Industry Issues | Surplus Lines Reform

Michigan DIFS to Issue Surplus Lines Policy Data Request

The Michigan Department of Insurance and Financial Services has alerted PCI that another annual request for policy data will be issued to eligible surplus lines insurance companies by the end of this month.

Notified companies will be asked to report to the Department surplus lines policy data in an Excel spreadsheet format - see Data Request Excel Template. This Excel spreadsheet includes four sheets. The first sheet includes formatting instructions and field definitions for the required fields. The other three sheets are labeled with "Surplus Lines", "Policyholder", and "Risk Purchasing Group". Below are the definitions for each category:

  • "Surplus Lines": This spreadsheet is for policies placed with surplus lines companies through surplus lines producers. See Sec. 500.1903
  • "Policyholder": This spreadsheet is for policies directly placed with surplus lines companies by the policyholders. See Sec. 500.1951
  • "Risk Purchasing Group": This spreadsheet is for policies where the insureds are risk purchasing groups. See Sec. 500.1801


  • Report one line per policy number. No duplicates.
  • Data years requested: 2015, 2016, and 2017
  • Due date: June 15, 2018

Completed spreadsheets and any questions are to be sent to You can also reach DIFS at 877-999-6442.

The information submitted will not be subject to disclosure under Michigan's Freedom of Information Act (FOIA). Patrick M. McPharlin, the director and chief administrative officer of DIFS, has authorized the promise of confidentiality under section 13(1)(f) of FOIA, Mich. Comp. Laws § 15.243(1)(f):

(1) A public body may exempt from disclosure as a public record under this act any of the following:

*  *  *

(f) Trade secrets or commercial or financial information voluntarily provided to an agency for use in developing governmental policy if:
(i) The information is submitted upon a promise of confidentiality by the public body.
(ii) The promise of confidentiality is authorized by the chief administrative officer of the public body or by an elected official at the time the promise is made.
(iii) A description of the information is recorded by the public body within a reasonable time after it has been submitted, maintained in a central place within the public body, and made available to a person upon request. This subdivision does not apply to information submitted as required by law or as a condition of receiving a governmental contract, license, or other benefit.

Pursuant to section 13(1)(f)(iii), the DIFS letter to the company will serve as the recorded description of the information that the company has voluntarily submitted and it will be maintained by DIFS. If DIFS receives a request for company information under FOIA, the request will be denied and the requester will only be furnished a copy of the letter.

PCI members with questions in advance of this data request may email them to

Michigan House to Introduce Substitute Surplus Lines HB 4532

PCI continues to engage the Michigan Legislature and the Department of Insurance and Financial Services (DIFS) regarding NRRA surplus lines legislation, HB 4532 (as introduced).

PCI testimony Letter and supporting Materials have been filed that outline our priority amendments to the bill as introduced.

On November 9, PCI met with legislative staff and DIFS to discuss the attached draft substitute bill. PCI will seek further opportunity to address new concerns related to a definition of an eligible nonadmitted insurer that would require recognition by the Director (commissioner). Additionally, there is now an inconsistent use of the terms nonadmitted insurance and surplus lines insurance. The draft also seeks to rename Chapter 19 and replace "surplus lines" for the "nonadmitted insurance" insurance act?

Email any member comment or questions to and

This legislation will also be on the agenda for general discussion during a Michigan Legislative Conference Call on Thursday, November 12, 2015, at 2:30 p.m. Central (3:30 p.m. Eastern). The dial-in number is 1-866-601-3136 and the conference code is 337 950 0114.

Michigan House Committee Hearing to Include Surplus Lines HB 4532

Michigan's Legislature continues to be focused on closing a deal on long-term road funding but is active on a number of issues of interest to PCI that are on the agenda for committee meetings this week. This includes HB 4532, broad surplus lines legislation intended, as in past sessions, to enact NRRA conforming law to Michigan (the last state to still not have adopted such modernization legislation). This bill is scheduled to be heard in the House Insurance Committee on Thursday, October 29. PCI will submit testimony (see here) to the committee in support of the intended reform and specific amendments to bring Michigan in-line with the NRRA. PCI will continue discussions with interested stakeholders and DIFS (Insurance Dept.) on amendments in hopes of action this fall on the bill.

Michigan HB4532 Introduced to Modify Surplus Lines Law
Michigan House Bill 4532 has been introduced to modernize the state's surplus lines insurance act. While there is some evidence of seeking to conform the surplus lines laws to the Nonadmitted and Reinsurance Reform Act, it has been reported that the primary focus is to increase the codification of requirements for alien unauthorized insurers to do business in the state. This appears to be sought mainly by repealing section 1950 related to the placement of insurance with an insurer that is neither an authorized insurer or an eligible nonadmitted (surplus lines) insurer.

PCI will seek closer conformance with the NRRA terms and definitions. Accordingly, we will further advocate to replace the term "unauthorized insurer" for "nonadmitted insurer."

Of note, HB 4532 would eliminate the special deposit requirement as a condition to be an eligible nonadmitted insurer to write surplus lines insurance. 

Michigan Regulation to Conform to the NRRA

PCI has been actively engaged with state property casualty trade association, Michigan Insurance Coalition, in legislative drafting to amend statutory surplus lines provisions to conform to the NRRA. PCI will also raise section 500.1921 which establishes a deposit requirement to gain recognition as an eligible unauthorized insurer in the state.

The DIFS has also issued Bulletin 2014-04-INS . According to the bulletin, the Department has adopted the Uniform Certificate of Authority Application (UCAA) developed by the NAIC for use by insurers applying in Michigan as an authorized insurer. Related to insurers seeking eligibility as a surplus lines insurer in Michigan, the Department announces that it has adopted application Form FIS 2260 that incorporates criteria set forth in the NRRA, as enacted within the Dodd-Frank Act of 2010.

Michigan OFIR Publishes NRRA-Surplus Lines FAQ

Michigan remains the only state who has not passed legislation in response to the provisions of the federal Nonadmitted and Reinsurance Reform Act of 2010 related to surplus lines. The Office of Financial and Insurance Regulation (OFIR) recently did publish Nonadmitted and Reinsurance Reform Act of 2010 FAQs which can be expected to act as the template for such legislation.

The FAQ does suggest that the Department will seek delegated authority to, on behalf of the state, participate in a multistate clearinghouse or tax sharing arrangement.

The document also indicates that alien and foreign insurers will be required to submit a completed application to verify the insurer's eligibility consistent with the NRRA.