South Carolina Code 38-90-220. Requirements applicable to sponsors
(B) The protected cell assets of a protected cell may not be charged with liabilities arising out of any other business the sponsored captive insurance company may conduct. All contracts or other documentation reflecting protected cell liabilities shall clearly indicate that only the protected cell assets are available for the satisfaction of those protected cell liabilities. Under no circumstances may a protected cell be authorized to issue insurance or reinsurance contracts directly to policyholders or reinsureds or have any obligation to the policyholders or reinsureds of the sponsored captive insurance company‘s general account.
Terms Used In South Carolina Code 38-90-220
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- 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
- Contract: A legal written agreement that becomes binding when signed.
- Director: means the Director of the South Carolina Department of Insurance or the director's designee. 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
- insurance: includes annuities. See South Carolina Code 38-1-20
- Insurance company: means an "insurer". See South Carolina Code 38-1-20
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- 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
- 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 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. 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
- 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
(C) The income, gains and losses, realized or unrealized, from protected cell assets and protected cell liabilities must be credited to or charged against the protected cell without regard to other income, gains or losses of the sponsored captive insurance company, including income, gains or losses of other protected cells. Investments must be handled pursuant to § 38-90-100(B).
(D) In all sponsored captive insurance company transactions, the contracts or other documentation effecting the transaction shall contain provisions identifying the protected cell to which the transaction will be attributed. In addition, the contracts or other documentation must clearly disclose that the assets of that protected cell, and only those assets are available to pay the obligations of that protected cell. Notwithstanding the provisions of this subsection and subject to the provisions of this chapter and any other applicable law or regulation, the failure to include such language in the contracts or other documentation may not be used as the sole basis by creditors, reinsurers, or other claimants to circumvent the provisions of this chapter.
(E) Assets attributed to a protected cell must be valued at their market value on the date of valuation or if there is no readily available market, as provided in the contract or the rules or other written documentation applicable to the protected cell.
(F) At the cessation of business of a protected cell in accordance with the plan approved by the director, the sponsored captive insurance company voluntarily shall close out the protected cell account.