On February 26 2008, the Michigan Senate voted unanimously to adopt S.B. 1061 as amended by the Michigan House on February 21, 2008, and the most significant change is an increase in the annual fees paid by captive insurance companies within the state of Michigan. Companies with annual premium volumes equal to or greater than $75,000,000 will now be required to pay a fee of $100,000.00. In an earlier version of the bill, companies with annual premium volumes equal to or greater than $60,000,000 would have been required to pay a fee of $25,000.00. (Click here to read out report on the prior version of the bill.)
Additionally, the adopted bill includes penalties for failing to make required filings; a grant to the the Commissioner of the authority to exempt special purpose captive insurance companies from the provisions of the new legislation and to employ legal counsel as needed; and the provision of additional conditions that may cause a captive insurance company to have its limited certificate of authority suspended or revoked.
Related proposed legislation regarding the taxation of captives, incorporated in S.B. 1062, which is tie barred with S.B. 1061, was also passed by the Michigan House on February 21, 2008 and given immediate effect by the Michigan Senate on February 26, 2008. Both bills will be presented to the Governor for review.