statutory target: amend MCL 500.4705 upon enactment.

Note: This summary focuses on the substantive changes to MCL 500.4705 reflected in HB 6102 as passed by the House; the bill combines fee/timing changes with a restatement of SPFC organizational and operational requirements already regulated under that section.

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

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