31A-37-403. Participants in sponsored captive insurance companies.
(1)
Any of the following may be a participant in a sponsored captive insurance company holding a certificate of authority under this chapter:
Terms Used In Utah Code 31A-37-403
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
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
Insurance: includes :
(i)
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
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
Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
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
(a)
an association;
(b)
a corporation that is for profit or nonprofit;
(c)
a limited liability company;
(d)
a partnership;
(e)
a trust; or
(f)
any other business entity.
(2)
A sponsor may be a participant in a sponsored captive insurance company.
(3)
A participant need not be:
(a)
a shareholder of the sponsored captive insurance company; or
(b)
an affiliate of the sponsored captive insurance company.
(4)
A participant shall insure only the participant’s own risks through a sponsored captive insurance company unless otherwise approved by the commissioner.
