Michigan Laws 500.7702 – Purpose and construction of chapter
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Terms Used In Michigan Laws 500.7702
- Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
- Association: means the Michigan life and health insurance guaranty association created under section 7706. See Michigan Laws 500.7705
- authorized: when used in the context of assessments means a resolution or motion passed by the association's board of directors that directs that an assessment be called immediately or in the future from member insurers for a specific amount. See Michigan Laws 500.7705
- Commissioner: means the director. See Michigan Laws 500.102
- Insurer: means an individual, corporation, association, partnership, reciprocal exchange, inter-insurer, Lloyds organization, fraternal benefit society, or other legal entity, engaged or attempting to engage in the business of making insurance or surety contracts. See Michigan Laws 500.106
(1) The purpose of this chapter is to protect, subject to certain limitations, persons specified in section 7704(1) against failure in the performance of contractual obligations under insurance policies and annuity contracts specified in section 7704(2) because of the impairment or insolvency of the insurer issuing the policies or contracts. To provide this protection:
(a) An association of insurers is created to enable the guaranty of payment of benefits and continuation of coverages as limited in this chapter.
(b) Members of the association are subject to assessment to provide funds to carry out the purpose of this chapter.
(c) The association is authorized to assist the commissioner, in the prescribed manner, in the detection and prevention of insurer impairments or insolvencies.
(2) This chapter shall be construed to execute the purposes provided in subsection (1).