Michigan House Bill HB6101

Michigan 2023-2024 Regular Session

• Introduced: 11/13/24
• Refer: 11/13/24
• Report Pass: 12/5/24
• Engrossed: 12/12/24
• Refer: 12/18/24

Caption

Insurance: other; special purpose financial captive plan of operation; modify. Amends sec. 4731 of 1956 PA 218 (MCL 500.4731).

Impact

The bill is expected to have a significant impact on state laws governing captive insurance and financial operations. By allowing specific changes to be made without regulatory hurdles, it shifts the landscape for SPFCs, potentially encouraging more entities to operate within Michigan. This may lead to an increase in the establishment of SPFCs, which could enhance the local finance industry while ensuring compliance with federal guidelines and maintaining consumer protections.

Summary

House Bill 6101 amends Michigan's Insurance Code of 1956, specifically targeting the operations and regulatory framework of Special Purpose Financial Captives (SPFC). The bill enables SPFCs to make certain material changes to their operational plans without those changes being considered material, thus streamlining the process for the continuation of securitization activities. This aims to facilitate greater operational flexibility for SPFCs, particularly in managing swaps and other financial instruments critical to their business functions.

Sentiment

The sentiment surrounding HB 6101 appears positive among industry stakeholders who view the amendments as beneficial for the financial stability of SPFCs. Proponents argue that the bill will foster a more efficient business environment conducive to innovative financial solutions. However, there may be concerns from consumer advocacy groups regarding whether these regulatory changes adequately protect policyholders and ensure transparency within the operations of SPFCs.

Contention

Noteworthy points of contention include the balance between operational flexibility for SPFCs and the necessity for rigorous oversight by state regulators. Critics might raise issues about the potential for less stringent regulatory scrutiny under this bill, which could lead to increased risk. The amendments suggest a shift toward greater self-governance for SPFCs, which may spark debates on maintaining adequate checks and balances within the state's insurance regulatory framework.