Michigan Office of Administrative Hearings and Rules  
Administrative Rules Division (ARD)  
MOAHR-Rules@michigan.gov  
REQUEST FOR RULEMAKING (RFR)  
1. Department:  
Insurance and Financial Services  
2. Bureau:  
Insurance  
3. Promulgation type:  
Full Process  
4. Title of proposed rule set:  
Term and Universal Life Insurance Reserve Financing  
5. Rule numbers or rule set range of numbers:  
R 500.121 - R 500.128  
6. Estimated time frame:  
6 months  
Name of person filling out RFR:  
Julie Merriman  
E-mail of person filling out RFR:  
MerrimanJ2@michigan.gov  
Phone number of person filling out RFR:  
517-284-8787  
Address of person filling out RFR:  
530 W. Allegan St, Lansing, Michigan, 48933  
7. Describe the general purpose of these rules, including any problems the changes are intended  
to address.  
The proposed rules govern reserve financing arrangements used by certain life insurers in  
reinsurance transactions to secure the reinsurance treaty or capitalize the reinsurer in order to meet  
statutory reserve requirements. The proposed rules ensure that funds backing these transactions are  
held in the appropriate form and level of security. The proposed rules would adopt Model  
Regulation #787 of the National Association of Insurance Commissioners (NAIC). The  
Department currently implements substantially similar requirements through review of financial  
statements filed with the Department pursuant to the Director’s order issued under MCL 500.438  
of the Insurance Code of 1956. The NAIC has adopted the Model Regulation as a state insurance  
department accreditation standard. Accordingly, the proposed rules would also assist in  
establishing uniform, national standards for the reserve financing arrangements subject to the rules  
and ensure that the Department maintains its accreditation status.  
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 1106 of the Insurance Code of 1956, 1956 PA 218, MCL 500.210 and 500.1106,  
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.  
MCL 24.239  
RFR-Page 2  
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 Regulation.  
10. Is the subject matter of the rules currently contained in any guideline, handbook, manual,  
instructional bulletin, form with instructions, or operational memoranda?  
Yes. The Director’s order issued pursuant to MCL 500.438 prescribes accounting practices and  
procedures that include an actuarial guideline deemed substantially similar to the NAIC Model  
Regulation adopted by the proposed rules.  
11. Are the rules listed on the department’s annual regulatory plan as rules to be processed  
for the current year?  
Yes. The proposed rules are listed on the Department’s 2023 to 2024 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  
13. Please describe the extent to which the rules exceed similar regulations, compliance  
requirements, or other standards adopted at the state, regional, or federal level.  
The proposed rules do not exceed similar regulations, compliance requirements, or other standards  
adopted at the state, regional, or federal level.  
14. Do the rules incorporate the recommendations received from the public regarding any  
complaints or comments regarding the rules? If yes, please explain.  
No. The proposed rules do not incorporate any recommendations received from the public  
regarding any complaints or comments.  
15. If amending an existing rule set, please provide the date of the last evaluation of the rules  
and the degree, if any, to which technology, economic conditions, or other factors have changed  
the regulatory activity covered by the rules since the last evaluation.  
The proposed rules would establish a new rule set.  
16. Are there any changes or developments since implementation that demonstrate there is no  
continued need for the rules, or any portion of the rules?  
No. The proposed rules would establish a new rule set.  
17. Is there an applicable decision record (as defined in MCL 24.203(6) and required by MCL  
24.239(2))? If so, please attach the decision record.  
No  
Based on the information provided in this RFR, MOAHR concludes that there are sufficient  
policy and legal bases for approving the RFR. The RFR satisfies the requirements of the  
Administrative Procedures Act of 1969, 1969 PA 306, MCL 24.201 to 24.328, and Executive  
Order No. 2019-6.  
MCL 24.239  
;