HB 5383 Michigan House · 2025-2026 Regular Session

Insurance: other; limited certificate of authority to transact insurance or reinsurance; modify. Amends sec. 4705 of 1956 PA 218 (MCL 500.4705).

HB 5383 amends Michigan's Insurance Code (MCL 500.4705) to establish a new regulatory framework for "Special Purpose Financial Companies" (SPFCs), which are specialized insurance entities created to insure risks for a single counterparty (typically a parent company). The bill requires SPFCs seeking to operate in Michigan to obtain a limited certificate of authority by meeting specific criteria, including maintaining a Michigan principal office, holding annual management meetings in-state, designating a Michigan resident agent, and submitting detailed documentation about their insurance securitization transactions and financial plans. Key provisions mandate that SPFCs only cover risks of their designated counterparty, provide stress-case financial projections, and undergo review by both the Attorney General's office and the Insurance Commissioner. This bill directly affects companies forming SPFCs for risk management and their parent companies, creating a structured pathway for these entities to operate under Michigan law.

Bill status passed both 4 of 5 stages cleared

Introduction

Dec 2025

Committee Review

Mar 2026

House Passage

Mar 2026

Senate Passage

Mar 2026

Governor

Introduced Dec 16, 2025 Last action Mar 10, 2026

Maddy AI version diff · 1 comparison

What changed between versions

House Introduced Bill → As Passed by the House · 10 edits · Mar 4, 2026

MAJOR

This bill amends Michigan's insurance code to establish new rules for Special Purpose Financial Companies (SPFCs), which are entities that can issue insurance securities to transfer risk. The changes add detailed requirements for SPFCs to operate in Michigan, including stricter documentation, higher fees, and more comprehensive reporting obligations to protect policyholders and ensure financial stability.

Scope change

The bill expands regulatory requirements specifically for SPFCs operating in Michigan, adding new operational standards, documentation requirements, and fee structures that were not present in the original version.

REQUIREMENT

Added new requirements for SPFCs to hold annual management meetings in Michigan and maintain their principal place of business within the state.

Added requirement for SPFCs to file a complete set of insurance securitization documentation shortly after closing, including legal opinions and financial statements under oath.

Added requirement for organizational documents to include details about corporate powers, number of directors/managers, capital stock requirements, and entity term.

Added new section requiring SPFCs to submit detailed plans of operation including stress test scenarios, investment strategies, and underwriting methods before receiving authority.

Added requirement for biographical affidavits from all prospective officers and directors of SPFCs.

Added requirement for SPFCs using protected cells to file detailed business plans showing how paid losses, reserves, and expenses are accounted for.

Added requirement for SPFCs to submit affidavits verifying compliance with the chapter and describing their investment strategy and asset management practices.

Added requirement for SPFC securities to be properly registered with securities commissioner or qualify as exempt securities under state law.

FISCAL

Reduced the initial application fee from $10,000 to $5,000 for SPFCs not authorized under chapter 46.

Added tiered annual renewal fee structure ranging from $5,000 to $100,000 based on annual premium volume.

Floor votes · House Mar 4, 2026

How they voted

This bill passed the Senate by voice vote (no roll call recorded).

Full legislative history

Actions timeline

Total actions

Key actions

Committee

Mar 10, 2026

Committee

REFERRED TO COMMITTEE ON FINANCE, INSURANCE, AND CONSUMER PROTECTION

upper

Mar 10, 2026

Upper · Passed

PASSED BY HOUSE WITH IMMEDIATE EFFECT

upper

Mar 4, 2026

Lower · Passed

passed; given immediate effect Roll Call #70 Yeas 106 Nays 0 Excused 0 Not Voting 4

lower

Feb 4, 2026

Committee

referred to second reading

lower

Feb 4, 2026

Lower · Passed

reported with recommendation without amendment

lower

Dec 16, 2025

Committee

referred to Committee on Insurance

lower

Dec 16, 2025

Introduced

introduced by Representative Rep. Jerry Neyer

lower

1 primary · 1 co-sponsor