LANSING -- Governor John Engler has signed legislation into law allowing Michigan to become a member of the Interstate Insurance Receivership compact (IIRC). By entering the compact, Michigan joins California, Illinois, Nebraska, and New Hampshire in improving and streamlining receivership activities among compacting states. Receivership activities include supervision and liquidation of troubled or insolvent insurers.

The Compact creates an interstate commission comprised of the insurance commissioners from the compacting states. The commission will coordinate orderly, efficient, and uniform receivership operations. By better coordinating activities related to insurance company receiverships, the IIRC can reduce unnecessary complications or disputes between the states concerning those activities.

Because Michigan will become a member of the IIRC while its by-laws are being developed, Michigan Insurance Commissioner D. Joseph Olson will play an integral role in determining how the Compact will operate.

"It is important for Michigan to join the IIRC to protect its citizens from unnecessary costs associated with a receivership or a liquidation of an insolvent insurer," Commissioner Olson said. "In addition," he said, "the creation of the Compact diminishes one of the various looming threats to state regulation of insurance. The adoption of this bill is a preemptive measure which reduces the likelihood that Congress will feel compelled to 'help' the states."

"We are thrilled that the Legislature passed and the Governor signed the legislation in time for Michigan to participate in an important meeting of the IIRC in early August," the Commissioner said.