The commissioner may issue a certificate of authority to act as an insurer in this state to a captive insurance company that meets the requirements of this chapter.
Terms Used In Utah Code 31A-37-201
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application for a certificate of authority for a captive insurance company, unless the application has been denied or withdrawn. See Utah Code 31A-37-102
Application: means a document:
(a)
(i)
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.
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
Business plan: means the information required to be supplied to the commissioner under Subsections 31A-5-204(2)(i) and (j), including the information required when these subsections apply by reference under:
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;
an individual who meets the requirements of Subsection (53)(b). See Utah Code 31A-1-301
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.
Filed: means that a filing is:
(i)
submitted to the department as required by and in accordance with applicable statute, rule, or filing order;
(ii)
received by the department within the time period provided in applicable statute, rule, or filing order; and
(iii)
accompanied by the appropriate fee in accordance with:
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.
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
Process: means a writ or summons issued in the course of a judicial proceeding. See Utah Code 68-3-12.5
Protected cell: means a separate account established and maintained by a sponsored captive insurance company for one participant. See Utah Code 31A-37-102
Service of process: The service of writs or summonses to the appropriate party.
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
To conduct insurance business in this state, a captive insurance company shall:
(a)
obtain from the commissioner a certificate of authority authorizing it to conduct insurance business in this state;
(b)
hold at least once each year in the state a meeting of the governing body;
(c)
maintain in this state:
(i)
the principal place of business of the captive insurance company; or
(ii)
in the case of a branch captive insurance company, the principal place of business for the branch operations of the branch captive insurance company; and
(d)
except as provided in Subsection (3), appoint a resident registered agent to accept service of process and to otherwise act on behalf of the captive insurance company in the state.
(3)
In the case of a captive insurance company formed as a corporation, if the registered agent cannot with reasonable diligence be found at the registered office of the captive insurance company, the commissioner is the agent of the captive insurance company upon whom process, notice, or demand may be served.
(4)
(a)
Before receiving a certificate of authority, an applicant captive insurance company shall file with the commissioner:
(i)
a certified copy of the captive insurance company’s organizational charter;
(ii)
a statement under oath of the captive insurance company’s president and secretary or their equivalents showing the captive insurance company’s financial condition; and
(iii)
any other statement or document required by the commissioner under Section 31A-37-106.
(b)
In addition to the information required under Subsection (4)(a), an applicant captive insurance company shall file with the commissioner evidence of:
(i)
the amount and liquidity of the assets of the applicant captive insurance company relative to the risks to be assumed by the applicant captive insurance company;
(ii)
the adequacy of the expertise, experience, and character of the person who will manage the applicant captive insurance company;
(iii)
the overall soundness of the plan of operation of the applicant captive insurance company;
(iv)
the adequacy of the loss prevention programs for the prospective insureds of the applicant captive insurance company as the commissioner deems necessary; and
considers relevant in ascertaining whether the applicant captive insurance company will be able to meet the policy obligations of the applicant captive insurance company.
(c)
In addition to the information required by Subsections (4)(a) and (b), an applicant sponsored captive insurance company shall file with the commissioner:
(i)
a business plan at the level of detail required by the commissioner under Section 31A-37-106 demonstrating:
(A)
the manner in which the applicant sponsored captive insurance company will account for the losses and expenses of each protected cell; and
(B)
the manner in which the applicant sponsored captive insurance company will report to the commissioner the financial history, including losses and expenses, of each protected cell;
(ii)
a statement acknowledging that the applicant sponsored captive insurance company will make all financial records of the applicant sponsored captive insurance company, including records pertaining to a protected cell, available for inspection or examination by the commissioner;
(iii)
a contract or sample contract between the applicant sponsored captive insurance company and a participant; and
(iv)
evidence that expenses will be allocated to each protected cell in an equitable manner.
the public official receiving the information agrees in writing to maintain the confidentiality of the information; and
(ii)
the laws of the state in which the public official serves require the information to be confidential.
(c)
This Subsection (5) does not apply to information provided by an industrial insured captive insurance company insuring the risks of an industrial insured group.
(6)
(a)
A captive insurance company shall pay to the department the following nonrefundable fees established by the department under Sections 31A-3-103, 31A-3-304, and 63J-1-504:
(i)
a fee for examining, investigating, and processing, by a department employee, of an application for a certificate of authority made by an applicant captive insurance company;
(ii)
a fee for obtaining a certificate of authority for the year the captive insurance company is issued a certificate of authority by the department; and
(iii)
a certificate of authority renewal fee, assessed annually.
(b)
The commissioner may:
(i)
assign a department employee or retain legal, financial, or examination services from outside the department to perform the services described in:
charge the reasonable cost of services described in Subsection (6)(b)(i) to the applicant captive insurance company.
(7)
If the commissioner is satisfied that the documents and statements filed by the applicant captive insurance company comply with this chapter, the commissioner may grant a certificate of authority authorizing the company to do insurance business in this state.
(8)
A certificate of authority granted under this section expires annually and shall be renewed by July 1 of each year.
