Section 500.4735 - Cessation of business; suspension or revocation of limited certificate of authority; violations; penalties; notice.
THE INSURANCE CODE OF 1956 (EXCERPT)
Act 218 of 1956
500.4735 Cessation of business; suspension or revocation of limited certificate of authority; violations; penalties; notice.
Sec. 4735.
(1) At the cessation of business of an SPFC following termination or cancellation of an SPFC contract and the redemption of any related SPFC securities issued in connection with it, the authority granted by the commissioner expires or, for retiring and surviving protected cells, is modified. The SPFC is no longer authorized to conduct activities unless and until a new or modified limited certificate of authority is issued pursuant to a new filing under section 4705 or as agreed by the commissioner.
(2) The commissioner may suspend or revoke the limited certificate of authority of an SPFC in this state for any of the following:
(a) Insolvency.
(b) Failure to meet the provisions of section 4709 or 4713(4).
(c) The SPFC is no longer safe, reliable, or entitled to public confidence or is unsound, or the SPFC is using financial methods and practices in the conduct of its business that render further transaction of insurance by the SPFC in this state hazardous to the public, the holders of the securities, or counterparties in the SPFC.
(d) Failure to respond within 30 days to an inquiry from the commissioner under section 4731(3).
(e) Failure to submit to examination or any legal obligation relative to an examination under section 4703.
(f) Refusal or failure to pay the costs of examination under section 4733.
(g) For a captive insurer formed as a limited liability company, the captive insurer is no longer in good standing under the Michigan limited liability company act, 1993 PA 23, MCL 450.4101 to 450.5200.
(h) The SPFC has failed, after written request by the commissioner, to remove or discharge an officer or director whose record of business conduct does not satisfy the requirements of section 4603 or who has been convicted of any crime involving fraud, dishonesty, or like moral turpitude.
(i) The captive insurance company has failed for an unreasonable period to pay any final judgment rendered against it in this state on any policy, bond, recognizance, or undertaking issued or guaranteed by it.
(j) Failure to otherwise comply in any material respect with applicable laws of this state.
(3) If the commissioner finds, upon examination or other evidence, that an SPFC has committed any of the acts specified in subsection (2)(b), (c), or (d), the commissioner may impose the penalties provided in section 150 if the commissioner considers it in the best interest of the public, the holders of the securities, and the policyholders of the SPFC.
(4) Unless the grounds for suspension or revocation relate only to the financial condition or soundness of the SPFC or to a deficiency in its assets, the commissioner shall notify the SPFC not less than 30 days before revoking its authority to do business in this state and shall specify in the notice the particulars of the alleged violation of the law or its organizational documents or grounds for revocation and the SPFC shall be offered the opportunity to be heard pursuant to section 437.
History: Add. 2008, Act 29, Imd. Eff. Mar. 13, 2008
Popular Name: Act 218