Section R. 500.87 - Transactions subject to prior notice; notice filing; Form DRule 17.
(1) An insurer required to give notice of a proposed transaction pursuant to section 1341 of the act, MCL 500.1341, shall furnish the required information on Form D.(2) Agreements for cost sharing services and management services must, at a minimum, do all of the following, as applicable: (a) Identify the person providing services and the nature of the services.(b) Set forth the methods to allocate costs.(c) Require timely settlement, not less frequently than on a quarterly basis, and compliance with the requirements in the NAIC Accounting Practices and Procedures Manual.(d) Prohibit advancement of money by the insurer to the affiliate except to pay for services defined in the agreement.(e) State that the insurer shall maintain oversight for functions provided to the insurer by the affiliate and that the insurer shall monitor services annually for quality assurance.(f) Define books and records of the insurer to include all books and records developed or maintained under or related to the agreement.(g) Specify that all books and records of the insurer are and remain the property of the insurer, held for the benefit of the insurer and are subject to the control of the insurer.(h) State that all money and invested assets of the insurer are the exclusive property of the insurer, held for the benefit of the insurer and are subject to the control of the insurer.(i) Include standards for termination of the agreement with and without cause.(j) Include provisions for indemnification of the insurer if there is gross negligence or willful misconduct on the part of the affiliate providing the services.(k) Specify that if the insurer is placed in receivership or seized by the director under chapter 81 of the act, MCL 500.8101 to 500.8160, all of the following apply: (i) All of the rights of the insurer under the agreement extend to the receiver or director.(ii) All books and records must immediately be made available to the receiver or the director and must be turned over to the receiver or director immediately upon the receiver's or director's request.(l) Specify that the affiliate has no automatic right to terminate the agreement if the insurer is placed in receivership pursuant to chapter 81 of the act, MCL 500.8101 to 500.8159.(m) Specify that the affiliate shall continue to maintain any systems, programs, or other infrastructure notwithstanding a seizure by the director under chapter 81 of the act, MCL 500.8101 to 500.8159, and shall make them available to the receiver, for so long as the affiliate continues to receive timely payment for services rendered.Mich. Admin. Code R. 500.87
2024 MR 6, Eff. March 20, 2024