Michigan Laws 500.839 – Capital notes
Current as of: 2023 | Check for updates
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(1) A domestic insurer may issue capital notes under this section.
(2) A capital note issued by a domestic insurer may provide for interest payments at fixed or adjustable rates, for sinking fund payments, and for payments and redemptions of principal under the terms of the capital note.
Terms Used In Michigan Laws 500.839
- 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
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
(3) The issuance of a capital note is not subject to the commissioner‘s prior approval.
(4) A capital note shall be treated as a liability in the computation of statutory surplus and shall be reported as a liability on the domestic insurer’s annual statement filed with the commissioner under section 438.
(5) In a liquidation proceeding pursuant to chapter 81, a capital note is a similar obligation under section 8142(1)(h).
(6) A capital note may be included in a domestic insurer’s total adjusted capital. For a capital note to be so included, the commissioner may require the capital note to contain other features as the commissioner determines are adequate and appropriate to ensure that the insurer continues to be safe, reliable, and entitled to public confidence.
(7) As used in this section:
(a) “Capital note” means a debt instrument that complies with this section.
(b) “Total adjusted capital” means the sum of an insurer’s statutory capital and surplus as determined under the annual statement filed with the commissioner under section 438.