(a) One (1) or more sponsors may form a sponsored captive insurance company under this subchapter.
(b) A sponsor of a sponsored captive insurance company must be:
(1) An insurer licensed under the laws of any state;
(2) A reinsurer authorized or approved under the laws of any state;
(3) A captive insurance company formed or licensed under this subchapter; or
(4) Any other corporation, if approved by the Insurance Commissioner, in a manner to be prescribed by regulation.
(c) The business written by a sponsored captive insurance company must be fronted by an insurance company licensed under the laws of any state.
(d) A risk retention group may not be either a sponsor or a participant of a sponsored captive insurance company.
(e) A sponsored captive insurance company formed or licensed under this subchapter may establish and maintain one (1) or more protected cells to insure risks of one (1) or more participants, subject to the following conditions:
(1) The shareholders of a sponsored captive insurance company must be limited to its participants and sponsors;
(2) Each protected cell must be accounted for separately on the books and records of the sponsored captive insurance company to reflect the financial condition, results of operations of the protected cell, net income or loss, dividends or other distributions to participants, and other factors provided for in the participant contract or required by the commissioner;
(3) The assets of a protected cell must not be chargeable with liabilities arising out of any other insurance business the sponsored captive insurance company may conduct;
(4) No sale, exchange, or other transfer of assets may be made by the sponsored captive insurance company between or among any of its protected cells without the consent of the protected cells;
(5) (A) No sale, exchange, transfer of assets, dividend, or distribution may be made from a protected cell to a sponsor or participant without the commissioner's approval.
(B) In no event may the commissioner's approval be given if the sale, exchange, transfer, dividend, or distribution would result in insolvency or impairment with respect to a protected cell;
(6) A sponsored captive insurance company shall file annually all the financial reports the commissioner requires, which shall include, but are not limited to, accounting statements detailing the financial experience of each protected cell;
(7) A sponsored captive insurance company shall notify the commissioner in writing within ten (10) business days of a protected cell that is insolvent or unable to meet its claim or expense obligations; and
(8) (A) No participant contract shall take effect without the commissioner's prior written approval.
(B) The addition of each new protected cell and the withdrawal of any participant of any existing protected cell constitute a change in the business plan requiring the commissioner's prior written approval.
Section: Previous 23-63-1610 23-63-1611 23-63-1612 23-63-1613 23-63-1614 23-63-1615 23-63-1616 23-63-1617 23-63-1618 23-63-1619 23-63-1620 23-63-1621 23-63-1622 23-63-1623 NextLast modified: November 15, 2016