RFR-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.
8. Please cite the specific promulgation authority for the rules (i.e. department director,
commission, board, etc.).
By authority conferred on the Director of the Department.
A. Please list all applicable statutory references (MCLs, Executive Orders, etc.).
Sections 210 and 1361 of the Insurance Code of 1956, 1956 PA 218, MCL 500.210 and 500.1361,
and Executive Reorganization Order No. 2013-1, MCL 550.991
B. Are the rules mandated by any applicable constitutional or statutory provision? If so, please
explain.
No. The proposed rules are not mandated under applicable statutory authority.
9. Please describe the extent to which the rules conflict with or duplicate similar rules,
compliance requirements, or other standards adopted at the state, regional, or federal level.
The proposed rules do not conflict with or duplicate any similar rules, compliance requirements,
or other standards adopted at the state, regional, or federal level, apart from their implementation
of the NAIC model law and regulation, as explained above.
10. Is the subject matter of the rules currently contained in any guideline, handbook, manual,
instructional bulletin, form with instructions, or operational memoranda?
Yes. As adopted annually under the Director’s order, insurance holding company forms and
instructions are issued and made publicly available on the Department’s webpage.
11. Are the rules listed on the department’s annual regulatory plan as rules to be processed
for the current year?
No. The proposed rules are not listed on the department’s current annual regulatory plan.
12. Will the proposed rules be promulgated under Section 44 of the Administrative Procedures
Act, 1969 PA 306, MCL 24.244, or under the full rulemaking process?
Full Process
MCL 24.239