Sec. 5256.
(1) Each domestic insurer shall keep under its control all records relating to the insurer's business or affairs at 1 or more of the following locations:
(a) The principal place of doing business in this state.
(b) One or more locations outside the state approved for that purpose, in writing, by the commissioner.
(2) A domestic insurer shall produce those records relating to the insurer's business or affairs and personnel knowledgeable about the records at a principal place of doing business in or outside this state for examination within a reasonable time period specified by the commissioner.
(3) A domestic insurer may place for safekeeping all or any part of its securities, notes, mortgages, or other evidences of indebtedness, with any national bank, state bank, trust company, or any other United States corporation authorized as a custodian to accept and hold personal property for safekeeping. A national bank, state bank, trust company, or United States corporation authorized to accept and hold personal property for safekeeping may employ a subcustodian outside of the United States to hold assets that are not in physical form or that are customarily traded outside the United States. A statutory deposit required by any state or foreign country shall be excepted and any delivery and pledge or assignment of its notes, mortgages, or other securities by any such insurer, as security for money borrowed by it or as required in the regular course of its business by the laws of any state or foreign country, shall also be excepted. The insurer may hold certificates evidencing shares of stock or other registrable securities in the name of a nominee or nominees employed by the insurer and responsible to the insurer. The nominee or nominees, on the request of the insurer, shall indorse the certificate representing shares of stock or other registrable securities in blank or by assignment separate from the certificates. The insurer at all times shall maintain control or possession of the certificate representing the share of stock or other registrable securities, but, if necessary, the nominee or nominees may have access thereto for the purpose of examination under the supervision of the corporation.
(4) The records required to be retained by this section may be maintained in paper, photograph, micro process, magnetic, mechanical or electronic media, or by any process that accurately reproduces or forms a durable medium for the reproduction of a record. If the original document is unavailable, the domestic insurer may produce in an alternative format the same data that was contained on the original document.
(5) Removal of all or a material part of the records of a domestic insurer from this state, except pursuant to a plan or merger or consolidation approved by the commissioner under this act or as may be approved in writing by the commissioner, is prohibited. If after a hearing is held pursuant to the administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328, the commissioner determines that the insurer has violated this section, the commissioner shall reduce his or her findings and decision to writing and shall issue and cause to be served upon the insurer charged with the violation a copy of the findings and order requiring the insurer to return the office, records, and assets to this state. An insurer that violates this section shall be treated as a foreign insurer for the period of time the records were removed from this state, and the insurer shall be liable for both of the following:
(a) The amount of tax prescribed in section 476a and interest in the amount of 3% of the amount due and unpaid for each month or part of a month that the insurer was in violation of this section.
(b) A penalty of $5,000.00 plus an additional $50.00 for each day that the insurer was not in compliance with this section. A domestic insurer that fails to comply with an order of the commissioner issued under this section is presumed to be no longer safe, reliable, and entitled to public confidence under section 436.
(6) If an insurer fails to comply with an order issued under this section, as modified or extended, the commissioner shall suspend or revoke the insurer's certificate of authority.
(7) The commissioner may require a domestic insurer to transfer its domicile to another state if the commissioner is not satisfied with the production of the records and personnel knowledgeable about the records because all or part of the records or personnel are located outside this state.
History: 1956, Act 218, Eff. Jan. 1, 1957 ;-- Am. 1969, Act 318, Eff. Mar. 20, 1970 ;-- Am. 1982, Act 338, Imd. Eff. Dec. 17, 1982 ;-- Am. 1989, Act 302, Imd. Eff. Jan. 3, 1990 ;-- Am. 1990, Act 256, Imd. Eff. Oct. 15, 1990 ;-- Am. 1998, Act 121, Imd. Eff. June 10, 1998 Popular Name: Act 218
Structure Michigan Compiled Laws
Chapter 500 - Insurance Code of 1956
Act 218 of 1956 - The Insurance Code of 1956 (500.100 - 500.8302)
Section 500.5200 - Applicability of Chapter.
Section 500.5202 - Life, Accident or Sickness Insurers; Reorganization Under Code.
Section 500.5204 - Companies Deemed Bodies Corporate and Politic; Corporation Law Applicable.
Section 500.5205 - Proof of Corporate Existence and Authority to Insure.
Section 500.5206 - Corporate Powers; Enumeration; Exercise by Board of Directors.
Section 500.5209 - Insurer's Name; Restrictions.
Section 500.5210 - Dealing in Commodities Prohibited; Exception.
Section 500.5214 - Articles of Incorporation; Amendment.
Section 500.5220 - Blank Forms for Amending Articles.
Section 500.5222 - Corporate Life; Extension.
Section 500.5224 - Corporate Life; Expiration, Liquidation.
Section 500.5228 - Bylaws; Adoption; Filing.
Section 500.5230 - Special Meetings of Stockholders or Members; Notice of Meetings.
Section 500.5232 - Voting Rights; Stockholders, Members, Proxies, Fiduciaries, Pledgees.
Section 500.5234 - Stockholders and Members; Voting Rights, Quorum.
Section 500.5236 - Voting Rights; Inspectors of Election.
Section 500.5239 - Repealed. 1988, Act 290, Eff. Jan. 1, 1989.
Section 500.5241 - Indemnification Against Expenses of Action, Suit, or Proceeding Generally.
Section 500.5242d - “Corporation” Defined for Purposes of MCL 500.5241 to 500.5242c.
Section 500.5243 - Repealed. 1988, Act 290, Eff. Jan. 1, 1989.
Section 500.5244 - Liability for Payment Under Invalid Law or Ordinance.
Section 500.5246 - Officers and Agents; Appointment, Removal, Bond.
Section 500.5248 - Directors, Officers, and Employees of Domestic Insurer; Compensation.
Section 500.5258 - Acknowledgments.
Section 500.5260 - Stock Certificates; Substitutions.
Section 500.5264 - Expenditures, Vouchers, and Affidavits.
Section 500.5266 - Dividends to Stockholders; General Provision.
Section 500.5267 - Dividends to Stockholders; Domestic Fire Insurance Company.
Section 500.5270 - Insurer's Rights as Stockholder in Other Corporations.
Section 500.5274 - Domestic Fire Insurance Company; Assessment of Stockholders.
Section 500.5280 - Domestic Mutual Insurer; Assets; Deficiency; Liability of Director.
Section 500.5282 - Domestic Stock Insurer; Statement of Beneficial Ownership of Equity Securities.
Section 500.5283c - Stock Purchase Plan; Limitations.
Section 500.5284 - Securities Not Owned; Sale; Failure to Deliver to Transferee; Exception.
Section 500.5285 - Nonapplication of Sections to Certain Transactions.
Section 500.5286 - Foreign or Domestic Arbitrage Transactions; Exemptions.
Section 500.5287 - Equity Security; Definition.
Section 500.5288 - Registered Equity Securities; Exemptions; Conditions.
Section 500.5289 - Insurance Commissioner; Regulatory Powers; Effect of Good Faith.
Section 500.5290 - Unlawful Solicitation; Use of Name to Solicit Proxies or Consents.