THE INSURANCE CODE OF 1956
Act 218 of 1956
500.4054 Proceeds of policy; exemption from creditors.
Sec. 4054.
(1) Any authorized life insurer shall have power to hold the proceeds of any life or endowment insurance or annuity contract issued by it (a) upon such terms and restrictions as to revocation by the insured and control by beneficiaries; (b) with such exemptions from legal process and the claims of creditors of beneficiaries other than the insured; and (c) upon such other terms and conditions, irrespective of the time and manner of payment of said proceeds, as shall have been agreed to in writing by such insurer and the insured or beneficiary.
(2) Such insurer shall not be required to segregate funds so held but may hold them as a part of its general corporate assets.
(3) Any life or endowment insurance or annuity contract issued by a domestic, foreign or alien insurer may provide that the proceeds thereof or payments thereunder shall not be subject to the claims of creditors of any beneficiary other than the insured or any legal process against any beneficiary other than the insured; and if the said contract so provides, the benefits accruing thereunder to such beneficiary other than the insured shall not be transferable nor subject to commutation or encumbrance, or to process.
History: 1956, Act 218, Eff. Jan. 1, 1957
PopularName Notes:
Act 218
Notes of Decisions
Cited in
5
cases, 1988–2019 · leading case:
In Re Brooks, 248 B.R. 99 (Bankr. W.D. Mich. 2000).
In Re Brooks, 248 B.R. 99 (Bankr. W.D. Mich. 2000).
· cites it 11× “1993) (annuitant’s conservator, who was named as “payee” under annuity, was considered to be “insured” and “beneficiary” within the meaning of Mich. Comp. Laws Ann. § 500.4054 , and therefore not within the protection of the statute); Mich.”
In Re Olson, 424 B.R. 770 (Bankr. E.D. Mich. 2010).
· cites it 11× “This matter is before the Court on the Trustee’s Objection to Debtor’s Exemption of an annuity pursuant to Mich. Comp. Laws § 500.4054 . Subsequent to the filing of the Trustee’s Objection, Debtor filed amended exemptions, omitting the annuity entirely, claiming that the annuity…”
In re Parsons, 161 B.R. 194 (W.D. Mich. 1993).
· cites it 4× “The second statute, Mich.Comp.Laws Ann. § 500.4054, provides in part that: (1) Any authorized life insurer shall have power to hold the proceeds of any life or endowment insurance or annuity contract issued by it .”
In re Soori-Arachi, 600 B.R. 153 (Bankr. D.R.I. 2019).
· cites it 3× “During the 1920s and 1930s, "legislatures across the country began passing two types of statutes to protect life insurance proceeds.”
Baltrusaitis v. Cook, 435 N.W.2d 417 (Mich. Ct. App. 1988).
· cites it 2× “As to exempting a beneficiary’s creditors from the proceeds of a life insurance policy, MCL 500.4054; MSA 24.14054 provides: (1) Any authorized life insurer shall have power to hold the proceeds of any life or endowment insurance or annuity contract issued by it (a).”
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