Michigan Laws 500.8140 – Subrogation to rights of creditor; distribution; excess received by creditor
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Terms Used In Michigan Laws 500.8140
- Creditor: is a person having a claim against the insurer, whether matured or unmatured, liquidated or unliquidated, secured or unsecured, absolute, fixed, or contingent. See Michigan Laws 500.8103
- Foreign guaranty association: means any similar entities now in existence or hereafter created by the legislature of any other state. See Michigan Laws 500.8103
- Guaranty association: means the Michigan property and casualty guaranty association, the worker's compensation self-insurance security fund, the Michigan life and health insurance guaranty association, and any other similar entity now or hereafter created by the legislature of this state for the payment of claims of insolvent insurers. See Michigan Laws 500.8103
- Insurer: means an individual, corporation, association, partnership, reciprocal exchange, inter-insurer, Lloyds organization, fraternal benefit society, or other legal entity, engaged or attempting to engage in the business of making insurance or surety contracts. See Michigan Laws 500.106
- person: may extend and be applied to bodies politic and corporate, as well as to individuals. See Michigan Laws 8.3l
If a creditor, whose claim against an insurer is secured in whole or in part by the undertaking of another person, fails to prove and file that claim, the other person may do so in the creditor’s name and shall be subrogated to the rights of the creditor, whether the claim has been filed by the creditor or by the other person in the creditor’s name, to the extent that he or she discharges the undertaking. In the absence of an agreement with the creditor to the contrary, the other person shall not be entitled to any distribution until the amount paid to the creditor on the undertaking plus the distributions paid on the claim from the insurer’s estate to the creditor equals the amount of the entire claim of the creditor. Any excess received by the creditor shall be held by him or her in trust for the other person. The term “other person”, as used in this section, is not intended to apply to a guaranty association or foreign guaranty association.