Louisiana Revised Statutes 22:550.13 – A. Except as otherwise provided in this Section, a captive insurer licensed pursuant to this Subpart may transact any form of insurance classified in R.S. 22:47.
Terms Used In Louisiana Revised Statutes 22:550.13
- Affiliated company: means a company in the same corporate system as its parent or a member organization by virtue of common ownership, control, operation or management. See Louisiana Revised Statutes 22:550.2
- Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
- Association: means a legal entity consisting of two or more corporations, partnerships, associations or other forms of business organizations that are engaged in businesses or activities similar or related to a common business, trade, product, services, premises or operations. See Louisiana Revised Statutes 22:550.2
- Association captive insurer: means any company that insures only the risks of the member organizations of the association, affiliated companies of the member organizations, and the risks of the association itself. See Louisiana Revised Statutes 22:550.2
- Captive insurer: means any pure captive insurer or association captive insurer formed or licensed under the provisions of this Subpart. See Louisiana Revised Statutes 22:550.2
- Commissioner: means the commissioner of insurance. See Louisiana Revised Statutes 22:550.2
- Parent: means a corporation, limited liability company, partnership, association or other form of business organization that directly or indirectly owns, controls or holds with power to vote more than fifty-one percent of the outstanding voting securities of a captive insurer organized as a stock corporation. See Louisiana Revised Statutes 22:550.2
- Pure captive insurer: means a captive insurer that insures only the risks of its parent and affiliated companies. See Louisiana Revised Statutes 22:550.2
A. Except as otherwise provided in this Section, a captive insurer licensed pursuant to this Subpart may transact any form of insurance classified in La. Rev. Stat. 22:47.
B. A captive insurer licensed pursuant to this Subpart shall comply with the following:
(1) The insurer shall not directly provide insurance classified as life, health and accident, title, credit life, health, and accident, credit property and casualty, or annuity, as described in La. Rev. Stat. 22:47.
(2) The insurer shall not directly provide personal motor vehicle, homeowners’ insurance coverage, or any other noncommercial line of coverage.
(3) The insurer shall not directly provide workers’ compensation or employers’ liability insurance coverage, except in connection with a self-funded insurance program as prescribed in this Section.
(4) The insurer shall not accept or cede reinsurance, except as otherwise provided in La. Rev. Stat. 22:550.17.
(5) The insurer may provide excess workers’ compensation insurance to its parent and affiliated companies, unless otherwise prohibited by the laws of the state in which the insurance is transacted.
(6) The insurer may reinsure workers’ compensation insurance provided pursuant to a program of self-funded insurance of its parent and affiliated companies if either one of the following applies:
(a) The parent or affiliated company which is providing the self-funded insurance is certified as a self-insured employer by the Louisiana Workforce Commission, if the insurance is being transacted in this state.
(b) The program of self-funded insurance is otherwise qualified pursuant to, or in compliance with, the laws of the state in which the insurance is transacted.
C. A pure captive insurer shall not insure any risks other than those of its parent and affiliated companies or controlled unaffiliated businesses.
D. An association captive insurer shall not insure any risks other than those of the member organizations of its association and the affiliated companies of the member organizations.
E. An association captive insurer shall not expose itself to loss on any one risk in an amount which exceeds ten percent of the captive insurer’s capital and surplus. A risk, or any portion thereof, which has been reinsured shall be deducted in determining the limitation of risk prescribed in the Section.
F. An association captive insurer shall maintain a ratio of actual annual premiums written, net of reinsurance, to current capital and surplus less than or equal to four to one.
G. Notwithstanding the provisions of this Section, a captive insurer may be licensed to provide coverage for unrelated risks if the commissioner deems that extraordinary circumstances exist which make the provision of this coverage by a captive insurer appropriate and in the best interest of the public. In determining whether such extraordinary circumstances exist, the commissioner shall consider all of the following factors:
(1) The extent to which the particular coverage is available in the voluntary market.
(2) The existence of a relationship between the parent of the captive insurer and the proposed policyholders other than that of insurer to insured.
(3) Whether the captive insurer has sufficient capital and surplus to insure the proposed risks.
(4) Any other factors which the commissioner deems appropriate.
Acts 2008, No. 403, §1, eff. Jan. 1, 2009; Acts 2008, No. 743, §7; Redesignated by Acts 2009, No. 503, §3; Acts 2012, No. 633, §1.