Michigan Captive Insurers Face New Filing Deadlines

Captive insurance companies licensed in Michigan will face new deadlines to file annual financial reports with the state Department of Insurance and Financial Services under legislation signed into law on December 20, 2018, by Governor Rick Snyder.

Under prior law, captives were required to file their annual reports by March 1. The new law changes that deadline, mandating that the report is submitted no later than 60 days after the end of a captive's fiscal year.

The measure also gives captives a new alternative financial reporting method. Under prior law, captives could either use generally accepted accounting methods or statutory accounting principles. The new law gives a third alternative: international financial report standards (IFRS), which are widely used outside the United States.

"Some believe that using the IFRS would simplify accounting procedures for Michigan domestic captive insurers and make Michigan a more attractive place for those insurers to operate," according to an earlier analysis by the Michigan Senate Fiscal Agency.

Michigan is one of the smaller US captive domiciles. In June 2018, the most recently available information, 23 captives were licensed in Michigan.

The action in Michigan concludes an extraordinarily busy year for captives on the legislative front with lawmakers in Connecticut, Delaware, Illinois, Kansas, North Carolina, South Carolina, and Vermont all passing legislation amending their captive statutes.