Insurance: other; sponsor of sponsored captive insurance company; modify. Amends sec. 4665 of 1956 PA 218 (MCL 500.4665).

HB 5380 amends Michigan's insurance code to update rules for "sponsored captive insurance companies" (specialized insurers formed by businesses to cover their own risks). It specifies that only authorized insurers, certain holding companies, reinsurers, or director-approved captives may sponsor these companies, while banning risk retention groups from serving as sponsors or participants. The bill requires all business written by these captives to meet one of three security standards: fronting by a subsidiary insurer, reinsurance by a state-approved reinsurer, or securing policies with a U.S. trust fund backed by irrevocable letters of credit. These changes aim to strengthen oversight of captive insurers while clarifying eligibility for sponsors and security requirements.