Terms not otherwise defined in this chapter shall have the same meaning ascribed to them in this title. As used in this chapter, unless the context otherwise requires, the term:
(1) "Affiliate" means an individual, partnership, corporation, trust, or estate that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with one or more of the shareholders or members of a captive insurance company. Affiliates shall also include employees of any shareholder or member, or any affiliate thereof, of a captive insurance company. For the purpose of the foregoing definition of affiliate, "control" means:
(A) Ownership of shares of a corporation possessing 50 percent or more of the total voting power of all classes of shares entitled to vote or possessing 50 percent or more of the total value of the outstanding shares of the corporation; and
(B) Ownership of 50 percent or more by value of the beneficial interests in a partnership, trust, or estate.
(2) "Association" means any membership organization whose members consist of a group of individuals, corporations, partnerships, or other associations who engage in similar or related professional, trade, or business activities and who collectively own, control, or hold with power to vote all of the outstanding voting interests of an association captive insurance company or of a corporation that is the sole shareholder of an association captive insurance company.
(3) "Association captive insurance company" means any domestic insurance company granted a certificate of authority under this chapter to insure or reinsure the similar or related risks of members and affiliates of members of its association.
(4) "Captive insurance company" means any pure captive insurance company, association captive insurance company, industrial insured captive insurance company, or risk retention group captive insurance company.
(5) "Controlled unaffiliated business" means:
(A) A person:
(i) That is not an affiliate;
(ii) That has an existing contractual relationship with an affiliate under which the affiliate bears a potential financial loss; and
(iii) The risks of which are managed by a captive insurance company under an arrangement approved by the Commissioner; or
(B) A reinsurance pooling arrangement with other captive insurance companies that is approved by the Commissioner.
(6) "Industrial insured" means an insured:
(A) Who procures the insurance of any risk or risks through the use of the services of a full-time employee who acts as an insurance manager, risk manager, or insurance buyer or through the services of a person licensed as a property and casualty agent, broker, or counselor in such person's state of domicile;
(B) Whose aggregate annual premiums for insurance on all risks total at least $25,000.00; and
(C) Who either:
(i) Has at least 25 full-time employees;
(ii) Has gross assets in excess of $3 million; or
(iii) Has annual gross revenues in excess of $5 million.
(7) "Industrial insured captive insurance company" means any domestic insurance company granted a certificate of authority under this chapter to insure or reinsure the risks of industrial insureds and their affiliates and which has as its shareholders or members only industrial insureds that are insured or reinsured by the industrial insured captive insurance company or which has as its sole shareholder or sole member a corporation whose only shareholders are industrial insureds that are insured or reinsured by the industrial insured captive insurance company.
(8) "Parent" means a corporation which directly owns shares representing more than 50 percent of the total outstanding voting power and value of a pure captive insurance company.
(9) "Pure captive insurance company" means any domestic insurance company granted a certificate of authority under this chapter to insure or reinsure the risks of its parent and affiliates of its parent, and controlled unaffiliated business.
(10) "Risk retention group captive insurance company" is any pure, association, or industrial insured captive insurance company which has been granted a certificate of authority under this chapter and determined by the Commissioner to be established and maintained as a "risk retention group" as defined under the federal Liability Risk Retention Act of 1986, as amended. A risk retention group may be chartered and licensed either under this chapter or under Chapter 40 of this title.
(11) "Transact," as used in this chapter, shall not include the organizational activities associated with the preliminary formation, incorporation, petitioning for a certificate of authority, and initial capitalization of a captive insurance company.
Section: 33-41-1 33-41-2 33-41-3 33-41-4 33-41-5 33-41-6 33-41-7 33-41-8 33-41-9 33-41-10 33-41-11 33-41-12 33-41-13 33-41-14 33-41-15 NextLast modified: October 14, 2016