31A-37-305. Contributions to guaranty or insolvency fund prohibited.
(1)
A captive insurance company may not join or contribute financially to any of the following in this state:
Terms Used In Utah Code 31A-37-305
Affiliate: means a person who controls, is controlled by, or is under common control with, another person. See Utah Code 31A-1-301
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
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;
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
Member: means a person having membership rights in an insurance corporation. See Utah Code 31A-1-301
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
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
(a)
a plan;
(b)
a pool;
(c)
an association;
(d)
a guaranty fund; or
(e)
an insolvency fund.
(2)
A captive insurance company, the insured of a captive insurance company, the parent of a captive insurance company, an affiliate of a captive insurance company, or a member organization of an association captive insurance company may not receive a benefit from:
(a)
a plan;
(b)
a pool;
(c)
an association;
(d)
a guaranty fund for claims arising out of the operations of the captive insurance company; or
(e)
an insolvency fund for claims arising out of the operations of the captive insurance company.
