reglab/statecodes huggingface dataset:
2023 Michigan Compiled Laws › Chapter 500 - Insurance Code of 1956 › Act 218 of 1956 - The Insurance Code of 1956 (500.100 - 500.8302) › 218-1956-81 - Chapter 81 Supervision, Rehabilitation, and Liquidation (500.8101...500.8160) › Section 500.8116 - Order of Liquidation; Petition; Duties of Circuit Court; Order Terminating Rehabilitation; Restoration to Possession of Property and Control of Business.

500.8116 Order of liquidation; petition; duties of circuit court; order terminating rehabilitation; restoration to possession of property and control of business.
Sec. 8116.
(1) If the commissioner believes further attempts to rehabilitate an insurer would substantially increase the risk of loss to creditors, policyholders, or the public, or would be futile, the commissioner may petition the circuit court for Ingham county for an order of liquidation. A petition under this subsection shall have the same effect as a petition under section 8117. The circuit court shall permit the directors of the insurer to take such actions as are reasonably necessary to defend against the petition and may order payment from the insurer's estate for costs and other defense expenses as justice may require.
(2) The rehabilitator may petition at any time the circuit court for Ingham county for an order terminating rehabilitation of an insurer. The court shall also permit the insurer's directors to petition the court for an order terminating rehabilitation of the insurer and may order payment from the insurer's estate for costs and other expenses of the petition as justice may require. If the court finds that rehabilitation has been accomplished and that grounds for rehabilitation under section 8112 no longer exist, it shall order that the insurer be restored to possession of its property and the control of the business. The court may also make that finding and issue that order at any time upon its own motion.
History:
Add. 1989, Act 302, Imd. Eff. Jan. 3, 1990
Popular Name:
Act 218
2023 Michigan Compiled Laws › Chapter 500 - Insurance Code of 1956 › Act 218 of 1956 - The Insurance Code of 1956 (500.100 - 500.8302) › 218-1956-81 - Chapter 81 Supervision, Rehabilitation, and Liquidation (500.8101...500.8160) › Section 500.8117 - Liquidation of Domestic or Alien Insurer; Basis.

500.8117 Liquidation of domestic or alien insurer; basis.
Sec. 8117.
The commissioner may petition the circuit court for Ingham county for an order directing him or her to liquidate a domestic insurer or an alien insurer domiciled in this state on the following basis:
(a) Any ground for an order of rehabilitation as specified in section 8112, whether or not there has been a prior order directing the rehabilitation of the insurer.
(b) That the insurer is insolvent.
(c) That the insurer is in such condition that the further transaction of business would be hazardous, financially or otherwise, to its policyholders, its creditors, or the public.
History:
Add. 1989, Act 302, Imd. Eff. Jan. 3, 1990
Popular Name:
Act 218
2023 Michigan Compiled Laws › Chapter 500 - Insurance Code of 1956 › Act 218 of 1956 - The Insurance Code of 1956 (500.100 - 500.8302) › 218-1956-81 - Chapter 81 Supervision, Rehabilitation, and Liquidation (500.8101...500.8160) › Section 500.8118 - Order of Liquidation; Provisions; Filing as Notice; Rights and Liabilities; Judicial Declaration of Insolvency; Accounting.

500.8118 Order of liquidation; provisions; filing as notice; rights and liabilities; judicial declaration of insolvency; accounting.
Sec. 8118.
(1) An order to liquidate the business of a domestic insurer shall appoint the commissioner and his or her successors in office as liquidator and shall direct the liquidator to take possession immediately of the insurer's assets and to administer them under the court's general supervision. The liquidator shall be vested by operation of law with the title to all of the property, contracts, and rights of action, and all of the books and records of the insurer ordered liquidated, wherever located, as of the entry of the final order of liquidation. The filing or recording of the order with the clerk of the circuit court and the register of deeds of the county in which its principal office or place of business is located or, in the case of real estate, with the register of deeds of the county where the property is located, shall impart the same notice as a deed, bill of sale, or other evidence of title duly filed or recorded which the register of deeds would have imparted.
(2) Upon issuance of the order, the rights and liabilities of the insurer and of its creditors, policyholders, shareholders, members, and all other persons interested in its estate shall become fixed as of the date of entry of the order of liquidation, except as provided in sections 8119 and 8137.
(3) An order to liquidate the business of an alien insurer domiciled in this state shall be in the same terms and have the same legal effect as an order to liquidate a domestic insurer, except that the court is vested by operation of law with titles to the trusteed assets of the alien insurer and that the assets and business of the insurer in the United States shall be the only assets and business included in the order. The liquidator shall administer the trusteed assets in accordance with this chapter, subject at all times to the court's direction and supervision.
(4) At the time of petitioning for an order of liquidation, or at any time thereafter, the commissioner, after making appropriate findings of an insurer's insolvency, may petition the court for a judicial declaration of insolvency. After providing notice and hearing as it considers proper, the court may make the declaration.
(5) An order issued under this section shall require accounting to the court by the liquidator. Accountings shall be at intervals as the court specifies in its order.
History:
Add. 1989, Act 302, Imd. Eff. Jan. 3, 1990 ;-- Am. 1994, Act 227, Imd. Eff. June 27, 1994
Popular Name:
Act 218
2023 Michigan Compiled Laws › Chapter 500 - Insurance Code of 1956 › Act 218 of 1956 - The Insurance Code of 1956 (500.100 - 500.8302) › 218-1956-81 - Chapter 81 Supervision, Rehabilitation, and Liquidation (500.8101...500.8160) › Section 500.8118a - Order Transferring Title to and Possession of Trusteed Assets; Actions of Court; Considerations.

500.8118a Order transferring title to and possession of trusteed assets; actions of court; considerations.
Sec. 8118a.
(1) For an alien insurer domiciled in this state, at any time after the court grants an order pursuant to section 8118, any person having an interest in the trusteed assets of the insurer or in their due administration or in the due administration of the insurer's estate and seeking to have all or part of the trusteed assets transferred to that person shall do so by petitioning the court for an order directing that title to and possession of all or part of the trusteed assets be transferred to that person.
(2) After providing notice and hearing as it considers proper, the court may grant, deny, or suspend a petition made pursuant to subsection (1) on terms and conditions, or make such other order, as the court considers appropriate, considering the following:
(a) The interests of policyholders, other claimants and creditors of the insurer, and the public.
(b) Whether the order requested, and any governing legislation upon which it is based, is conducive to or contrary to the objectives of this chapter.
(c) Whether the order requested is consistent with the terms, conditions, and objectives of the trust agreement or agreements referred to in section 411(4).
(d) The effect the order requested would have or could reasonably be expected to have on the ability of the liquidator to use assets of the insurer's estate under the liquidation order to transfer policy obligations to a solvent assuming insurer.
(e) Any agreements with a receiver or commissioner or like official of another state in which the insurer was doing business, or of the country under the laws of which the insurer was formed, relating to the rehabilitation, liquidation, conservation, or dissolution of the insurer.
(f) The adequacy of information available to the court upon which to make a determination.
(g) The costs that could reasonably be expected to be incurred as a result of the order.
History:
Add. 1994, Act 227, Imd. Eff. June 27, 1994
Popular Name:
Act 218
2023 Michigan Compiled Laws › Chapter 500 - Insurance Code of 1956 › Act 218 of 1956 - The Insurance Code of 1956 (500.100 - 500.8302) › 218-1956-81 - Chapter 81 Supervision, Rehabilitation, and Liquidation (500.8101...500.8160) › Section 500.8119 - Order of Liquidation; Continuation of Policies in Force; Termination of Coverages.

500.8119 Order of liquidation; continuation of policies in force; termination of coverages.
Sec. 8119.
(1) All policies, other than life or health insurance or annuities, in effect at the time of issuance of an order of liquidation shall continue in force only for the lesser of:
(a) A period of 30 days from the date of entry of the liquidation order.
(b) The expiration of the policy coverage.
(c) The date the insured replaces the insurance coverage with equivalent insurance in another insurer or otherwise terminates the policy.
(d) The date the liquidator effects a transfer of the policy obligation pursuant to section 8121(1)(h).
(2) An order of liquidation under section 8118 shall terminate coverages at the time specified in subsection (1) for purposes of any other statute.
(3) Policies of life or health insurance or annuities shall continue in force for such period and under such terms as is provided for by an applicable guaranty association or foreign guaranty association.
(4) Policies of life or health insurance or annuities or any period or coverage of such policies not covered by a guaranty association or foreign guaranty association shall terminate under subsections (1) and (2).
History:
Add. 1989, Act 302, Imd. Eff. Jan. 3, 1990
Popular Name:
Act 218
2023 Michigan Compiled Laws › Chapter 500 - Insurance Code of 1956 › Act 218 of 1956 - The Insurance Code of 1956 (500.100 - 500.8302) › 218-1956-81 - Chapter 81 Supervision, Rehabilitation, and Liquidation (500.8101...500.8160) › Section 500.8120 - Dissolution of Corporation.

500.8120 Dissolution of corporation.
Sec. 8120.
The commissioner may petition for an order dissolving the corporate existence of a domestic insurer or the United States branch of an alien insurer domiciled in this state at the time he or she applies for a liquidation order. The court shall order dissolution of the corporation upon petition by the commissioner upon or after the granting of a liquidation order. If the dissolution has not previously been ordered, it shall be effected by operation of law upon the discharge of the liquidator if the insurer is insolvent and may be ordered by the court upon the discharge of the liquidator if the insurer is under a liquidation order for some other reason.
History:
Add. 1989, Act 302, Imd. Eff. Jan. 3, 1990
Popular Name:
Act 218
2023 Michigan Compiled Laws › Chapter 500 - Insurance Code of 1956 › Act 218 of 1956 - The Insurance Code of 1956 (500.100 - 500.8302) › 218-1956-81 - Chapter 81 Supervision, Rehabilitation, and Liquidation (500.8101...500.8160) › Section 500.8122 - Notice of Liquidation; Filing Claims; Changes of Address.

500.8122 Notice of liquidation; filing claims; changes of address.
Sec. 8122.
(1) Unless the court otherwise directs, the liquidator shall give or cause to be given notice of the liquidation order as soon as possible as follows:
(a) By first-class mail and either by telegram or telephone to the insurance commissioner of each jurisdiction in which the insurer is doing business.
(b) By first-class mail to each guaranty association or foreign guaranty association which is or may become obligated as a result of the liquidation.
(c) By first class mail to all insurance agents of the insurer.
(d) By first class mail to all persons known or reasonably expected to have claims against the insurer including all policyholders, at their last known address as indicated by the records of the insurer.
(e) By publication in a newspaper of general circulation in the county in which the insurer has its principal place of business and in other locations as the liquidator considers appropriate.
(2) Notice to potential claimants under subsection (1) shall require claimants to file with the liquidator their claims together with proper proofs as required under section 8136 on or before a date the liquidator shall specify in the notice. Although an earlier date may be set by the liquidator, the last day to file claims shall be not later than 18 months following the order of liquidation. The liquidator need not require persons claiming cash surrender values or other investment values in life insurance and annuities to file a claim. All claimants shall have a duty to keep the liquidator informed of any changes of address.
(3) If notice is given in accordance with this section, the distribution of assets of the insurer under this chapter shall be conclusive with respect to all claimants, whether or not they received notice.
History:
Add. 1989, Act 302, Imd. Eff. Jan. 3, 1990
Popular Name:
Act 218
2023 Michigan Compiled Laws › Chapter 500 - Insurance Code of 1956 › Act 218 of 1956 - The Insurance Code of 1956 (500.100 - 500.8302) › 218-1956-81 - Chapter 81 Supervision, Rehabilitation, and Liquidation (500.8101...500.8160) › Section 500.8123 - Notice by Agent to Policyholder; Report of Compliance; Penalty; Waiver.

500.8123 Notice by agent to policyholder; report of compliance; penalty; waiver.
Sec. 8123.
(1) Every agent who receives notice in the form prescribed in section 8122 that an insurer which he or she represents as an agent is the subject of a liquidation order shall within 15 days of the notice give notice of the liquidation order to each policyholder or other person named in a policy issued through the agent by the insured. The notice shall be sent by first class mail to the last address contained in the agent's records for each policyholder or other person named in the policy issued through the agent by the insurer, if the agent has a record of the address of the policyholder or other person. A policy shall be considered issued through an agent, if the agent has a property interest in the expiration of the policy or if the agent has had in his or her possession a copy of the declarations of the policy at any time during the life of the policy, unless the property interest or the files of the insured have been transferred to another. The written notice shall include the name and address of the insurer, the name and address of the agent, identification of the policy impaired, and the nature of the impairment including termination of coverage, as described in section 8119. Notice by a general agent satisfies the notice requirement for an agent under contract to the general agent. Each agent obligated to give notice under this section shall file a report of compliance with the liquidator.
(2) An agent failing to give notice or file a report of compliance as required in subsection (1) may be subject to payment of a penalty of not more than $1,000.00 and may have his or her license suspended after a hearing held by the commissioner.
(3) The liquidator may waive the duties imposed by this section if he or she determines that other notice to the policyholders of the insurer under liquidation is adequate.
History:
Add. 1989, Act 302, Imd. Eff. Jan. 3, 1990
Popular Name:
Act 218
2023 Michigan Compiled Laws › Chapter 500 - Insurance Code of 1956 › Act 218 of 1956 - The Insurance Code of 1956 (500.100 - 500.8302) › 218-1956-81 - Chapter 81 Supervision, Rehabilitation, and Liquidation (500.8101...500.8160) › Section 500.8124a - Guaranty Association or Foreign Guaranty Association; Court Standing; Right to Intervene; Jurisdiction.

500.8124a Guaranty association or foreign guaranty association; court standing; right to intervene; jurisdiction.
Sec. 8124a.
Any guaranty association or foreign guaranty association has standing to appear and may intervene as a party as a matter of right or otherwise appear and participate in any court proceeding concerning the rehabilitation or liquidation of an insurer if the association is or may become liable to act as a result of the liquidation. Exercise by any guaranty association or its designated representative of the right to intervene conferred under this subsection does not constitute grounds to establish general personal jurisdiction by the courts of this state. The intervening guaranty association or foreign guaranty association is subject to the court's jurisdiction only for the limited purpose for which it intervenes.
History:
Add. 2006, Act 356, Imd. Eff. Sept. 18, 2006
Compiler's Notes:
Act 218
2023 Michigan Compiled Laws › Chapter 500 - Insurance Code of 1956 › Act 218 of 1956 - The Insurance Code of 1956 (500.100 - 500.8302) › 218-1956-81 - Chapter 81 Supervision, Rehabilitation, and Liquidation (500.8101...500.8160) › Section 500.8125 - List of Insurer's Assets; Amendments and Supplements; Filing; Reduction of Assets to Liquidity; Submission of Assets for Disbursement.

500.8125 List of insurer's assets; amendments and supplements; filing; reduction of assets to liquidity; submission of assets for disbursement.
Sec. 8125.
(1) As soon as practicable after the liquidation order but not later than 120 days after the liquidation order, the liquidator shall prepare in duplicate a list of the insurer's assets. The list shall be amended or supplemented from time to time as the liquidator may determine. One copy shall be filed in the office of the clerk of the circuit court and 1 copy shall be retained for the liquidator's files. All amendments and supplements shall be similarly filed.
(2) The liquidator shall reduce the assets to a degree of liquidity that is consistent with the effective execution of the liquidation.
(3) A submission to the court for disbursement of assets in accordance with section 8134 fulfills the requirements of subsection (1).
History:
Add. 1989, Act 302, Imd. Eff. Jan. 3, 1990
Popular Name:
Act 218
2023 Michigan Compiled Laws › Chapter 500 - Insurance Code of 1956 › Act 218 of 1956 - The Insurance Code of 1956 (500.100 - 500.8302) › 218-1956-81 - Chapter 81 Supervision, Rehabilitation, and Liquidation (500.8101...500.8160) › Section 500.8129 - Claim of Creditor; Allowance; Excused Late Filing.

500.8129 Claim of creditor; allowance; excused late filing.
Sec. 8129.
(1) A claim of a creditor who has received or acquired a preference, lien, conveyance, transfer, assignment, or encumbrance voidable under this chapter shall not be allowed unless the creditor surrenders the preference, lien, conveyance, transfer, assignment, or encumbrance. If the avoidance is effected by a proceeding in which a final judgment has been entered, the claim shall not be allowed unless the money is paid or the property is delivered to the liquidator within 30 days from the date of the entering of the final judgment, unless the court having jurisdiction over the liquidation allows further time for an appeal or other continuation of the proceeding.
(2) A claim allowable under subsection (1) by reason of the avoidance, whether voluntary or involuntary, or a preference, lien, conveyance, transfer, assignment, or encumbrance, may be filed as an excused late filing under section 8135 if filed within 30 days from the date of the avoidance or within the further time allowed by the court under subsection (1).
History:
Add. 1989, Act 302, Imd. Eff. Jan. 3, 1990
Popular Name:
Act 218
2023 Michigan Compiled Laws › Chapter 500 - Insurance Code of 1956 › Act 218 of 1956 - The Insurance Code of 1956 (500.100 - 500.8302) › 218-1956-81 - Chapter 81 Supervision, Rehabilitation, and Liquidation (500.8101...500.8160) › Section 500.8130 - Setoff or Counterclaim.

500.8130 Setoff or counterclaim.
Sec. 8130.
(1) Mutual debts or mutual credits, whether arising out of 1 or more contracts, between the insurer and another person in connection with an action or proceeding under this chapter shall be set off and the balance only shall be allowed or paid, except as provided in subsection (2) and section 8133.
(2) A setoff or counterclaim shall not be allowed in favor of a person if:
(a) The insurer's obligation to the person would not at the date of the filing of a petition for receivership entitle the person to share as a claimant in the assets of the insurer.
(b) The insurer's obligation to the person was purchased by or transferred to the person with a view to its being used as a setoff.
(c) The insurer's obligation is owed to an affiliate of the person or any other entity or association other than the person.
(d) The person's obligation is owed to an affiliate of the insurer or any other entity or association other than the insurer.
(e) The person's obligation is to pay an assessment levied against the insurer's members or subscribers, is to pay a balance upon a subscription to the capital stock of the insurer, or is in any other way in the nature of a capital contribution.
(f) The obligations between the person and the insurer arise from business where either the person or the insurer has assumed risks and obligations from the other party and then has ceded back to that party substantially the same risks and obligations.
(3) The receiver shall provide persons with accounting statements identifying all debts that are due and payable. If a person owes to the insurer amounts that are due and payable, against which the person asserts setoff of mutual credits that may become due and payable from the insurer in the future, the person shall promptly pay to the receiver the amounts due and payable, provided that, notwithstanding section 8142 or any other provision of this chapter, the receiver shall promptly and fully refund, to the extent of the person's prior payments, any mutual credits that become due and payable to the person by the insurer. Prior to the termination of any proceeding under this chapter, the amount due the person shall be determined for the purpose of the receiver making a final refund, if any.
(4) Subsections (2)(c), (d), and (f) and (3) apply to all contracts entered into, renewed, extended, or amended on or after 1 year after the effective date of this subsection and to debts or credits arising from any business written or transactions occurring after the effective date of this subsection pursuant to any such contract. For purposes of this section any change in the terms of, or consideration for, any such contract shall be considered an amendment.
History:
Add. 1989, Act 302, Imd. Eff. Jan. 3, 1990 ;-- Am. 1994, Act 226, Imd. Eff. June 27, 1994
Popular Name:
Act 218
2023 Michigan Compiled Laws › Chapter 500 - Insurance Code of 1956 › Act 218 of 1956 - The Insurance Code of 1956 (500.100 - 500.8302) › 218-1956-81 - Chapter 81 Supervision, Rehabilitation, and Liquidation (500.8101...500.8160) › Section 500.8130a - Contributions of Parties; Determination by Court; Distribution to Stockholders; Recovery of Distributions; Limitations.

500.8130a Contributions of parties; determination by court; distribution to stockholders; recovery of distributions; limitations.
Sec. 8130a.
(1) Prior to the termination of a liquidation, rehabilitation, or conservation proceeding, the court may take into consideration the contributions of the respective parties, including the association, the shareholders, and policyowners of the insolvent insurer, and any other party with a bona fide interest, in making an equitable distribution of the ownership rights of the insolvent insurer. In making a determination, consideration shall be given to the welfare of the policyholders of the continuing or successor insurer.
(2) A distribution to stockholders, if any, of an impaired or insolvent insurer shall not be made until and unless the total amount of valid claims of the association with interest thereon for funds expended in carrying out its powers and duties under section 7708 with respect to the insurer have been fully recovered by the association.
(3) If an order for liquidation or rehabilitation of an insurer domiciled in this state has been entered, the receiver appointed under the order shall have a right to recover on behalf of the insurer or from any affiliate that controlled it the amount of distributions, other than stock dividends paid by the insurer on its capital stock, made at any time during the 5 years preceding the petition for liquidation or rehabilitation subject to the following limitations:
(a) A distribution shall not be recoverable if the insurer shows that when paid the distribution was lawful and reasonable, and that the insurer did not know and could not reasonably have known that the distribution might adversely affect the ability of the insurer to fulfill its contractual obligations.
(b) A person who was an affiliate that controlled the insurer at the time the distributions were paid shall be liable up to the amount of distributions he or she received. A person who was an affiliate that controlled the insurer at the time the distributions were declared shall be liable up to the amount of distributions he or she would have received if they had been paid immediately. If 2 or more persons are liable with respect to the same distributions, they shall be jointly and severally liable. If a person liable under this subdivision is insolvent, all controlling affiliates at the time the distribution was paid shall be jointly and severally liable for any resulting deficiency in the amount recovered from the insolvent affiliate.
(c) The maximum amount recoverable under this subsection shall be the amount needed in excess of all other available assets of the insolvent insurer to pay the contractual obligations of the insolvent insurer.
History:
Add. 1989, Act 302, Imd. Eff. Jan. 3, 1990
Popular Name:
Act 218
2023 Michigan Compiled Laws › Chapter 500 - Insurance Code of 1956 › Act 218 of 1956 - The Insurance Code of 1956 (500.100 - 500.8302) › 218-1956-81 - Chapter 81 Supervision, Rehabilitation, and Liquidation (500.8101...500.8160) › Section 500.8133 - Payment of Unpaid Earned Premium; Recovery of Unearned Premium; Prohibited Credits and Setoffs; Violation; Penalty; Notice; Hearing; Appeal.

500.8133 Payment of unpaid earned premium; recovery of unearned premium; prohibited credits and setoffs; violation; penalty; notice; hearing; appeal.
Sec. 8133.
(1) An agent, premium finance company, or any other person, other than the insured, responsible for the payment of a premium held by him or her shall be obligated to pay any unpaid earned premium due the insurer at the time of the declaration of insolvency. The liquidator shall also have the right to recover from that person any part of an unearned premium that represents that person's commission. Credits, setoffs, or both, shall not be allowed to an agent, broker, or premium finance company for an amount advanced to the insurer by the agent, broker, or premium finance company on behalf of, but in the absence of a payment by, the insured. An insured shall be obligated to pay any unpaid earned premium due the insurer at the time of the declaration of insolvency, as shown on the insurer's records.
(2) Upon satisfactory evidence of a violation of this section, the commissioner may pursue either 1 or both of the following courses of action:
(a) Suspend or revoke or refuse to renew the licenses of each offending party.
(b) Impose a penalty of not more than $1,000.00 for each and every act in violation of this section by each offending party.
(3) Before the commissioner takes action under subsection (2), the commissioner shall give written notice to the person, company, association, or exchange accused of violating the law, stating specifically the nature of the alleged violation and fixing a time and place, at least 10 days thereafter, for a hearing on the matter. After the hearing, or upon failure of the accused to appear at the hearing, the commissioner, if he or she finds a violation, shall impose the penalties under subsection (2) as he or she considers advisable.
(4) If the commissioner takes action under subsection (2), the party aggrieved may appeal from that action to the circuit court.
History:
Add. 1989, Act 302, Imd. Eff. Jan. 3, 1990
Popular Name:
Act 218
2023 Michigan Compiled Laws › Chapter 500 - Insurance Code of 1956 › Act 218 of 1956 - The Insurance Code of 1956 (500.100 - 500.8302) › 218-1956-81 - Chapter 81 Supervision, Rehabilitation, and Liquidation (500.8101...500.8160) › Section 500.8135 - Proof of Claims; Filing; Circumstances Permitting Late Filing; Receipt of Distributions by Late Filing Claimants.

500.8135 Proof of claims; filing; circumstances permitting late filing; receipt of distributions by late filing claimants.
Sec. 8135.
(1) Proof of all claims shall be filed with the liquidator in the form required by section 8136 on or before the last day for filing specified in the notice required under section 8122, except that proof of claims for cash surrender values or other investment values in life insurance and annuities need not be filed unless the liquidator expressly so requires.
(2) The liquidator may permit a claimant making a late filing to share in distributions, whether past or future, as if he or she were not late, to the extent that the payment will not prejudice the orderly administration of the liquidation, under the following circumstances:
(a) The existence of the claim was not known to the claimant and that he or she filed his or her claim as promptly thereafter as reasonably possible after learning of it.
(b) A transfer to a creditor was avoided under sections 8126 to 8128, or was voluntarily surrendered under section 8129, and that the filing satisfies the conditions of section 8129.
(c) The valuation under section 8141 of security held by a secured creditor shows a deficiency, which is filed within 30 days after the valuation.
(3) The liquidator shall permit late filing claims to share in distributions, whether past or future, as if they were not late, if those claims are claims of a guaranty association or foreign guaranty association for reimbursement of covered claims paid, expenses incurred, or both, after the last day for filing and if the payments were made and expenses incurred as provided by law.
(4) The liquidator may consider a claim filed late which is not covered by subsection (2) and permit it to receive distributions which are subsequently declared on any claims of the same or lower priority if the payment does not prejudice the orderly administration of the liquidation. The late filing claimant shall receive, at each distribution, the same percentage of the amount allowed on his or her claim as is then being paid to claimants of any lower priority. This shall continue until his or her claim has been paid in full.
History:
Add. 1989, Act 302, Imd. Eff. Jan. 3, 1990
Popular Name:
Act 218
2023 Michigan Compiled Laws › Chapter 500 - Insurance Code of 1956 › Act 218 of 1956 - The Insurance Code of 1956 (500.100 - 500.8302) › 218-1956-81 - Chapter 81 Supervision, Rehabilitation, and Liquidation (500.8101...500.8160) › 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.

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.
Sec. 8136.
(1) Proof of claim shall consist of a statement signed by the claimant or other authorized person that includes all of the following that are applicable:
(a) The particulars of the claim, including the consideration given for it.
(b) The identity and amount of the security on the claim.
(c) The payments made on the debt, if any.
(d) That the sum claimed is justly owing and that there is no setoff, counterclaim, or defense to the claim.
(e) Any right of priority of payment or other specific right asserted by the claimants.
(f) A copy of the written instrument which is the foundation of the claim.
(g) The name and address of the claimant and the attorney who represents him or her, if any.
(2) A claim need not be considered or allowed if it does not contain all the information in subsection (1) which may be applicable. The liquidator may require that a prescribed form be used and may require that other information and documents be included.
(3) The liquidator may request the claimant to present information or evidence supplementary to that required under subsection (1) at any time and may take testimony under oath, require production of affidavits or depositions, or otherwise obtain additional information or evidence.
(4) A judgment or order against an insured or the insurer entered after the date of filing of a successful petition for liquidation and a judgment or order against an insured or the insurer entered at any time by default or by collusion need not be considered as evidence of liability or of quantum of damages. A judgment or order against an insured or the insurer entered within 4 months before the filing of the petition need not be considered as evidence of liability or of the quantum of damages.
(5) All claims of a guaranty association or foreign guaranty association shall be in the form and contain the substantiation agreed to by the association and the liquidator.
History:
Add. 1989, Act 302, Imd. Eff. Jan. 3, 1990
Popular Name:
Act 218
2023 Michigan Compiled Laws › Chapter 500 - Insurance Code of 1956 › Act 218 of 1956 - The Insurance Code of 1956 (500.100 - 500.8302) › 218-1956-81 - Chapter 81 Supervision, Rehabilitation, and Liquidation (500.8101...500.8160) › Section 500.8137 - Contingent Claims; Discounting Claims at Legal Rate of Interest; Claims Made Under Employment Contracts.

500.8137 Contingent claims; discounting claims at legal rate of interest; claims made under employment contracts.
Sec. 8137.
(1) The claim of a third party which is contingent only on his or her first obtaining a judgment against the insured shall be considered and allowed as if there were no such contingency.
(2) A claim may be allowed even if contingent, if it is filed in accordance with section 8135. It may be allowed and may participate in all distributions declared after it is filed to the extent that it does not prejudice the orderly administration of the liquidation.
(3) Claims that are due except for the passage of time shall be treated as absolute claims are treated, except that those claims may be discounted at the legal rate of interest.
(4) Claims made under employment contracts by directors, principal officers, or persons in fact performing similar functions or having similar powers are limited to payment for services rendered prior to the issuance of an order of rehabilitation or liquidation under section 8113 or 8118.
History:
Add. 1989, Act 302, Imd. Eff. Jan. 3, 1990
Popular Name:
Act 218
2023 Michigan Compiled Laws › Chapter 500 - Insurance Code of 1956 › Act 218 of 1956 - The Insurance Code of 1956 (500.100 - 500.8302) › 218-1956-81 - Chapter 81 Supervision, Rehabilitation, and Liquidation (500.8101...500.8160) › Section 500.8139 - Denial of Claim; Filing of Objections; Hearing; Notice.

500.8139 Denial of claim; filing of objections; hearing; notice.
Sec. 8139.
(1) If a claim is denied in whole or in part by the liquidator, written notice of the determination shall be given to the claimant or his or her attorney by first-class mail at the address shown in the proof of claim. Within 60 days from the mailing of the notice, the claimant may file his or her objections with the liquidator. If a filing of objection is not made, the claimant shall not further object to the determination.
(2) If objections are filed with the liquidator and the liquidator does not alter his or her denial of the claim as a result of the objections, the liquidator shall ask the court for a hearing as soon as practicable and shall give notice of the hearing by first-class mail to the claimant or his or her attorney and to any other persons directly affected, not less than 10 nor more than 30 days before the date of the hearing. The matter may be heard by the court or by a court appointed referee who shall submit findings of fact along with his or her recommendation.
History:
Add. 1989, Act 302, Imd. Eff. Jan. 3, 1990
Popular Name:
Act 218
2023 Michigan Compiled Laws › Chapter 500 - Insurance Code of 1956 › Act 218 of 1956 - The Insurance Code of 1956 (500.100 - 500.8302) › 218-1956-81 - Chapter 81 Supervision, Rehabilitation, and Liquidation (500.8101...500.8160) › Section 500.8140 - Subrogation to Rights of Creditor; Distribution; Excess Received by Creditor.

500.8140 Subrogation to rights of creditor; distribution; excess received by creditor.
Sec. 8140.
If a creditor, whose claim against an insurer is secured in whole or in part by the undertaking of another person, fails to prove and file that claim, the other person may do so in the creditor's name and shall be subrogated to the rights of the creditor, whether the claim has been filed by the creditor or by the other person in the creditor's name, to the extent that he or she discharges the undertaking. In the absence of an agreement with the creditor to the contrary, the other person shall not be entitled to any distribution until the amount paid to the creditor on the undertaking plus the distributions paid on the claim from the insurer's estate to the creditor equals the amount of the entire claim of the creditor. Any excess received by the creditor shall be held by him or her in trust for the other person. The term "other person", as used in this section, is not intended to apply to a guaranty association or foreign guaranty association.
History:
Add. 1989, Act 302, Imd. Eff. Jan. 3, 1990
Popular Name:
Act 218
2023 Michigan Compiled Laws › Chapter 500 - Insurance Code of 1956 › Act 218 of 1956 - The Insurance Code of 1956 (500.100 - 500.8302) › 218-1956-81 - Chapter 81 Supervision, Rehabilitation, and Liquidation (500.8101...500.8160) › Section 500.8141 - Value of Security; Determination; Supervision and Control; Crediting Amount Determined; Deficiency Treated as Unsecured Claim; Surrender of Security to Liquidator.

500.8141 Value of security; determination; supervision and control; crediting amount determined; deficiency treated as unsecured claim; surrender of security to liquidator.
Sec. 8141.
(1) The value of security held by a secured creditor shall be determined in 1 of the following ways, as the court may direct:
(a) By converting the same into money according to the terms of the agreement pursuant to which the security was delivered to the creditors.
(b) By agreement, arbitration, compromise, or litigation between the creditor and the liquidator.
(2) The determination shall be under the court's supervision and control with due regard for the liquidator's recommendation. The amount determined shall be credited upon the secured claim and any deficiency shall be treated as an unsecured claim. If the claimant surrenders his or her security to the liquidator, the entire claim shall be allowed as if unsecured.
History:
Add. 1989, Act 302, Imd. Eff. Jan. 3, 1990
Popular Name:
Act 218
2023 Michigan Compiled Laws › Chapter 500 - Insurance Code of 1956 › Act 218 of 1956 - The Insurance Code of 1956 (500.100 - 500.8302) › 218-1956-81 - Chapter 81 Supervision, Rehabilitation, and Liquidation (500.8101...500.8160) › Section 500.8141a - Payment of Special Deposit Claims; Priority; Transfer of Special Deposits.

500.8141a Payment of special deposit claims; priority; transfer of special deposits.
Sec. 8141a.
(1) Special deposit claims shall be paid pursuant to the following order of priority:
(a) To the receiver for the costs and expenses of the receivership.
(b) To the guaranty association for the costs and expenses of administration with respect to the payment of claims.
(c) To claims of Michigan policyholders of the insurer and to claimants of those Michigan policyholders.
(d) To Michigan beneficiaries of insurance contracts owned by non-Michigan residents.
(e) To other Michigan claimants of the insurer.
(f) To claims of non-Michigan policyholders of the insurer and to claimants of those non-Michigan policyholders.
(g) To non-Michigan beneficiaries of insurance contracts owned by non-Michigan residents.
(h) To the stockholders or owners of the insurer.
(2) Upon request of a guaranty association of this state to which the insurer is a member, special deposits made by the insurer shall be transferred to that guaranty association for the payment of claims pursuant to this section.
History:
Add. 1989, Act 302, Imd. Eff. Jan. 3, 1990 ;-- Am. 1994, Act 443, Imd. Eff. Jan. 10, 1995
Compiler's Notes:
Section 2 of Act 443 of 1994 provides:“Section 8141a of Act No. 218 of the Public Acts of 1956, being section 500.8141a of the Michigan Compiled Laws, as amended by this amendatory act is curative, reflects the original intent of the legislature, is retroactive, and is effective beginning January 3, 1990.”
Popular Name:
Act 218
2023 Michigan Compiled Laws › Chapter 500 - Insurance Code of 1956 › Act 218 of 1956 - The Insurance Code of 1956 (500.100 - 500.8302) › 218-1956-81 - Chapter 81 Supervision, Rehabilitation, and Liquidation (500.8101...500.8160) › Section 500.8143 - Review of Claims by Liquidator; Investigation; Negotiation; Unresolved Disputes; Report on Claims by Liquidator; Approval, Disapproval, or Modification; Limitation.

500.8143 Review of claims by liquidator; investigation; negotiation; unresolved disputes; report on claims by liquidator; approval, disapproval, or modification; limitation.
Sec. 8143.
(1) The liquidator shall review all claims duly filed in the liquidation and shall further investigate as he or she considers necessary. The liquidator may compound, compromise, or in any other manner negotiate the amount for which claims will be recommended to the court unless the liquidator is required by law to accept claims as settled by a person or organization, including a guaranty association or foreign guaranty association. Unresolved disputes shall be determined under section 8139. As soon as practicable, the liquidator shall present to the court a report of the claims against the insurer with his or her recommendations. The report shall include the name and address of each claimant and the amount of the claim finally recommended, if any. If the insurer has issued annuities or life insurance policies, the liquidator shall report the persons, according to the records of the insurer, to whom amounts are owed as cash surrender values or other investment value and the amounts owed.
(2) The court may approve, disapprove, or modify the report on claims by the liquidator. Reports not modified by the court within a period of 60 days following submission by the liquidator shall be treated by the liquidator as allowed claims, subject to later modification or to rulings made by the court pursuant to section 8139. A claim under a policy of insurance shall not be allowed for an amount in excess of the applicable policy limits.
History:
Add. 1989, Act 302, Imd. Eff. Jan. 3, 1990
Popular Name:
Act 218
2023 Michigan Compiled Laws › Chapter 500 - Insurance Code of 1956 › Act 218 of 1956 - The Insurance Code of 1956 (500.100 - 500.8302) › 218-1956-81 - Chapter 81 Supervision, Rehabilitation, and Liquidation (500.8101...500.8160) › Section 500.8144 - Distributions; Manner of Payment; Distribution of Assets in Kind.

500.8144 Distributions; manner of payment; distribution of assets in kind.
Sec. 8144.
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 between the expeditious completion of the liquidation and the protection of unliquidated and undetermined claims, including third party claims. Distribution of assets in kind may be made at valuations set by agreement between the liquidator and the creditor and approved by the court.
History:
Add. 1989, Act 302, Imd. Eff. Jan. 3, 1990
Popular Name:
Act 218
2023 Michigan Compiled Laws › Chapter 500 - Insurance Code of 1956 › Act 218 of 1956 - The Insurance Code of 1956 (500.100 - 500.8302) › 218-1956-81 - Chapter 81 Supervision, Rehabilitation, and Liquidation (500.8101...500.8160) › Section 500.8145 - Disposition of Unclaimed or Withheld Funds.

500.8145 Disposition of unclaimed or withheld funds.
Sec. 8145.
(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 discharge, including the amount distributable to a creditor, shareholder, member, or other person who is unknown or cannot be found, shall be deposited with the state treasurer, and shall be paid without interest except in accordance with section 8142 to the person entitled or his or her legal representative upon proof of right to it satisfactory to the state treasurer. An amount on deposit not claimed within 6 years from the discharge of the liquidator shall be considered to have been abandoned, shall escheat to the state without formal escheat proceedings, and shall be deposited in the general fund.
(2) All funds withheld under section 8137 and not distributed shall be deposited, upon discharge of the liquidator, with the state treasurer and paid by him or her in accordance with section 8142. Sums remaining which under section 8142 would revert to the undistributed assets of the insurer shall be transferred to the state treasurer and become the property of the state under subsection (1), unless the commissioner in his or her discretion petitions the court to reopen the liquidation under section 8147.
History:
Add. 1989, Act 302, Imd. Eff. Jan. 3, 1990
Popular Name:
Act 218
2023 Michigan Compiled Laws › Chapter 500 - Insurance Code of 1956 › Act 218 of 1956 - The Insurance Code of 1956 (500.100 - 500.8302) › 218-1956-81 - Chapter 81 Supervision, Rehabilitation, and Liquidation (500.8101...500.8160) › Section 500.8146 - Application for Discharge.

500.8146 Application for discharge.
Sec. 8146.
(1) If all assets justifying the expense of collection and distribution have been collected and distributed under this chapter, the liquidator shall apply to the court for discharge. The court may grant the discharge and make any other orders, including an order to transfer any remaining funds that are uneconomic to distribute, as may be considered appropriate.
(2) Any other person may apply to the court at any time for an order under subsection (1). If the application is denied, the applicant shall pay the costs and expenses of the liquidator in resisting the application, including a reasonable attorney's fee.
History:
Add. 1989, Act 302, Imd. Eff. Jan. 3, 1990
Popular Name:
Act 218
2023 Michigan Compiled Laws › Chapter 500 - Insurance Code of 1956 › Act 218 of 1956 - The Insurance Code of 1956 (500.100 - 500.8302) › 218-1956-81 - Chapter 81 Supervision, Rehabilitation, and Liquidation (500.8101...500.8160) › Section 500.8147 - Petition to Reopen Proceedings.

500.8147 Petition to reopen proceedings.
Sec. 8147.
After the liquidation proceeding has been terminated and the liquidator discharged, the commissioner or other interested party may petition the circuit court at any time to reopen the proceedings for good cause, including the discovery of additional assets. If the court is satisfied that there is justification for reopening, it shall order a reopening.
History:
Add. 1989, Act 302, Imd. Eff. Jan. 3, 1990
Popular Name:
Act 218
2023 Michigan Compiled Laws › Chapter 500 - Insurance Code of 1956 › Act 218 of 1956 - The Insurance Code of 1956 (500.100 - 500.8302) › 218-1956-81 - Chapter 81 Supervision, Rehabilitation, and Liquidation (500.8101...500.8160) › Section 500.8148 - Retention or Destruction of Records.

500.8148 Retention or destruction of records.
Sec. 8148.
If it appears to the commissioner that the records of an insurer in process of liquidation or completely liquidated are no longer useful, the commissioner may recommend to the court and the court shall direct what records should be retained for future reference and what should be destroyed.
History:
Add. 1989, Act 302, Imd. Eff. Jan. 3, 1990
Popular Name:
Act 218