Bill > HB5383

This bill modifies the Insurance Code of 1956 by amending Section 4705, primarily to update references from "commissioner" to "director of the department" and make other technical changes. The bill clarifies the process for a Special Purpose Financial Entity (SPFC), which is a type of company that can insure or reinsure risks for its counterparty, to obtain a limited certificate of authority to operate in Michigan. Key requirements for an SPFC include holding management meetings in the state, maintaining its principal business address in Michigan, designating a registered agent, and providing detailed documentation of its insurance securitization transactions to the director of the department. The bill also outlines the required content of an SPFC's organizational documents, including details about its incorporators, principal office, name, purpose, management structure, capital stock, and term of existence. It further specifies that directors of an SPFC may have limited personal liability for breaches of fiduciary duty, with exceptions for bad faith, intentional misconduct, or improper personal benefit. The bill details the review process by the director of the department before granting a certificate, which includes assessing the SPFC's financial condition, management expertise, plan of operation, and compliance with securities laws. Additionally, it adjusts application and annual renewal fees for SPFCs and clarifies the renewal process.