33-28-102. Certificates of authority — lines of business — definition. (1) A captive insurance company, when permitted by its organizational document, may apply to the commissioner for a certificate of authority to provide property insurance, casualty insurance, life insurance, disability income insurance, surety insurance, marine insurance, and health insurance coverage or a group health plan as defined in 33-22-140, except that:

Terms Used In Montana Code 33-28-102

  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Association: means any legal association of sole proprietorships or business entities that has been in continuous existence for at least 1 year unless the 1-year requirement is waived by the commissioner and the members of which collectively, or the association itself:

    (a)owns, controls, or holds with power to vote all of the outstanding voting securities of an association captive insurance company incorporated as a stock insurer;

    (b)has complete voting control over an association captive insurance company incorporated as a mutual insurer;

    (c)constitutes all of the subscribers of an association captive insurance company formed as a reciprocal insurer; or

    (d)owns, controls, or holds with power to vote all of the outstanding ownership interests of an association captive insurance company organized as a limited liability company. See Montana Code 33-28-101

  • Attorney-in-fact: A person who, acting as an agent, is given written authorization by another person to transact business for him (her) out of court.
  • Branch captive insurance company: means any foreign captive insurance company authorized by the commissioner to transact the business of insurance in this state through a business unit with a principal place of business in this state. See Montana Code 33-28-101
  • Business entity: means a corporation, limited liability company, or other legal entity formed by an organizational document. See Montana Code 33-28-101
  • Captive insurance company: means any pure captive insurance company, association captive insurance company, protected cell captive insurance company, special purpose captive insurance company, or industrial insured captive insurance company formed or authorized under the provisions of this chapter. See Montana Code 33-28-101
  • Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
  • Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
  • Industrial insured: means an insured:

    (a)who procures the insurance of any risk or risks by use of the services of a full-time employee acting as an insurance manager or buyer;

    (b)whose aggregate annual premiums for insurance on all risks total at least $25,000; and

    (c)who has at least 25 full-time employees. See Montana Code 33-28-101

  • Industrial insured group: means any group that meets either of the following:

    (a)the group collectively:

    (i)owns, controls, or holds with power to vote all of the outstanding voting securities of an industrial insured captive insurance company incorporated as a stock insurer; or

    (ii)has complete voting control over an industrial insured captive insurance company incorporated as a mutual insurer; or

    (b)the group is a captive risk retention group. See Montana Code 33-28-101

  • Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
  • Oath: includes an affirmation or declaration. See Montana Code 1-1-201
  • Oath: A promise to tell the truth.
  • Organizational document: means articles of incorporation, articles of organization, a subscribers' agreement, a charter, or any other document that establishes a business entity. See Montana Code 33-28-101
  • Parent: means a sole proprietorship, business entity, or individual that directly or indirectly owns, controls, or holds with power to vote more than 50% of the outstanding voting securities of a captive insurance company. See Montana Code 33-28-101
  • Person: includes a corporation or other entity as well as a natural person. See Montana Code 1-1-201
  • Power of attorney: A written instrument which authorizes one person to act as another's agent or attorney. The power of attorney may be for a definite, specific act, or it may be general in nature. The terms of the written power of attorney may specify when it will expire. If not, the power of attorney usually expires when the person granting it dies. Source: OCC
  • Property: means real and personal property. See Montana Code 1-1-205
  • Protected cell: means a separate account established by a protected cell captive insurance company formed or authorized under the provisions of this chapter, in which an identified pool of assets and liabilities are segregated and insulated, as provided in this chapter, from the remainder of the protected cell captive insurance company's assets and liabilities in accordance with the terms of one or more participant contracts to fund the liability of the protected cell captive insurance company with respect to the participants as set forth in the participant contracts. See Montana Code 33-28-101
  • Protected cell captive insurance company: means any captive insurance company:

    (a)in which the minimum capital and surplus required by applicable law are provided by one or more sponsors;

    (b)that is formed or authorized under the provisions of this chapter;

    (c)that insures the risks of separate participants through participant contracts;

    (d)that funds its liability to each participant through one or more protected cells and segregates the assets of each protected cell from the assets of other protected cells and from the assets of the protected cell captive insurance company's general account; and

    (e)that is incorporated or formed as a limited liability company. See Montana Code 33-28-101

  • Pure captive insurance company: means any company that insures risks of its parent and affiliated companies and controlled unaffiliated business entities. See Montana Code 33-28-101
  • Service of process: The service of writs or summonses to the appropriate party.
  • Special purpose captive insurance company: means a captive insurance company that is formed or authorized under this chapter that does not meet the definition of any other type of captive insurance company defined in this section or is formed by, on behalf of, or for the benefit of a political subdivision of this state. See Montana Code 33-28-101
  • State: when applied to the different parts of the United States, includes the District of Columbia and the territories. See Montana Code 1-1-201
  • Subpoena: A command to a witness to appear and give testimony.
  • Writing: includes printing. See Montana Code 1-1-203

(a)a pure captive insurance company may not insure any risks other than those of its parent and affiliated companies and controlled unaffiliated business entities;

(b)an industrial insured captive insurance company may not insure any risks other than those of the industrial insureds that comprise the industrial insured group and their affiliated companies;

(c)an association captive insurance company may not insure any risks other than those of the members or affiliated companies of members;

(d)a special purpose captive insurance company may not provide insurance or reinsurance for risks unless approved by the commissioner;

(e)a captive insurance company or a branch captive insurance company may not:

(i)provide personal lines of insurance, including but not limited to motor vehicle or homeowner’s insurance coverage or any component of those coverages;

(ii)accept or cede reinsurance except as provided in 33-28-203;

(iii)provide health insurance coverage or a group health plan unless the captive insurance company or branch captive insurance company is only providing health insurance coverage or a group health plan for the parent company and its affiliated companies; or

(iv)write workers’ compensation insurance on a direct basis; and

(f)a protected cell captive insurance company may not insure any risks other than those of its participants.

(2)A captive insurance company may not write any insurance business unless:

(a)it first obtains from the commissioner a certificate of authority under this section;

(b)its board of directors, board of managing members, or a reciprocal insurer’s subscribers’ advisory committee holds at least one meeting each year in this state;

(c)it maintains its principal place of business in this state; and

(d)it designates a registered agent to accept service of process, files the name and contact information and any subsequent changes regarding the registered agent with the commissioner, and agrees that whenever the registered agent cannot be found with reasonable diligence, the commissioner’s office may act as an agent of the captive insurance company with respect to any action or proceeding and may be served in accordance with 33-1-605 and 33-1-606.

(3)(a) Before receiving a certificate of authority and with respect to a captive insurance company formed as a business entity, a captive insurance company shall:

(i)file with the commissioner a certified copy of its organizational documents, a statement under oath of an officer of the business entity showing its financial condition, and any other statements or documents required by the commissioner; and

(ii)submit to the commissioner for approval a description of the coverages, deductibles, coverage limits, and rates, together with any additional information that the commissioner may reasonably require; and

(iii)provide a statement to the commissioner that addresses the following:

(A)the character, reputation, financial standing, and purposes of the organizers;

(B)the character, reputation, financial responsibility, insurance experience, and business qualifications of any officers, directors, or managing members; and

(C)any other factors that the commissioner considers appropriate.

(b)If there is a subsequent material change in any of the items in the description provided for in subsection (3)(a), the captive insurance company shall submit to the commissioner for approval an appropriate revision and may not offer any additional kinds of insurance until the commissioner approves a revision of the description. The captive insurance company shall inform the commissioner of any change in rates within 30 days of the adoption of the change.

(c)In addition to the information required by subsections (3)(a) and (3)(b), each applicant captive insurance company shall file with the commissioner evidence of the following:

(i)the amount and liquidity of its assets relative to the risks to be assumed;

(ii)the adequacy of the expertise, experience, and character of the person or persons who will manage it;

(iii)the overall soundness of its plan of operation;

(iv)the adequacy of the loss prevention programs of its parent, members, or industrial insureds as applicable; and

(v)any other factors considered relevant by the commissioner in ascertaining whether the proposed captive insurance company will be able to meet its policy obligations.

(d)In addition to the information required by this section, each applicant that is a protected cell captive insurance company shall file with the commissioner the following:

(i)a business plan demonstrating how the applicant will account for the loss and expense experience of each protected cell at a level of detail found to be sufficient by the commissioner and how it will report the experience to the commissioner;

(ii)a statement acknowledging that all financial records of the protected cell captive insurance company, including records pertaining to any protected cells, must be made available for inspection or examination by the commissioner or the commissioner’s designated agent;

(iii)all contracts or sample contracts between the protected cell captive insurance company and any participants; and

(iv)evidence that expenses will be allocated to each protected cell in a fair and equitable manner.

(e)In addition to the requirements of subsection (3)(a), a captive insurance company formed as a reciprocal insurer must file with the commissioner a certified copy of the power of attorney of its attorney-in-fact, a certified copy of its subscribers’ agreement, a statement under oath of its attorney-in-fact showing its financial condition, and any other statements or documents required by the commissioner;

(f)Information submitted pursuant to this subsection (3) must remain confidential and may not be made public by the commissioner or an employee or agent of the commissioner without the written consent of the company, except that:

(i)the information may be discoverable by a party in a civil action or contested case to which the captive insurance company that submitted the information is a party, upon a showing by the party seeking to discover the information that the information sought is relevant to and necessary for the furtherance of the action or case, the information sought is unavailable from other nonconfidential sources, and a subpoena issued by a judicial or administrative officer of competent jurisdiction has been submitted to the commissioner;

(ii)the commissioner may, in the commissioner’s discretion, disclose the information to a public officer having jurisdiction over the regulation of insurance in another state or to a public official of the federal government, as long as the public official agrees in writing to maintain the confidentiality of the information and the laws of the state in which the public official serves, if applicable, require the information to be and to remain confidential.

(4)(a) Each captive insurance company, individual series of members as defined in 35-8-102 of a limited liability company, and protected cell shall pay to the commissioner a nonrefundable fee of $200 for the examining, investigating, and processing of its application, and the commissioner is authorized to retain legal, financial, and examination services from outside the department, the reasonable cost of which may be charged to the applicant.

(b)The provisions of Title 33, chapter 1, part 4, apply to examinations, investigations, and processing conducted under the authority of this section. In addition, each captive insurance company, individual series of members as defined in 35-8-102 of a limited liability company, and protected cell shall pay a fee for the year of registration and a renewal fee for each subsequent year of $300.

(5)If the commissioner is satisfied that the documents and statements that the applicant captive insurance company has filed comply with the provisions of this chapter and applicable provisions of Title 33, the commissioner may grant a certificate authorizing the company to do insurance business in this state. The certificate is effective until March 1 of each year and may be renewed upon proper compliance with this chapter.

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