HOUSE BILL No. 5642


     March 10, 1998, Introduced by Rep. Profit and referred to the Committee on Insurance.


        A bill to amend 1956 PA 218, entitled

   "The insurance code of 1956,"

   by amending section 2210 (MCL 500.2210), as amended by 1994 PA

   227.

               THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 1         Sec. 2210.  (1) As used in this section:

 2         (a) "Employee  welfare  benefit plan" means that term as

 3    defined by the employee retirement income security act of 1974,

 4    Public Law 93-406, 88 Stat. 829.

 5         (b) "Employer" means an individual, sole proprietorship,

 6    partnership, firm, corporation, association, or any other legal

 7    entity, which has 1 or more employees and is legally doing busi-

 8    ness in this state.

 9         (c) "Trust" means a trust established by an employer.  and

10     maintained for the sole purpose of providing for the cost of


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 1    benefits under an employee welfare benefit plan maintained for

 2     employees or retired employees, including a sole proprietor or a

 3     partner of the employer, and their qualified dependents and

 4     beneficiaries. 

 5         (2) Notwithstanding any other section of this act, an

 6    employer OR A TRUST has an insurable interest in, and may, with

 7    the written consent of the insured, insure on an individual or

 8    group basis for its benefit the lives of  its  THE EMPLOYER'S

 9    directors, officers, managers, nonmanagement employees, and  its 

10    retired employees.  An employer OR A TRUST may insure the lives

11    of  its  THE EMPLOYER'S nonmanagement employees and its retired

12    employees only if those persons give written consent to be

13    insured and the coverage is limited to an amount reasonably com-

14    mensurate with the employer's projected unfunded liabilities  to

15     nonmanagement and retired employees for employee welfare benefit

16     plans,  calculated according to accepted actuarial principles.

17    An employer shall not retaliate in any manner against an employee

18    or a retired employee for refusing consent to be insured.

19         (3) Notwithstanding any other section of this act,  a

20     trustee of  a trust MAINTAINED FOR THE PURPOSE OF PROVIDING FOR

21    THE COST OF BENEFITS UNDER AN EMPLOYEE BENEFIT PLAN MAINTAINED

22    FOR EMPLOYEES OR RETIRED EMPLOYEES has an insurable interest in,

23    and may, with the acquiescence of the insured, insure on an indi-

24    vidual or group basis  ,  FOR ITS BENEFIT the lives of the

25    employer's directors, officers, managers, nonmanagement employ-

26    ees, and  its  retired employees.  A  trustee of a  trust may

27    insure the life of a nonmanagement employee and a retired



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 1    employee only if that person is given written notice of the

 2    coverage, he or she has not notified either the employer or the

 3     trustee  TRUST in writing that he or she does not want to be

 4    insured for the coverage, and the coverage is limited to an

 5    amount reasonably commensurate with the employer's projected

 6    unfunded liabilities to nonmanagement and retired employees for

 7    employee  welfare  benefit plans, calculated according to

 8    accepted actuarial principles.  An employer or a  trustee  TRUST

 9    shall not retaliate in any manner against an employee or a

10    retired employee for providing the written notice that he or she

11    does not want to be insured for the coverage.

12         (4) The proceeds of any policy or certificate issued pursu-

13    ant to subsection (2) or (3)  is  ARE exempt from the claims of

14    any creditor or dependent of the insured.





























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