Michigan Laws 500.1325a – Annual enterprise risk report
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Terms Used In Michigan Laws 500.1325a
- Director: means , unless the context clearly implies a different meaning, the director of the department. See Michigan Laws 500.102
- Enterprise risk: means an activity, circumstance, event, or series of events involving 1 or more affiliates of an insurer that, if not remedied promptly, is likely to have a material adverse effect on the financial condition or liquidity of the insurer or its insurance holding company system as a whole, including, but not limited to, anything that would cause the insurer to be hazardous to policyholders, creditors, and the public. See Michigan Laws 500.1301
- Insurance holding company system: means 2 or more affiliated persons, 1 or more of which is an insurer. See Michigan Laws 500.115
- Insurer: means that term as defined in section 106 and includes a nonprofit dental care corporation operating under 1963 PA 125, MCL 550. See Michigan Laws 500.1301
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Person: means that term as defined in section 114, except that it does not include a securities broker that does not perform more than the usual and customary broker's function, so long as the securities broker holds less than 10% of the voting securities of an insurer or of any person that controls an insurer. See Michigan Laws 500.1301
- state: when applied to the different parts of the United States, shall be construed to extend to and include the District of Columbia and the several territories belonging to the United States; and the words "United States" shall be construed to include the district and territories. See Michigan Laws 8.3o
(1) Except as otherwise provided in subsection (2), the ultimate controlling person of an insurer subject to registration under section 1324 shall file an annual enterprise risk report with the director or a jurisdiction designated by the director. The report must be appropriate to the nature, scale, and complexity of the operations of the insurance holding company system and must, to the best of the ultimate controlling person’s knowledge and belief, identify the material risks within the insurance holding company system that could pose enterprise risk to the insurer. The ultimate controlling person of an insurer subject to registration under section 1324 may request an exemption from this section. The ultimate controlling person of the insurer shall file with the director a written statement discussing the reasons why the ultimate controlling person of the insurer should be exempt. The director may grant the exemption if after review of the statement the director finds that compliance with this section would create an undue financial or organizational hardship on the ultimate controlling person.
(2) The ultimate controlling person of an insurance holding company system subject to registration under section 1324 that meets the requirements of this subsection before December 23, 2015 is not required to file an annual enterprise risk report under subsection (1) if all of the following requirements are met:
(a) The ultimate controlling person is exempt from taxation under section 501(c)(5) of the internal revenue code of 1986, 26 USC 501.
(b) The ultimate controlling person was organized under the laws of this state before January 1, 1921.
(c) The director has not approved the controlling person’s petition for disclaimer of affiliation or has disallowed a disclaimer of affiliation under section 1332.
(d) The insurer in which the ultimate controlling person owns a controlling interest meets both of the following requirements:
(i) Is registered under section 1324.
(ii) Is a wholly domestic insurer with not more than 10% of its written premium covering risks outside of this state and has not issued policies directly insuring any risk located outside of this state.