31A-37-102. Definitions.
As used in this chapter:
(1) "Affiliated company" means a business entity that because of common ownership, control, operation, or management is in the same corporate or limited liability company system as: a parent; an industrial insured; or a member organization. "Affiliated company" does not include a business entity for which the commissioner issues an order finding that the business entity is not an affiliated company.
(2) "Agency captive" means a captive insurer that: is owned by one or more business entities that are licensed in any state as insurance producers or managing general agents; and only insures risks on policies placed through the captive insurer's owners.
(3) "Alien captive insurance company" means an insurer: formed to write insurance business for a parent or affiliate of the insurer; and licensed in accordance with the laws of an alien or foreign jurisdiction that imposes statutory or regulatory standards: on a business entity transacting the business of insurance in the alien or foreign jurisdiction; and in a form acceptable to the commissioner.
(4) "Applicant captive insurance company" means an entity that has submitted an application for a certificate of authority for a captive insurance company, unless the application has been denied or withdrawn.
(5) "Association" means a legal association of two or more persons that meets the following requirements: the persons are exposed to similar or related liability because of related, similar, or common business trade, products, services, premises, or operations; and the association or the association's member organizations: own, control, or hold power to vote all of the outstanding voting securities of an association captive insurance company incorporated as a stock insurer; have complete voting control over an association captive insurance company incorporated as a mutual insurer; or have complete voting control over an association captive insurance company formed as a limited liability company; or the association's member organizations collectively constitute all of the subscribers of an association captive insurance company formed as a reciprocal insurer.
(6) "Association captive insurance company" means a business entity that insures risks of: a member organization of the association; an affiliate of a member organization of the association; and the association.
(7) "Branch business" means an insurance business transacted by a branch captive insurance company in this state.
(8) "Branch captive insurance company" means an alien captive insurance company that has a certificate of authority from the commissioner to transact the business of insurance in this state through a captive insurance company that is domiciled outside of this state.
(9) "Branch operation" means a business operation of a branch captive insurance company in this state.
(10) "Captive insurance company" means the same as that term is defined in Section. 31A-1-301 "Captive insurance company" includes any of the following formed or holding a certificate of authority under this chapter: an agency captive insurance company; an association captive insurance company; a branch captive insurance company; an industrial insured captive insurance company; a pooling captive insurance company; a pure captive insurance company; a risk retention group formed in this state as a corporation or other limited liability entity under the Liability Risk Retention Act of 1986, 15 U.S.C. Sec. 3901 et seq.; a sponsored captive insurance company; a special purpose captive insurance company; or a special purpose financial captive insurance company.
(11) "Cell" means a separate account for one or more participants formed and operating under the authority of a sponsored captive insurance company to write insurance coverage as described in this title. "Cell" includes an account formed as either: an incorporated cell; or a protected cell.
(12) "Commissioner" means Utah's Insurance Commissioner or the commissioner's designee.
(13) "Common ownership and control" means that two or more captive insurance companies are owned or controlled by the same person or group of persons as follows: in the case of a captive insurance company that is a stock corporation, the direct or indirect ownership of 80% or more of the outstanding voting stock of the stock corporation; in the case of a captive insurance company that is a mutual corporation, the direct or indirect ownership of 80% or more of the surplus and the voting power of the mutual corporation; in the case of a captive insurance company that is a limited liability company, the direct or indirect ownership by the same member or members of 80% or more of the membership interests in the limited liability company; or in the case of a sponsored captive insurance company, a cell is a separate captive insurance company owned and controlled by the cell's participant, only if: the participant is the only participant with respect to the cell; and the participant is the sponsor or is affiliated with the sponsor of the sponsored captive insurance company through common ownership and control.
(14) "Consolidated debt to total capital ratio" means the ratio of Subsectionto. (14)(a) (b) This Subsectionis an amount equal to the sum of all debts and hybrid capital instruments including: (14)(a) all borrowings from depository institutions; all senior debt; all subordinated debts; all trust preferred shares; and all other hybrid capital instruments that are not included in the determination of consolidated GAAP net worth issued and outstanding. This Subsectionis an amount equal to the sum of: (14)(b) total capital consisting of all debts and hybrid capital instruments as described in Subsection; and (14)(a) shareholders' equity determined in accordance with generally accepted accounting principles for reporting to the United States Securities and Exchange Commission.
(15) "Consolidated GAAP net worth" means the consolidated shareholders' or members' equity determined in accordance with generally accepted accounting principles for reporting to the United States Securities and Exchange Commission.
(16) "Controlled unaffiliated business" means a business entity: in the case of a captive insurance company, other than a risk retention group, that is not in the corporate or limited liability company system of a parent or the parent's affiliate; or in the case of an industrial insured captive insurance company, that is not in the corporate or limited liability company system of an industrial insured or an affiliated company of the industrial insured; in the case of a captive insurance company, other than a risk retention group, that has a contractual relationship with a parent or affiliate; or in the case of an industrial insured captive insurance company, that has a contractual relationship with an industrial insured or an affiliated company of the industrial insured; and whose risks that are or will be insured by a captive insurance company, other than a risk retention group, are managed in accordance with Subsectionby: 31A-37-106(1)(j) a captive insurance company; or an industrial insured captive insurance company; or a parent or affiliate of: a captive insurance company; or an industrial insured captive insurance company.
(17) "Criminal act" means an act for which a person receives a verdict or finding of guilt after a criminal trial or a plea of guilty or nolo contendere to a criminal charge.
(18) "Establisher" means a person who establishes a business entity or a trust.
(19) "Governing body" means the persons who hold the ultimate authority to direct and manage the affairs of an entity.
(20) "Incorporated cell" means a separate account: established and maintained by a sponsored captive insurance company for a participant; and that has been organized as a corporation, a limited liability company, or a not-for-profit organization.
(21) "Industrial insured" means an insured: that produces insurance: by the services of a full-time employee acting as a risk manager or insurance manager; or using the services of a regularly and continuously qualified insurance consultant; whose aggregate annual premiums for insurance on all risks total at least $25,000; and that has at least 25 full-time employees.
(22) "Industrial insured captive insurance company" means a business entity that: insures risks of the industrial insureds that comprise the industrial insured group; and may insure the risks of: an affiliated company of an industrial insured; or a controlled unaffiliated business of: an industrial insured; or an affiliated company of an industrial insured.
(23) "Industrial insured group" means: a group of industrial insureds that collectively: own, control, or hold with power to vote all of the outstanding voting securities of an industrial insured captive insurance company incorporated or organized as a limited liability company as a stock insurer; or have complete voting control over an industrial insured captive insurance company incorporated or organized as a limited liability company as a mutual insurer; or a group that has complete voting control over an industrial captive insurance company formed as a limited liability company.
(24) "Member organization" means a person that belongs to an association.
(25) "Parent" means a person that directly or indirectly owns, controls, or holds with power to vote more than 50% of the outstanding securities of an organization.
(26) "Participant" means an entity that is insured by a sponsored captive insurance company: if the losses of the participant are limited through a participant contract to the assets of a protected cell; and the entity is permitted to be a participant under Section; or 31A-37-403 the entity is an affiliate of an entity permitted to be a participant under Section. 31A-37-403
(27) "Participant contract" means a contract by which a sponsored captive insurance company: insures the risks of a participant; and limits the losses of the participant to the assets of a protected cell.
(28) "Pooling captive" means a captive insurer organized for the purpose of establishing a risk-sharing arrangement between other captive insurers.
(29) "Protected cell" means a separate account: established and maintained by a sponsored captive insurance company for a participant; and that has not been organized as an entity including a corporation, a limited liability company, or a not-for-profit organization.
(30) "Pure captive insurance company" means a business entity that insures risks of a parent, affiliate, or controlled unaffiliated business of the business entity.
(31) "Special purpose financial captive insurance company" means the same as that term is defined in Section. 31A-37a-102
(32) "Sponsor" means an entity that: meets the requirements of Section; and 31A-37-402 is approved by the commissioner to: provide all or part of the capital and surplus in an amount: required by Section; or 31A-37-204 greater than the amount required by Section, if, by order, the commissioner deems the increase necessary; and 31A-37-204 organize and operate a sponsored captive insurance company.
(33) "Sponsored captive insurance company" means a captive insurance company: in which the minimum capital and surplus required by applicable law is provided by one or more sponsors or participants; that is formed or holding a certificate of authority under this chapter; that insures the risks of a separate participant through the contract; and that segregates each participant's liability through one or more cells.
(34) "Treasury rates" means the United States Treasury strip asked yield as published in the Wall Street Journal as of a balance sheet date.