Title 58 — INSURANCE

58-46-2. Repealed by SL 2009, ch 272 , § 2.

No later than six months after the close of its financial year, a special purpose captive insurance company shall submit to the director a report of its financial condition pursuant to §

Terms used in this chapter mean: (1) "Affiliated entity," any entity, in the same corporate system as the captive insurance company, owned or controlled, directly or indirectly, by a parent or subsidiary, or a member organization by virtue of control, operation, or management. In…

A pure or agency captive insurance company may be incorporated as a stock corporation, a nonstock corporation, a nonprofit corporation, or may be formed as a limited liability company, business trust under chapter 47-14A , or other form of legal entity as approved by the director…

A captive insurance company shall have at least three organizers of whom at least one shall be a resident of this state. Source: SL 1996, ch 287 , § 11; SL 2013, ch 257 , § 10.

At least one of the members of the governing board of a captive insurance company incorporated in this state shall be a resident of this state. Source: SL 1996, ch 287 , § 12; SL 2013, ch 257 , § 11.

Any captive insurance company formed under the provisions of this chapter has the privileges and is subject to the provisions of title 47 or title 55, as applicable to the entity under which it is formed and is otherwise relevant, as well as the applicable provisions contained in…

The provisions of chapters 58-5 and 58-5A pertaining to acquisitions, mergers, and consolidations apply in determining the procedures to be followed by captive insurance companies in carrying out any of the transactions described by those chapters. However, the director may waive…

Each group or sponsored captive insurance company shall submit annually to the director a report of its financial condition pursuant to § 58-6-75 , no later than six months after the close of its financial year. The report shall be audited by an independent certified public accou…

A pure, agency, or trust captive insurance company may make written application for filing the report required by § 58-46-15 on a fiscal year-end that is consistent with the parent company's fiscal year. If an alternative reporting date is granted, the annual report is due six mo…

At least once in five years and whenever the director determines it to be prudent, the director shall examine each captive insurance company to ascertain its financial condition and whether it has complied with the provisions of this chapter. Chapter 58-3 applies to any examinati…

The certificate of authority of a captive insurance company to do insurance business in this state may be suspended or revoked by the director for any of the following reasons: (1) Insolvency or impairment of capital or surplus; (2) Failure to meet the requirements of § 58-46-8 ;…

No pure, agency, or trust captive insurance company is subject to any restrictions on allowable investments. However, the director may prohibit or limit any investment that threatens the solvency or liquidity of any such company. Unless the director has provided written approval …

A pure, agency, or trust captive insurance company may make a loan to its parent or affiliated entities. No loan to its parent or affiliated entities may be made without prior written approval of the director. A group, sponsored, or special purpose captive insurance company may m…

Any captive insurance company may take credit for reserves on risks or portions of risks ceded to reinsurers complying with provisions of chapter 58-14 or 58-46 . Prior approval of the director shall be required for ceding or taking credit for reserves on risks or portions of ris…

No captive insurance company may be required to join a rating organization. Source: SL 1996, ch 287 , § 22.

No captive insurance company may join or contribute financially to any plan, pool, association, or guaranty or insolvency fund in this state. No captive insurance company or its parent or affiliated entities may receive any benefit from any such plan, pool, association, or guaran…

A pure or agency captive insurance company may enter into any arrangement to provide risk management services to a controlled unaffiliated business or an unaffiliated business but may not accept any insurance risk from an unaffiliated business. A trust captive insurance company m…

A captive insurance company may not insure: (1) Any life or health risk; or (2) Any personal lines property casualty risk. Source: SL 2013, ch 257 , § 21.

Each captive insurance company shall pay to the Division of Insurance an annual supervision fee of the greater of five thousand dollars or eight one-hundredths of one percent on gross premiums, less return premiums, for insurance written on all risks or property resident, situate…

The terms and conditions set forth in chapter 58-29B pertaining to insurers' supervision, rehabilitation, and liquidation apply to captive insurance companies formed under this chapter. Source: SL 1996, ch 287 , § 25.

No provisions of Title 58, other than those contained in this chapter or contained in specific references contained in this chapter, apply to captive insurance companies. Source: SL 1996, ch 287 , § 26.

A sponsored captive insurance company may establish and maintain one or more protected cells to insure risks of one or more participants, subject to the following conditions: (1) The owner of a sponsored captive insurance company is limited to its participants and sponsors; (2) T…

A sponsor of a sponsored captive insurance company shall be any entity approved by the director. A risk retention group may not be a sponsor of a sponsored captive insurance company, and a risk retention group may be a participant of a sponsored captive insurance company only to …

Any entity may be a participant in any sponsored captive insurance company. A sponsor may be a participant in a sponsored captive insurance company. A participant need not be an owner of the sponsored captive insurance company or any affiliate thereof. Except as otherwise approve…

No captive insurance company may do any insurance business in this state unless: (1) It first obtains from the director a certificate of authority authorizing it to do insurance business in this state; (2) Its governing board holds at least one meeting each year in this state in …

A group, sponsored, or special purpose captive insurance company shall limit its exposure to loss on any one risk or hazard to an amount deemed acceptable by the director. The amount shall be determined based on whether the risk or hazard is reinsured through an insurance company…

Notwithstanding the provisions of § 58-46-27 , a sponsored captive insurance company may combine the assets of two or more protected cells for purposes of investing those assets. Such a combination of assets may not be construed as defeating the segregation of assets for purposes…

The director shall prescribe the form for making an application and any application submitted shall contain such information as required. The applicant may, with approval of the director, designate confidential information. All information the director generates in making an inve…

The director may promulgate rules pursuant to chapter 1-26 to further the provisions of this chapter. The rules may include: (1) Definition of terms; (2) Requirements for doing business; (3) Application requirements and procedures; (4) Conditions for receiving a certificate of au…

Before receiving a certificate of authority, a captive insurance company shall file with the director a certified copy of its governing documents, a statement under oath of an officer, manager, trustee, or other appropriately authorized representative, satisfactory to the directo…

In addition to the information required by § 58-46-4 , each applicant captive insurance company shall file with the director evidence of the following: (1) The amount and liquidity of its assets relative to the risks to be assumed; (2) The adequacy of the expertise, experience, a…

Each captive insurance company shall pay to the director a nonrefundable fee of two thousand dollars for examining, investigating, and processing its application for certificate of authority. Two or more captive insurance companies under common ownership or control shall pay this…

If the director is satisfied that the documents and statements that the captive insurance company has filed comply with the provisions of this chapter, the director shall issue a certificate of authority authorizing it to do insurance business in this state. Source: SL 1996, ch 2…

No captive insurance company, other than a trust captive insurance company, may be issued a certificate of authority unless it possesses and maintains unimpaired paid-in capital and surplus of two hundred fifty thousand dollars. A sponsored captive may include the capital and sur…

No captive insurance company may pay a dividend out of, or other distribution with respect to, capital or surplus, in excess of the limitations set forth in § 58-5A-35 , without the prior approval of the director. Source: SL 1996, ch 287 , § 9; SL 2009, ch 272 , § 5; SL 2013, ch …

A pure, agency, or trust captive insurance company shall provide a report of its financial condition audited by an independent certified public accountant every five years pursuant to chapter 58-43 if it has annual direct premiums written of less than two million five hundred tho…