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:
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
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
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
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)
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
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
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
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
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
(a)
determine circumstances under which a branch captive insurance company is not required to be a pure captive insurance company;
(b)
require a statement, document, or information that a captive insurance company shall provide to the commissioner to obtain a certificate of authority;
(c)
determine a factor a captive insurance company shall provide evidence of under Subsection 31A-37-201(4)(b);
(d)
prescribe one or more capital requirements for a captive insurance company in addition to those required under Section 31A-37-204 based on the type, volume, and nature of insurance business transacted by the captive insurance company;
(e)
waive or modify a requirement for public notice and hearing for the following by a captive insurance company:
(i)
merger;
(ii)
consolidation;
(iii)
conversion;
(iv)
mutualization;
(v)
redomestication; or
(vi)
acquisition;
(f)
approve the use of one or more reliable methods of valuation and rating for:
(i)
an association captive insurance company;
(ii)
a sponsored captive insurance company; or
(iii)
an industrial insured group;
(g)
prohibit or limit an investment that threatens the solvency or liquidity of:
(i)
a pure captive insurance company; or
(ii)
an industrial insured captive insurance company;
(h)
determine the financial reports a sponsored captive insurance company shall annually file with the commissioner;
(i)
prescribe the required forms and reports under Section 31A-37-501;
(j)
establish one or more standards to ensure that:
(i)
one of the following is able to exercise control of the risk management function of a controlled unaffiliated business to be insured by a pure captive insurance company:
(A)
a parent; or
(B)
an affiliated company of a parent; or
(ii)
one of the following is able to exercise control of the risk management function of a controlled unaffiliated business to be insured by an industrial insured captive insurance company:
(A)
an industrial insured; or
(B)
an affiliated company of the industrial insured; and
(k)
establish requirements for obtaining, maintaining, and renewing a certificate of dormancy.
(2)
Notwithstanding Subsection (1)(j), until the commissioner adopts the rules authorized under Subsection (1)(j), the commissioner may by temporary order grant authority to insure risks to:
(a)
a pure captive insurance company; or
(b)
an industrial insured captive insurance company.
(3)
The commissioner may issue prohibitory, mandatory, and other orders relating to a captive insurance company as necessary to enable the commissioner to secure compliance with this chapter.
