Michigan Compiled Laws 218-1956-81 Chapter 81 Supervision, Rehabilitation, And Liquidation (500.8101...500.8160)

• Section 500.8101 Construction And Purpose Of Chapter.
  (1) This chapter shall not be interpreted to limit the powers granted the commissioner by other provisions of this code. (2) This chapter shall...
• Section 500.8102 Applicability Of Proceedings Authorized By Chapter.
  The proceedings authorized by this chapter may be applied to: (a) An insurer who is transacting, or has transacted, insurance business in this state,...
• Section 500.8103 Definitions.
  As used in this chapter: (a) “Ancillary state” means any state other than a domiciliary state. (b) “Creditor” is a person having a claim...
• Section 500.8104 Commencement Of Delinquency Proceeding; Jurisdiction; Stay Of Proceedings.
  (1) A delinquency proceeding shall not be commenced under this chapter by anyone other than the commissioner of this state and a court shall...
• Section 500.8105 Receiver; Application For Relief.
  (1) A receiver appointed in a proceeding under this chapter may at any time apply for, and the circuit court for Ingham county may...
• Section 500.8106 Cooperation With Commissioner; Obstruction Or Interference Prohibited; Existing Legal Rights Not Abridged; Penalties; Petition For Relief.
  (1) An officer, manager, director, trustee, owner, employee, or agent of an insurer, or any other persons with authority over or in charge of...
• Section 500.8107 Official Bonds.
  In a proceeding under this chapter, the commissioner and his or her deputies shall be responsible on their official bonds for the faithful performance...
• Section 500.8108a Prohibited Conduct By Insurer.
  Until all payments of or on account of the insurer's contractual obligations by all guaranty associations and all expenses and interest on the payments...
• Section 500.8109 Orders; Determination; Supervision Of Insurer; Restrictions; Compliance; Hearings; Notice; Time; Judicial Review; Review Of Supervisor's Action; Violation Of Supervision Order; Penalty; Enforcement Of Supervision Order; Personal Liability To Insurer For Reduction Of Net Worth Or Loss; Action; Costs And Expenses.
  (1) If the commissioner has reasonable cause to believe and determines after a hearing held under subsection (5) that a domestic insurer has committed...
• Section 500.8110 Seizure Order.
  (1) The commissioner may file in the circuit court for Ingham county a petition alleging, with respect to a domestic insurer: (a) That there...
• Section 500.8111 Confidentiality; Exception; “third Parties” Defined.
  (1) Except as provided in subsection (2), in all proceedings and judicial review of these proceedings under sections 8109 and 8110, all records of...
• Section 500.8112 Rehabilitation Of Insurer; Petition; Grounds.
  The commissioner may apply by petition to the circuit court for Ingham county for an order authorizing the commissioner to rehabilitate a domestic insurer...
• Section 500.8113 Order To Rehabilitate Insurer; Provisions; Filing As Notice; Title To Assets Vested In Rehabilitator; Accounting.
  (1) An order to rehabilitate the business of a domestic insurer, or an alien insurer domiciled in this state, shall appoint the commissioner and...
• Section 500.8114 Commissioner As Rehabilitator; Appointment Of Special Deputies; Employment Of Counsel, Clerks, And Assistants; Compensation; Terms; Expenses; Powers Of Rehabilitator; Criminal Or Tortious Conduct; Breach Of Contractual Or Fiduciary Obligation; Plan To Effect Changes; Avoidance Of Fraudulent Transfers.
  (1) The commissioner as rehabilitator may appoint 1 or more special deputies, including but not limited to the Michigan life and health insurance guaranty...
• Section 500.8115 Stay Of Action Or Proceeding; Purpose; Duties Of Rehabilitator; Statute Of Limitations; Laches; Standing Of Guaranty Association.
  (1) A court in this state before which an action or proceeding in which the insurer is a party, or is obligated to defend...
• Section 500.8115a Netting Agreement Or Qualified Financial Contract; Rights; Transfer; Duties Of Receiver; Exception; Rights Of Counterparties; Definitions.
  (1) Notwithstanding any other provision of this act, including section 8141, any provision of this act permitting the modification of contracts, or other law...
• Section 500.8116 Order Of Liquidation; Petition; Duties Of Circuit Court; Order Terminating Rehabilitation; Restoration To Possession Of Property And Control Of Business.
  (1) If the commissioner believes further attempts to rehabilitate an insurer would substantially increase the risk of loss to creditors, policyholders, or the public,...
• Section 500.8117 Liquidation Of Domestic Or Alien Insurer; Basis.
  The commissioner may petition the circuit court for Ingham county for an order directing him or her to liquidate a domestic insurer or an...
• Section 500.8118 Order Of Liquidation; Provisions; Filing As Notice; Rights And Liabilities; Judicial Declaration Of Insolvency; Accounting.
  (1) An order to liquidate the business of a domestic insurer shall appoint the commissioner and his or her successors in office as liquidator...
• Section 500.8118a Order Transferring Title To And Possession Of Trusteed Assets; Actions Of Court; Considerations.
  (1) For an alien insurer domiciled in this state, at any time after the court grants an order pursuant to section 8118, any person...
• Section 500.8119 Order Of Liquidation; Continuation Of Policies In Force; Termination Of Coverages.
  (1) All policies, other than life or health insurance or annuities, in effect at the time of issuance of an order of liquidation shall...
• Section 500.8120 Dissolution Of Corporation.
  The commissioner may petition for an order dissolving the corporate existence of a domestic insurer or the United States branch of an alien insurer...
• Section 500.8121 Powers Of Liquidator; Extended Reporting Period; Powers And Authority Not Exclusive; Delaying Sale Of Assets.
  (1) The liquidator shall have the power to do the following: (a) To appoint a special deputy, including, but not limited to, the Michigan...
• Section 500.8122 Notice Of Liquidation; Filing Claims; Changes Of Address.
  (1) Unless the court otherwise directs, the liquidator shall give or cause to be given notice of the liquidation order as soon as possible...
• Section 500.8123 Notice By Agent To Policyholder; Report Of Compliance; Penalty; Waiver.
  (1) Every agent who receives notice in the form prescribed in section 8122 that an insurer which he or she represents as an agent...
• Section 500.8124 Order Appointing Liquidator As Bar To Action At Law Or Equity; Full Faith And Credit To Injunctions; Intervention; Expense; Institution Of Action Or Proceeding On Behalf Of Estate Of Insurer; Period Of Limitation; Statute Of Limitation Or Defense Of Laches.
  (1) Upon issuance of an order appointing a liquidator of a domestic insurer or of an alien insurer domiciled in this state, an action...
• Section 500.8124a Guaranty Association Or Foreign Guaranty Association; Court Standing; Right To Intervene; Jurisdiction.
  Any guaranty association or foreign guaranty association has standing to appear and may intervene as a party as a matter of right or otherwise...
• Section 500.8125 List Of Insurer's Assets; Amendments And Supplements; Filing; Reduction Of Assets To Liquidity; Submission Of Assets For Disbursement.
  (1) As soon as practicable after the liquidation order but not later than 120 days after the liquidation order, the liquidator shall prepare in...
• Section 500.8126 Transfers And Obligations As Fraudulent; Avoidance By Receiver; Retention Of Property, Lien, Or Obligation As Security For Repayment; Preservation Of Transfer Or Obligation; Perfection Of Transfer; Transfer Creating Equitable Lien; Fraudulent Transaction Of Insurer With Reinsurer.
  (1) Every transfer made or suffered and every obligation incurred by an insurer within 1 year prior to the filing of a successful petition...
• Section 500.8127 Transfer Of Insurer's Real Property; Validity; Constructive Notice Of Commencement Of Proceeding In Rehabilitation Or Liquidation; Judicial Sale Of Real Property Of Insurer; Validity Of Transfer Against Receiver; Payment Of Indebtedness Or Delivery Of Property To Insurer; Knowledge Of Pending Rehabilitation Or Liquidation; Burden Of Proof; Currency Or Negotiable Instruments Not Impaired.
  (1) After a petition for rehabilitation or liquidation has been filed, a transfer of the insurer's real property made to a person acting in...
• Section 500.8128 Preference Generally; Transfers Considered Made Or Suffered; Lien Obtainable By Legal Or Equitable Proceedings; Dissolution Of Voidable Lien; Discharge Of Property From Lien; Summary Jurisdiction; Hearing; Notice; Order; Liability Of Surety; Set Off Against Preference; Examination Of Transactions; Payment Of Attorney; Personal Liability; Recovery Of Certain Commissions In Delinquency Proceedings.
  (1) A preference is a transfer of any of the property of an insurer to or for the benefit of a creditor, for or...
• Section 500.8129 Claim Of Creditor; Allowance; Excused Late Filing.
  (1) A claim of a creditor who has received or acquired a preference, lien, conveyance, transfer, assignment, or encumbrance voidable under this chapter shall...
• Section 500.8130 Setoff Or Counterclaim.
  (1) Mutual debts or mutual credits, whether arising out of 1 or more contracts, between the insurer and another person in connection with an...
• Section 500.8130a Contributions Of Parties; Determination By Court; Distribution To Stockholders; Recovery Of Distributions; Limitations.
  (1) Prior to the termination of a liquidation, rehabilitation, or conservation proceeding, the court may take into consideration the contributions of the respective parties,...
• Section 500.8131 Report Of Liquidator To Court; Levy Of Assessment; Order To Show Cause; Notice; Hearing; Determination; Enforcement.
  (1) As soon as practicable but not more than 2 years from the date of an order of liquidation under section 8118 of an...
• Section 500.8132 Amount Recoverable By Liquidator From Reinsurers; Reduction Prohibited; Reinsurer's Obligation To Insurer's Estate; Assumption Of Obligations By Life And Health Insurance Guaranty Association.
  (1) The amount recoverable by the liquidator from reinsurers shall not be reduced as a result of the delinquency proceedings, regardless of any provision...
• Section 500.8133 Payment Of Unpaid Earned Premium; Recovery Of Unearned Premium; Prohibited Credits And Setoffs; Violation; Penalty; Notice; Hearing; Appeal.
  (1) An agent, premium finance company, or any other person, other than the insured, responsible for the payment of a premium held by him...
• Section 500.8133a Deductible Agreement; Collateral As Asset Maintained And Administered By Receiver; Jurisdiction Of Circuit Court; Rights Of Guaranty Association Or Foreign Guaranty Association; Applicability To Delinquency Proceedings; Applicability To First Party Claims; Definitions.
  (1) Notwithstanding any other law or contract to the contrary, any collateral held by or for the benefit of or assigned to the insurer...
• Section 500.8134 Proposal To Make Early Access Disbursements; Effect Of Insufficient Assets; Report; Provisions Of Proposal; Notice Of Application; Action On Application; Return Of Early Access Funds; Limitation.
  (1) Within 120 days of a final determination of insolvency of an insurer by a court of competent jurisdiction of this state, the liquidator...
• Section 500.8135 Proof Of Claims; Filing; Circumstances Permitting Late Filing; Receipt Of Distributions By Late Filing Claimants.
  (1) Proof of all claims shall be filed with the liquidator in the form required by section 8136 on or before the last day...
• Section 500.8136 Proof Of Claim; Statement; Form; Additional Information Or Evidence; Judgment Or Order Entered By Default Or Collusion; Judgment Or Order As Evidence Of Liability Or Quantum Of Damages; Claims Of Guaranty Association.
  (1) Proof of claim shall consist of a statement signed by the claimant or other authorized person that includes all of the following that...
• Section 500.8137 Contingent Claims; Discounting Claims At Legal Rate Of Interest; Claims Made Under Employment Contracts.
  (1) The claim of a third party which is contingent only on his or her first obtaining a judgment against the insured shall be...
• Section 500.8138 Third Party Claim; Claim By Insured; Insured As Unexcused Late Filer; Recommendations Of Liquidator; Withholding Dividends; Hearing; Payment Of Insured; Reversions To Undistributed Assets; Delay In Final Payment; Filing Of Several Claims Founded On 1 Policy; Prohibited Claims.
  (1) If a third party asserts a cause of action against an insured of an insurer in liquidation, the third party may file a...
• Section 500.8139 Denial Of Claim; Filing Of Objections; Hearing; Notice.
  (1) If a claim is denied in whole or in part by the liquidator, written notice of the determination shall be given to the...
• Section 500.8140 Subrogation To Rights Of Creditor; Distribution; Excess Received By Creditor.
  If a creditor, whose claim against an insurer is secured in whole or in part by the undertaking of another person, fails to prove...
• Section 500.8141 Value Of Security; Determination; Supervision And Control; Crediting Amount Determined; Deficiency Treated As Unsecured Claim; Surrender Of Security To Liquidator.
  (1) The value of security held by a secured creditor shall be determined in 1 of the following ways, as the court may direct:...
• Section 500.8141a Payment Of Special Deposit Claims; Priority; Transfer Of Special Deposits.
  (1) Special deposit claims shall be paid pursuant to the following order of priority: (a) To the receiver for the costs and expenses of...
• Section 500.8142 Priority Of Distribution Of Claims From Insurer's Estate; Class Of Claims; Subclasses Prohibited; Order Of Distribution; Assets In Separate Account; Definitions.
  (1) Except as provided in subsection (2), the priority of distribution of claims from the insurer's estate shall be in accordance with the order...
• Section 500.8143 Review Of Claims By Liquidator; Investigation; Negotiation; Unresolved Disputes; Report On Claims By Liquidator; Approval, Disapproval, Or Modification; Limitation.
  (1) The liquidator shall review all claims duly filed in the liquidation and shall further investigate as he or she considers necessary. The liquidator...
• Section 500.8144 Distributions; Manner Of Payment; Distribution Of Assets In Kind.
  Under the court's direction, the liquidator shall pay distributions in a manner that will assure the proper recognition of priorities and a reasonable balance...
• Section 500.8145 Disposition Of Unclaimed Or Withheld Funds.
  (1) All unclaimed funds subject to distribution remaining in the liquidator's hands when he or she is ready to apply to the court for...
• Section 500.8146 Application For Discharge.
  (1) If all assets justifying the expense of collection and distribution have been collected and distributed under this chapter, the liquidator shall apply to...
• Section 500.8147 Petition To Reopen Proceedings.
  After the liquidation proceeding has been terminated and the liquidator discharged, the commissioner or other interested party may petition the circuit court at any...
• Section 500.8148 Retention Or Destruction Of Records.
  If it appears to the commissioner that the records of an insurer in process of liquidation or completely liquidated are no longer useful, the...
• Section 500.8149 Audits.
  The circuit court may cause audits, as it considers desirable, to be made of the books of the commissioner relating to any receivership established...
• Section 500.8150 Conservator.
  (1) If a domiciliary liquidator has not been appointed, the commissioner may apply to the circuit court by verified petition for an order directing...
• Section 500.8151 Petition For Order Directing Commissioner To Liquidate Assets; Grounds; Notice; Order; Liquidator As Ancillary Receiver; Commissioner As Receiver; Paying Claims Of Residents.
  (1) If a domiciliary receiver has not been appointed, the commissioner may apply to the circuit court by verified petition for an order directing...
• Section 500.8152 Vesting Of Title In Domiciliary Liquidator Or Commissioner; Filing Claims.
  (1) The domiciliary liquidator of an insurer domiciled in a reciprocal state shall be vested by operation of law, except as to special deposits...
• Section 500.8153 Petition Requesting Appointment Of Ancillary Receiver; Order; Notice; Powers And Duties Of Ancillary Receiver.
  (1) If a domiciliary liquidator has been appointed for an insurer not domiciled in this state, the commissioner may file a petition with the...
• Section 500.8154 Institution Of Proceedings Under Mcl 500.8109 To 500.8111.
  The commissioner in his or her sole discretion may institute proceedings under sections 8109 to 8111 at the request of the commissioner or other...
• Section 500.8155 Filing Of Claims; Proof; Conclusiveness Of Final Allowance Of Claims.
  (1) In a liquidation proceeding begun in this state against an insurer domiciled in this state, claimants residing in foreign countries or in states...
• Section 500.8156 Filing Of Claims; Proof; Recommendation; Hearing; Notice; Appearance Or Representation; Conclusiveness Of Final Allowance Of Claim.
  (1) In a liquidation proceeding in a reciprocal state against an insurer domiciled in that state, claimants against the insurer who reside within this...
• Section 500.8157 Prohibited Action Or Proceeding.
  during the pendency in this or any other state of a liquidation proceeding, whether called by that name or not, an action or proceeding...
• Section 500.8158 Controlling Order Of Distribution; Equal Priority Of Payment; Priority Against Special Deposits; Deficiency; Deferred Sharing; Surrender Of Security And Filing Claim As General Creditor; Discharge Of Claim.
  (1) In a liquidation proceeding in this state involving 1 or more reciprocal states, the order of distribution of the domiciliary state shall control...
• Section 500.8159 Failure To Transfer Assets.
  If an ancillary receiver in another state or foreign country, whether called by that name or not, fails to transfer to the domiciliary liquidator...
• Section 500.8160 Repealed. 2001, Act 143, Imd. Eff. Oct. 26, 2001.
  Compiler's Notes: The repealed section pertained to reports to legislature.Popular Name: Act 218

Last modified: October 10, 2016