Connecticut 2020 Regular Session

Connecticut Senate Bill SB00339 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
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2	2
3	3	LCO No. 1825 1 of 28
4	4
5	5	General Assembly Raised Bill No. 339
6	6	February Session, 2020
7	7	LCO No. 1825
8	8
9	9
10	10	Referred to Committee on INSURANCE AND REAL ESTATE
11	11
12	12
13	13	Introduced by:
14	14	(INS)
15	15
16	16
17	17
18	18
19	19	AN ACT CONCERNING TH E INSURANCE DEPARTME NT'S
20	20	RECOMMENDATIONS REGA RDING CAPTIVE INSURANCE
21	21	COMPANIES.
22	22	Be it enacted by the Senate and House of Representatives in General
23	23	Assembly convened:
24	24
25	25	Section 1. Section 38a-91aa of the general statutes is repealed and the 1
26	26	following is substituted in lieu thereof (Effective July 1, 2020): 2
27	27	As used in sections 38a-91aa to [38a-91tt] 38a-91uu, inclusive, [and] 3
28	28	as amended by this act, sections 38a-91ww and 38a-91xx and section 2 4
29	29	of this act: 5
30	30	(1) "Affiliated company" means any company in the same corporate 6
31	31	system as a parent, an industrial insured or a member organization by 7
32	32	virtue of common ownership, control, operation or management. 8
33	33	(2) "Agency captive insurance company" means a captive insurance 9
34	34	company that: 10
35	35	(A) Is owned or directly or indirectly controlled by one or more 11
36	36	insurance agents or insurance producers licensed in accordance with 12 Raised Bill No. 339
37	37
38	38
39	39
40	40	LCO No. 1825 2 of 28
41	41
42	42	sections 38a-702a to 38a-702r, inclusive; 13
43	43	(B) Only insures against risks covered by insurance policies sold, 14
44	44	solicited or negotiated through the insurance agents or insurance 15
45	45	producers that own or control such captive insurance company; and 16
46	46	(C) Does not insure against risks covered by any health insurance 17
47	47	policy or plan. 18
48	48	(3) "Alien captive insurance company" means any insurance 19
49	49	company formed to write insurance business for its parent and affiliated 20
50	50	companies and licensed pursuant to the laws of an alien jurisdiction that 21
51	51	imposes statutory or regulatory standards on companies transacting the 22
52	52	business of insurance in such jurisdiction that the commissioner deems 23
53	53	to be acceptable. 24
54	54	(4) "Association" means any legal association of individuals, 25
55	55	corporations, limited liability companies, partnerships, associations or 26
56	56	other entities [that has been in continuous existence for at least one 27
57	57	year,] where the association itself or some or all of the member 28
58	58	organizations: 29
59	59	(A) Directly or indirectly own, control or hold with power to vote all 30
60	60	of the outstanding voting securities or other voting interests of an 31
61	61	association captive insurance company incorporated as a stock insurer; 32
62	62	(B) Have complete voting control over an association captive 33
63	63	insurance company incorporated as a mutual corporation or formed as 34
64	64	a limited liability company; or 35
65	65	(C) Constitute all of the subscribers of an association captive 36
66	66	insurance company formed as a reciprocal insurer. 37
67	67	(5) "Association captive insurance company" means any company 38
68	68	that insures risks of the member organizations of an association, and 39
69	69	includes a company that also insures risks of such member 40
70	70	organizations' affiliated companies or of the association. 41 Raised Bill No. 339
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72	72
73	73
74	74	LCO No. 1825 3 of 28
75	75
76	76	(6) "Branch business" means any insurance business transacted in this 42
77	77	state by a branch captive insurance company. 43
78	78	(7) "Branch captive insurance company" means any alien captive 44
79	79	insurance company or foreign captive insurance company licensed by 45
80	80	the commissioner to transact the business of insurance in this state 46
81	81	through a business unit with a principal place of business in this state. 47
82	82	(8) "Branch operations" means any business operations in this state of 48
83	83	a branch captive insurance company. 49
84	84	(9) "Captive insurance company" means any (A) pure captive 50
85	85	insurance company, agency captive insurance company, association 51
86	86	captive insurance company, industrial insured captive insurance 52
87	87	company, risk retention group, sponsored captive insurance company 53
88	88	or special purpose financial captive insurance company that is 54
89	89	domiciled in this state and formed or licensed under the provisions of 55
90	90	sections 38a-91aa to 38a-91tt, inclusive, as amended by this act, or (B) 56
91	91	branch captive insurance company. 57
92	92	(10) "Ceding insurer" means an insurance company, approved by the 58
93	93	commissioner and licensed or otherwise authorized to transact the 59
94	94	business of insurance or reinsurance in its state or country of domicile, 60
95	95	that cedes risk to a special purpose financial captive insurance company 61
96	96	pursuant to a reinsurance contract. 62
97	97	(11) "Commissioner" means the Insurance Commissioner. 63
98	98	(12) "Controlled unaffiliated business" means any person: 64
99	99	(A) Who, (i) in the case of a pure captive insurance company, is not 65
100	100	in the corporate system of a parent and the parent's affiliated companies, 66
101	101	or (ii) in the case of an industrial insured captive insurance company, is 67
102	102	not in the corporate system of an industrial insured and the industrial 68
103	103	insured's affiliated companies; 69
104	104	(B) Who, (i) in the case of a pure captive insurance company, has an 70
105	105	existing contractual relationship with a parent or one of the parent's 71 Raised Bill No. 339
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107	107
108	108
109	109	LCO No. 1825 4 of 28
110	110
111	111	affiliated companies, or (ii) in the case of an industrial insured captive 72
112	112	insurance company, has an existing contractual relationship with an 73
113	113	industrial insured or one of the industrial insured's affiliated companies; 74
114	114	and 75
115	115	(C) Whose risks are managed by a pure captive insurance company 76
116	116	or an industrial insured captive insurance company, as applicable, in 77
117	117	accordance with section 38a-91qq. 78
118	118	(13) "Excess workers' compensation insurance" means, in the case of 79
119	119	an employer that has insured or self-insured its workers' compensation 80
120	120	risks in accordance with applicable state or federal law, insurance in 81
121	121	excess of a specified per-incident or aggregate limit established by the 82
122	122	commissioner. 83
123	123	(14) "Foreign captive insurance company" means any insurance 84
124	124	company formed to write insurance business for its parent and affiliated 85
125	125	companies and licensed pursuant to the laws of a foreign jurisdiction 86
126	126	that imposes statutory or regulatory standards on comp anies 87
127	127	transacting the business of insurance in such jurisdiction that the 88
128	128	commissioner deems to be acceptable. 89
129	129	[(14)] (15) "Incorporated protected cell" means a protected cell that is 90
130	130	established as a corporation or a limited liability company, separate 91
131	131	from the sponsored captive insurance company, with which [it] such 92
132	132	sponsored captive insurance company has entered into a participant 93
133	133	contract. 94
134	134	[(15)] (16) "Industrial insured" means an insured: 95
135	135	(A) Who procures the insurance of any risk or risks by use of the 96
136	136	services of a full-time employee acting as an insurance manager or 97
137	137	buyer; 98
138	138	(B) Whose aggregate annual premiums for insurance on all risks total 99
139	139	at least twenty-five thousand dollars; and 100
140	140	(C) Who has at least twenty-five full-time employees. 101 Raised Bill No. 339
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142	142
143	143
144	144	LCO No. 1825 5 of 28
145	145
146	146	[(16)] (17) "Industrial insured captive insurance company" means any 102
147	147	company that insures risks of the industrial insureds that comprise an 103
148	148	industrial insured group, and includes a company that also insures risks 104
149	149	of such industrial insureds' affiliated companies. 105
150	150	[(17)] (18) "Industrial insured group" means any group of industrial 106
151	151	insureds that collectively: 107
152	152	(A) Directly or indirectly own, control or hold with power to vote all 108
153	153	of the outstanding voting securities or other voting interests of an 109
154	154	industrial insured captive insurance company incorporated as a stock 110
155	155	insurer; 111
156	156	(B) Have complete voting control over an industrial insured captive 112
157	157	insurance company incorporated as a mutual corporation or formed as 113
158	158	a limited liability company; or 114
159	159	(C) Constitute all of the subscribers of an industrial insured captive 115
160	160	insurance company formed as a reciprocal insurer. 116
161	161	[(18)] (19) "Insurance securitization" or "securitization" means a 117
162	162	transaction or a group of related transactions, which may include capital 118
163	163	market offerings, that are effected through related risk transfer 119
164	164	instruments and facilitating administrative agreements, in which all or 120
165	165	part of the result of such transaction is used to fund a special purpose 121
166	166	financial captive insurance company's obligations under a reinsurance 122
167	167	contract with a ceding insurer and by which: 123
168	168	(A) A special purpose financial captive insurance company directly 124
169	169	or indirectly obtains proceeds through the issuance of securities by such 125
170	170	company or any other person; or 126
171	171	(B) A person provides, for the benefit of a special purpose financial 127
172	172	captive insurance company, one or more letters of credit or other assets 128
173	173	that the commissioner has authorized such company to treat as 129
174	174	admitted assets for purposes of its annual report. "Insurance 130
175	175	securitization" or "securitization" does not include the issuance of a 131 Raised Bill No. 339
176	176
177	177
178	178
179	179	LCO No. 1825 6 of 28
180	180
181	181	letter of credit for the benefit of the commissioner to satisfy all or part of 132
182	182	a special purpose financial captive insurance company's capital and 133
183	183	surplus requirements under section 38a-91dd, as amended by this act. 134
184	184	[(19)] (20) "Member organization" means any individual, corporation, 135
185	185	limited liability company, partnership, association or other entity that 136
186	186	belongs to an association. 137
187	187	[(20)] (21) "Mutual corporation" means a corporation organized 138
188	188	without stockholders and includes a nonprofit corporation with 139
189	189	members. 140
190	190	[(21)] (22) "Parent" means any individual, corporation, limited 141
191	191	liability company, partnership or other entity that directly or indirectly 142
192	192	owns, controls or holds with power to vote more than fifty per cent of 143
193	193	the outstanding voting: 144
194	194	(A) Securities of a pure captive insurance company organized as a 145
195	195	stock insurer; or 146
196	196	(B) Membership interests of a pure captive insurance company 147
197	197	organized as a nonprofit corporation or as a limited liability company. 148
198	198	[(22)] (23) "Participant" means any association, corporation, limited 149
199	199	liability company, partnership, trust or other entity, and any affiliated 150
200	200	company thereof, that is insured by a sponsored captive insurance 151
201	201	company pursuant to a participant contract. 152
202	202	[(23)] (24) "Participant contract" means a contract entered into by a 153
203	203	sponsored captive insurance company and a participant by which the 154
204	204	sponsored captive insurance company insures the risks of the 155
205	205	participant and limits the losses of each such participant to its pro rata 156
206	206	share of the assets of one or more protected cells identified in such 157
207	207	participant contract. 158
208	208	[(24)] (25) "Protected cell" means a separate account established by a 159
209	209	sponsored captive insurance company, in which assets are maintained 160
210	210	for one or more participants in accordance with the terms of one or more 161 Raised Bill No. 339
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212	212
213	213
214	214	LCO No. 1825 7 of 28
215	215
216	216	participant contracts to fund the liability of the sponsored captive 162
217	217	insurance company assumed on behalf of such participants as set forth 163
218	218	in such participant contracts. 164
219	219	[(25)] (26) "Pure captive insurance company" means any company 165
220	220	that insures risks of its parent and affiliated companies or controlled 166
221	221	unaffiliated business. 167
222	222	[(26)] (27) "Reinsurance contract" means a contract entered into by a 168
223	223	special purpose financial captive insurance company and a ceding 169
224	224	insurer by which the special purpose financial captive insurance 170
225	225	company agrees to provide reinsurance to the ceding insurer for risks 171
226	226	associated with the ceding insurer's insurance or reinsurance business. 172
227	227	[(27)] (28) "Risk retention group" means a captive insurance company 173
228	228	organized under the laws of this state pursuant to the federal Liability 174
229	229	Risk Retention Act of 1986, 15 USC 3901 et seq., as amended from time 175
230	230	to time, as a stock insurer or mutual corporation, a reciprocal or other 176
231	231	limited liability entity. 177
232	232	[(28)] (29) "Security" has the same meaning as provided in section 178
233	233	36b-3 and includes any form of debt obligation, equity, surplus 179
234	234	certificate, surplus note, funding agreement, derivative or other 180
235	235	financial instrument that the commissioner designates as a security for 181
236	236	purposes of sections 38a-91aa to 38a-91tt, inclusive, as amended by this 182
237	237	act. 183
238	238	[(29)] (30) "Special purpose financial captive insurance company" 184
239	239	means a company that is licensed by the commissioner in accordance 185
240	240	with section 38a-91bb, as amended by this act. 186
241	241	[(30)] (31) "Special purpose financial captive insurance company 187
242	242	security" means a security issued by (A) a special purpose financial 188
243	243	captive insurance company, or (B) a third party, the proceeds of which 189
244	244	are obtained directly or indirectly by a special purpose financial captive 190
245	245	insurance company. 191 Raised Bill No. 339
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247	247
248	248
249	249	LCO No. 1825 8 of 28
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251	251	[(31)] (32) "Sponsor" means any association, corporation, limited 192
252	252	liability company, partnership, trust or other entity that is approved by 193
253	253	the commissioner to organize and operate a sponsored captive 194
254	254	insurance company and to provide all or part of the required 195
255	255	unimpaired paid-in capital and surplus. 196
256	256	[(32)] (33) "Sponsored captive insurance company" means a captive 197
257	257	insurance company: 198
258	258	(A) In which the minimum required unimpaired paid-in capital and 199
259	259	surplus are provided by one or more sponsors; 200
260	260	(B) That insures risks of its participants only through separate 201
261	261	participant contracts; and 202
262	262	(C) That funds its liability to each participant through one or more 203
263	263	protected cells and segregates the assets of each protected cell from the 204
264	264	assets of other protected cells and from the assets of the sponsored 205
265	265	captive insurance company's general account. 206
266	266	[(33)] (34) "Surplus note" means an unsecured subordinated debt 207
267	267	obligation possessing characteristics consistent with the National 208
268	268	Association of Insurance Commissioners Statement of Statutory 209
269	269	Accounting Principles No. 41, as amended from time to time, and as 210
270	270	modified or supplemented by the commissioner. 211
271	271	Sec. 2. (NEW) (Effective July 1, 2020) (a) The Commissioner of Revenue 212
272	272	Services shall waive any and all penalties that would otherwise be due 213
273	273	under section 38a-277 of the general statutes for any taxable period 214
274	274	beginning on or after July 1, 2017, and ending prior to July 1, 2020, if the 215
275	275	insured: 216
276	276	(1) Establishes a branch captive insurance company in this state, or 217
277	277	transfers the domicile of its alien captive insurance company or foreign 218
278	278	captive insurance company to this state in accordance with the 219
279	279	provisions of section 38a-58a of the general statutes, not later than July 220
280	280	1, 2021; and 221 Raised Bill No. 339
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282	282
283	283
284	284	LCO No. 1825 9 of 28
285	285
286	286	(2) Pays all taxes and interest due and outstanding under section 38a-222
287	287	277 of the general statutes for all taxable periods ending on or after July 223
288	288	1, 2017, but before July 1, 2020, not later than forty-five days after such 224
289	289	insured satisfies the provisions of subdivision (1) of this subsection. 225
290	290	(b) Any insured that satisfies the provisions of subsection (a) of this 226
291	291	section shall not be liable for any taxes, interest and penalties that would 227
292	292	otherwise be due under section 38a-277 of the general statutes for any 228
293	293	taxable period ending prior to July 1, 2017. 229
294	294	Sec. 3. Section 38a-91bb of the general statutes is repealed and the 230
295	295	following is substituted in lieu thereof (Effective July 1, 2020): 231
296	296	(a) Any captive insurance company, when permitted by its articles of 232
297	297	association, charter or other organizational document, may apply to the 233
298	298	[Insurance Commissioner] commissioner for a license to do the business 234
299	299	of insurance against any kind of loss, damage or liability properly a 235
300	300	subject of insurance, if such insurance is not prohibited by law or [is not] 236
301	301	disapproved by the commissioner as being contrary to public policy, 237
302	302	including life insurance, annuities, health insurance, as defined in 238
303	303	section 38a-469, and commercial risk insurance, as defined in section 239
304	304	38a-663, provided: 240
305	305	(1) No pure captive insurance company may insure any risks other 241
306	306	than those of its parent and affiliated companies or controlled 242
307	307	unaffiliated business; 243
308	308	(2) No association captive insurance company may insure any risks 244
309	309	other than those of its association, the member organizations of its 245
310	310	association, and the member organizations' affiliated companies; 246
311	311	(3) No industrial insured captive insurance company may insure any 247
312	312	risks other than those of (A) the industrial insureds that comprise the 248
313	313	industrial insured group, (B) the industrial insureds' affiliated 249
314	314	companies, or (C) the industrial insureds' controlled unaffiliated 250
315	315	businesses; 251 Raised Bill No. 339
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317	317
318	318
319	319	LCO No. 1825 10 of 28
320	320
321	321	(4) No risk retention group may insure any risks other than those of 252
322	322	its members and owners; 253
323	323	(5) No captive insurance company may provide personal risk 254
324	324	insurance, as defined in section 38a-663, for private passenger motor 255
325	325	vehicle or homeowners insurance coverage or any component thereof; 256
326	326	(6) No captive insurance company may accept or cede reinsurance 257
327	327	except as provided in section 38a-91kk; 258
328	328	(7) Any captive insurance company may provide excess workers' 259
329	329	compensation insurance to its parent and affiliated companies, unless 260
330	330	prohibited by the laws of the state having jurisdiction over the 261
331	331	transaction or by federal law. Any captive insurance company may 262
332	332	reinsure a workers' compensation qualified self-insured plan of its 263
333	333	parent and affiliated companies, unless prohibited by federal law; 264
334	334	(8) Any captive insurance company that provides life insurance, 265
335	335	annuities or health insurance shall comply with all applicable state and 266
336	336	federal laws. 267
337	337	(b) No captive insurance company shall do any insurance business in 268
338	338	this state unless: 269
339	339	(1) [It] The captive insurance company first obtains from the 270
340	340	[Insurance Commissioner] commissioner (A) a license authorizing [it] 271
341	341	the captive insurance company to do insurance business in this state, or 272
342	342	(B) a conditional certificate of authority under subsection (f) of this 273
343	343	section; 274
344	344	[(2) Its board of directors or committee of managers or, in the case of 275
345	345	a reciprocal insurer, its subscribers' advisory committee holds at least 276
346	346	one meeting each year in this state;] 277
347	347	[(3) It] (2) The captive insurance company maintains its principal 278
348	348	place of business in this state; and 279
349	349	[(4) It] (3) The captive insurance company appoints a registered agent 280 Raised Bill No. 339
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351	351
352	352
353	353	LCO No. 1825 11 of 28
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355	355	to accept service of process and to otherwise act on its behalf in this state. 281
356	356	Whenever such registered agent cannot with reasonable diligence be 282
357	357	found at the registered office of the captive insurance company, the 283
358	358	[Insurance Commissioner] commissioner shall be an agent of [such] the 284
359	359	captive insurance company upon whom any process, notice or demand 285
360	360	may be served. 286
361	361	(c) (1) To be considered for a license, a captive insurance company 287
362	362	shall: 288
363	363	(A) File with the commissioner a certified copy of its organizational 289
364	364	documents, a statement under oath of its president and secretary 290
365	365	showing its financial condition, and any other statements or documents 291
366	366	required by the commissioner; and 292
367	367	(B) Submit to the commissioner for approval a description of the 293
368	368	coverages, deductibles, coverage limits and rates and such additional 294
369	369	information as the commissioner may require. In the event of any 295
370	370	subsequent material change in any item in such description, the captive 296
371	371	insurance company shall submit to the commissioner for approval an 297
372	372	appropriate revision and shall not offer any additional kinds of 298
373	373	insurance until a revision of such description is approved by the 299
374	374	commissioner. The captive insurance company shall inform the 300
375	375	commissioner of any material change in rates not later than thirty days 301
376	376	after the adoption of such change. 302
377	377	(2) Each applicant captive insurance company shall also file with the 303
378	378	commissioner evidence of the following: 304
379	379	(A) The amount and liquidity of the company's assets relative to the 305
380	380	risks to be assumed; 306
381	381	(B) The adequacy of the expertise, experience and character of the 307
382	382	persons who will manage the company; 308
383	383	(C) The overall soundness of the company's plan of operation; 309
384	384	(D) The adequacy of the loss prevention programs of the company's 310 Raised Bill No. 339
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386	386
387	387
388	388	LCO No. 1825 12 of 28
389	389
390	390	insureds; and 311
391	391	(E) Such other factors deemed relevant by the commissioner in 312
392	392	ascertaining whether the proposed captive insurance company will be 313
393	393	able to meet its policy obligations. 314
394	394	(3) Each applicant sponsored captive insurance company shall also 315
395	395	file with the commissioner: 316
396	396	(A) Materials demonstrating how the applicant will account for the 317
397	397	loss and expense experience of each protected cell at a level of detail 318
398	398	deemed sufficient by the commissioner, and how [it] such applicant will 319
399	399	report such experience to the commissioner; 320
400	400	(B) A statement acknowledging that all financial records of the 321
401	401	sponsored captive insurance company, including records pertaining to 322
402	402	any protected cells, shall be made available for examination or 323
403	403	inspection or by the commissioner or the commissioner's designee; 324
404	404	(C) All contracts or sample contracts between the sponsored captive 325
405	405	insurance company and any participants; and 326
406	406	(D) Evidence that expenses shall be allocated to each protected cell in 327
407	407	a fair and equitable manner. 328
408	408	(4) Each applicant special purpose financial captive insurance 329
409	409	company shall also: 330
410	410	(A) Include with its plan of operation: 331
411	411	(i) A complete description of all significant transactions, including 332
412	412	reinsurance, reinsurance security arrangements, securitizations, related 333
413	413	transactions or arrangements, and to the extent not included in the 334
414	414	transactions listed in this clause, a complete description of all parties 335
415	415	other than the special purpose financial captive insurance company and 336
416	416	the ceding insurer that will be involved in the issuance of special 337
417	417	purpose financial captive insurance company securities and a 338
418	418	description of any pledge, hypothecation or grant of a security interest 339 Raised Bill No. 339
419	419
420	420
421	421
422	422	LCO No. 1825 13 of 28
423	423
424	424	in any of the special purpose financial captive insurance company's 340
425	425	assets and in any stock or limited liability company interest in the 341
426	426	special purpose financial captive insurance company; 342
427	427	(ii) The source and form of the special purpose financial captive 343
428	428	insurance company's capital and surplus; 344
429	429	(iii) The proposed investment policy of the special purpose financial 345
430	430	captive insurance company; 346
431	431	(iv) A description of the underwriting, reporting and claims payment 347
432	432	methods by which losses covered by the reinsurance contract will be 348
433	433	reported, accounted for and settled; 349
434	434	(v) Pro forma balance sheets and income statements illustrating one 350
435	435	or more adverse case scenarios, as determined under criteria required 351
436	436	by the commissioner, for the performance of the special purpose 352
437	437	financial captive insurance company under all reinsurance contracts; 353
438	438	and 354
439	439	(vi) The proposed rate and method for discounting reserves, if the 355
440	440	special purpose financial captive insurance company is requesting 356
441	441	authority to discount its reserves; 357
442	442	(B) Submit an affidavit of its president, a vice president, its treasurer 358
443	443	or its chief financial officer that includes the following statements, that 359
444	444	to the best of such person's knowledge and belief after reasonable 360
445	445	inquiry: 361
446	446	(i) The proposed organization and operation of the special purpose 362
447	447	financial captive insurance company comply with all applicable 363
448	448	provisions of this chapter; 364
449	449	(ii) The special purpose financial captive insurance company's 365
450	450	investment policy reflects and takes into account the liquidity of assets 366
451	451	and the reasonable preservation, administration and management of 367
452	452	such assets with respect to the risks associated with the reinsurance 368
453	453	contract and the insurance securitization transaction. With respect to a 369 Raised Bill No. 339
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455	455
456	456
457	457	LCO No. 1825 14 of 28
458	458
459	459	special purpose financial captive insurance company, "management" 370
460	460	means the board of directors, managing board or other individual or 371
461	461	individuals vested with overall responsibility for the management of the 372
462	462	affairs of such company, including, but not limited to, officers or other 373
463	463	agents elected or appointed to act on behalf of such company; and 374
464	464	(iii) The reinsurance contract and any arrangement for securing the 375
465	465	special purpose financial captive insurance company's obligations 376
466	466	under such reinsurance contract, including, but not limited to, any 377
467	467	agreements or other documentation to implement such arrangement, 378
468	468	comply with the provisions of this chapter; and 379
469	469	(C) Include with its application: 380
470	470	(i) Copies of all agreements and documentation described in 381
471	471	subparagraph (A) of this subdivision unless otherwise approved by the 382
472	472	commissioner, and any other statements or documents required by the 383
473	473	commissioner to evaluate the special purpose financial captive 384
474	474	insurance company's application for licensure; and 385
475	475	(ii) An opinion of qualified legal counsel, in a form acceptable to the 386
476	476	commissioner, that the offer and sale of any special purpose financial 387
477	477	captive insurance company securities complies with all applicable 388
478	478	registration requirements or applicable exemptions from or exceptions 389
479	479	to such requirements of the federal securities laws and that the offer and 390
480	480	sale of securities by the special purpose financial captive insurance 391
481	481	company itself comply with all registration requirements or applicable 392
482	482	exemptions from or exceptions to such requirements of the securities 393
483	483	laws of this state. Such opinion shall not be required as part of the 394
484	484	application if the special purpose financial captive insurance company 395
485	485	includes a specific statement in its plan of operation that such opinions 396
486	486	will be provided to the commissioner in advance of the offer or sale of 397
487	487	any special purpose financial captive insurance company securities. 398
488	488	(5) A sponsored captive insurance company may apply to be licensed 399
489	489	as a special purpose financial captive insurance company. Such 400
490	490	company shall be subject to the provisions of sections 38a-91aa to 38a-401 Raised Bill No. 339
491	491
492	492
493	493
494	494	LCO No. 1825 15 of 28
495	495
496	496	91tt, inclusive, as amended by this act, applicable to a sponsored captive 402
497	497	insurance company and to a special purpose financial captive insurance 403
498	498	company. In the event of conflict between such provisions applicable to 404
499	499	a sponsored captive insurance company and to a special purpose 405
500	500	financial captive insurance company, the provisions applicable to a 406
501	501	special purpose financial captive insurance company shall control. 407
502	502	(6) Information submitted pursuant to this subsection shall be and 408
503	503	shall remain confidential and shall not be made public by the 409
504	504	commissioner or an employee or agent of the commissioner without the 410
505	505	written consent of the company, except that: 411
506	506	(A) Such information may be discoverable by a party in a civil action 412
507	507	or contested case to which the captive insurance company that 413
508	508	submitted such information is a party upon a showing by the party 414
509	509	seeking to discover such information that: 415
510	510	(i) The information sought is relevant to and necessary for the 416
511	511	furtherance of such action or case; 417
512	512	(ii) The information sought is unavailable from other nonconfidential 418
513	513	sources; and 419
514	514	(iii) A subpoena issued by a judicial or administrative officer of 420
515	515	competent jurisdiction has been submitted to the commissioner, 421
516	516	provided such submission requirement shall not apply to a risk 422
517	517	retention group; and 423
518	518	(B) The commissioner may, in the commissioner's discretion, disclose 424
519	519	such information to a public official having jurisdiction over the 425
520	520	regulation of insurance in another state, provided: 426
521	521	(i) Such public official agrees, in writing, to maintain the 427
522	522	confidentiality of such information; and 428
523	523	(ii) The laws of the state in which such public official serves require 429
524	524	such information to be and [to] remain confidential. 430 Raised Bill No. 339
525	525
526	526
527	527
528	528	LCO No. 1825 16 of 28
529	529
530	530	(d) (1) Each captive insurance company shall pay to the commissioner 431
531	531	a nonrefundable fee of eight hundred dollars for examining, 432
532	532	investigating and processing its application for a license. The 433
533	533	commissioner may retain legal, financial and examination services from 434
534	534	outside the department for the licensing and financial oversight of a 435
535	535	captive insurance company, the reasonable cost of which may be 436
536	536	charged against such company. The provisions of subdivisions (2) to (5), 437
537	537	inclusive, of subsection (k) of section 38a-14 shall apply to this 438
538	538	subdivision. 439
539	539	(2) Each captive insurance company shall pay a license fee for the first 440
540	540	year of licensure and a renewal fee for each year thereafter as set forth 441
541	541	in section 38a-11. 442
542	542	(e) (1) If the commissioner finds that the documents and statements 443
543	543	that a captive insurance company, other than a special purpose financial 444
544	544	captive insurance company, has filed comply with the provisions of 445
545	545	sections 38a-91aa to 38a-91tt, inclusive, as amended by this act, the 446
546	546	commissioner may grant a license authorizing the company to do 447
547	547	insurance business in this state until April first thereafter. The captive 448
548	548	insurance company may apply to renew such license on such forms as 449
549	549	the commissioner prescribes. 450
550	550	(2) (A) The commissioner may grant a license authorizing a special 451
551	551	purpose financial captive insurance company to do reinsurance 452
552	552	business in this state until April first thereafter upon the commissioner's 453
553	553	finding that (i) the proposed plan of operation provides for a reasonable 454
554	554	and expected successful operation, (ii) the terms of the reinsurance 455
555	555	contract and related transactions comply with sections 38a-91aa to 38a-456
556	556	91tt, inclusive, as amended by this act, (iii) the proposed plan of 457
557	557	operation is not hazardous to any ceding insurer, and (iv) the insurance 458
558	558	regulator of the state of domicile of each ceding insurer has notified the 459
559	559	commissioner in writing or has otherwise provided assurance 460
560	560	satisfactory to the commissioner that such regulator has approved or 461
561	561	has not disapproved the transaction, provided the commissioner shall 462
562	562	not be precluded from issuing a license to a special purpose financial 463 Raised Bill No. 339
563	563
564	564
565	565
566	566	LCO No. 1825 17 of 28
567	567
568	568	captive insurance company if such regulator has not responded with 464
569	569	respect to all or any part of the transaction. 465
570	570	(B) In conjunction with granting such license, the commissioner may 466
571	571	issue an order to the special purpose financial captive insurance 467
572	572	company of any additional provisions, terms or conditions regarding 468
573	573	the organization, licensing or operation of such company that are not 469
574	574	inconsistent with the provisions of this chapter and are deemed 470
575	575	appropriate by the commissioner. 471
576	576	(3) The commissioner shall not grant a license to a branch captive 472
577	577	insurance company unless the alien captive insurance company or 473
578	578	foreign captive insurance company grants the commissioner authority 474
579	579	to examine the alien captive insurance company or foreign captive 475
580	580	insurance company in the jurisdiction in which the alien captive 476
581	581	insurance company or foreign captive insurance company is formed, 477
582	582	operates or maintains books and records. 478
583	583	(f) (1) The commissioner may, in the commissioner's sole discretion, 479
584	584	grant to a captive insurance company a conditional certificate of 480
585	585	authority to do insurance business in this state until the commissioner 481
586	586	completes examining, investigating and processing the captive 482
587	587	insurance company's application for a license if the captive insurance 483
588	588	company submits to the commissioner: 484
589	589	(A) Evidence that the captive insurance company possesses capital 485
590	590	and surplus that satisfies the requirements under section 38a-91dd, as 486
591	591	amended by this act; 487
592	592	(B) Such application and all other materials necessary for the 488
593	593	commissioner to grant a license to the captive insurance company 489
594	594	pursuant to this section; and 490
595	595	(C) A statement of compliance by all persons who hold an ownership 491
596	596	interest in the captive insurance company stating that, to the best of their 492
597	597	knowledge and belief, such application and the materials described in 493
598	598	subparagraph (B) of this subdivision satisfy: 494 Raised Bill No. 339
599	599
600	600
601	601
602	602	LCO No. 1825 18 of 28
603	603
604	604	(i) All provisions of sections 38a-91aa to 38a-91tt, inclusive, as 495
605	605	amended by this act, and 38a-91ww to 38a-91xx, inclusive, that the 496
606	606	captive insurance company must satisfy in order for the commissioner 497
607	607	to grant a license to the captive insurance company pursuant to this 498
608	608	section; and 499
609	609	(ii) Any other requirements established by the commissioner that the 500
610	610	captive insurance company must satisfy in order for the commissioner 501
611	611	to grant to the captive insurance company a conditional certificate of 502
612	612	authority pursuant to this section. 503
613	613	(2) The commissioner may, in the commissioner's sole discretion, 504
614	614	summarily revoke a conditional certificate of authority granted to a 505
615	615	captive insurance company pursuant to subdivision (1) of this 506
616	616	subsection if the commissioner: 507
617	617	(A) Is unable to verify, within the six-month period beginning on the 508
618	618	date that the commissioner granted such conditional certificate of 509
619	619	authority to the captive insurance company, that the captive insurance 510
620	620	company possesses capital and surplus that satisfies the requirements 511
621	621	of section 38a-91dd, as amended by this act; or 512
622	622	(B) Determines that the application and all other materials that the 513
623	623	captive insurance company submitted to the commissioner to receive a 514
624	624	license pursuant to this section: 515
625	625	(i) Does not satisfy all provisions of sections 38a-91aa to 38a-91tt, 516
626	626	inclusive, as amended by this act, and 38a-91ww to 38a-91xx, inclusive, 517
627	627	that the captive insurance company must satisfy in order for the 518
628	628	commissioner to grant to such captive insurance company a license 519
629	629	pursuant to this section; or 520
630	630	(ii) Any other requirements established by the commissioner that the 521
631	631	captive insurance company must satisfy in order for the commissioner 522
632	632	to grant to the captive insurance company a conditional certificate of 523
633	633	authority pursuant to this subsection. 524 Raised Bill No. 339
634	634
635	635
636	636
637	637	LCO No. 1825 19 of 28
638	638
639	639	(3) Each captive insurance company that receives from the 525
640	640	commissioner a conditional certificate of authority to do insurance 526
641	641	business in this state under this subsection shall comply with, and be 527
642	642	subject to, all provisions of sections 38a-91aa to 38a-91tt, inclusive, as 528
643	643	amended by this act, and 38a-91ww to 38a-91xx, inclusive, that are 529
644	644	applicable to the captive insurance company. 530
645	645	Sec. 4. Section 38a-91dd of the general statutes is repealed and the 531
646	646	following is substituted in lieu thereof (Effective July 1, 2020): 532
647	647	(a) (1) [The Insurance Commissioner] Except as provided in 533
648	648	subdivision (3) of this subsection, the commissioner shall not issue a 534
649	649	license to a captive insurance company or allow the company to retain 535
650	650	such license unless the company has and maintains unimpaired paid-in 536
651	651	capital and surplus of: 537
652	652	(A) In the case of a pure captive insurance company, not less than the 538
653	653	greater of: 539
654	654	(i) [two hundred fifty] Fifty thousand dollars; or 540
655	655	(ii) An amount that the commissioner determines is necessary for the 541
656	656	pure captive insurance company to meet such pure captive insurance 542
657	657	company's policy obligations; 543
658	658	(B) In the case of an association captive insurance company, not less 544
659	659	than five hundred thousand dollars; 545
660	660	(C) In the case of an industrial insured captive insurance company, 546
661	661	not less than five hundred thousand dollars; 547
662	662	(D) In the case of a risk retention group, not less than one million 548
663	663	dollars; 549
664	664	(E) In the case of a sponsored captive insurance company, not less 550
665	665	than two hundred twenty-five thousand dollars; 551
666	666	(F) In the case of a special purpose financial captive insurance 552 Raised Bill No. 339
667	667
668	668
669	669
670	670	LCO No. 1825 20 of 28
671	671
672	672	company, not less than two hundred fifty thousand dollars; 553
673	673	(G) In the case of a sponsored captive insurance company licensed as 554
674	674	a special purpose financial captive insurance company, not less than five 555
675	675	hundred thousand dollars; and 556
676	676	(H) In the case of an agency captive insurance company, not less than 557
677	677	five hundred thousand dollars. 558
678	678	(2) (A) The [Insurance Commissioner] commissioner shall not issue a 559
679	679	license to a branch captive insurance company or allow the branch 560
680	680	captive insurance company to retain such license unless the branch 561
681	681	captive insurance company has and maintains, as security for the 562
682	682	payment of liabilities attributable to the branch operations: 563
683	683	(i) Not less than the greater of: 564
684	684	(I) [two hundred fifty] Fifty thousand dollars; or 565
685	685	(II) An amount that the commissioner determines is necessary to 566
686	686	secure the payment of liabilities attributable to the branch captive 567
687	687	insurance company's operations; and 568
688	688	(ii) Reserves on such insurance policies or such reinsurance contracts 569
689	689	as may be issued or assumed by the branch captive insurance company 570
690	690	through its branch operations, including reserves for losses, allocated 571
691	691	loss adjustment expenses, incurred but not reported losses and 572
692	692	unearned premiums with regard to business written through the branch 573
693	693	operations. The commissioner may permit a branch captive insurance 574
694	694	company to credit against any such reserves any [security for loss 575
695	695	reserves that the branch captive insurance company posts with a ceding 576
696	696	insurer or is posted by a reinsurer with the branch captive insurance 577
697	697	company, so long as such security remains posted.] assets belonging to: 578
698	698	(I) The branch captive insurance company that are held in trust for, 579
699	699	or otherwise segregated or controlled by, a ceding insurer that secure 580
700	700	the branch captive insurance company's reinsurance obligations to the 581
701	701	ceding insurer; or 582 Raised Bill No. 339
702	702
703	703
704	704
705	705	LCO No. 1825 21 of 28
706	706
707	707	(II) A reinsurer that are held in trust for, or otherwise under the 583
708	708	control of, the branch captive insurance company and secure the 584
709	709	reinsurer's reinsurance obligations to the branch captive insurance 585
710	710	company. 586
711	711	(B) The amounts required under subparagraph (A) of this 587
712	712	subdivision may be held, with the prior approval of the commissioner, 588
713	713	in the form of: 589
714	714	(i) [a] A trust formed under a trust agreement and funded by assets 590
715	715	acceptable to the commissioner; [,] 591
716	716	(ii) [an] An irrevocable letter of credit issued or confirmed by a bank 592
717	717	approved by the commissioner; [,] 593
718	718	(iii) [with] With respect to the amount required under subparagraph 594
719	719	(A)(i) of this subdivision only, cash on deposit with the commissioner; 595
720	720	[,] or 596
721	721	(iv) [any] Any combination [thereof] of the forms described in 597
722	722	subparagraphs (B)(i) to (B)(iii), inclusive, of this subdivision. 598
723	723	(3) The commissioner may exempt a branch captive insurance 599
724	724	company from the provisions of subdivisions (1) and (2) of this 600
725	725	subsection if the branch captive insurance company is a foreign captive 601
726	726	insurance company and the commissioner, in the commissioner's 602
727	727	discretion, determines that the branch captive insurance company is 603
728	728	financially stable. 604
729	729	[(b) The commissioner may adopt regulations, in accordance with 605
730	730	chapter 54, to establish additional capital and surplus requirements 606
731	731	based upon the type, volume and nature of insurance business 607
732	732	transacted.] 608
733	733	[(c)] (b) Notwithstanding any other provision of this section, the 609
734	734	commissioner shall have the discretion to allow a captive insurance 610
735	735	company, other than a captive insurance company organized as a risk 611
736	736	retention group, to maintain less than the required unimpaired paid-in 612 Raised Bill No. 339
737	737
738	738
739	739
740	740	LCO No. 1825 22 of 28
741	741
742	742	capital and surplus set forth in subsection (a) of this section. The 613
743	743	commissioner shall consider the type, volume and nature of the 614
744	744	insurance or reinsurance business transacted by such a captive 615
745	745	insurance company in establishing the amount of unimpaired paid-in 616
746	746	capital and surplus the company is required to maintain. 617
747	747	[(d)] (c) Except as specified in subdivision (2) of subsection (a) of this 618
748	748	section, capital and surplus may be in the form of cash or an irrevocable 619
749	749	letter of credit issued by a bank approved by the commissioner. 620
750	750	(d) The commissioner may adopt regulations, in accordance with 621
751	751	chapter 54, to establish additional capital and surplus requirements 622
752	752	based upon the type, volume and nature of insurance business 623
753	753	transacted. 624
754	754	Sec. 5. Subsection (h) of section 38a-91ff of the general statutes is 625
755	755	repealed and the following is substituted in lieu thereof (Effective July 1, 626
756	756	2020): 627
757	757	(h) In the case of a captive insurance company licensed as a branch 628
758	758	captive insurance company, the alien captive insurance company or 629
759	759	foreign captive insurance company shall petition the commissioner to 630
760	760	issue a certificate setting forth the commissioner's finding that, after 631
761	761	considering the character, reputation, financial responsibility, insurance 632
762	762	experience, and business qualifications of the officers and directors of 633
763	763	the alien captive insurance company or foreign captive insurance 634
764	764	company, the licensing and maintenance of the branch operations will 635
765	765	promote the general good of the state. The alien captive insurance 636
766	766	company or foreign captive insurance company may register to do 637
767	767	business in this state after the commissioner's certificate is issued. 638
768	768	Sec. 6. Subdivision (1) of subsection (b) of section 38a-91gg of the 639
769	769	general statutes is repealed and the following is substituted in lieu 640
770	770	thereof (Effective July 1, 2020): 641
771	771	(b) (1) (A) [Prior] Except as provided in subparagraph (B) of this 642
772	772	subdivision, prior to March first of each year and, in the case of pure 643 Raised Bill No. 339
773	773
774	774
775	775
776	776	LCO No. 1825 23 of 28
777	777
778	778	captive insurance companies and industrial insured captive insurance 644
779	779	companies, prior to March fifteenth of each year, each captive insurance 645
780	780	company [other than a branch captive insurance company] shall 646
781	781	[submit] file with [to] the [Insurance Commissioner] commissioner a 647
782	782	report of [its] the captive insurance company's financial condition 648
783	783	verified by oath of two [of its] executive officers of the captive insurance 649
784	784	company. The commissioner shall establish the form and content of the 650
785	785	annual report to be filed by special purpose captive insurance 651
786	786	companies. 652
787	787	(B) [In the case of branch captive insurance companies, prior to March 653
788	788	first of each year, each such company] Each branch captive insurance 654
789	789	company shall [submit to] file with the commissioner a copy of all 655
790	790	reports and statements required to be filed under the laws of the 656
791	791	jurisdiction in which the alien captive insurance company or foreign 657
792	792	captive insurance company is formed. Such reports and statements shall 658
793	793	be verified by oath of two [of its] executive officers of the branch captive 659
794	794	insurance company and filed with the commissioner on the same day 660
795	795	that such reports and statements must be filed in the domiciliary 661
796	796	jurisdiction of the alien captive insurance company or foreign captive 662
797	797	insurance company. If the commissioner is satisfied that the annual 663
798	798	report filed by the alien captive insurance company or foreign captive 664
799	799	insurance company in [its] the domiciliary jurisdiction of the alien 665
800	800	captive insurance company or foreign captive insurance company 666
801	801	provides adequate information concerning the financial condition of 667
802	802	[the alien captive insurance company] the branch captive insurance 668
803	803	company, the commissioner may waive the requirement for completion 669
804	804	of the [captive] annual [statement for business written in the alien 670
805	805	jurisdiction.] report required under subparagraph (A) of this 671
806	806	subdivision. If the commissioner is not satisfied with such reports and 672
807	807	statements, or if the branch captive insurance company is not required 673
808	808	to file such reports and statements in the domiciliary jurisdiction of the 674
809	809	alien captive insurance company or foreign captive insurance company, 675
810	810	the branch captive insurance company shall file a report, at a time and 676
811	811	in a form and manner prescribed by the commissioner, that provides the 677 Raised Bill No. 339
812	812
813	813
814	814
815	815	LCO No. 1825 24 of 28
816	816
817	817	commissioner with adequate information concerning the financial 678
818	818	condition of the branch captive insurance company. 679
819	819	Sec. 7. Subsection (a) of section 38a-91hh of the general statutes is 680
820	820	repealed and the following is substituted in lieu thereof (Effective July 1, 681
821	821	2020): 682
822	822	(a) (1) [At least once every three years, and additionally whenever] 683
823	823	Except as provided in subdivision (3) of this subsection, the [Insurance 684
824	824	Commissioner] commissioner or the commissioner's designee shall, 685
825	825	whenever the commissioner determines it to be prudent, [the 686
826	826	commissioner or the commissioner's designee shall visit each captive 687
827	827	insurance company and thoroughly] but not less frequently than once 688
828	828	every five years, inspect and examine [its] each captive insurance 689
829	829	company's affairs to ascertain [its] the captive insurance company's 690
830	830	financial condition, [its] the captive insurance company's ability to fulfill 691
831	831	its obligations and whether [it] the captive insurance company has 692
832	832	complied with the provisions of sections 38a-91aa to 38a-91tt, inclusive, 693
833	833	as amended by this act, and any other applicable provisions of this title. 694
834	834	[The commissioner may extend the three-year period to five years, 695
835	835	provided a captive insurance company is subject to a comprehensive 696
836	836	annual audit during such period by independent auditors approved by 697
837	837	the commissioner and of a scope satisfactory to the commissioner.] 698
838	838	(2) The examination of a branch captive insurance company pursuant 699
839	839	to this section shall be of branch business and branch operations only, 700
840	840	as long as the branch captive insurance company provides annually to 701
841	841	the commissioner a certificate of compliance or its equivalent, issued by 702
842	842	or filed with the licensing authority of the jurisdiction in which the 703
843	843	branch captive insurance company is formed, and demonstrates to the 704
844	844	commissioner's satisfaction that it is operating in sound financial 705
845	845	condition in accordance with all applicable laws and regulations of such 706
846	846	jurisdiction. 707
847	847	(3) The commissioner may waive the requirement that the 708
848	848	commissioner or the commissioner's designee inspect and examine a 709 Raised Bill No. 339
849	849
850	850
851	851
852	852	LCO No. 1825 25 of 28
853	853
854	854	captive insurance company's affairs pursuant to this subsection if the 710
855	855	captive insurance company is a pure captive insurance company. 711
856	856	Sec. 8. Subsection (a) of section 38a-91ii of the general statutes is 712
857	857	repealed and the following is substituted in lieu thereof (Effective July 1, 713
858	858	2020): 714
859	859	(a) (1) The commissioner may, at any time, for cause, suspend, revoke 715
860	860	or refuse to renew any license of a captive insurance company, or in lieu 716
861	861	of or in addition to suspension or revocation of such license, the 717
862	862	commissioner, after reasonable notice to and hearing of any holder of 718
863	863	such license, may impose a fine not to exceed ten thousand dollars. Such 719
864	864	hearings may be held by the commissioner or any person designated by 720
865	865	the commissioner. For purposes of this subsection, cause for such 721
866	866	administrative action shall include, but not be limited to, the following 722
867	867	reasons: (A) Insolvency or impairment of capital or surplus; (B) failure 723
868	868	to meet the requirements of section 38a-91dd, as amended by this act; 724
869	869	(C) refusal or failure to [submit] file an annual report, as required by 725
870	870	section 38a-91gg, as amended by this act, or any other report or 726
871	871	statement required by law or by lawful order of the commissioner; (D) 727
872	872	failure to comply with the provisions of its own charter, bylaws or other 728
873	873	organizational document; (E) failure to submit to or pay the cost of 729
874	874	examination or any legal obligation relative thereto; (F) use of methods 730
875	875	that, although not otherwise specifically prohibited by law, nevertheless 731
876	876	render its operation detrimental or its condition unsound with respect 732
877	877	to the public or to its policyholders; or (G) failure otherwise to comply 733
878	878	with the laws of this state. 734
879	879	(2) Any captive insurance company aggrieved by the action of the 735
880	880	commissioner in suspending, revoking or refusing to renew a license or 736
881	881	in imposing a fine may appeal therefrom, in accordance with the 737
882	882	provisions of section 4-183, except venue for such appeal shall be in the 738
883	883	judicial district of New Britain. Appeals under this section shall be 739
884	884	privileged in respect to the order of trial assignment. 740
885	885	Sec. 9. Subparagraph (A) of subdivision (2) of subsection (g) of section 741 Raised Bill No. 339
886	886
887	887
888	888
889	889	LCO No. 1825 26 of 28
890	890
891	891	38a-91ss of the general statutes is repealed and the following is 742
892	892	substituted in lieu thereof (Effective July 1, 2020): 743
893	893	(A) Proceeds from a special purpose financial captive insurance 744
894	894	company securitization or letters of credit or other assets described in 745
895	895	subdivision [(18)] (19) of section 38a-91aa, as amended by this act; 746
896	896	Sec. 10. Section 38a-91uu of the general statutes is repealed and the 747
897	897	following is substituted in lieu thereof (Effective July 1, 2020): 748
898	898	(a) For the purposes of this section, [unless the context otherwise 749
899	899	requires: 750
900	900	(1) "Dormant captive insurance company" means a pure captive 751
901	901	insurance company, a sponsored captive insurance company or an 752
902	902	industrial insured captive insurance company, each as defined in 753
903	903	section 38a-91aa, that has: 754
904	904	(A) Ceased transacting insurance business; and 755
905	905	(B) No liabilities associated with any insurance business that 756
906	906	occurred, or insurance policy that was issued, prior to, on or after the 757
907	907	filing of its application for a certificate of dormancy under subsection 758
908	908	(b) of this section; and 759
909	909	(2) "Insurance business"] "insurance business" means the business of 760
910	910	insurance, as defined in section 38a-905. 761
911	911	(b) (1) [A dormant captive insurance company that is domiciled in 762
912	912	this state may apply to the Insurance Commissioner for] The 763
913	913	commissioner may issue to a pure captive insurance company, 764
914	914	sponsored captive insurance company or industrial insured captive 765
915	915	insurance company a certificate of dormancy if such company: 766
916	916	(A) Files with the commissioner, in a form and manner prescribed by 767
917	917	the commissioner, an application for such certificate; 768
918	918	(B) Has ceased transacting insurance business; and 769 Raised Bill No. 339
919	919
920	920
921	921
922	922	LCO No. 1825 27 of 28
923	923
924	924	(C) Has no liabilities associated with any insurance business that 770
925	925	occurred, or insurance policy that was issued, prior to, on or after the 771
926	926	date that such company files an application with the commissioner 772
927	927	pursuant to subparagraph (A) of this subdivision. 773
928	928	(2) [The] Each certificate of dormancy issued by the commissioner 774
929	929	pursuant to subdivision (1) of this subsection shall be subject to renewal 775
930	930	once every two years [,] and shall be forfeited if the [dormant captive 776
931	931	insurance company] pure captive insurance company, sponsored 777
932	932	captive insurance company or industrial insured captive insurance 778
933	933	company that receives such certificate commences transacting insurance 779
934	934	business or fails to timely renew such certificate. 780
935	935	(c) [A dormant captive insurance company] Each pure captive 781
936	936	insurance company, sponsored captive insurance company or industrial 782
937	937	insured captive insurance company that [has been issued] receives or 783
938	938	renews a certificate of dormancy under subsection (b) of this section 784
939	939	shall: 785
940	940	(1) Possess and maintain unimpaired, paid-in capital and surplus of 786
941	941	not less than twenty-five thousand dollars; 787
942	942	(2) Not later than March [15, 2018] fifteenth, annually, submit to the 788
943	943	commissioner a report on the financial condition of such company, 789
944	944	verified by oath of two executive officers of such company, in such form 790
945	945	as the commissioner prescribes; and 791
946	946	(3) Pay the license renewal fee specified in section 38a-11 for a captive 792
947	947	insurance company. 793
948	948	This act shall take effect as follows and shall amend the following
949	949	sections:
950	950
951	951	Section 1 July 1, 2020 38a-91aa
952	952	Sec. 2 July 1, 2020 New section
953	953	Sec. 3 July 1, 2020 38a-91bb
954	954	Sec. 4 July 1, 2020 38a-91dd
955	955	Sec. 5 July 1, 2020 38a-91ff(h) Raised Bill No. 339
956	956
957	957
958	958
959	959	LCO No. 1825 28 of 28
960	960
961	961	Sec. 6 July 1, 2020 38a-91gg(b)(1)
962	962	Sec. 7 July 1, 2020 38a-91hh(a)
963	963	Sec. 8 July 1, 2020 38a-91ii(a)
964	964	Sec. 9 July 1, 2020 38a-91ss(g)(2)(A)
965	965	Sec. 10 July 1, 2020 38a-91uu
966	966
967	967	Statement of Purpose:
968	968	To: (1) Amend certain captive insurance company definitions; (2)
969	969	provide tax amnesty to an insured that establishes a branch captive
970	970	insurance company in, or transfers domicile of its alien captive
971	971	insurance company or foreign captive insurance company to, this state;
972	972	(3) modify licensing requirements; (4) authorize the Insurance
973	973	Commissioner to license foreign captive insurance companies, and issue
974	974	unlicensed captive insurance companies a conditional certificate of
975	975	authority; (5) reduce capitalization requirements for pure captive and
976	976	branch captive insurance companies; (6) authorize the commissioner to
977	977	exempt foreign branch captive insurance companies from minimum
978	978	capitalization requirements; (7) authorize foreign captive insurance
979	979	companies to register to do business in this state; and (8) authorize the
980	980	commissioner to waive the requirement that (A) alien captive insurance
981	981	companies and foreign captive insurance companies file an annual
982	982	report concerning their financial condition; and (B) the commissioner
983	983	periodically examine the financial condition of pure captive insurance
984	984	companies.
985	985	[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except
986	986	that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not
987	987	underlined.]
988	988