According to Michael Koziol, assistant vice president and counsel for PCI:
With these reforms, Michigan joins other key states such as California, Illinois, Pennsylvania and Texas in ensuring that the guaranty fund’s exposure on large deductible policies will be the same as what it would have been for the insolvent insurer. This change means that the guaranty fund, which will be paying the claims for the insurer, will be reimbursed for the deductible amount the guaranty fund pays rather than it being used to enrich the estate of the insolvent insurer.
The other aspects of the reform include, “permits the guaranty association to receive confidential information regarding a supervision proceeding, gives the guaranty association the right to obtain claim records in the custody of a third party administrator, gives the guaranty association the two-part trigger language embodied in the NCIGF model – that is an order of liquidation with a finding of insolvency, and adds new net worth language excluding first- and third-party claims of insureds with net worth of $25 million or more.”
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