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Insurance Companies/Financial Institutions 10. Under the CIT "insurance company" is defined as an "authorized insurer" at MCL 206.605(5). What is the meaning of "authorized insurer"? If an insurance company is not an "authorized insurer

An authorized insurer is an insurer as defined by the insurance code of 1956, 1956 PA 218, MCL 500.106, as "any individual, corporation, association, partnership, reciprocal exchange, inter-insurer, Lloyds organization, fraternal benefit society, and any other legal entity, engaged or attempting to engage in the business of making insurance or surety contracts," which is authorized according to the insurance code at section 108. "Authorized" means "an insurer duly authorized, by a subsisting certificate of authority issued by the [insurance] commissioner, to transact insurance in this state." Thus, an insurance company under the CIT is an insurer as defined and authorized by the insurance code.

If an insurance entity does not meet these requirements, that entity is taxed as a standard taxpayer under the CIT. Likewise, a non-nexus insurance member of a unitary business group which is not an "authorized insurer" will be treated as a standard taxpayer and its corporate income and sales will determine the liability of the group.

The direction of MCL 206.691, that any corporate income and sales attributable to the insurance company be eliminated from the UBG return, is not applicable because the unauthorized insurance company is not "subject to the tax under chapter 12."