Michigan Office of Administrative Hearings and Rules  
MOAHR-Rules@michigan.gov  
AGENCY REPORT TO THE  
JOINT COMMITEE ON ADMNINISTRATIVE RULES (JCAR)  
1. Agency Information  
Agency name:  
Insurance and Financial Services  
Division/Bureau/Office:  
Insurance  
Name of person completing this form:  
Julie Merriman  
Phone number of person completing this form:  
517-284-8787  
E-mail of person completing this form:  
MerrimanJ2@michigan.gov  
Name of Department Regulatory Affairs Officer reviewing this form:  
Sarah Wohlford  
2. Rule Set Information  
MOAHR assigned rule set number:  
2023-21 IF  
Title of proposed rule set:  
Holding Companies  
3. Purpose for the proposed rules and background:  
MCL 24.242 and 24.245  
Agency Report to JCAR-Page 2  
Michigan regulates the acquisition of control of, and merger with, insurance companies and  
transactions between insurance companies and affiliated entities. Statutory requirements for such  
insurance holding company systems are set forth in Chapter 13 of the Insurance Code of 1956, MCL  
500.1301 to 500.1379, and are implemented by the Director of the Department of Insurance and  
Financial Services (Department), in part, through required registration and statement filings on forms  
and instructions, as prescribed by the Director. These requirements are based on the model Insurance  
Holding Company System Regulatory Act and Regulation promulgated by the National Association  
of Insurance Commissioners (NAIC).  
The proposed rules ensure that Michigan’s oversight of insurance holding company systems are  
aligned with the NAIC models to strengthen and clarify existing regulatory requirements, including  
implementation of the group capital calculation (GCC) and liquidity stress test, as adopted under the  
NAIC models and enacted in Michigan under a series of public acts amending Chapter 13. See 2022  
PA 258 to 263. These requirements are intended to strengthen financial solvency regulatory  
requirements for insurers and give state insurance regulators a better understanding of risks to  
insurance groups and their policyholders. A state’s adoption of the NAIC models is generally required  
for a state to maintain its accreditation through the NAIC, and the changes relevant to the GCC are  
anticipated to become part of the accreditation requirements. The GCC is also intended to comply  
with the “Covered Agreements” between the United States and the European Union (EU) and the  
United Kingdom (UK), and such compliance ensures that a supervisor in the EU or UK could not  
impose its own group capital calculation on a United States group operating in that jurisdiction.  
4. Summary of proposed rules:  
The proposed rules establish a new rule set based on the Insurance Holding Company System  
Regulatory Act (#440) and Insurance Holding Company System Model Regulation (#450)  
promulgated by the National Association of Insurance Commissioners (NAIC). Recent changes to the  
NAIC models strengthen and clarify existing regulatory requirements, including implementation of  
the group capital calculation and liquidity stress test, which were enacted in Michigan under  
amendments to Chapter 13 of the Insurance Code of 1956. See 2022 PA 258 to 264. These  
requirements, which are implemented under the proposed rules, are intended to strengthen financial  
solvency regulatory requirements for insurers and give state insurance regulators a better  
understanding of risks to insurers at the group level.  
5. List names of newspapers in which the notice of public hearing was published and  
publication dates:  
Lansing State Journal, December 1, 2023; Detroit Free Press, November 29, 2023; Daily Press  
(Escanaba), December 1, 2023.  
6. Date of publication of rules and notice of public hearing in Michigan Register:  
12/1/2023  
7. Date, time, and location of public hearing:  
12/19/2023 10:30 AM at Ottawa Building, Conference Room #6 , 611 West Ottawa Street, Lansing,  
Michigan 48933  
8. Provide the link the agency used to post the regulatory impact statement and cost-benefit  
analysis on its website:  
MCL 24.242 and 24.245  
Agency Report to JCAR-Page 3  
https://ARS.apps.lara.state.mi.us/Transaction/RFRTransaction?TransactionID=1448  
9. List of the name and title of agency representative(s) who attended the public hearing:  
Julie Merriman, Administrative Law Specialist, Office of Appeals, Legal Research, and Market  
Regulation.  
10. Persons submitting comments of support:  
Dyck E. Van Koevering, Insurance Alliance of Michigan.  
11. Persons submitting comments of opposition:  
There were no comments in opposition of the entire rule set.  
12. Persons submitting other comments:  
Johanna M. Novak, Upper Peninsula Health Plan; Eric Poe and Justin Klitsch, Reciprocal Attorney-In  
-Fact, Inc., and NJ PURE and Reciprocal Management Corp. and CURE Auto Insurance.  
13. Identify any changes made to the proposed rules based on comments received during the  
public comment period:  
Name &  
Organization public hearing  
Comments made at Written  
Agency Rationale Rule number  
for Rule Change & citation  
and Description changed  
of Change(s)  
Comments  
Made  
1
Johanna M.  
Novak, Upper  
Peninsula  
Filings submitted The Department  
R 500.74(2)  
under the  
currently instructs  
the filings to be  
proposed rules  
Health Plan  
should allow for submitted  
the Department’s electronically  
current electronic pursuant to an  
filing  
annual order of the  
instructions.  
Director. The rule  
has been updated  
to accommodate  
this process.  
14.Date report completed:  
1/17/2024  
MCL 24.242 and 24.245  
;