As used in this chapter, unless the context requires otherwise:

(1) "Alien captive insurance company" means an 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 or regulatory standards in a form acceptable to the director on companies transacting the business of insurance in such jurisdiction.

Terms Used In South Carolina Code 38-90-10

  • Alien captive insurance company: means an 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 or regulatory standards in a form acceptable to the director on companies transacting the business of insurance in such jurisdiction. See South Carolina Code 38-90-10
  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Association: means a legal association of individuals, corporations, limited liability companies, partnerships, political subdivisions, or associations:

    (a) the member organizations of which collectively, or which does itself:

    (i) own, control, or hold with power to vote all of the outstanding voting securities of an association captive insurance company incorporated as a stock insurer or organized as a limited liability company; or

    (ii) have complete voting control over an association captive insurance company organized as a mutual insurer; or

    (b) the member organizations of which collectively constitute all of the subscribers of an association captive insurance company formed as a reciprocal insurer. See South Carolina Code 38-90-10
  • Association captive insurance company: means a company that insures risks of the member organizations of the association and their affiliated companies. See South Carolina Code 38-90-10
  • Branch captive insurance company: means an alien captive insurance company licensed by the director to transact the business of insurance in this State through a business unit with a principal place of business in this State. See South Carolina Code 38-90-10
  • Captive insurance company: means a pure captive insurance company, association captive insurance company, sponsored captive insurance company, special purpose captive insurance company, risk retention group, or industrial insured captive insurance company formed or licensed under this chapter. See South Carolina Code 38-90-10
  • Commission: means the part of the premium paid to the producer as compensation for his services. See South Carolina Code 38-1-20
  • Contract: A legal written agreement that becomes binding when signed.
  • Controlled unaffiliated business: means a person that:

    (a) is not an affiliate of a parent company; and

    (b) has an existing contractual relationship pursuant to which a parent or affiliated company exercises control of the risk management function of the person. See South Carolina Code 38-90-10
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Department: means the South Carolina Department of Insurance. See South Carolina Code 38-90-10
  • Director: means the Director of the South Carolina Department of Insurance or the director's designee. See South Carolina Code 38-90-10
  • GAAP: means generally accepted accounting principles. See South Carolina Code 38-90-10
  • General account: means the assets and liabilities of a sponsored captive insurance company other than protected cell assets and protected cell liabilities. See South Carolina Code 38-90-10
  • Industrial insured: means an insured as defined in § 38-25-150(8). See South Carolina Code 38-90-10
  • Industrial insured captive insurance company: means a company that insures risks of the industrial insureds that comprise the industrial insured group and their affiliated companies. See South Carolina Code 38-90-10
  • Industrial insured group: means a group that meets either of the following criteria:

    (a) a group of industrial insureds that collectively:

    (i) own, control, or hold with power to vote all of the outstanding voting securities of an industrial insured captive insurance company incorporated as a stock insurer or limited liability company; or

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

    (b) a risk retention group. See South Carolina Code 38-90-10
  • insurance: includes annuities. See South Carolina Code 38-1-20
  • Insurance company: means an "insurer". See South Carolina Code 38-1-20
  • Insurer: includes a corporation, fraternal organization, burial association, other association, partnership, society, order, individual, or aggregation of individuals engaging or proposing or attempting to engage as principals in any kind of insurance or surety business, including the exchanging of reciprocal or interinsurance contracts between individuals, partnerships, and corporations. See South Carolina Code 38-1-20
  • 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.
  • Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
  • Parent: means any corporation, limited liability company, partnership, or individual that directly or indirectly owns, controls, or holds with power to vote more than fifty percent of the outstanding voting interests of a captive insurance company. See South Carolina Code 38-90-10
  • Participant: means an entity as defined in § 38-90-240, and any affiliates of that entity, that are insured by a sponsored captive insurance company, where the losses of the participant are limited through a participant contract to the assets of a protected cell. See South Carolina Code 38-90-10
  • 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. See South Carolina Code 38-90-10
  • Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
  • Person: means an individual, corporation, partnership, association, joint stock company, trust, unincorporated organization, or any similar entity or combination thereof. See South Carolina Code 38-90-10
  • Principal place of business: means the physical location in the State of South Carolina where the complete books and records of the captive company are available for examination by the director. See South Carolina Code 38-90-10
  • Protected cell: means an identified pool of assets and liabilities of a sponsored captive insurance company for one or more participants that is segregated and insulated from the remainder of the sponsored captive insurance company's assets and liabilities as set forth in this chapter. See South Carolina Code 38-90-10
  • Protected cell assets: means all assets, contract rights, and general intangibles, identified with and attributable to a specific protected cell of a sponsored captive insurance company. See South Carolina Code 38-90-10
  • Protected cell liabilities: means all liabilities and other obligations identified with and attributable to a specific protected cell of a sponsored captive insurance company. See South Carolina Code 38-90-10
  • Pure captive insurance company: means a company that insures risks of its parent, affiliated companies, controlled unaffiliated business, or a combination thereof or cedes or assumes business from a risk pool for the purpose of risk sharing. See South Carolina Code 38-90-10
  • Remainder: An interest in property that takes effect in the future at a specified time or after the occurrence of some event, such as the death of a life tenant.
  • Risk retention group: means a captive insurance company formed under the Liability Risk Retention Act of 1986, 15 U. See South Carolina Code 38-90-10
  • Special purpose captive insurance company: means a captive insurance company that is formed or licensed under this chapter that does not meet the definition of any other type of captive insurance company defined in this section. See South Carolina Code 38-90-10
  • Sponsored captive insurance company: means a captive insurance company:

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

    (b) that is formed or licensed under this chapter;

    (c) that segregates liability through one or more protected cells; and

    (d) that insures the risks of participants through participant contracts. See South Carolina Code 38-90-10
  • under common control with: means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is the result of an official position with or corporate office held by the person. See South Carolina Code 38-90-10

(2) "Affiliate of" or "affiliated with" means a specific person who directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with the person specified.

(3) "Association" means a legal association of individuals, corporations, limited liability companies, partnerships, political subdivisions, or associations:

(a) the member organizations of which collectively, or which does itself:

(i) own, control, or hold with power to vote all of the outstanding voting securities of an association captive insurance company incorporated as a stock insurer or organized as a limited liability company; or

(ii) have complete voting control over an association captive insurance company organized as a mutual insurer; or

(b) the member organizations of which collectively constitute all of the subscribers of an association captive insurance company formed as a reciprocal insurer.

(4) "Association captive insurance company" means a company that insures risks of the member organizations of the association and their affiliated companies.

(5) "Branch business" means any insurance business transacted by a branch captive insurance company in this State.

(6) "Branch captive insurance company" means an alien captive insurance company licensed by the director to transact the business of insurance in this State through a business unit with a principal place of business in this State.

(7) "Branch operations" means any business operations of a branch captive insurance company in this State.

(8) "Captive insurance company" means a pure captive insurance company, association captive insurance company, sponsored captive insurance company, special purpose captive insurance company, risk retention group, or industrial insured captive insurance company formed or licensed under this chapter. For purposes of this chapter, a branch captive insurance company must be a pure captive insurance company with respect to operations in this State, unless otherwise permitted by the director.

(9) "Consolidated GAAP net worth" means the consolidated owners’ equity determined in accordance with GAAP for reporting to the United States Securities and Exchange Commission.

(10) "Control", including the terms "controlling," "controlled by", and "under common control with", means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is the result of an official position with or corporate office held by the person. Control is presumed to exist if any person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing ten percent or more of the voting securities of any other person. This presumption may be rebutted by a showing made in the manner provided by § 38-21-220 that control does not exist in fact. The director may determine, after furnishing all persons in interest notice and opportunity to be heard and making specific findings of fact to support his determination, that control exists in fact, notwithstanding the absence of a presumption to that effect.

(11) "Controlled unaffiliated business" means a person that:

(a) is not an affiliate of a parent company; and

(b) has an existing contractual relationship pursuant to which a parent or affiliated company exercises control of the risk management function of the person.

(12) "Director" means the Director of the South Carolina Department of Insurance or the director’s designee.

(13) "Department" means the South Carolina Department of Insurance.

(14) "GAAP" means generally accepted accounting principles.

(15) "General account" means the assets and liabilities of a sponsored captive insurance company other than protected cell assets and protected cell liabilities.

(16) "Industrial insured" means an insured as defined in § 38-25-150(8).

(17) "Industrial insured captive insurance company" means a company that insures risks of the industrial insureds that comprise the industrial insured group and their affiliated companies.

(18) "Industrial insured group" means a group that meets either of the following criteria:

(a) a group of industrial insureds that collectively:

(i) own, control, or hold with power to vote all of the outstanding voting securities of an industrial insured captive insurance company incorporated as a stock insurer or limited liability company; or

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

(b) a risk retention group.

(19) "Member organization" means any individual, corporation, limited liability company, partnership, or association that belongs to an association.

(20) "Parent" means any corporation, limited liability company, partnership, or individual that directly or indirectly owns, controls, or holds with power to vote more than fifty percent of the outstanding voting interests of a captive insurance company.

(21) "Participant" means an entity as defined in § 38-90-240, and any affiliates of that entity, that are insured by a sponsored captive insurance company, where the losses of the participant are limited through a participant contract to the assets of a protected cell.

(22) "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.

(23) "Person" means an individual, corporation, partnership, association, joint stock company, trust, unincorporated organization, or any similar entity or combination thereof.

(24) "Principal place of business" means the physical location in the State of South Carolina where the complete books and records of the captive company are available for examination by the director.

(25) "Protected cell" means an identified pool of assets and liabilities of a sponsored captive insurance company for one or more participants that is segregated and insulated from the remainder of the sponsored captive insurance company’s assets and liabilities as set forth in this chapter. A protected cell may be unincorporated or incorporated.

(26) "Protected cell account" means a specifically identified bank or custodial account established by a sponsored captive insurance company for the purpose of segregating the protected cell assets of one protected cell from the protected cell assets of other protected cells and from the assets of the sponsored captive insurance company’s general account.

(27) "Protected cell assets" means all assets, contract rights, and general intangibles, identified with and attributable to a specific protected cell of a sponsored captive insurance company.

(28) "Protected cell liabilities" means all liabilities and other obligations identified with and attributable to a specific protected cell of a sponsored captive insurance company.

(29) "Pure captive insurance company" means a company that insures risks of its parent, affiliated companies, controlled unaffiliated business, or a combination thereof or cedes or assumes business from a risk pool for the purpose of risk sharing.

(30) "Risk retention group" means a captive insurance company formed under the Liability Risk Retention Act of 1986, 15 U.S.C. § 3901, et seq., as amended.

(31) "Special purpose captive insurance company" means a captive insurance company that is formed or licensed under this chapter that does not meet the definition of any other type of captive insurance company defined in this section.

(32) "Sponsor" means an entity that is approved by the director to provide all or part of the capital and surplus required by applicable law and to organize and operate a sponsored captive insurance company.

(33) "Sponsored captive insurance company" means a captive insurance company:

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

(b) that is formed or licensed under this chapter;

(c) that segregates liability through one or more protected cells; and

(d) that insures the risks of participants through participant contracts.

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