Title 56, Insurance

(a) No captive insurance company shall be issued a license unless it possesses and maintains unimpaired paid-in capital and surplus of:(1) In the case of a pure captive insurance company, not less than two hundred fifty thousand dollars ($250,000);(2) In the case of an associatio…

No captive insurance company shall pay a dividend out of, or other distribution with respect to, capital or surplus without the prior approval of the commissioner. Approval of an ongoing plan for the payment of dividends or other distributions shall be conditioned upon the retent…

(a) A pure captive insurance company or agency captive insurance company may be incorporated as a stock insurer with its capital divided into shares and held by the stockholders, as a nonprofit corporation with one (1) or more members, or as a limited liability company. (b) An as…

(a) No captive insurance companies shall be required to make any annual report except as provided in this chapter and as required by title 48 and title 61. (b) Prior to March 15 of each year, each captive insurance company shall submit to the commissioner a report of its financia…

(a) At least once every three (3) years, and whenever the commissioner determines it to be prudent, the commissioner shall visit each captive insurance company and thoroughly inspect and examine its affairs to ascertain its financial condition, its ability to fulfill its obligati…

(a) The license of a captive insurance company may be suspended or revoked by the commissioner for any of the following reasons:(1) Insolvency or impairment of capital or surplus;(2) Failure to meet the requirements of § 56-13-105;(3) Refusal or failure to submit an annual report…

(a) Except as may be otherwise authorized by the commissioner, association captive insurance companies and risk retention groups shall comply with the investment requirements contained in §§ 56-3-401 — 56-3-409, as applicable. Notwithstanding any other provision of this title, th…

(a) Any captive insurance company may provide reinsurance as authorized by this title on risks ceded by any other insurer. (b) Any captive insurance company may take credit for the reinsurance of risks or portions of risks ceded to reinsurers complying with this title. If the rei…

(a) No captive insurance company shall be required to join a rating organization. (b) No captive insurance company shall be permitted to join or contribute financially to any plan, pool, association, or guaranty or insolvency fund in this state, nor shall any such captive insuran…

(a) Each captive insurance company shall pay to the department, on or prior to March 15 of each year, a tax at the rate of four-tenths of one percent (0.4%) on the first twenty million dollars ($20,000,000), and three-tenths of one percent (0.3%) on each dollar thereafter on the …

The commissioner may adopt and, from time to time, amend such rules relating to captive insurance companies as are necessary to enable the commissioner to carry out this chapter.

No provisions of this title, other than those contained in this chapter or expressly provided in this chapter, shall apply to captive insurance companies. Risk retention groups shall have the privileges and be subject to chapter 45 of this title in addition to the applicable prov…

The commissioner may adopt rules establishing standards to ensure that a parent or its affiliated company, or an industrial insured or its affiliated company, is able to exercise control of the risk management function of any controlled unaffiliated business to be insured by a pu…

(a) No captive insurance company shall make any material change or changes to its plan of operation until the department has approved the change or changes. (b) Each subsequent material change of plan of operation filed during each year is subject to the fee described in § 56-4-1…

Any municipality, metropolitan government, county, authority, utility district, or other public body generally classified as a governmental body or governmental entity, whether organized by private act or public act of the general assembly, or otherwise, or any agency, board, or …

(a) If, after providing notice consistent with the process established by § 4-5-320(c) and providing the opportunity for a contested case hearing held in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, part 3, the commissioner finds that…

The commissioner is authorized to promulgate rules and regulations necessary to effectuate the purposes of this chapter; provided, that, no rule promulgated pursuant to this chapter shall affect a special purpose financial captive (SPFC) insurance securitization, as defined and a…

(a) The regulation of captive insurance companies as authorized by this chapter is subject to audit by the comptroller of the treasury as otherwise provided by state law. Information submitted to the department by captive insurance companies subject to this chapter shall, without…

(a) Notwithstanding any other method authorized by law, a foreign or alien insurer may become a domestic captive insurance company by complying with all of the requirements of this chapter relative to the organization and licensing of a domestic captive insurance company of the s…

(a) As used in this section, “dormant captive insurance company” means any captive insurance company other than a captive risk retention group that has:(1) Ceased transacting the business of insurance, including the issuance of insurance policies; and(2) No remaining liabilities …

(a) For purposes of this section:(1) “Foreign” means outside the United States, its territories, or possessions;(2) “Foreign currency” means currency issued by a government outside the United States that is recognized by the United States as a legitimate government-issued currenc…

(a) One (1) or more sponsors may form a protected cell captive insurance company under this chapter. In addition to part 1 of this chapter, this part shall apply to protected cell captive insurance companies. (b) A protected cell captive insurance company shall be incorporated as…

(1) As used in this part, unless the context requires otherwise:(1) “General account” means all assets and liabilities of a protected cell captive insurance company not attributable to a protected cell;(2) “Participant” means a person or an entity, authorized to be a participant …

(1) In addition to the information required by § 56-13-103(c)(1), each applicant-protected cell captive insurance company shall file with the commissioner the following:(1) Materials demonstrating how the applicant will account for the loss and expense experience of each protecte…

(1) A protected cell captive insurance company formed or licensed under this chapter may establish and maintain one (1) or more incorporated or unincorporated protected cells, to insure risks of one (1) or more participants, subject to the following conditions:(1) (A) A protected…

(a) Associations, corporations, limited liability companies, partnerships, trusts, and other business entities may be participants in any protected cell captive insurance company formed or licensed under this chapter. (b) A sponsor may be a participant in a protected cell captive…

Notwithstanding § 56-13-204, the assets of two (2) or more protected cells may be combined for purposes of investment, and such combination shall not be construed as defeating the segregation of such assets for accounting or other purposes. Notwithstanding any other provision of …

(a) Except as otherwise provided in this section, chapter 9 of this title shall apply to a protected cell captive insurance company. (b) Upon any order of supervision, rehabilitation, or liquidation of a protected cell captive insurance company, the receiver shall manage the asse…

(a) The pleadings in any legal action brought by or against a protected cell captive insurance company shall specify which protected cell or cells are or should be named a party to the suit. If the general account is party to this suit, it likewise shall be separately identified …

(a) (1) Upon the application of a protected cell captive insurance company, one of its protected cells may be converted to any form of captive insurance company authorized pursuant to this chapter with the consent of the commissioner. Upon compliance with part 1 of this chapter, …

(a) A branch captive insurance company may be established in this state, in accordance with this chapter, to write in this state any insurance or reinsurance of the employee benefit business of its parent and affiliated companies that is subject to the Employee Retirement Income …

(1) As used in this part, unless the context requires otherwise:(1) “Alien captive insurance company” means any insurance company formed to write insurance business for its parents and affiliates and licensed pursuant to the laws of an alien jurisdiction which imposes statutory o…

(a) No branch captive insurance company shall be issued a license by the commissioner unless it possesses and maintains, as security for the payment of liabilities attributable to the branch operations:(1) An amount equal to the amount set forth in § 56-13-105 as the minimum capi…

In the case of a captive insurance company seeking to become licensed as a branch captive insurance company, the alien captive insurance company shall petition the commissioner to issue a certificate setting forth the commissioner's finding that, after considering the character, …

Prior to March 1 of each year, or with the approval of the commissioner within sixty (60) days after its fiscal year-end, a branch captive insurance company shall file with the commissioner a copy of all reports and statements required to be filed under the laws of the jurisdicti…

(a) The examination of a branch captive insurance company pursuant to § 56-13-109 shall be of branch business and branch operations only, if the branch captive insurance company provides annually to the commissioner a certificate of compliance, or its equivalent, issued by or fil…

In the case of a branch captive insurance company, the tax provided for in § 56-13-114 shall apply only to the branch business of such company.

This part provides for the creation of “special purpose financial captives” (SPFCs) exclusively to facilitate the securitization of one (1) or more risks, as a means of accessing alternative sources of capital and achieving the benefits of securitization. SPFCs are created for th…

(1) For purposes of this part:(1) “Affiliated company” means a company in the same corporate system as a parent, by virtue of common ownership, control, operation, or management;(2) “Control”, “controlling”, “controlled by”, and “under common control with” mean the possession, di…

(a) No provisions of this title, other than those expressly provided in this part, shall apply to an SPFC, and those provisions apply only as modified by this part. If a conflict occurs between this title and this part, this part shall control. (b) The commissioner, by rule, regu…

(a) An SPFC, when permitted by its organizational documents, may apply to the commissioner for a certificate of authority to transact insurance or reinsurance business as authorized by this part. An SPFC shall only insure or reinsure the risks of its counterparty. Notwithstanding…

(a) An SPFC may be established as a stock corporation, limited liability company, mutual, partnership, or other form of organization approved by the commissioner. (b) The SPFC's organizational documents shall limit the SPFC's authority to transact the business of insurance or rei…

(a) An SPFC shall initially possess and maintain, minimum capitalization of not less than two hundred and fifty thousand dollars ($250,000). All of the minimum initial capitalization shall be in cash. All other funds of the SPFC in excess of its minimum initial capitalization sha…

(a) An SPFC shall only insure the risks of a counterparty. (b) No SPFC shall issue a contract for assumption of risk or indemnification of loss other than an SPFC contract. However, the SPFC may cede risks assumed through an SPFC contract to third party reinsurers through the pur…

(a) This section and § 56-13-409 provide a basis for the creation and use of protected cells by an SPFC as a means of accessing alternative sources of capital, lowering formation and administrative expenses, and generally making insurance securitizations more efficient. If a conf…

(a) (1) The creation of a protected cell shall not create, with respect to that protected cell, a legal person separate from the SPFC.(2) Notwithstanding subdivision (a)(1), a protected cell shall have its own distinct name or designation that includes the words “protected cell”.…