Affiliate: means a person who controls, is controlled by, or is under common control with, another person. See Utah Code 31A-1-301
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:
completed by an applicant to provide information about the risk to be insured; and
(ii)
that contains information that is used by the insurer to evaluate risk and decide whether to:
(A)
insure the risk under:
(I)
the coverage as originally offered; or
(II)
a modification of the coverage as originally offered; or
(B)
decline to insure the risk; or
(b)
used by the insurer to gather information from the applicant before issuance of an annuity contract. See Utah Code 31A-1-301
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 two or more persons that meets the following requirements:
(a)
the persons are exposed to similar or related liability because of related, similar, or common business trade, products, services, premises, or operations; and
(b)
(i)
the association or the association's member organizations:
(A)
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;
(B)
have complete voting control over an association captive insurance company incorporated as a mutual insurer; or
(C)
have complete voting control over an association captive insurance company formed as a limited liability company; or
(ii)
the association's member organizations collectively constitute all of the subscribers of an association captive insurance company formed as a reciprocal insurer. See Utah Code 31A-37-102
Association captive insurance company: means a business entity that insures risks of:
(a)
a member organization of the association;
(b)
an affiliate of a member organization of the association; and
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. See Utah Code 31A-37-102
providing health care insurance by an organization that is or is required to be licensed under this title;
(b)
providing a benefit to an employee in the event of a contingency not within the control of the employee, in which the employee is entitled to the benefit as a right, which benefit may be provided either:
(i)
by a single employer or by multiple employer groups; or
(ii)
through one or more trusts, associations, or other entities;
(c)
providing an annuity:
(i)
including an annuity issued in return for a gift; and
(ii)
except an annuity provided by a person specified in Subsections 31A-22-1305(2) and (3);
(d)
providing the characteristic services of a motor club;
(e)
providing another person with insurance;
(f)
making as insurer, guarantor, or surety, or proposing to make as insurer, guarantor, or surety, a contract or policy offering title insurance;
(g)
transacting or proposing to transact any phase of title insurance, including:
(i)
solicitation;
(ii)
negotiation preliminary to execution;
(iii)
execution of a contract of title insurance;
(iv)
insuring; and
(v)
transacting matters subsequent to the execution of the contract and arising out of the contract, including reinsurance;
(h)
transacting or proposing a life settlement; and
(i)
doing, or proposing to do, any business in substance equivalent to Subsections (95)(a) through (h) in a manner designed to evade this title. See Utah Code 31A-1-301
Captive insurance company: includes any of the following formed or holding a certificate of authority under this chapter:
(i)
a branch captive insurance company;
(ii)
a pure captive insurance company;
(iii)
an association captive insurance company;
(iv)
a sponsored captive insurance company;
(v)
an industrial insured captive insurance company, including an industrial insured captive insurance company formed as a risk retention group captive in this state pursuant to the provisions of the Federal Liability Risk Retention Act of 1986;
Commissioner: means Utah's Insurance Commissioner or the commissioner's designee. See Utah Code 31A-37-102
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:
(a)
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;
(b)
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;
(c)
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
(d)
in the case of a sponsored captive insurance company, a protected cell is a separate captive insurance company owned and controlled by the protected cell's participant, only if:
(i)
the participant is the only participant with respect to the protected cell; and
(ii)
the participant is the sponsor or is affiliated with the sponsor of the sponsored captive insurance company through common ownership and control. See Utah Code 31A-37-102
consultant: means a person who:
(a)
advises another person about insurance needs and coverages;
(b)
is compensated by the person advised on a basis not directly related to the insurance placed; and
(c)
except as provided in Section 31A-23a-501, is not compensated directly or indirectly by an insurer or producer for advice given. See Utah Code 31A-1-301
Contract: A legal written agreement that becomes binding when signed.
Controlled unaffiliated business: means a business entity:
(a)
(i)
in the case of a pure captive insurance company, that is not in the corporate or limited liability company system of a parent or the parent's affiliate; or
(ii)
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;
(b)
(i)
in the case of a pure captive insurance company, that has a contractual relationship with a parent or affiliate; or
(ii)
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
(c)
whose risks that are or will be insured by a pure captive insurance company, an industrial insured captive insurance company, or both, are managed in accordance with Subsection 31A-37-106(1)(j) by:
(i)
(A)
a pure captive insurance company; or
(B)
an industrial insured captive insurance company; or
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.
Corporation: means an insurance corporation, except when referring to:
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
(ii)
have complete voting control over an industrial insured captive insurance company incorporated or organized as a limited liability company as a mutual insurer;
a risk distributing arrangement providing for compensation or replacement for damages or loss through the provision of a service or a benefit in kind;
(ii)
a contract of guaranty or suretyship entered into by the guarantor or surety as a business and not as merely incidental to a business transaction; and
(iii)
a plan in which the risk does not rest upon the person who makes an arrangement, but with a class of persons who have agreed to share the risk. See Utah Code 31A-1-301
insurance company: means a person doing an insurance business as a principal including:
(i)
a fraternal benefit society;
(ii)
an issuer of a gift annuity other than an annuity specified in Subsections 31A-22-1305(2) and (3);
(iii)
a motor club;
(iv)
an employee welfare plan;
(v)
a person purporting or intending to do an insurance business as a principal on that person's own account; and
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.
Member: means a person having membership rights in an insurance corporation. See Utah Code 31A-1-301
Member organization: means a person that belongs to an association. See Utah Code 31A-37-102
mutual corporation: means a mutual insurance corporation. See Utah Code 31A-1-301
Nolo contendere: No contest-has the same effect as a plea of guilty, as far as the criminal sentence is concerned, but may not be considered as an admission of guilt for any other purpose.
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. See Utah Code 31A-37-102
Participant: means an entity that is insured by a sponsored captive insurance company:
(a)
if the losses of the participant are limited through a participant contract to the assets of a protected cell; and
(b)
(i)
the entity is permitted to be a participant under Section 31A-37-403; or
(ii)
the entity is an affiliate of an entity permitted to be a participant under Section 31A-37-403. See Utah Code 31A-37-102
Person: includes :
(a)
an individual;
(b)
a partnership;
(c)
a corporation;
(d)
an incorporated or unincorporated association;
(e)
a joint stock company;
(f)
a trust;
(g)
a limited liability company;
(h)
a reciprocal;
(i)
a syndicate; or
(j)
another similar entity or combination of entities acting in concert. See Utah Code 31A-1-301
Plea: In a criminal case, the defendant's statement pleading "guilty" or "not guilty" in answer to the charges, a declaration made in open court.
Protected cell: means a separate account established and maintained by a sponsored captive insurance company for one participant. See Utah Code 31A-37-102
Pure captive insurance company: means a business entity that insures risks of a parent or affiliate of the business entity. See Utah Code 31A-37-102
Special purpose financial captive insurance company: means the same as that term is defined in Section 31A-37a-102. See Utah Code 31A-37-102
provide all or part of the capital and surplus required by applicable law in an amount of not less than $350,000, which amount the commissioner may increase by order if the commissioner considers it necessary; and
(ii)
organize and operate a sponsored captive insurance company. See Utah Code 31A-37-102
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 holding a certificate of authority under this chapter;
(c)
that insures the risks of a separate participant through the contract; and
(d)
that segregates each participant's liability through one or more protected cells. See Utah Code 31A-37-102
State: when applied to the different parts of the United States, includes a state, district, or territory of the United States. See Utah Code 68-3-12.5
Surplus: means the excess of assets over the sum of paid-in capital and liabilities. See Utah Code 31A-1-301
Trial: A hearing that takes place when the defendant pleads "not guilty" and witnesses are required to come to court to give evidence.
United States: includes each state, district, and territory of the United States of America. See Utah Code 68-3-12.5
Verdict: The decision of a petit jury or a judge.
(a)
“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:
(i)
a parent;
(ii)
an industrial insured; or
(iii)
a member organization.
(b)
“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)
“Alien captive insurance company” means an insurer:
(a)
formed to write insurance business for a parent or affiliate of the insurer; and
(b)
licensed pursuant to the laws of an alien or foreign jurisdiction that imposes statutory or regulatory standards:
(i)
on a business entity transacting the business of insurance in the alien or foreign jurisdiction; and
(ii)
in a form acceptable to the commissioner.
(3)
“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.
(4)
“Association” means a legal association of two or more persons that meets the following requirements:
(a)
the persons are exposed to similar or related liability because of related, similar, or common business trade, products, services, premises, or operations; and
(b)
(i)
the association or the association’s member organizations:
(A)
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;
(B)
have complete voting control over an association captive insurance company incorporated as a mutual insurer; or
(C)
have complete voting control over an association captive insurance company formed as a limited liability company; or
(ii)
the association’s member organizations collectively constitute all of the subscribers of an association captive insurance company formed as a reciprocal insurer.
(5)
“Association captive insurance company” means a business entity that insures risks of:
(a)
a member organization of the association;
(b)
an affiliate of a member organization of the association; and
(c)
the association.
(6)
“Branch business” means an insurance business transacted by a branch captive insurance company in this state.
(7)
“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.
(8)
“Branch operation” means a business operation of a branch captive insurance company in this state.
(9)
(a)
“Captive insurance company” means the same as that term is defined in Section 31A-1-301.
(b)
“Captive insurance company” includes any of the following formed or holding a certificate of authority under this chapter:
(i)
a branch captive insurance company;
(ii)
a pure captive insurance company;
(iii)
an association captive insurance company;
(iv)
a sponsored captive insurance company;
(v)
an industrial insured captive insurance company, including an industrial insured captive insurance company formed as a risk retention group captive in this state pursuant to the provisions of the Federal Liability Risk Retention Act of 1986;
(vi)
a special purpose captive insurance company; or
(vii)
a special purpose financial captive insurance company.
(10)
“Commissioner” means Utah’s InsuranceCommissioner or the commissioner’s designee.
(11)
“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:
(a)
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;
(b)
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;
(c)
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
(d)
in the case of a sponsored captive insurance company, a protected cell is a separate captive insurance company owned and controlled by the protected cell’s participant, only if:
(i)
the participant is the only participant with respect to the protected cell; and
(ii)
the participant is the sponsor or is affiliated with the sponsor of the sponsored captive insurance company through common ownership and control.
(12)
“Consolidated debt to total capital ratio” means the ratio of Subsection (12)(a) to (b).
(a)
This Subsection (12)(a) is an amount equal to the sum of all debts and hybrid capital instruments including:
(i)
all borrowings from depository institutions;
(ii)
all senior debt;
(iii)
all subordinated debts;
(iv)
all trust preferred shares; and
(v)
all other hybrid capital instruments that are not included in the determination of consolidated GAAP net worth issued and outstanding.
(b)
This Subsection (12)(b) is an amount equal to the sum of:
(i)
total capital consisting of all debts and hybrid capital instruments as described in Subsection (12)(a); and
(ii)
shareholders’ equity determined in accordance with generally accepted accounting principles for reporting to the United States Securities and Exchange Commission.
(13)
“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.
(14)
“Controlled unaffiliated business” means a business entity:
(a)
(i)
in the case of a pure captive insurance company, that is not in the corporate or limited liability company system of a parent or the parent’s affiliate; or
(ii)
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;
(b)
(i)
in the case of a pure captive insurance company, that has a contractual relationship with a parent or affiliate; or
(ii)
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
(c)
whose risks that are or will be insured by a pure captive insurance company, an industrial insured captive insurance company, or both, are managed in accordance with Subsection 31A-37-106(1)(j) by:
(i)
(A)
a pure captive insurance company; or
(B)
an industrial insured captive insurance company; or
(ii)
a parent or affiliate of:
(A)
a pure captive insurance company; or
(B)
an industrial insured captive insurance company.
(15)
“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.
(16)
“Establisher” means a person who establishes a business entity or a trust.
(17)
“Governing body” means the persons who hold the ultimate authority to direct and manage the affairs of an entity.
(18)
“Industrial insured” means an insured:
(a)
that produces insurance:
(i)
by the services of a full-time employee acting as a risk manager or insurance manager; or
(ii)
using the services of a regularly and continuously qualified insurance consultant;
(b)
whose aggregate annual premiums for insurance on all risks total at least $25,000; and
(c)
that has at least 25 full-time employees.
(19)
“Industrial insured captive insurance company” means a business entity that:
(a)
insures risks of the industrial insureds that comprise the industrial insured group; and
(b)
may insure the risks of:
(i)
an affiliated company of an industrial insured; or
(ii)
a controlled unaffiliated business of:
(A)
an industrial insured; or
(B)
an affiliated company of an industrial insured.
(20)
“Industrial insured group” means:
(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 or organized as a limited liability company as a stock insurer; or
(ii)
have complete voting control over an industrial insured captive insurance company incorporated or organized as a limited liability company as a mutual insurer;
(b)
a group that is:
(i)
created under the Product Liability Risk Retention Act of 1981, 15 U.S.C. § 3901 et seq., as amended, as a corporation or other limited liability association; and
(ii)
taxable under this title as a:
(A)
stock corporation; or
(B)
mutual insurer; or
(c)
a group that has complete voting control over an industrial captive insurance company formed as a limited liability company.
(21)
“Member organization” means a person that belongs to an association.
(22)
“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.
(23)
“Participant” means an entity that is insured by a sponsored captive insurance company:
(a)
if the losses of the participant are limited through a participant contract to the assets of a protected cell; and
(b)
(i)
the entity is permitted to be a participant under Section 31A-37-403; or
(ii)
the entity is an affiliate of an entity permitted to be a participant under Section 31A-37-403.
(24)
“Participant contract” means a contract by which a sponsored captive insurance company:
(a)
insures the risks of a participant; and
(b)
limits the losses of the participant to the assets of a protected cell.
(25)
“Protected cell” means a separate account established and maintained by a sponsored captive insurance company for one participant.
(26)
“Pure captive insurance company” means a business entity that insures risks of a parent or affiliate of the business entity.
(27)
“Special purpose financial captive insurance company” means the same as that term is defined in Section 31A-37a-102.
provide all or part of the capital and surplus required by applicable law in an amount of not less than $350,000, which amount the commissioner may increase by order if the commissioner considers it necessary; and
(ii)
organize and operate a sponsored captive insurance company.
(29)
“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 holding a certificate of authority under this chapter;
(c)
that insures the risks of a separate participant through the contract; and
(d)
that segregates each participant’s liability through one or more protected cells.
(30)
“Treasury rates” means the United States Treasury strip asked yield as published in the Wall Street Journal as of a balance sheet date.
