Mich. Admin. Code R. 500.1122 - Definitions

Rule 2.

(1) As used in these rules:

(a) "Beneficiary" means the entity for whose sole benefit a trust or letter of credit has been established and any successor of the beneficiary by operation of law. If a court of law appoints a successor in interest to the named beneficiary, then the named beneficiary includes and is limited to the court appointed domiciliary receiver (including conservator, rehabilitator, or liquidator).

(b) "Code" means the insurance code of 1956, 1956 PA 218, MCL 500.100 to 500.8302.

(c) "Department" means the Michigan department of insurance and financial services.

(d) "Director" means the director of the department.

(e) "Grantor" means the entity that has established a trust for the sole benefit of the beneficiary. When a trust is established in conjunction with a reinsurance agreement, the grantor is the unlicensed, unaccredited assuming insurer.

(f) "Liabilities" means the assuming insurer's gross liabilities attributable to reinsurance ceded by United States domiciled insurers, excluding liabilities that are otherwise secured by acceptable means, and includes all of the following:

(i) For business ceded by domestic insurers authorized to write accident and health, and property and casualty insurance all of the following:

(A) Losses and allocated loss expenses paid by the ceding insurer, recoverable from the assuming insurer.

(B) Reserves for losses reported and outstanding.

(C) Reserves for losses incurred but not reported.

(D) Reserves for allocated loss expenses.

(E) Unearned premiums.

(ii) For business ceded by domestic insurers authorized to write life, health, and annuity insurance all of the following:

(A) Aggregate reserves for life policies and contracts net of policy loans and net due and deferred premiums.

(B) Aggregate reserves for accident and health policies.

(C) Deposit funds and other liabilities without life or disability contingencies.

(D) Liabilities for policy and contract claims.

(g) "NAIC" means the National Association of Insurance Commissioners.

(h) "Obligations" means any of the following:

(i) Reinsured losses and allocated loss expenses paid by the ceding company, but not recovered from the assuming insurer.

(ii) Reserves for reinsured losses reported and outstanding.

(iii) Reserves for reinsured losses incurred but not reported.

(iv) Reserves for allocated reinsured loss expenses and unearned premiums.

(i) "Solvent scheme of arrangement" means a foreign or alien statutory or regulatory compromise procedure that is subject to requisite majority creditor approval and judicial sanction in the assuming insurer's home jurisdiction either to finally commute liabilities of duly noticed classed members or creditors of a solvent debtor or to reorganize or restructure the debts and obligations of a solvent debtor on a final basis and that may be subject to judicial recognition and enforcement of the arrangement by a governing authority outside the ceding insurer's home jurisdiction.

(2) A term defined in the code has the same meaning when used in these rules.

Notes

Mich. Admin. Code R. 500.1122

1996 AC; 2019 AACS; 2021 MR 10, Eff. 5/18/2021