Connecticut 2022 Regular Session

Connecticut Senate Bill SB00011 Compare Versions

Version 1 (Old)

Version 2 (New)

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7		-	General Assembly Substitute Bill No. 11
8		-	February Session, 2022
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14		-	AN ACT MAKING ADJUSTMENTS TO STATE REVENUE AND
15		-	CONCERNING CAPTIVE INSURANCE COMPANIES.
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	7	+	LCO No. 641 1 of 39
	8	+
	9	+	General Assembly Governor's Bill No. 11
	10	+	February Session, 2022
	11	+	LCO No. 641
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	14	+	Referred to Committee on FINANCE, REVENUE AND
	15	+	BONDING
	16	+
	17	+
	18	+	Introduced by:
	19	+	Request of the Governor Pursuant
	20	+	to Joint Rule 9
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	22	+
	23	+
	24	+
	25	+
	26	+	AN ACT CONCERNING REVENUE ITEMS TO IMPLEMENT THE
	27	+	GOVERNOR'S BUDGET.
16	28		Be it enacted by the Senate and House of Representatives in General
17	29		Assembly convened:
18	30
19	31		Section 1. Subsection (b) of section 12-704c of the 2022 supplement to 1
20	32		the general statutes is repealed and the following is substituted in lieu 2
21	33		thereof (Effective from passage): 3
22	34		(b) (1) The credit allowed under this section shall not exceed (A) for 4
23	35		taxable years commencing on or after January 1, 2011, but prior to 5
24	36		January 1, 2016, three hundred dollars; [and] (B) for taxable years 6
25	37		commencing on or after January 1, 2016, but prior to January 1, 2022, 7
26	38		two hundred dollars; and (C) for taxable years commencing on or after 8
27	39		January 1, 2022, three hundred dollars. In the case of any husband and 9
28	40		wife who file a return under the federal income tax for such taxable year 10
29	41		as married individuals filing a joint return, the credit allowed, in the 11
30		-	aggregate, shall not exceed such amount for each such taxable year. 12
	42	+	aggregate, shall not exceed such amount for each such taxable year. 12 Governor's Bill No. 11
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31	48		(2) Notwithstanding the provisions of subsection (a) of this section, 13
32	49		for the taxable years commencing January 1, 2017, to January 1, [2022] 14
33	50		2021, inclusive, the credit under this section shall be allowed only for a 15
34	51		resident of this state (A) who has attained age sixty-five before the close 16
35	52		of the applicable taxable year, or (B) who files a return under the federal 17
36		-	income tax for the applicable taxable year validly claiming one or more 18 Substitute Bill No. 11
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	53	+	income tax for the applicable taxable year validly claiming one or more 18
43	54		dependents. 19
44	55		Sec. 2. Subparagraph (B) of subdivision (20) of subsection (a) of 20
45	56		section 12-701 of the 2022 supplement to the general statutes is repealed 21
46	57		and the following is substituted in lieu thereof (Effective from passage): 22
47	58		(B) There shall be subtracted therefrom: 23
48	59		(i) To the extent properly includable in gross income for federal 24
49	60		income tax purposes, any income with respect to which taxation by any 25
50	61		state is prohibited by federal law; 26
51	62		(ii) To the extent allowable under section 12-718, exempt dividends 27
52	63		paid by a regulated investment company; 28
53	64		(iii) To the extent properly includable in gross income for federal 29
54	65		income tax purposes, the amount of any refund or credit for 30
55	66		overpayment of income taxes imposed by this state, or any other state 31
56	67		of the United States or a political subdivision thereof, or the District of 32
57	68		Columbia; 33
58	69		(iv) To the extent properly includable in gross income for federal 34
59	70		income tax purposes and not otherwise subtracted from federal 35
60	71		adjusted gross income pursuant to clause (x) of this subparagraph in 36
61	72		computing Connecticut adjusted gross income, any tier 1 railroad 37
62	73		retirement benefits; 38
63	74		(v) To the extent any additional allowance for depreciation under 39
64	75		Section 168(k) of the Internal Revenue Code for property placed in 40
65	76		service after September 27, 2017, was added to federal adjusted gross 41
66		-	income pursuant to subparagraph (A)(ix) of this subdivision in 42
	77	+	income pursuant to subparagraph (A)(ix) of this subdivision in 42 Governor's Bill No. 11
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67	83		computing Connecticut adjusted gross income, twenty-five per cent of 43
68	84		such additional allowance for depreciation in each of the four 44
69	85		succeeding taxable years; 45
70	86		(vi) To the extent properly includable in gross income for federal 46
71		-	income tax purposes, any interest income from obligations issued by or 47 Substitute Bill No. 11
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	87	+	income tax purposes, any interest income from obligations issued by or 47
78	88		on behalf of the state of Connecticut, any political subdivision thereof, 48
79	89		or public instrumentality, state or local authority, district or similar 49
80	90		public entity created under the laws of the state of Connecticut; 50
81	91		(vii) To the extent properly includable in determining the net gain or 51
82	92		loss from the sale or other disposition of capital assets for federal income 52
83	93		tax purposes, any gain from the sale or exchange of obligations issued 53
84	94		by or on behalf of the state of Connecticut, any political subdivision 54
85	95		thereof, or public instrumentality, state or local authority, district or 55
86	96		similar public entity created under the laws of the state of Connecticut, 56
87	97		in the income year such gain was recognized; 57
88	98		(viii) Any interest on indebtedness incurred or continued to purchase 58
89	99		or carry obligations or securities the interest on which is subject to tax 59
90	100		under this chapter but exempt from federal income tax, to the extent that 60
91	101		such interest on indebtedness is not deductible in determining federal 61
92	102		adjusted gross income and is attributable to a trade or business carried 62
93	103		on by such individual; 63
94	104		(ix) Ordinary and necessary expenses paid or incurred during the 64
95	105		taxable year for the production or collection of income which is subject 65
96	106		to taxation under this chapter but exempt from federal income tax, or 66
97	107		the management, conservation or maintenance of property held for the 67
98	108		production of such income, and the amortizable bond premium for the 68
99	109		taxable year on any bond the interest on which is subject to tax under 69
100	110		this chapter but exempt from federal income tax, to the extent that such 70
101	111		expenses and premiums are not deductible in determining federal 71
102	112		adjusted gross income and are attributable to a trade or business carried 72
103	113		on by such individual; 73
104		-	(x) (I) For taxable years commencing prior to January 1, 2019, for a 74
	114	+	(x) (I) For taxable years commencing prior to January 1, 2019, for a 74 Governor's Bill No. 11
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105	120		person who files a return under the federal income tax as an unmarried 75
106	121		individual whose federal adjusted gross income for such taxable year is 76
107	122		less than fifty thousand dollars, or as a married individual filing 77
108	123		separately whose federal adjusted gross income for such taxable year is 78
109		-	less than fifty thousand dollars, or for a husband and wife who file a 79 Substitute Bill No. 11
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	124	+	less than fifty thousand dollars, or for a husband and wife who file a 79
116	125		return under the federal income tax as married individuals filing jointly 80
117	126		whose federal adjusted gross income for such taxable year is less than 81
118	127		sixty thousand dollars or a person who files a return under the federal 82
119	128		income tax as a head of household whose federal adjusted gross income 83
120	129		for such taxable year is less than sixty thousand dollars, an amount 84
121	130		equal to the Social Security benefits includable for federal income tax 85
122	131		purposes; 86
123	132		(II) For taxable years commencing prior to January 1, 2019, for a 87
124	133		person who files a return under the federal income tax as an unmarried 88
125	134		individual whose federal adjusted gross income for such taxable year is 89
126	135		fifty thousand dollars or more, or as a married individual filing 90
127	136		separately whose federal adjusted gross income for such taxable year is 91
128	137		fifty thousand dollars or more, or for a husband and wife who file a 92
129	138		return under the federal income tax as married individuals filing jointly 93
130	139		whose federal adjusted gross income from such taxable year is sixty 94
131	140		thousand dollars or more or for a person who files a return under the 95
132	141		federal income tax as a head of household whose federal adjusted gross 96
133	142		income for such taxable year is sixty thousand dollars or more, an 97
134	143		amount equal to the difference between the amount of Social Security 98
135	144		benefits includable for federal income tax purposes and the lesser of 99
136	145		twenty-five per cent of the Social Security benefits received during the 100
137	146		taxable year, or twenty-five per cent of the excess described in Section 101
138	147		86(b)(1) of the Internal Revenue Code; 102
139	148		(III) For the taxable year commencing January 1, 2019, and each 103
140	149		taxable year thereafter, for a person who files a return under the federal 104
141	150		income tax as an unmarried individual whose federal adjusted gross 105
142	151		income for such taxable year is less than seventy-five thousand dollars, 106
143	152		or as a married individual filing separately whose federal adjusted gross 107
144		-	income for such taxable year is less than seventy-five thousand dollars, 108
	153	+	income for such taxable year is less than seventy-five thousand dollars, 108 Governor's Bill No. 11
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145	159		or for a husband and wife who file a return under the federal income tax 109
146	160		as married individuals filing jointly whose federal adjusted gross 110
147	161		income for such taxable year is less than one hundred thousand dollars 111
148		-	or a person who files a return under the federal income tax as a head of 112 Substitute Bill No. 11
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	162	+	or a person who files a return under the federal income tax as a head of 112
155	163		household whose federal adjusted gross income for such taxable year is 113
156	164		less than one hundred thousand dollars, an amount equal to the Social 114
157	165		Security benefits includable for federal income tax purposes; and 115
158	166		(IV) For the taxable year commencing January 1, 2019, and each 116
159	167		taxable year thereafter, for a person who files a return under the federal 117
160	168		income tax as an unmarried individual whose federal adjusted gross 118
161	169		income for such taxable year is seventy-five thousand dollars or more, 119
162	170		or as a married individual filing separately whose federal adjusted gross 120
163	171		income for such taxable year is seventy-five thousand dollars or more, 121
164	172		or for a husband and wife who file a return under the federal income tax 122
165	173		as married individuals filing jointly whose federal adjusted gross 123
166	174		income from such taxable year is one hundred thousand dollars or more 124
167	175		or for a person who files a return under the federal income tax as a head 125
168	176		of household whose federal adjusted gross income for such taxable year 126
169	177		is one hundred thousand dollars or more, an amount equal to the 127
170	178		difference between the amount of Social Security benefits includable for 128
171	179		federal income tax purposes and the lesser of twenty-five per cent of the 129
172	180		Social Security benefits received during the taxable year, or twenty-five 130
173	181		per cent of the excess described in Section 86(b)(1) of the Internal 131
174	182		Revenue Code; 132
175	183		(xi) To the extent properly includable in gross income for federal 133
176	184		income tax purposes, any amount rebated to a taxpayer pursuant to 134
177	185		section 12-746; 135
178	186		(xii) To the extent properly includable in the gross income for federal 136
179	187		income tax purposes of a designated beneficiary, any distribution to 137
180	188		such beneficiary from any qualified state tuition program, as defined in 138
181	189		Section 529(b) of the Internal Revenue Code, established and 139
182	190		maintained by this state or any official, agency or instrumentality of the 140
183		-	state; 141
	191	+	state; 141 Governor's Bill No. 11
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184	197		(xiii) To the extent allowable under section 12-701a, contributions to 142
185	198		accounts established pursuant to any qualified state tuition program, as 143
186		-	defined in Section 529(b) of the Internal Revenue Code, established and 144 Substitute Bill No. 11
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	199	+	defined in Section 529(b) of the Internal Revenue Code, established and 144
193	200		maintained by this state or any official, agency or instrumentality of the 145
194	201		state; 146
195	202		(xiv) To the extent properly includable in gross income for federal 147
196	203		income tax purposes, the amount of any Holocaust victims' settlement 148
197	204		payment received in the taxable year by a Holocaust victim; 149
198	205		(xv) To the extent properly includable in gross income for federal 150
199	206		income tax purposes of an account holder, as defined in section 31-151
200	207		51ww, interest earned on funds deposited in the ind ividual 152
201	208		development account, as defined in section 31-51ww, of such account 153
202	209		holder; 154
203	210		(xvi) To the extent properly includable in the gross income for federal 155
204	211		income tax purposes of a designated beneficiary, as defined in section 156
205	212		3-123aa, interest, dividends or capital gains earned on contributions to 157
206	213		accounts established for the designated beneficiary pursuant to the 158
207	214		Connecticut Homecare Option Program for the Elderly established by 159
208	215		sections 3-123aa to 3-123ff, inclusive; 160
209	216		(xvii) To the extent properly includable in gross income for federal 161
210	217		income tax purposes, any income received from the United States 162
211	218		government as retirement pay for a retired member of (I) the Armed 163
212	219		Forces of the United States, as defined in Section 101 of Title 10 of the 164
213	220		United States Code, or (II) the National Guard, as defined in Section 101 165
214	221		of Title 10 of the United States Code; 166
215	222		(xviii) To the extent properly includable in gross income for federal 167
216	223		income tax purposes for the taxable year, any income from the discharge 168
217	224		of indebtedness in connection with any reacquisition, after December 169
218	225		31, 2008, and before January 1, 2011, of an applicable debt instrument or 170
219	226		instruments, as those terms are defined in Section 108 of the Internal 171
220	227		Revenue Code, as amended by Section 1231 of the American Recovery 172
221		-	and Reinvestment Act of 2009, to the extent any such income was added 173
222		-	to federal adjusted gross income pursuant to subparagraph (A)(xi) of 174
223		-	this subdivision in computing Connecticut adjusted gross income for a 175 Substitute Bill No. 11
	228	+	and Reinvestment Act of 2009, to the extent any such income was added 173 Governor's Bill No. 11
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	234	+	to federal adjusted gross income pursuant to subparagraph (A)(xi) of 174
	235	+	this subdivision in computing Connecticut adjusted gross income for a 175
230	236		preceding taxable year; 176
231	237		(xix) To the extent not deductible in determining federal adjusted 177
232	238		gross income, the amount of any contribution to a manufacturing 178
233	239		reinvestment account established pursuant to section 32-9zz in the 179
234	240		taxable year that such contribution is made; 180
235	241		(xx) To the extent properly includable in gross income for federal 181
236	242		income tax purposes, (I) for the taxable year commencing January 1, 182
237	243		2015, ten per cent of the income received from the state teachers' 183
238	244		retirement system, (II) for the taxable years commencing January 1, 184
239	245		2016, to January 1, 2020, inclusive, twenty-five per cent of the income 185
240	246		received from the state teachers' retirement system, and (III) for the 186
241	247		taxable year commencing January 1, 2021, and each taxable year 187
242	248		thereafter, fifty per cent of the income received from the state teachers' 188
243	249		retirement system or, for a taxpayer whose federal adjusted gross 189
244	250		income does not exceed the applicable threshold under clause (xxi) of 190
245	251		this subparagraph, the percentage pursuant to said clause of the income 191
246	252		received from the state teachers' retirement system, whichever 192
247	253		deduction is greater; 193
248	254		(xxi) To the extent properly includable in gross income for federal 194
249	255		income tax purposes, except for retirement benefits under clause (iv) of 195
250	256		this subparagraph and retirement pay under clause (xvii) of this 196
251	257		subparagraph, for a person who files a return under the federal income 197
252	258		tax as an unmarried individual whose federal adjusted gross income for 198
253	259		such taxable year is less than seventy-five thousand dollars, or as a 199
254	260		married individual filing separately whose federal adjusted gross 200
255	261		income for such taxable year is less than seventy-five thousand dollars, 201
256	262		or as a head of household whose federal adjusted gross income for such 202
257	263		taxable year is less than seventy-five thousand dollars, or for a husband 203
258	264		and wife who file a return under the federal income tax as married 204
259	265		individuals filing jointly whose federal adjusted gross income for such 205
260		-	taxable year is less than one hundred thousand dollars, (I) for the taxable 206
261		-	year commencing January 1, 2019, fourteen per cent of any pension or 207
262		-	annuity income, (II) for the taxable year commencing January 1, 2020, 208 Substitute Bill No. 11
	266	+	taxable year is less than one hundred thousand dollars, (I) for the taxable 206 Governor's Bill No. 11
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	272	+	year commencing January 1, 2019, fourteen per cent of any pension or 207
	273	+	annuity income, (II) for the taxable year commencing January 1, 2020, 208
269	274		twenty-eight per cent of any pension or annuity income, (III) for the 209
270	275		taxable year commencing January 1, 2021, forty-two per cent of any 210
271	276		pension or annuity income, and (IV) for the taxable year commencing 211
272	277		January 1, 2022, [fifty-six per cent of any pension or annuity income, (V) 212
273	278		for the taxable year commencing January 1, 2023, seventy per cent of any 213
274	279		pension or annuity income, (VI) for the taxable year commencing 214
275	280		January 1, 2024, eighty-four per cent of any pension or annuity income, 215
276	281		and (VII) for the taxable year commencing January 1, 2025,] and each 216
277	282		taxable year thereafter, one hundred per cent of any pension or annuity 217
278	283		income; 218
279	284		(xxii) The amount of lost wages and medical, travel and housing 219
280	285		expenses, not to exceed ten thousand dollars in the aggregate, incurred 220
281	286		by a taxpayer during the taxable year in connection with the donation 221
282	287		to another person of an organ for organ transplantation occurring on or 222
283	288		after January 1, 2017; 223
284	289		(xxiii) To the extent properly includable in gross income for federal 224
285	290		income tax purposes, the amount of any financial assistance received 225
286	291		from the Crumbling Foundations Assistance Fund or paid to or on 226
287	292		behalf of the owner of a residential building pursuant to sections 8-442 227
288	293		and 8-443; 228
289	294		(xxiv) To the extent properly includable in gross income for federal 229
290	295		income tax purposes, the amount calculated pursuant to subsection (b) 230
291	296		of section 12-704g for income received by a general partner of a venture 231
292	297		capital fund, as defined in 17 CFR 275.203(l)-1, as amended from time to 232
293	298		time; 233
294	299		(xxv) To the extent any portion of a deduction under Section 179 of 234
295	300		the Internal Revenue Code was added to federal adjusted gross income 235
296	301		pursuant to subparagraph (A)(xiv) of this subdivision in computing 236
297	302		Connecticut adjusted gross income, twenty-five per cent of such 237
298		-	disallowed portion of the deduction in each of the four succeeding 238
299		-	taxable years; [and] 239 Substitute Bill No. 11
	303	+	disallowed portion of the deduction in each of the four succeeding 238 Governor's Bill No. 11
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	309	+	taxable years; [and] 239
306	310		(xxvi) To the extent properly includable in gross income for federal 240
307	311		income tax purposes, for a person who files a return under the federal 241
308	312		income tax as an unmarried individual whose federal adjusted gross 242
309	313		income for such taxable year is less than seventy-five thousand dollars, 243
310	314		or as a married individual filing separately whose federal adjusted gross 244
311	315		income for such taxable year is less than seventy-five thousand dollars, 245
312	316		or as a head of household whose federal adjusted gross income for such 246
313	317		taxable year is less than seventy-five thousand dollars, or for a husband 247
314	318		and wife who file a return under the federal income tax as married 248
315	319		individuals filing jointly whose federal adjusted gross income for such 249
316	320		taxable year is less than one hundred thousand dollars, (I) for the taxable 250
317	321		year commencing January 1, 2023, twenty-five per cent of any 251
318	322		distribution from an individual retirement account other than a Roth 252
319	323		individual retirement account, (II) for the taxable year commencing 253
320	324		January 1, 2024, fifty per cent of any distribution from an individual 254
321	325		retirement account other than a Roth individual retirement account, (III) 255
322	326		for the taxable year commencing January 1, 2025, seventy-five per cent 256
323	327		of any distribution from an individual retirement account other than a 257
324	328		Roth individual retirement account, and (IV) for the taxable year 258
325	329		commencing January 1, 2026, and each taxable year thereafter, any 259
326	330		distribution from an individual retirement account other than a Roth 260
327	331		individual retirement account; and 261
328	332		(xxvii) To the extent properly includable in gross income for federal 262
329	333		income tax purposes, for the taxable year commencing January 1, 2022, 263
330	334		the amount or amounts paid or otherwise credited to any eligible 264
331	335		resident of this state under (I) the 2020 Earned Income Tax Credit 265
332	336		enhancement program from funding allocated to the state through the 266
333	337		Coronavirus Relief Fund established under the Coronavirus Aid, Relief, 267
334	338		and Economic Security Act, P.L. 116-136, and (II) the 2021 Earned 268
335	339		Income Tax Credit enhancement program from funding allocated to the 269
336	340		state pursuant to Section 9901 of Subtitle M of Title IX of the American 270
337		-	Rescue Plan Act of 2021, P.L. 117-2. 271
338		-	Sec. 3. Section 12-217qq of the general statutes is repealed and the 272 Substitute Bill No. 11
	341	+	Rescue Plan Act of 2021, P.L. 117-2. 271 Governor's Bill No. 11
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	347	+	Sec. 3. Section 12-217qq of the general statutes is repealed and the 272
345	348		following is substituted in lieu thereof (Effective from passage and 273
346	349		applicable to calendar and income years commencing on or after January 1, 274
347	350		2022): 275
348	351		(a) As used in this section: 276
349	352		(1) "Authority" means the Connecticut Higher Education 277
350	353		Supplemental Loan Authority; 278
351	354		(2) "Commissioner" means the Commissioner of Revenue Services; 279
352	355		[(2)] (3) "Eligible education loan" means [a loan issued by the 280
353	356		authority to an individual to refinance one or more student loans] an 281
354	357		authority loan, as defined in section 10a-223, that is in repayment; 282
355	358		[(3)] (4) "Full-time" means required to work at least thirty-five hours 283
356	359		per week; 284
357	360		[(4)] (5) "Qualified employee" means an individual who (A) is a 285
358	361		resident of the state, (B) has earned his or her first bachelor's degree from 286
359	362		an institution of higher education in the immediately preceding five-287
360	363		year period, (C) is employed full-time in the state by a qualified 288
361	364		employer, (D) is not an owner, member or partner of such qualified 289
362	365		employer or a family member of an owner, member or partner of such 290
363	366		qualified employer, and (E) has received an eligible education loan; 291
364	367		[(5)] (6) "Qualified employer" means a corporation licensed to operate 292
365	368		a business in the state that is subject to tax under this chapter or chapter 293
366	369		207; and 294
367	370		[(6) "Student loan" means any loan in repayment that was issued by 295
368	371		(A) the authority, or (B) any other private or governmental lender to 296
369	372		finance attendance at an institution of higher education] 297
370	373		(7) "Qualified small business" means a qualified employer that has 298
371	374		gross receipts of not more than five million dollars for the calendar or 299
372		-	income year, as applicable, for which a credit under this section is 300
373		-	allowed. 301 Substitute Bill No. 11
	375	+	income year, as applicable, for which a credit under this section is 300 Governor's Bill No. 11
374	376
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	381	+	allowed. 301
380	382		(b) (1) For calendar or income years commencing on and after January 302
381	383		1, 2022, each qualified employer that employs a qualified employee and 303
382	384		makes a payment directly to the authority on behalf of such qualified 304
383	385		employee on an eligible education loan [on behalf of such qualified 305
384	386		employee] that was used to finance the qualified employee's attendance 306
385	387		at an institution of higher education may claim a credit against the tax 307
386	388		imposed under this chapter or chapter 207. Such credit shall be granted 308
387	389		in an amount equal to fifty per cent of the amount of payments made to 309
388	390		the outstanding principal balance of such loans by the qualified 310
389	391		employer during the calendar or income year, provided (A) the credit 311
390	392		shall not be allowed against the tax imposed under this chapter and 312
391	393		chapter 207 for the same loan payment, and (B) the amount of credit 313
392	394		allowed for any calendar or income year with respect to a specific 314
393	395		qualified employee shall not exceed two thousand six hundred twenty-315
394	396		five dollars. 316
395	397		(2) A qualified employer may claim the credit under subdivision (1) 317
396	398		of this subsection for a payment made during the part of the calendar or 318
397	399		income year the qualified employee worked and resided in the state, 319
398	400		provided a qualified employee who worked and resided in the state for 320
399	401		any part of a month shall be deemed to have worked and resided in the 321
400	402		state for the entire month for purposes of this section. 322
401	403		(c) A qualified employer that claims the credit under subsection (b) 323
402	404		of this section shall provide any documentation required by the 324
403	405		[Commissioner of Revenue Services] commissioner in a form and 325
404	406		manner prescribed by the commissioner. 326
405	407		(d) (1) A qualified small business may apply to the commissioner in 327
406	408		accordance with the provisions of subdivision (2) of this subsection to 328
407	409		exchange any credit allowed under subsection (b) of this section for a 329
408	410		credit refund equal to the value of the credit. Any amount of credit 330
409	411		refunded under this subsection shall be refunded to the qualified small 331
410		-	business in accordance with the provisions of this chapter or chapter 332
411		-	207, as applicable. No interest shall be allowed or paid on any amount 333
412		-	of credit refunded under this subsection. Any amount of credit refunded 334 Substitute Bill No. 11
	412	+	business in accordance with the provisions of this chapter or chapter 332 Governor's Bill No. 11
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	417	+
	418	+	207, as applicable. No interest shall be allowed or paid on any amount 333
	419	+	of credit refunded under this subsection. Any amount of credit refunded 334
419	420		under this subsection shall be subject to the provisions of section 12-39h. 335
420	421		(2) Each application for a credit refund under this subsection shall be 336
421	422		filed, on such forms and containing such information as prescribed by 337
422	423		the commissioner, on or before the original due date of the return 338
423	424		prescribed under section 12-205 or 12-222, as applicable, for the calendar 339
424	425		or income year for which such credit was earned or, if applicable, the 340
425	426		extended due date of such year's return. No application for a credit 341
426	427		refund under this subsection may be filed after the due date or extended 342
427	428		due date, as the case may be, of such return. 343
428	429		Sec. 4. Section 453 of public act 21-2 of the June special session is 344
429	430		repealed and the following is substituted in lieu thereof (Effective from 345
430	431		passage): 346
431	432		The Comptroller shall transfer to the General Fund from funds 347
432	433		allocated, in accordance with the provisions of special act 21-1, from the 348
433	434		federal funds designated for the state pursuant to the provisions of 349
434	435		Section 604 of Subtitle M of Title IX of the American Rescue Plan Act of 350
435	436		2021, P.L. 117-2, as amended from time to time, [: (1) Five hundred fifty-351
436	437		nine million nine hundred thousand dollars, for the fiscal year ending 352
437		-	June 30, 2022; and (2) one billion one hundred ninety-four] nine hundred 353
438		-	forty-four million nine hundred thousand dollars for the fiscal year 354
439		-	ending June 30, 2023. 355
440		-	Sec. 5. (Effective from passage) The Comptroller shall reserve eighty-356
441		-	three million two hundred thousand dollars of General Fund revenue 357
442		-	received from the federal government during the fiscal year ending June 358
443		-	30, 2022, pursuant to Section 9817 of the American Rescue Plan Act of 359
444		-	2021, P.L. 117-2, for federal revenue collections during the fiscal year 360
445		-	ending June 30, 2023. 361
446		-	Sec. 6. Section 38a-91aa of the general statutes is repealed and the 362
447		-	following is substituted in lieu thereof (Effective July 1, 2022): 363
448		-	As used in [sections 38a-91aa to 38a-91tt] this section, sections 38a-364
449		-	91bb to 38a-91uu, inclusive, as amended by this act, and sections 38a-365 Substitute Bill No. 11
	438	+	June 30, 2022; and (2) one billion one] nine hundred ninety-four million 353
	439	+	nine hundred thousand dollars for the fiscal year ending June 30, 2023. 354
	440	+	Sec. 5. (Effective from passage) The Comptroller shall reserve eighty-355
	441	+	three million two hundred thousand dollars of General Fund revenue 356
	442	+	received from the federal government during the fiscal year ending June 357
	443	+	30, 2022, pursuant to Section 9817 of the American Rescue Plan Act of 358
	444	+	2021, P.L. 117-2, for federal revenue collections during the fiscal year 359
	445	+	ending June 30, 2023. 360
	446	+	Sec. 6. Section 38a-91aa of the general statutes is repealed and the 361
	447	+	following is substituted in lieu thereof (Effective July 1, 2022): 362
	448	+	As used in [sections 38a-91aa to 38a-91tt] this section, sections 38a-363 Governor's Bill No. 11
450	449
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456		-	91ww and 38a-91xx: 366
457		-	(1) "Affiliated company" means any company in the same corporate 367
458		-	system as a parent, an industrial insured or a member organization by 368
459		-	virtue of common ownership, control, operation or management. 369
460		-	(2) "Agency captive insurance company" means a captive insurance 370
461		-	company that: 371
462		-	(A) Is owned or directly or indirectly controlled by one or more 372
463		-	insurance agents or insurance producers licensed in accordance with 373
464		-	sections 38a-702a to 38a-702r, inclusive; 374
465		-	(B) Only insures against risks covered by insurance policies sold, 375
466		-	solicited or negotiated through the insurance agents or insurance 376
467		-	producers that own or control such captive insurance company; and 377
468		-	(C) Does not insure against risks covered by any health insurance 378
469		-	policy or plan. 379
470		-	(3) "Alien captive insurance company" means any insurance 380
471		-	company formed to write insurance business for its parent and affiliated 381
472		-	companies and licensed pursuant to the laws of an alien jurisdiction that 382
473		-	imposes statutory or regulatory standards on companies transacting the 383
474		-	business of insurance in such jurisdiction that the commissioner deems 384
475		-	to be acceptable. 385
476		-	(4) "Association" means any legal association of individuals, 386
477		-	corporations, limited liability companies, partnerships, associations or 387
478		-	other entities, [that has been in continuous existence for at least one 388
479		-	year,] where the association itself or some or all of the member 389
480		-	organizations: 390
481		-	(A) Directly or indirectly own, control or hold with power to vote all 391
482		-	of the outstanding voting securities or other voting interests of an 392
483		-	association captive insurance company incorporated as a stock insurer; 393 Substitute Bill No. 11
	452	+	LCO No. 641 13 of 39
	453	+
	454	+	91bb to 38a-91uu, inclusive, as amended by this act, and sections 38a-364
	455	+	91ww and 38a-91xx: 365
	456	+	(1) "Affiliated company" means any company in the same corporate 366
	457	+	system as a parent, an industrial insured or a member organization by 367
	458	+	virtue of common ownership, control, operation or management. 368
	459	+	(2) "Agency captive insurance company" means a captive insurance 369
	460	+	company that: 370
	461	+	(A) Is owned or directly or indirectly controlled by one or more 371
	462	+	insurance agents or insurance producers licensed in accordance with 372
	463	+	sections 38a-702a to 38a-702r, inclusive; 373
	464	+	(B) Only insures against risks covered by insurance policies sold, 374
	465	+	solicited or negotiated through the insurance agents or insurance 375
	466	+	producers that own or control such captive insurance company; and 376
	467	+	(C) Does not insure against risks covered by any health insurance 377
	468	+	policy or plan. 378
	469	+	(3) "Alien captive insurance company" means any insurance 379
	470	+	company formed to write insurance business for its parent and affiliated 380
	471	+	companies and licensed pursuant to the laws of an alien jurisdiction that 381
	472	+	imposes statutory or regulatory standards on companies transacting the 382
	473	+	business of insurance in such jurisdiction that the commissioner deems 383
	474	+	to be acceptable. 384
	475	+	(4) "Association" means any legal association of individuals, 385
	476	+	corporations, limited liability companies, partnerships, associations or 386
	477	+	other entities, [that has been in continuous existence for at least one 387
	478	+	year,] where the association itself or some or all of the member 388
	479	+	organizations: 389
	480	+	(A) Directly or indirectly own, control or hold with power to vote all 390
	481	+	of the outstanding voting securities or other voting interests of an 391
	482	+	association captive insurance company incorporated as a stock insurer; 392 Governor's Bill No. 11
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489	485
490		-	(B) Have complete voting control over an association captive 394
491		-	insurance company incorporated as a mutual corporation or formed as 395
492		-	a limited liability company; or 396
493		-	(C) Constitute all of the subscribers of an association captive 397
494		-	insurance company formed as a reciprocal insurer. 398
495		-	(5) "Association captive insurance company" means any company 399
496		-	that insures risks of the member organizations of an association, and 400
497		-	includes a company that also insures risks of such member 401
498		-	organizations' affiliated companies or of the association. 402
499		-	(6) "Branch business" means any insurance business transacted in this 403
500		-	state by a branch captive insurance company. 404
501		-	(7) "Branch captive insurance company" means any alien captive 405
502		-	insurance company or foreign captive insurance company licensed by 406
503		-	the commissioner to transact the business of insurance in this state 407
504		-	through a business unit with a principal place of business in this state. 408
505		-	(8) "Branch operations" means any business operations in this state of 409
506		-	a branch captive insurance company. 410
507		-	(9) "Captive insurance company" means any (A) pure captive 411
508		-	insurance company, agency captive insurance company, association 412
509		-	captive insurance company, industrial insured captive insurance 413
510		-	company, risk retention group, sponsored captive insurance company 414
511		-	or special purpose financial captive insurance company that is 415
512		-	domiciled in this state and formed or licensed under the provisions of 416
513		-	[sections 38a-91aa] this section and sections 38a-91bb to 38a-91tt, 417
514		-	inclusive, as amended by this act, or (B) branch captive insurance 418
515		-	company. 419
516		-	(10) "Ceding insurer" means an insurance company, approved by the 420
517		-	commissioner and licensed or otherwise authorized to transact the 421
518		-	business of insurance or reinsurance in its state or country of domicile, 422
519		-	that cedes risk to a special purpose financial captive insurance company 423 Substitute Bill No. 11
	486	+	LCO No. 641 14 of 39
	487	+
	488	+	(B) Have complete voting control over an association captive 393
	489	+	insurance company incorporated as a mutual corporation or formed as 394
	490	+	a limited liability company; or 395
	491	+	(C) Constitute all of the subscribers of an association captive 396
	492	+	insurance company formed as a reciprocal insurer. 397
	493	+	(5) "Association captive insurance company" means any company 398
	494	+	that insures risks of the member organizations of an association, and 399
	495	+	includes a company that also insures risks of such member 400
	496	+	organizations' affiliated companies or of the association. 401
	497	+	(6) "Branch business" means any insurance business transacted in this 402
	498	+	state by a branch captive insurance company. 403
	499	+	(7) "Branch captive insurance company" means any alien captive 404
	500	+	insurance company or foreign captive insurance company licensed by 405
	501	+	the commissioner to transact the business of insurance in this state 406
	502	+	through a business unit with a principal place of business in this state. 407
	503	+	(8) "Branch operations" means any business operations in this state of 408
	504	+	a branch captive insurance company. 409
	505	+	(9) "Captive insurance company" means any (A) pure captive 410
	506	+	insurance company, agency captive insurance company, association 411
	507	+	captive insurance company, industrial insured captive insurance 412
	508	+	company, risk retention group, sponsored captive insurance company 413
	509	+	or special purpose financial captive insurance company that is 414
	510	+	domiciled in this state and formed or licensed under the provisions of 415
	511	+	[sections 38a-91aa] this section and sections 38a-91bb to 38a-91tt, 416
	512	+	inclusive, as amended by this act, or (B) branch captive insurance 417
	513	+	company. 418
	514	+	(10) "Ceding insurer" means an insurance company, approved by the 419
	515	+	commissioner and licensed or otherwise authorized to transact the 420
	516	+	business of insurance or reinsurance in its state or country of domicile, 421
	517	+	that cedes risk to a special purpose financial captive insurance company 422 Governor's Bill No. 11
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526		-	pursuant to a reinsurance contract. 424
527		-	(11) "Commissioner" means the Insurance Commissioner. 425
528		-	(12) "Controlled unaffiliated business" means any person: 426
529		-	(A) Who, (i) in the case of a pure captive insurance company, is not 427
530		-	in the corporate system of a parent and the parent's affiliated companies, 428
531		-	[or] (ii) in the case of an industrial insured captive insurance company, 429
532		-	is not in the corporate system of an industrial insured and the industrial 430
533		-	insured's affiliated companies, or (iii) in the case of a sponsored captive 431
534		-	insurance company, is not in the corporate system of a participant and 432
535		-	the participant's affiliated companies; 433
536		-	(B) Who, (i) in the case of a pure captive insurance company, has an 434
537		-	existing contractual relationship with a parent or one of the parent's 435
538		-	affiliated companies, [or] (ii) in the case of an industrial insured captive 436
539		-	insurance company, has an existing contractual relationship with an 437
540		-	industrial insured or one of the industrial insured's affiliated companies, 438
541		-	or (iii) in the case of a sponsored captive insurance company, has an 439
542		-	existing contractual relationship with a participant or one of the 440
543		-	participant's affiliated companies; and 441
544		-	(C) Whose risks are managed by a pure captive insurance company, 442
545		-	[or] an industrial insured captive insurance company or a sponsored 443
546		-	captive insurance company, as applicable, in accordance with section 444
547		-	38a-91qq, as amended by this act. 445
548		-	(13) "Excess workers' compensation insurance" means, in the case of 446
549		-	an employer that has insured or self-insured its workers' compensation 447
550		-	risks in accordance with applicable state or federal law, insurance in 448
551		-	excess of a specified per-incident or aggregate limit established by the 449
552		-	commissioner. 450
553		-	(14) "Foreign captive insurance company" means any insurance 451
554		-	company formed to write insurance business for its parent and affiliated 452
555		-	companies and licensed pursuant to the laws of a foreign jurisdiction 453 Substitute Bill No. 11
	521	+	LCO No. 641 15 of 39
	522	+
	523	+	pursuant to a reinsurance contract. 423
	524	+	(11) "Commissioner" means the Insurance Commissioner. 424
	525	+	(12) "Controlled unaffiliated business" means any person: 425
	526	+	(A) Who, (i) in the case of a pure captive insurance company, is not 426
	527	+	in the corporate system of a parent and the parent's affiliated companies, 427
	528	+	[or] (ii) in the case of an industrial insured captive insurance company, 428
	529	+	is not in the corporate system of an industrial insured and the industrial 429
	530	+	insured's affiliated companies, or (iii) in the case of a sponsored captive 430
	531	+	insurance company, is not in the corporate system of a participant and 431
	532	+	the participant's affiliated companies; 432
	533	+	(B) Who, (i) in the case of a pure captive insurance company, has an 433
	534	+	existing contractual relationship with a parent or one of the parent's 434
	535	+	affiliated companies, [or] (ii) in the case of an industrial insured captive 435
	536	+	insurance company, has an existing contractual relationship with an 436
	537	+	industrial insured or one of the industrial insured's affiliated companies, 437
	538	+	or (iii) in the case of a sponsored captive insurance company, has an 438
	539	+	existing contractual relationship with a participant or one of the 439
	540	+	participant's affiliated companies; and 440
	541	+	(C) Whose risks are managed by a pure captive insurance company, 441
	542	+	[or] an industrial insured captive insurance company or a sponsored 442
	543	+	captive insurance company, as applicable, in accordance with section 443
	544	+	38a-91qq, as amended by this act. 444
	545	+	(13) "Excess workers' compensation insurance" means, in the case of 445
	546	+	an employer that has insured or self-insured its workers' compensation 446
	547	+	risks in accordance with applicable state or federal law, insurance in 447
	548	+	excess of a specified per-incident or aggregate limit established by the 448
	549	+	commissioner. 449
	550	+	(14) "Foreign captive insurance company" means any insurance 450
	551	+	company formed to write insurance business for its parent and affiliated 451
	552	+	companies and licensed pursuant to the laws of a foreign jurisdiction 452 Governor's Bill No. 11
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561	555
562		-	that imposes statutory or regulatory standards on companies 454
563		-	transacting the business of insurance in such jurisdiction that the 455
564		-	commissioner deems to be acceptable. 456
565		-	[(14)] (15) "Incorporated protected cell" means a protected cell that is 457
566		-	established as a corporation or a limited liability company, separate 458
567		-	from the sponsored captive insurance company with which it has 459
568		-	entered into a participant contract. 460
569		-	[(15)] (16) "Industrial insured" means an insured: 461
570		-	(A) Who procures the insurance of any risk or risks by use of the 462
571		-	services of a full-time employee acting as an insurance manager or 463
572		-	buyer; 464
573		-	(B) Whose aggregate annual premiums for insurance on all risks total 465
574		-	at least twenty-five thousand dollars; and 466
575		-	(C) Who has at least twenty-five full-time employees. 467
576		-	[(16)] (17) "Industrial insured captive insurance company" means any 468
577		-	company that insures risks of the industrial insureds that comprise an 469
578		-	industrial insured group, and includes a company that also insures risks 470
579		-	of such industrial insureds' affiliated companies. 471
580		-	[(17)] (18) "Industrial insured group" means any group of industrial 472
581		-	insureds that collectively: 473
582		-	(A) Directly or indirectly own, control or hold with power to vote all 474
583		-	of the outstanding voting securities or other voting interests of an 475
584		-	industrial insured captive insurance company incorporated as a stock 476
585		-	insurer; 477
586		-	(B) Have complete voting control over an industrial insured captive 478
587		-	insurance company incorporated as a mutual corporation or formed as 479
588		-	a limited liability company; or 480
589		-	(C) Constitute all of the subscribers of an industrial insured captive 481 Substitute Bill No. 11
	556	+	LCO No. 641 16 of 39
	557	+
	558	+	that imposes statutory or regulatory standards on companies 453
	559	+	transacting the business of insurance in such jurisdiction that the 454
	560	+	commissioner deems to be acceptable. 455
	561	+	[(14)] (15) "Incorporated protected cell" means a protected cell that is 456
	562	+	established as a corporation or a limited liability company, separate 457
	563	+	from the sponsored captive insurance company with which it has 458
	564	+	entered into a participant contract. 459
	565	+	[(15)] (16) "Industrial insured" means an insured: 460
	566	+	(A) Who procures the insurance of any risk or risks by use of the 461
	567	+	services of a full-time employee acting as an insurance manager or 462
	568	+	buyer; 463
	569	+	(B) Whose aggregate annual premiums for insurance on all risks total 464
	570	+	at least twenty-five thousand dollars; and 465
	571	+	(C) Who has at least twenty-five full-time employees. 466
	572	+	[(16)] (17) "Industrial insured captive insurance company" means any 467
	573	+	company that insures risks of the industrial insureds that comprise an 468
	574	+	industrial insured group, and includes a company that also insures risks 469
	575	+	of such industrial insureds' affiliated companies. 470
	576	+	[(17)] (18) "Industrial insured group" means any group of industrial 471
	577	+	insureds that collectively: 472
	578	+	(A) Directly or indirectly own, control or hold with power to vote all 473
	579	+	of the outstanding voting securities or other voting interests of an 474
	580	+	industrial insured captive insurance company incorporated as a stock 475
	581	+	insurer; 476
	582	+	(B) Have complete voting control over an industrial insured captive 477
	583	+	insurance company incorporated as a mutual corporation or formed as 478
	584	+	a limited liability company; or 479
	585	+	(C) Constitute all of the subscribers of an industrial insured captive 480 Governor's Bill No. 11
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595	588
596		-	insurance company formed as a reciprocal insurer. 482
597		-	[(18)] (19) "Insurance securitization" or "securitization" means a 483
598		-	transaction or a group of related transactions, which may include capital 484
599		-	market offerings, that are effected through related risk transfer 485
600		-	instruments and facilitating administrative agreements, in which all or 486
601		-	part of the result of such transaction is used to fund a special purpose 487
602		-	financial captive insurance company's obligations under a reinsurance 488
603		-	contract with a ceding insurer and by which: 489
604		-	(A) A special purpose financial captive insurance company directly 490
605		-	or indirectly obtains proceeds through the issuance of securities by such 491
606		-	company or any other person; or 492
607		-	(B) A person provides, for the benefit of a special purpose financial 493
608		-	captive insurance company, one or more letters of credit or other assets 494
609		-	that the commissioner has authorized such company to treat as 495
610		-	admitted assets for purposes of its annual report. "Insurance 496
611		-	securitization" or "securitization" does not include the issuance of a 497
612		-	letter of credit for the benefit of the commissioner to satisfy all or part of 498
613		-	a special purpose financial captive insurance company's capital and 499
614		-	surplus requirements under section 38a-91dd, as amended by this act. 500
615		-	[(19)] (20) "Member organization" means any individual, corporation, 501
616		-	limited liability company, partnership, association or other entity that 502
617		-	belongs to an association. 503
618		-	[(20)] (21) "Mutual corporation" means a corporation organized 504
619		-	without stockholders and includes a nonprofit corporation with 505
620		-	members. 506
621		-	[(21)] (22) "Parent" means any individual, corporation, limited 507
622		-	liability company, partnership or other entity that directly or indirectly 508
623		-	owns, controls or holds with power to vote more than fifty per cent of 509
624		-	the outstanding voting: 510
625		-	(A) Securities of a pure captive insurance company organized as a 511 Substitute Bill No. 11
	589	+	LCO No. 641 17 of 39
	590	+
	591	+	insurance company formed as a reciprocal insurer. 481
	592	+	[(18)] (19) "Insurance securitization" or "securitization" means a 482
	593	+	transaction or a group of related transactions, which may include capital 483
	594	+	market offerings, that are effected through related risk transfer 484
	595	+	instruments and facilitating administrative agreements, in which all or 485
	596	+	part of the result of such transaction is used to fund a special purpose 486
	597	+	financial captive insurance company's obligations under a reinsurance 487
	598	+	contract with a ceding insurer and by which: 488
	599	+	(A) A special purpose financial captive insurance company directly 489
	600	+	or indirectly obtains proceeds through the issuance of securities by such 490
	601	+	company or any other person; or 491
	602	+	(B) A person provides, for the benefit of a special purpose financial 492
	603	+	captive insurance company, one or more letters of credit or other assets 493
	604	+	that the commissioner has authorized such company to treat as 494
	605	+	admitted assets for purposes of its annual report. "Insurance 495
	606	+	securitization" or "securitization" does not include the issuance of a 496
	607	+	letter of credit for the benefit of the commissioner to satisfy all or part of 497
	608	+	a special purpose financial captive insurance company's capital and 498
	609	+	surplus requirements under section 38a-91dd, as amended by this act. 499
	610	+	[(19)] (20) "Member organization" means any individual, corporation, 500
	611	+	limited liability company, partnership, association or other entity that 501
	612	+	belongs to an association. 502
	613	+	[(20)] (21) "Mutual corporation" means a corporation organized 503
	614	+	without stockholders and includes a nonprofit corporation with 504
	615	+	members. 505
	616	+	[(21)] (22) "Parent" means any individual, corporation, limited 506
	617	+	liability company, partnership or other entity that directly or indirectly 507
	618	+	owns, controls or holds with power to vote more than fifty per cent of 508
	619	+	the outstanding voting: 509
	620	+	(A) Securities of a pure captive insurance company organized as a 510 Governor's Bill No. 11
626	621
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631	623
632		-	stock insurer; or 512
633		-	(B) Membership interests of a pure captive insurance company 513
634		-	organized as a nonprofit corporation or as a limited liability company. 514
635		-	[(22)] (23) "Participant" means any association, corporation, limited 515
636		-	liability company, partnership, trust or other entity, and any affiliated 516
637		-	company or controlled unaffiliated business thereof, that is insured by 517
638		-	a sponsored captive insurance company pursuant to a participant 518
639		-	contract. 519
640		-	[(23)] (24) "Participant contract" means a contract entered into by a 520
641		-	sponsored captive insurance company and a participant by which the 521
642		-	sponsored captive insurance company insures the risks of the 522
643		-	participant and limits the losses of each such participant to its pro rata 523
644		-	share of the assets of one or more protected cells identified in such 524
645		-	participant contract. 525
646		-	[(24)] (25) "Protected cell" means a separate account established by a 526
647		-	sponsored captive insurance company, in which assets are maintained 527
648		-	for one or more participants in accordance with the terms of one or more 528
649		-	participant contracts to fund the liability of the sponsored captive 529
650		-	insurance company assumed on behalf of such participants as set forth 530
651		-	in such participant contracts. 531
652		-	[(25)] (26) "Pure captive insurance company" means any company 532
653		-	that insures risks of its parent and affiliated companies or controlled 533
654		-	unaffiliated business. 534
655		-	[(26)] (27) "Reinsurance contract" means a contract entered into by a 535
656		-	special purpose financial captive insurance company and a ceding 536
657		-	insurer by which the special purpose financial captive insurance 537
658		-	company agrees to provide reinsurance to the ceding insurer for risks 538
659		-	associated with the ceding insurer's insurance or reinsurance business. 539
660		-	[(27)] (28) "Risk retention group" means a captive insurance company 540
661		-	organized under the laws of this state pursuant to the federal Liability 541 Substitute Bill No. 11
	624	+	LCO No. 641 18 of 39
	625	+
	626	+	stock insurer; or 511
	627	+	(B) Membership interests of a pure captive insurance company 512
	628	+	organized as a nonprofit corporation or as a limited liability company. 513
	629	+	[(22)] (23) "Participant" means any association, corporation, limited 514
	630	+	liability company, partnership, trust or other entity, and any affiliated 515
	631	+	company or controlled unaffiliated business thereof, that is insured by 516
	632	+	a sponsored captive insurance company pursuant to a participant 517
	633	+	contract. 518
	634	+	[(23)] (24) "Participant contract" means a contract entered into by a 519
	635	+	sponsored captive insurance company and a participant by which the 520
	636	+	sponsored captive insurance company insures the risks of the 521
	637	+	participant and limits the losses of each such participant to its pro rata 522
	638	+	share of the assets of one or more protected cells identified in such 523
	639	+	participant contract. 524
	640	+	[(24)] (25) "Protected cell" means a separate account established by a 525
	641	+	sponsored captive insurance company, in which assets are maintained 526
	642	+	for one or more participants in accordance with the terms of one or more 527
	643	+	participant contracts to fund the liability of the sponsored captive 528
	644	+	insurance company assumed on behalf of such participants as set forth 529
	645	+	in such participant contracts. 530
	646	+	[(25)] (26) "Pure captive insurance company" means any company 531
	647	+	that insures risks of its parent and affiliated companies or controlled 532
	648	+	unaffiliated business. 533
	649	+	[(26)] (27) "Reinsurance contract" means a contract entered into by a 534
	650	+	special purpose financial captive insurance company and a ceding 535
	651	+	insurer by which the special purpose financial captive insurance 536
	652	+	company agrees to provide reinsurance to the ceding insurer for risks 537
	653	+	associated with the ceding insurer's insurance or reinsurance business. 538
	654	+	[(27)] (28) "Risk retention group" means a captive insurance company 539
	655	+	organized under the laws of this state pursuant to the federal Liability 540 Governor's Bill No. 11
662	656
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667	658
668		-	Risk Retention Act of 1986, 15 USC 3901 et seq., as amended from time 542
669		-	to time, as a stock insurer or mutual corporation, a reciprocal or other 543
670		-	limited liability entity. 544
671		-	[(28)] (29) "Security" has the same meaning as provided in section 545
672		-	36b-3 and includes any form of debt obligation, equity, surplus 546
673		-	certificate, surplus note, funding agreement, derivative or other 547
674		-	financial instrument that the commissioner designates as a security for 548
675		-	purposes of [sections 38a-91aa] this section and sections 38a-91bb to 38a-549
676		-	91tt, inclusive, as amended by this act. 550
677		-	[(29)] (30) "Special purpose financial captive insurance company" 551
678		-	means a company that is licensed by the commissioner in accordance 552
679		-	with section 38a-91bb, as amended by this act. 553
680		-	[(30)] (31) "Special purpose financial captive insurance company 554
681		-	security" means a security issued by (A) a special purpose financial 555
682		-	captive insurance company, or (B) a third party, the proceeds of which 556
683		-	are obtained directly or indirectly by a special purpose financial captive 557
684		-	insurance company. 558
685		-	[(31)] (32) "Sponsor" means any association, corporation, limited 559
686		-	liability company, partnership, trust or other entity that is approved by 560
687		-	the commissioner to organize and operate a sponsored captive 561
688		-	insurance company and to provide all or part of the required 562
689		-	unimpaired paid-in capital and surplus. 563
690		-	[(32)] (33) "Sponsored captive insurance company" means a captive 564
691		-	insurance company: 565
692		-	(A) In which the minimum required unimpaired paid-in capital and 566
693		-	surplus are provided by one or more sponsors; 567
694		-	(B) That insures risks of its participants only through separate 568
695		-	participant contracts; and 569
696		-	(C) That funds its liability to each participant through one or more 570 Substitute Bill No. 11
	659	+	LCO No. 641 19 of 39
	660	+
	661	+	Risk Retention Act of 1986, 15 USC 3901 et seq., as amended from time 541
	662	+	to time, as a stock insurer or mutual corporation, a reciprocal or other 542
	663	+	limited liability entity. 543
	664	+	[(28)] (29) "Security" has the same meaning as provided in section 544
	665	+	36b-3 and includes any form of debt obligation, equity, surplus 545
	666	+	certificate, surplus note, funding agreement, derivative or other 546
	667	+	financial instrument that the commissioner designates as a security for 547
	668	+	purposes of [sections 38a-91aa] this section and sections 38a-91bb to 38a-548
	669	+	91tt, inclusive, as amended by this act. 549
	670	+	[(29)] (30) "Special purpose financial captive insurance company" 550
	671	+	means a company that is licensed by the commissioner in accordance 551
	672	+	with section 38a-91bb, as amended by this act. 552
	673	+	[(30)] (31) "Special purpose financial captive insurance company 553
	674	+	security" means a security issued by (A) a special purpose financial 554
	675	+	captive insurance company, or (B) a third party, the proceeds of which 555
	676	+	are obtained directly or indirectly by a special purpose financial captive 556
	677	+	insurance company. 557
	678	+	[(31)] (32) "Sponsor" means any association, corporation, limited 558
	679	+	liability company, partnership, trust or other entity that is approved by 559
	680	+	the commissioner to organize and operate a sponsored captive 560
	681	+	insurance company and to provide all or part of the required 561
	682	+	unimpaired paid-in capital and surplus. 562
	683	+	[(32)] (33) "Sponsored captive insurance company" means a captive 563
	684	+	insurance company: 564
	685	+	(A) In which the minimum required unimpaired paid-in capital and 565
	686	+	surplus are provided by one or more sponsors; 566
	687	+	(B) That insures risks of its participants only through separate 567
	688	+	participant contracts; and 568
	689	+	(C) That funds its liability to each participant through one or more 569
	690	+	protected cells and segregates the assets of each protected cell from the 570 Governor's Bill No. 11
697	691
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702	693
703		-	protected cells and segregates the assets of each protected cell from the 571
704		-	assets of other protected cells and from the assets of the sponsored 572
705		-	captive insurance company's general account. 573
706		-	[(33)] (34) "Surplus note" means an unsecured subordinated debt 574
707		-	obligation possessing characteristics consistent with the National 575
708		-	Association of Insurance Commissioners Statement of Statutory 576
709		-	Accounting Principles No. 41, as amended from time to time, and as 577
710		-	modified or supplemented by the commissioner. 578
711		-	Sec. 7. (Effective July 1, 2022) (a) As used in this section, "alien captive 579
712		-	insurance company", "branch captive insurance company" and "foreign 580
713		-	captive insurance company" have the same meanings as provided in 581
714		-	section 38a-91aa of the general statutes, as amended by this act. 582
715		-	(b) The Commissioner of Revenue Services shall waive any and all 583
716		-	penalties that would otherwise be due under section 38a-277 of the 584
717		-	general statutes for any taxable period beginning on or after July 1, 2019, 585
718		-	and ending prior to July 1, 2022, if, not later than June 30, 2023, the 586
719		-	insured: 587
720		-	(1) Establishes a branch captive insurance company in this state or 588
721		-	transfers the domicile of its alien captive insurance company or foreign 589
722		-	captive insurance company to this state in accordance with the 590
723		-	provisions of section 38a-58a of the general statutes; and 591
724		-	(2) Pays all taxes and interest due and outstanding under section 38a-592
725		-	277 of the general statutes for all taxable periods ending on or after July 593
726		-	1, 2019, but prior to July 1, 2022. 594
727		-	(c) Any insured that satisfies the provisions of subsection (b) of this 595
728		-	section shall not be liable for any taxes, interest and penalties that would 596
729		-	otherwise be due under section 38a-277 of the general statutes for any 597
730		-	taxable period ending prior to July 1, 2019. 598
731		-	Sec. 8. Section 38a-91bb of the general statutes is repealed and the 599
732		-	following is substituted in lieu thereof (Effective July 1, 2022): 600 Substitute Bill No. 11
	694	+	LCO No. 641 20 of 39
	695	+
	696	+	assets of other protected cells and from the assets of the sponsored 571
	697	+	captive insurance company's general account. 572
	698	+	[(33)] (34) "Surplus note" means an unsecured subordinated debt 573
	699	+	obligation possessing characteristics consistent with the National 574
	700	+	Association of Insurance Commissioners Statement of Statutory 575
	701	+	Accounting Principles No. 41, as amended from time to time, and as 576
	702	+	modified or supplemented by the commissioner. 577
	703	+	Sec. 7. (Effective July 1, 2022) (a) As used in this section, "alien captive 578
	704	+	insurance company", "branch captive insurance company" and "foreign 579
	705	+	captive insurance company" have the same meanings as provided in 580
	706	+	section 38a-91aa of the general statutes, as amended by this act. 581
	707	+	(b) The Commissioner of Revenue Services shall waive any and all 582
	708	+	penalties that would otherwise be due under section 38a-277 of the 583
	709	+	general statutes for any taxable period beginning on or after July 1, 2019, 584
	710	+	and ending prior to July 1, 2022, if, not later than June 30, 2023, the 585
	711	+	insured: 586
	712	+	(1) Establishes a branch captive insurance company in this state or 587
	713	+	transfers the domicile of its alien captive insurance company or foreign 588
	714	+	captive insurance company to this state in accordance with the 589
	715	+	provisions of section 38a-58a of the general statutes; and 590
	716	+	(2) Pays all taxes and interest due and outstanding under section 38a-591
	717	+	277 of the general statutes for all taxable periods ending on or after July 592
	718	+	1, 2019, but prior to July 1, 2022. 593
	719	+	(c) Any insured that satisfies the provisions of subsection (b) of this 594
	720	+	section shall not be liable for any taxes, interest and penalties that would 595
	721	+	otherwise be due under section 38a-277 of the general statutes for any 596
	722	+	taxable period ending prior to July 1, 2019. 597
	723	+	Sec. 8. Section 38a-91bb of the general statutes is repealed and the 598
	724	+	following is substituted in lieu thereof (Effective July 1, 2022): 599
	725	+	(a) Any captive insurance company, when permitted by its articles of 600 Governor's Bill No. 11
733	726
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738	728
739		-	(a) Any captive insurance company, when permitted by its articles of 601
740		-	association, charter or other organizational document, may apply to the 602
741		-	[Insurance Commissioner] commissioner for a license to do the business 603
742		-	of insurance against any kind of loss, damage or liability properly a 604
743		-	subject of insurance, if such insurance is not prohibited by law or [is not] 605
744		-	disapproved by the commissioner as being contrary to public policy, 606
745		-	including life insurance, annuities, health insurance, as defined in 607
746		-	section 38a-469, and commercial risk insurance, as defined in section 608
747		-	38a-663, provided: 609
748		-	(1) No pure captive insurance company may insure any risks other 610
749		-	than those of its parent and affiliated companies or controlled 611
750		-	unaffiliated business; 612
751		-	(2) No association captive insurance company may insure any risks 613
752		-	other than those of its association, the member organizations of its 614
753		-	association, and the member organizations' affiliated companies; 615
754		-	(3) No industrial insured captive insurance company may insure any 616
755		-	risks other than those of (A) the industrial insureds that comprise the 617
756		-	industrial insured group, (B) the industrial insureds' affiliated 618
757		-	companies, or (C) the industrial insureds' controlled unaffiliated 619
758		-	businesses; 620
759		-	(4) No risk retention group may insure any risks other than those of 621
760		-	its members and owners; 622
761		-	(5) No captive insurance company may provide personal risk 623
762		-	insurance, as defined in section 38a-663, for private passenger motor 624
763		-	vehicle or homeowners insurance coverage or any component thereof; 625
764		-	(6) No captive insurance company may accept or cede reinsurance 626
765		-	except as provided in section 38a-91kk, as amended by this act; 627
766		-	(7) Any captive insurance company may provide excess workers' 628
767		-	compensation insurance to its parent and affiliated companies, unless 629
768		-	prohibited by the laws of the state having jurisdiction over the 630 Substitute Bill No. 11
	729	+	LCO No. 641 21 of 39
	730	+
	731	+	association, charter or other organizational document, may apply to the 601
	732	+	[Insurance Commissioner] commissioner for a license to do the business 602
	733	+	of insurance against any kind of loss, damage or liability properly a 603
	734	+	subject of insurance, if such insurance is not prohibited by law or [is not] 604
	735	+	disapproved by the commissioner as being contrary to public policy, 605
	736	+	including life insurance, annuities, health insurance, as defined in 606
	737	+	section 38a-469, and commercial risk insurance, as defined in section 607
	738	+	38a-663, provided: 608
	739	+	(1) No pure captive insurance company may insure any risks other 609
	740	+	than those of its parent and affiliated companies or controlled 610
	741	+	unaffiliated business; 611
	742	+	(2) No association captive insurance company may insure any risks 612
	743	+	other than those of its association, the member organizations of its 613
	744	+	association, and the member organizations' affiliated companies; 614
	745	+	(3) No industrial insured captive insurance company may insure any 615
	746	+	risks other than those of (A) the industrial insureds that comprise the 616
	747	+	industrial insured group, (B) the industrial insureds' affiliated 617
	748	+	companies, or (C) the industrial insureds' controlled unaffiliated 618
	749	+	businesses; 619
	750	+	(4) No risk retention group may insure any risks other than those of 620
	751	+	its members and owners; 621
	752	+	(5) No captive insurance company may provide personal risk 622
	753	+	insurance, as defined in section 38a-663, for private passenger motor 623
	754	+	vehicle or homeowners insurance coverage or any component thereof; 624
	755	+	(6) No captive insurance company may accept or cede reinsurance 625
	756	+	except as provided in section 38a-91kk, as amended by this act; 626
	757	+	(7) Any captive insurance company may provide excess workers' 627
	758	+	compensation insurance to its parent and affiliated companies, unless 628
	759	+	prohibited by the laws of the state having jurisdiction over the 629
	760	+	transaction or by federal law. Any captive insurance company may 630 Governor's Bill No. 11
769	761
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774	763
775		-	transaction or by federal law. Any captive insurance company may 631
776		-	reinsure a workers' compensation qualified self-insured plan of its 632
777		-	parent and affiliated companies, unless prohibited by federal law; 633
778		-	(8) Any captive insurance company that provides life insurance, 634
779		-	annuities or health insurance shall comply with all applicable state and 635
780		-	federal laws. 636
781		-	(b) No captive insurance company shall do any insurance business in 637
782		-	this state unless: 638
783		-	(1) [It] The captive insurance company first obtains from the 639
784		-	[Insurance Commissioner] commissioner a license authorizing [it] the 640
785		-	captive insurance company to do insurance business in this state; 641
786		-	(2) [Its] The captive insurance company's board of directors or 642
787		-	committee of managers or, in the case of a reciprocal insurer, its 643
788		-	subscribers' advisory committee holds at least one meeting each year in 644
789		-	this state; 645
790		-	(3) [It] The captive insurance company maintains its principal place 646
791		-	of business in this state; and 647
792		-	(4) [It] The captive insurance company appoints a registered agent to 648
793		-	accept service of process and to otherwise act on its behalf in this state. 649
794		-	Whenever such registered agent cannot with reasonable diligence be 650
795		-	found at the registered office of the captive insurance company, the 651
796		-	[Insurance Commissioner] commissioner shall be an agent of [such] the 652
797		-	captive insurance company upon whom any process, notice or demand 653
798		-	may be served. 654
799		-	(c) (1) To be considered for a license, a captive insurance company 655
800		-	shall: 656
801		-	(A) File with the commissioner a certified copy of its organizational 657
802		-	documents, a statement under oath of its president and secretary 658
803		-	showing its financial condition, and any other statements or documents 659 Substitute Bill No. 11
	764	+	LCO No. 641 22 of 39
	765	+
	766	+	reinsure a workers' compensation qualified self-insured plan of its 631
	767	+	parent and affiliated companies, unless prohibited by federal law; 632
	768	+	(8) Any captive insurance company that provides life insurance, 633
	769	+	annuities or health insurance shall comply with all applicable state and 634
	770	+	federal laws. 635
	771	+	(b) No captive insurance company shall do any insurance business in 636
	772	+	this state unless: 637
	773	+	(1) [It] The captive insurance company first obtains from the 638
	774	+	[Insurance Commissioner] commissioner a license authorizing [it] the 639
	775	+	captive insurance company to do insurance business in this state; 640
	776	+	(2) [Its] The captive insurance company's board of directors or 641
	777	+	committee of managers or, in the case of a reciprocal insurer, its 642
	778	+	subscribers' advisory committee holds at least one meeting each year in 643
	779	+	this state; 644
	780	+	(3) [It] The captive insurance company maintains its principal place 645
	781	+	of business in this state; and 646
	782	+	(4) [It] The captive insurance company appoints a registered agent to 647
	783	+	accept service of process and to otherwise act on its behalf in this state. 648
	784	+	Whenever such registered agent cannot with reasonable diligence be 649
	785	+	found at the registered office of the captive insurance company, the 650
	786	+	[Insurance Commissioner] commissioner shall be an agent of [such] the 651
	787	+	captive insurance company upon whom any process, notice or demand 652
	788	+	may be served. 653
	789	+	(c) (1) To be considered for a license, a captive insurance company 654
	790	+	shall: 655
	791	+	(A) File with the commissioner a certified copy of its organizational 656
	792	+	documents, a statement under oath of its president and secretary 657
	793	+	showing its financial condition, and any other statements or documents 658
	794	+	required by the commissioner; and 659 Governor's Bill No. 11
804	795
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809	797
810		-	required by the commissioner; and 660
811		-	(B) Submit to the commissioner for approval a description of the 661
812		-	coverages, deductibles, coverage limits and rates and such additional 662
813		-	information as the commissioner may require. In the event of any 663
814		-	subsequent material change in any item in such description, the captive 664
815		-	insurance company shall submit to the commissioner for approval an 665
816		-	appropriate revision and shall not offer any additional kinds of 666
817		-	insurance until a revision of such description is approved by the 667
818		-	commissioner. The captive insurance company shall inform the 668
819		-	commissioner of any material change in rates not later than thirty days 669
820		-	after the adoption of such change. 670
821		-	(2) Each applicant captive insurance company shall also file with the 671
822		-	commissioner evidence of the following: 672
823		-	(A) The amount and liquidity of the company's assets relative to the 673
824		-	risks to be assumed; 674
825		-	(B) The adequacy of the expertise, experience and character of the 675
826		-	persons who will manage the company; 676
827		-	(C) The overall soundness of the company's plan of operation; 677
828		-	(D) The adequacy of the loss prevention programs of the company's 678
829		-	insureds; and 679
830		-	(E) Such other factors deemed relevant by the commissioner in 680
831		-	ascertaining whether the proposed captive insurance company will be 681
832		-	able to meet its policy obligations. 682
833		-	(3) Each applicant sponsored captive insurance company shall also 683
834		-	file with the commissioner: 684
835		-	(A) Materials demonstrating how the applicant will account for the 685
836		-	loss and expense experience of each protected cell at a level of detail 686
837		-	deemed sufficient by the commissioner, and how [it] such applicant will 687 Substitute Bill No. 11
	798	+	LCO No. 641 23 of 39
	799	+
	800	+	(B) Submit to the commissioner for approval a description of the 660
	801	+	coverages, deductibles, coverage limits and rates and such additional 661
	802	+	information as the commissioner may require. In the event of any 662
	803	+	subsequent material change in any item in such description, the captive 663
	804	+	insurance company shall submit to the commissioner for approval an 664
	805	+	appropriate revision and shall not offer any additional kinds of 665
	806	+	insurance until a revision of such description is approved by the 666
	807	+	commissioner. The captive insurance company shall inform the 667
	808	+	commissioner of any material change in rates not later than thirty days 668
	809	+	after the adoption of such change. 669
	810	+	(2) Each applicant captive insurance company shall also file with the 670
	811	+	commissioner evidence of the following: 671
	812	+	(A) The amount and liquidity of the company's assets relative to the 672
	813	+	risks to be assumed; 673
	814	+	(B) The adequacy of the expertise, experience and character of the 674
	815	+	persons who will manage the company; 675
	816	+	(C) The overall soundness of the company's plan of operation; 676
	817	+	(D) The adequacy of the loss prevention programs of the company's 677
	818	+	insureds; and 678
	819	+	(E) Such other factors deemed relevant by the commissioner in 679
	820	+	ascertaining whether the proposed captive insurance company will be 680
	821	+	able to meet its policy obligations. 681
	822	+	(3) Each applicant sponsored captive insurance company shall also 682
	823	+	file with the commissioner: 683
	824	+	(A) Materials demonstrating how the applicant will account for the 684
	825	+	loss and expense experience of each protected cell at a level of detail 685
	826	+	deemed sufficient by the commissioner, and how [it] such applicant will 686
	827	+	report such experience to the commissioner; 687
	828	+	(B) A statement acknowledging that all financial records of the 688 Governor's Bill No. 11
838	829
839	830
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843	831
844		-	report such experience to the commissioner; 688
845		-	(B) A statement acknowledging that all financial records of the 689
846		-	sponsored captive insurance company, including records pertaining to 690
847		-	any protected cells, shall be made available for examination or 691
848		-	inspection or by the commissioner or the commissioner's designee; 692
849		-	(C) All contracts or sample contracts between the sponsored captive 693
850		-	insurance company and any participants; and 694
851		-	(D) Evidence that expenses shall be allocated to each protected cell in 695
852		-	a fair and equitable manner. 696
853		-	(4) Each applicant special purpose financial captive insurance 697
854		-	company shall also: 698
855		-	(A) Include with its plan of operation: 699
856		-	(i) A complete description of all significant transactions, including 700
857		-	reinsurance, reinsurance security arrangements, securitizations, related 701
858		-	transactions or arrangements, and to the extent not included in the 702
859		-	transactions listed in this clause, a complete description of all parties 703
860		-	other than the special purpose financial captive insurance company and 704
861		-	the ceding insurer that will be involved in the issuance of special 705
862		-	purpose financial captive insurance company securities and a 706
863		-	description of any pledge, hypothecation or grant of a security interest 707
864		-	in any of the special purpose financial captive insurance company's 708
865		-	assets and in any stock or limited liability company interest in the 709
866		-	special purpose financial captive insurance company; 710
867		-	(ii) The source and form of the special purpose financial captive 711
868		-	insurance company's capital and surplus; 712
869		-	(iii) The proposed investment policy of the special purpose financial 713
870		-	captive insurance company; 714
871		-	(iv) A description of the underwriting, reporting and claims payment 715 Substitute Bill No. 11
	832	+	LCO No. 641 24 of 39
	833	+
	834	+	sponsored captive insurance company, including records pertaining to 689
	835	+	any protected cells, shall be made available for examination or 690
	836	+	inspection or by the commissioner or the commissioner's designee; 691
	837	+	(C) All contracts or sample contracts between the sponsored captive 692
	838	+	insurance company and any participants; and 693
	839	+	(D) Evidence that expenses shall be allocated to each protected cell in 694
	840	+	a fair and equitable manner. 695
	841	+	(4) Each applicant special purpose financial captive insurance 696
	842	+	company shall also: 697
	843	+	(A) Include with its plan of operation: 698
	844	+	(i) A complete description of all significant transactions, including 699
	845	+	reinsurance, reinsurance security arrangements, securitizations, related 700
	846	+	transactions or arrangements, and to the extent not included in the 701
	847	+	transactions listed in this clause, a complete description of all parties 702
	848	+	other than the special purpose financial captive insurance company and 703
	849	+	the ceding insurer that will be involved in the issuance of special 704
	850	+	purpose financial captive insurance company securities and a 705
	851	+	description of any pledge, hypothecation or grant of a security interest 706
	852	+	in any of the special purpose financial captive insurance company's 707
	853	+	assets and in any stock or limited liability company interest in the 708
	854	+	special purpose financial captive insurance company; 709
	855	+	(ii) The source and form of the special purpose financial captive 710
	856	+	insurance company's capital and surplus; 711
	857	+	(iii) The proposed investment policy of the special purpose financial 712
	858	+	captive insurance company; 713
	859	+	(iv) A description of the underwriting, reporting and claims payment 714
	860	+	methods by which losses covered by the reinsurance contract will be 715
	861	+	reported, accounted for and settled; 716
	862	+	(v) Pro forma balance sheets and income statements illustrating one 717 Governor's Bill No. 11
872	863
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877	865
878		-	methods by which losses covered by the reinsurance contract will be 716
879		-	reported, accounted for and settled; 717
880		-	(v) Pro forma balance sheets and income statements illustrating one 718
881		-	or more adverse case scenarios, as determined under criteria required 719
882		-	by the commissioner, for the performance of the special purpose 720
883		-	financial captive insurance company under all reinsurance contracts; 721
884		-	and 722
885		-	(vi) The proposed rate and method for discounting reserves, if the 723
886		-	special purpose financial captive insurance company is requesting 724
887		-	authority to discount its reserves; 725
888		-	(B) Submit an affidavit of its president, a vice president, its treasurer 726
889		-	or its chief financial officer that includes the following statements, that 727
890		-	to the best of such person's knowledge and belief after reasonable 728
891		-	inquiry: 729
892		-	(i) The proposed organization and operation of the special purpose 730
893		-	financial captive insurance company comply with all applicable 731
894		-	provisions of this chapter; 732
895		-	(ii) The special purpose financial captive insurance company's 733
896		-	investment policy reflects and takes into account the liquidity of assets 734
897		-	and the reasonable preservation, administration and management of 735
898		-	such assets with respect to the risks associated with the reinsurance 736
899		-	contract and the insurance securitization transaction. With respect to a 737
900		-	special purpose financial captive insurance company, "management" 738
901		-	means the board of directors, managing board or other individual or 739
902		-	individuals vested with overall responsibility for the management of the 740
903		-	affairs of such company, including, but not limited to, officers or other 741
904		-	agents elected or appointed to act on behalf of such company; and 742
905		-	(iii) The reinsurance contract and any arrangement for securing the 743
906		-	special purpose financial captive insurance company's obligations 744
907		-	under such reinsurance contract, including, but not limited to, any 745
908		-	agreements or other documentation to implement such arrangement, 746 Substitute Bill No. 11
	866	+	LCO No. 641 25 of 39
	867	+
	868	+	or more adverse case scenarios, as determined under criteria required 718
	869	+	by the commissioner, for the performance of the special purpose 719
	870	+	financial captive insurance company under all reinsurance contracts; 720
	871	+	and 721
	872	+	(vi) The proposed rate and method for discounting reserves, if the 722
	873	+	special purpose financial captive insurance company is requesting 723
	874	+	authority to discount its reserves; 724
	875	+	(B) Submit an affidavit of its president, a vice president, its treasurer 725
	876	+	or its chief financial officer that includes the following statements, that 726
	877	+	to the best of such person's knowledge and belief after reasonable 727
	878	+	inquiry: 728
	879	+	(i) The proposed organization and operation of the special purpose 729
	880	+	financial captive insurance company comply with all applicable 730
	881	+	provisions of this chapter; 731
	882	+	(ii) The special purpose financial captive insurance company's 732
	883	+	investment policy reflects and takes into account the liquidity of assets 733
	884	+	and the reasonable preservation, administration and management of 734
	885	+	such assets with respect to the risks associated with the reinsurance 735
	886	+	contract and the insurance securitization transaction. With respect to a 736
	887	+	special purpose financial captive insurance company, "management" 737
	888	+	means the board of directors, managing board or other individual or 738
	889	+	individuals vested with overall responsibility for the management of the 739
	890	+	affairs of such company, including, but not limited to, officers or other 740
	891	+	agents elected or appointed to act on behalf of such company; and 741
	892	+	(iii) The reinsurance contract and any arrangement for securing the 742
	893	+	special purpose financial captive insurance company's obligations 743
	894	+	under such reinsurance contract, including, but not limited to, any 744
	895	+	agreements or other documentation to implement such arrangement, 745
	896	+	comply with the provisions of this chapter; and 746
	897	+	(C) Include with its application: 747 Governor's Bill No. 11
909	898
910	899
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913		-	26 of 39
914	900
915		-	comply with the provisions of this chapter; and 747
916		-	(C) Include with its application: 748
917		-	(i) Copies of all agreements and documentation described in 749
918		-	subparagraph (A) of this subdivision unless otherwise approved by the 750
919		-	commissioner, and any other statements or documents required by the 751
920		-	commissioner to evaluate the special purpose financial captive 752
921		-	insurance company's application for licensure; and 753
922		-	(ii) An opinion of qualified legal counsel, in a form acceptable to the 754
923		-	commissioner, that the offer and sale of any special purpose financial 755
924		-	captive insurance company securities complies with all applicable 756
925		-	registration requirements or applicable exemptions from or exceptions 757
926		-	to such requirements of the federal securities laws and that the offer and 758
927		-	sale of securities by the special purpose financial captive insurance 759
928		-	company itself comply with all registration requirements or applicable 760
929		-	exemptions from or exceptions to such requirements of the securities 761
930		-	laws of this state. Such opinion shall not be required as part of the 762
931		-	application if the special purpose financial captive insurance company 763
932		-	includes a specific statement in its plan of operation that such opinions 764
933		-	will be provided to the commissioner in advance of the offer or sale of 765
934		-	any special purpose financial captive insurance company securities. 766
935		-	(5) A sponsored captive insurance company may apply to be licensed 767
936		-	as a special purpose financial captive insurance company. Such 768
937		-	company shall be subject to the provisions of sections 38a-91aa to 38a-769
938		-	91tt, inclusive, as amended by this act, applicable to a sponsored captive 770
939		-	insurance company and to a special purpose financial captive insurance 771
940		-	company. In the event of conflict between such provisions applicable to 772
941		-	a sponsored captive insurance company and to a special purpose 773
942		-	financial captive insurance company, the provisions applicable to a 774
943		-	special purpose financial captive insurance company shall control. 775
944		-	(6) Information submitted pursuant to this subsection shall be and 776
945		-	shall remain confidential and shall not be made public by the 777 Substitute Bill No. 11
	901	+	LCO No. 641 26 of 39
	902	+
	903	+	(i) Copies of all agreements and documentation described in 748
	904	+	subparagraph (A) of this subdivision unless otherwise approved by the 749
	905	+	commissioner, and any other statements or documents required by the 750
	906	+	commissioner to evaluate the special purpose financial captive 751
	907	+	insurance company's application for licensure; and 752
	908	+	(ii) An opinion of qualified legal counsel, in a form acceptable to the 753
	909	+	commissioner, that the offer and sale of any special purpose financial 754
	910	+	captive insurance company securities complies with all applicable 755
	911	+	registration requirements or applicable exemptions from or exceptions 756
	912	+	to such requirements of the federal securities laws and that the offer and 757
	913	+	sale of securities by the special purpose financial captive insurance 758
	914	+	company itself comply with all registration requirements or applicable 759
	915	+	exemptions from or exceptions to such requirements of the securities 760
	916	+	laws of this state. Such opinion shall not be required as part of the 761
	917	+	application if the special purpose financial captive insurance company 762
	918	+	includes a specific statement in its plan of operation that such opinions 763
	919	+	will be provided to the commissioner in advance of the offer or sale of 764
	920	+	any special purpose financial captive insurance company securities. 765
	921	+	(5) A sponsored captive insurance company may apply to be licensed 766
	922	+	as a special purpose financial captive insurance company. Such 767
	923	+	company shall be subject to the provisions of sections 38a-91aa to 38a-768
	924	+	91tt, inclusive, as amended by this act, applicable to a sponsored captive 769
	925	+	insurance company and to a special purpose financial captive insurance 770
	926	+	company. In the event of conflict between such provisions applicable to 771
	927	+	a sponsored captive insurance company and to a special purpose 772
	928	+	financial captive insurance company, the provisions applicable to a 773
	929	+	special purpose financial captive insurance company shall control. 774
	930	+	(6) Information submitted pursuant to this subsection shall be and 775
	931	+	shall remain confidential and shall not be made public by the 776
	932	+	commissioner or an employee or agent of the commissioner without the 777
	933	+	written consent of the company, except that: 778
	934	+	(A) Such information may be discoverable by a party in a civil action 779 Governor's Bill No. 11
946	935
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951	937
952		-	commissioner or an employee or agent of the commissioner without the 778
953		-	written consent of the company, except that: 779
954		-	(A) Such information may be discoverable by a party in a civil action 780
955		-	or contested case to which the captive insurance company that 781
956		-	submitted such information is a party upon a showing by the party 782
957		-	seeking to discover such information that: 783
958		-	(i) The information sought is relevant to and necessary for the 784
959		-	furtherance of such action or case; 785
960		-	(ii) The information sought is unavailable from other nonconfidential 786
961		-	sources; and 787
962		-	(iii) A subpoena issued by a judicial or administrative officer of 788
963		-	competent jurisdiction has been submitted to the commissioner, 789
964		-	provided such submission requirement shall not apply to a risk 790
965		-	retention group; and 791
966		-	(B) The commissioner may, in the commissioner's discretion, disclose 792
967		-	such information to a public official having jurisdiction over the 793
968		-	regulation of insurance in another state, provided: 794
969		-	(i) Such public official agrees, in writing, to maintain the 795
970		-	confidentiality of such information; and 796
971		-	(ii) The laws of the state in which such public official serves require 797
972		-	such information to be and [to] remain confidential. 798
973		-	(d) (1) Each captive insurance company shall pay to the commissioner 799
974		-	a nonrefundable fee of eight hundred dollars for examining, 800
975		-	investigating and processing its application for a license. The 801
976		-	commissioner may retain legal, financial and examination services from 802
977		-	outside the department for the licensing and financial oversight of a 803
978		-	captive insurance company, the reasonable cost of which may be 804
979		-	charged against such company. The provisions of subdivisions (2) to (5), 805
980		-	inclusive, of subsection (k) of section 38a-14 shall apply to this 806 Substitute Bill No. 11
	938	+	LCO No. 641 27 of 39
	939	+
	940	+	or contested case to which the captive insurance company that 780
	941	+	submitted such information is a party upon a showing by the party 781
	942	+	seeking to discover such information that: 782
	943	+	(i) The information sought is relevant to and necessary for the 783
	944	+	furtherance of such action or case; 784
	945	+	(ii) The information sought is unavailable from other nonconfidential 785
	946	+	sources; and 786
	947	+	(iii) A subpoena issued by a judicial or administrative officer of 787
	948	+	competent jurisdiction has been submitted to the commissioner, 788
	949	+	provided such submission requirement shall not apply to a risk 789
	950	+	retention group; and 790
	951	+	(B) The commissioner may, in the commissioner's discretion, disclose 791
	952	+	such information to a public official having jurisdiction over the 792
	953	+	regulation of insurance in another state, provided: 793
	954	+	(i) Such public official agrees, in writing, to maintain the 794
	955	+	confidentiality of such information; and 795
	956	+	(ii) The laws of the state in which such public official serves require 796
	957	+	such information to be and [to] remain confidential. 797
	958	+	(d) (1) Each captive insurance company shall pay to the commissioner 798
	959	+	a nonrefundable fee of eight hundred dollars for examining, 799
	960	+	investigating and processing its application for a license. The 800
	961	+	commissioner may retain legal, financial and examination services from 801
	962	+	outside the department for the licensing and financial oversight of a 802
	963	+	captive insurance company, the reasonable cost of which may be 803
	964	+	charged against such company. The provisions of subdivisions (2) to (5), 804
	965	+	inclusive, of subsection (k) of section 38a-14 shall apply to this 805
	966	+	subdivision. 806
	967	+	(2) Each captive insurance company shall pay a license fee for the first 807
	968	+	year of licensure and a renewal fee for each year thereafter as set forth 808
	969	+	in section 38a-11. 809 Governor's Bill No. 11
981	970
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986	972
987		-	subdivision. 807
988		-	(2) Each captive insurance company shall pay a license fee for the first 808
989		-	year of licensure and a renewal fee for each year thereafter as set forth 809
990		-	in section 38a-11. 810
991		-	(e) (1) If the commissioner finds that the documents and statements 811
992		-	that a captive insurance company, other than a special purpose financial 812
993		-	captive insurance company, has filed comply with the provisions of 813
994		-	sections 38a-91aa to 38a-91tt, inclusive, as amended by this act, the 814
995		-	commissioner may grant a license authorizing the company to do 815
996		-	insurance business in this state until April first thereafter. The captive 816
997		-	insurance company may apply to renew such license on such forms as 817
998		-	the commissioner prescribes. 818
999		-	(2) (A) The commissioner may grant a license authorizing a special 819
1000		-	purpose financial captive insurance company to do reinsurance 820
1001		-	business in this state until April first thereafter upon the commissioner's 821
1002		-	finding that (i) the proposed plan of operation provides for a reasonable 822
1003		-	and expected successful operation, (ii) the terms of the reinsurance 823
1004		-	contract and related transactions comply with sections 38a-91aa to 38a-824
1005		-	91tt, inclusive, as amended by this act, (iii) the proposed plan of 825
1006		-	operation is not hazardous to any ceding insurer, and (iv) the insurance 826
1007		-	regulator of the state of domicile of each ceding insurer has notified the 827
1008		-	commissioner in writing or has otherwise provided assurance 828
1009		-	satisfactory to the commissioner that such regulator has approved or 829
1010		-	has not disapproved the transaction, provided the commissioner shall 830
1011		-	not be precluded from issuing a license to a special purpose financial 831
1012		-	captive insurance company if such regulator has not responded with 832
1013		-	respect to all or any part of the transaction. 833
1014		-	(B) In conjunction with granting such license, the commissioner may 834
1015		-	issue an order to the special purpose financial captive insurance 835
1016		-	company of any additional provisions, terms or conditions regarding 836
1017		-	the organization, licensing or operation of such company that are not 837
1018		-	inconsistent with the provisions of this chapter and are deemed 838 Substitute Bill No. 11
	973	+	LCO No. 641 28 of 39
	974	+
	975	+	(e) (1) If the commissioner finds that the documents and statements 810
	976	+	that a captive insurance company, other than a special purpose financial 811
	977	+	captive insurance company, has filed comply with the provisions of 812
	978	+	sections 38a-91aa to 38a-91tt, inclusive, as amended by this act, the 813
	979	+	commissioner may grant a license authorizing the company to do 814
	980	+	insurance business in this state until April first thereafter. The captive 815
	981	+	insurance company may apply to renew such license on such forms as 816
	982	+	the commissioner prescribes. 817
	983	+	(2) (A) The commissioner may grant a license authorizing a special 818
	984	+	purpose financial captive insurance company to do reinsurance 819
	985	+	business in this state until April first thereafter upon the commissioner's 820
	986	+	finding that (i) the proposed plan of operation provides for a reasonable 821
	987	+	and expected successful operation, (ii) the terms of the reinsurance 822
	988	+	contract and related transactions comply with sections 38a-91aa to 38a-823
	989	+	91tt, inclusive, as amended by this act, (iii) the proposed plan of 824
	990	+	operation is not hazardous to any ceding insurer, and (iv) the insurance 825
	991	+	regulator of the state of domicile of each ceding insurer has notified the 826
	992	+	commissioner in writing or has otherwise provided assurance 827
	993	+	satisfactory to the commissioner that such regulator has approved or 828
	994	+	has not disapproved the transaction, provided the commissioner shall 829
	995	+	not be precluded from issuing a license to a special purpose financial 830
	996	+	captive insurance company if such regulator has not responded with 831
	997	+	respect to all or any part of the transaction. 832
	998	+	(B) In conjunction with granting such license, the commissioner may 833
	999	+	issue an order to the special purpose financial captive insurance 834
	1000	+	company of any additional provisions, terms or conditions regarding 835
	1001	+	the organization, licensing or operation of such company that are not 836
	1002	+	inconsistent with the provisions of this chapter and are deemed 837
	1003	+	appropriate by the commissioner. 838
	1004	+	(3) The commissioner shall not grant a license to a branch captive 839
	1005	+	insurance company unless the alien captive insurance company or 840
	1006	+	foreign captive insurance company grants the commissioner authority 841
	1007	+	to examine the alien captive insurance company or foreign captive 842 Governor's Bill No. 11
1019	1008
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1024	1010
1025		-	appropriate by the commissioner. 839
1026		-	(3) The commissioner shall not grant a license to a branch captive 840
1027		-	insurance company unless the alien captive insurance company or 841
1028		-	foreign captive insurance company grants the commissioner authority 842
1029		-	to examine the alien captive insurance company or foreign captive 843
1030		-	insurance company in the jurisdiction in which the alien captive 844
1031		-	insurance company or foreign captive insurance company is formed, 845
1032		-	operates or maintains books and records. 846
1033		-	Sec. 9. Section 38a-91dd of the general statutes is repealed and the 847
1034		-	following is substituted in lieu thereof (Effective July 1, 2022): 848
1035		-	(a) (1) [The Insurance Commissioner] Except as provided in 849
1036		-	subdivision (3) of this subsection, the commissioner shall not issue a 850
1037		-	license to a captive insurance company or allow the company to retain 851
1038		-	such license unless the company has and maintains unimpaired paid-in 852
1039		-	capital and surplus of: 853
1040		-	(A) In the case of a pure captive insurance company, not less than 854
1041		-	[two hundred fifty thousand dollars;] the greater of: 855
1042		-	(i) Fifty thousand dollars; or 856
1043		-	(ii) An amount that the commissioner determines is necessary for the 857
1044		-	pure captive insurance company to meet such pure captive insurance 858
1045		-	company's policy obligations; 859
1046		-	(B) In the case of an association captive insurance company, not less 860
1047		-	than [five hundred thousand dollars;] the greater of: 861
1048		-	(i) Two hundred fifty thousand dollars; or 862
1049		-	(ii) An amount that the commissioner determines is necessary for the 863
1050		-	association captive insurance company to meet such association captive 864
1051		-	insurance company's policy obligations; 865
1052		-	(C) In the case of an industrial insured captive insurance company, 866 Substitute Bill No. 11
	1011	+	LCO No. 641 29 of 39
	1012	+
	1013	+	insurance company in the jurisdiction in which the alien captive 843
	1014	+	insurance company or foreign captive insurance company is formed, 844
	1015	+	operates or maintains books and records. 845
	1016	+	Sec. 9. Section 38a-91dd of the general statutes is repealed and the 846
	1017	+	following is substituted in lieu thereof (Effective July 1, 2022): 847
	1018	+	(a) (1) [The Insurance Commissioner] Except as provided in 848
	1019	+	subdivision (3) of this subsection, the commissioner shall not issue a 849
	1020	+	license to a captive insurance company or allow the company to retain 850
	1021	+	such license unless the company has and maintains unimpaired paid-in 851
	1022	+	capital and surplus of: 852
	1023	+	(A) In the case of a pure captive insurance company, not less than 853
	1024	+	[two hundred fifty thousand dollars;] the greater of: 854
	1025	+	(i) Fifty thousand dollars; or 855
	1026	+	(ii) An amount that the commissioner determines is necessary for the 856
	1027	+	pure captive insurance company to meet such pure captive insurance 857
	1028	+	company's policy obligations; 858
	1029	+	(B) In the case of an association captive insurance company, not less 859
	1030	+	than [five hundred thousand dollars;] the greater of: 860
	1031	+	(i) Two hundred fifty thousand dollars; or 861
	1032	+	(ii) An amount that the commissioner determines is necessary for the 862
	1033	+	association captive insurance company to meet such association captive 863
	1034	+	insurance company's policy obligations; 864
	1035	+	(C) In the case of an industrial insured captive insurance company, 865
	1036	+	not less than [five hundred thousand dollars;] the greater of: 866
	1037	+	(i) Two hundred fifty thousand dollars; or 867
	1038	+	(ii) An amount that the commissioner determines is necessary for the 868
	1039	+	industrial insured captive insurance company to meet such industrial 869
	1040	+	insured captive insurance company's policy obligations; 870 Governor's Bill No. 11
1053	1041
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1058	1043
1059		-	not less than [five hundred thousand dollars;] the greater of: 867
1060		-	(i) Two hundred fifty thousand dollars; or 868
1061		-	(ii) An amount that the commissioner determines is necessary for the 869
1062		-	industrial insured captive insurance company to meet such industrial 870
1063		-	insured captive insurance company's policy obligations; 871
1064		-	(D) In the case of a risk retention group, not less than one million 872
1065		-	dollars; 873
1066		-	(E) In the case of a sponsored captive insurance company, not less 874
1067		-	than [two hundred twenty-five thousand dollars;] the greater of: 875
1068		-	(i) Seventy-five thousand dollars; or 876
1069		-	(ii) An amount that the commissioner determines is necessary for the 877
1070		-	sponsored captive insurance company to meet such sponsored captive 878
1071		-	insurance company's policy obligations; 879
1072		-	(F) In the case of a special purpose financial captive insurance 880
1073		-	company, not less than [two hundred fifty thousand dollars;] the greater 881
1074		-	of: 882
1075		-	(i) Two hundred fifty thousand dollars; or 883
1076		-	(ii) An amount that the commissioner determines is necessary for the 884
1077		-	special purpose financial captive insurance company to meet such 885
1078		-	special purpose financial captive insurance company's policy 886
1079		-	obligations; 887
1080		-	(G) In the case of a sponsored captive insurance company licensed as 888
1081		-	a special purpose financial captive insurance company, not less than 889
1082		-	[five hundred thousand dollars;] the greater of: 890
1083		-	(i) Two hundred fifty thousand dollars; or 891
1084		-	(ii) An amount that the commissioner determines is necessary for 892 Substitute Bill No. 11
	1044	+	LCO No. 641 30 of 39
	1045	+
	1046	+	(D) In the case of a risk retention group, not less than one million 871
	1047	+	dollars; 872
	1048	+	(E) In the case of a sponsored captive insurance company, not less 873
	1049	+	than [two hundred twenty-five thousand dollars;] the greater of: 874
	1050	+	(i) Seventy-five thousand dollars; or 875
	1051	+	(ii) An amount that the commissioner determines is necessary for the 876
	1052	+	sponsored captive insurance company to meet such sponsored captive 877
	1053	+	insurance company's policy obligations; 878
	1054	+	(F) In the case of a special purpose financial captive insurance 879
	1055	+	company, not less than [two hundred fifty thousand dollars;] the greater 880
	1056	+	of: 881
	1057	+	(i) Two hundred fifty thousand dollars; or 882
	1058	+	(ii) An amount that the commissioner determines is necessary for the 883
	1059	+	special purpose financial captive insurance company to meet such 884
	1060	+	special purpose financial captive insurance company's policy 885
	1061	+	obligations; 886
	1062	+	(G) In the case of a sponsored captive insurance company licensed as 887
	1063	+	a special purpose financial captive insurance company, not less than 888
	1064	+	[five hundred thousand dollars;] the greater of: 889
	1065	+	(i) Two hundred fifty thousand dollars; or 890
	1066	+	(ii) An amount that the commissioner determines is necessary for 891
	1067	+	such captive insurance company to meet such captive insurance 892
	1068	+	company's policy obligations; and 893
	1069	+	(H) In the case of an agency captive insurance company, not less than 894
	1070	+	[five hundred thousand dollars] the greater of: 895
	1071	+	(i) Two hundred fifty thousand dollars; or 896
	1072	+	(ii) An amount that the commissioner determines is necessary for the 897 Governor's Bill No. 11
1085	1073
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1090	1075
1091		-	such captive insurance company to meet such captive insurance 893
1092		-	company's policy obligations; and 894
1093		-	(H) In the case of an agency captive insurance company, not less than 895
1094		-	[five hundred thousand dollars] the greater of: 896
1095		-	(i) Two hundred fifty thousand dollars; or 897
1096		-	(ii) An amount that the commissioner determines is necessary for the 898
1097		-	agency captive insurance company to meet such agency captive 899
1098		-	insurance company's policy obligations. 900
1099		-	(2) (A) The [Insurance Commissioner] commissioner shall not issue a 901
1100		-	license to a branch captive insurance company or allow the branch 902
1101		-	captive insurance company to retain such license unless the branch 903
1102		-	captive insurance company has and maintains, as security for the 904
1103		-	payment of liabilities attributable to the branch operations: 905
1104		-	(i) Not less than [two hundred fifty thousand dollars;] the greater of: 906
1105		-	(I) Fifty thousand dollars; or 907
1106		-	(II) An amount that the commissioner determines is necessary to 908
1107		-	secure the payment of liabilities attributable to the branch captive 909
1108		-	insurance company's operations; and 910
1109		-	(ii) Reserves on such insurance policies or such reinsurance contracts 911
1110		-	as may be issued or assumed by the branch captive insurance company 912
1111		-	through its branch operations, including reserves for losses, allocated 913
1112		-	loss adjustment expenses, incurred but not reported losses and 914
1113		-	unearned premiums with regard to business written through the branch 915
1114		-	operations. The commissioner may permit a branch captive insurance 916
1115		-	company to credit against any such reserves any [security for loss 917
1116		-	reserves that the branch captive insurance company posts with a ceding 918
1117		-	insurer or is posted by a reinsurer with the branch captive insurance 919
1118		-	company, so long as such security remains posted] assets belonging to: 920 Substitute Bill No. 11
	1076	+	LCO No. 641 31 of 39
	1077	+
	1078	+	agency captive insurance company to meet such agency captive 898
	1079	+	insurance company's policy obligations. 899
	1080	+	(2) (A) The [Insurance Commissioner] commissioner shall not issue a 900
	1081	+	license to a branch captive insurance company or allow the branch 901
	1082	+	captive insurance company to retain such license unless the branch 902
	1083	+	captive insurance company has and maintains, as security for the 903
	1084	+	payment of liabilities attributable to the branch operations: 904
	1085	+	(i) Not less than [two hundred fifty thousand dollars;] the greater of: 905
	1086	+	(I) Fifty thousand dollars; or 906
	1087	+	(II) An amount that the commissioner determines is necessary to 907
	1088	+	secure the payment of liabilities attributable to the branch captive 908
	1089	+	insurance company's operations; and 909
	1090	+	(ii) Reserves on such insurance policies or such reinsurance contracts 910
	1091	+	as may be issued or assumed by the branch captive insurance company 911
	1092	+	through its branch operations, including reserves for losses, allocated 912
	1093	+	loss adjustment expenses, incurred but not reported losses and 913
	1094	+	unearned premiums with regard to business written through the branch 914
	1095	+	operations. The commissioner may permit a branch captive insurance 915
	1096	+	company to credit against any such reserves any [security for loss 916
	1097	+	reserves that the branch captive insurance company posts with a ceding 917
	1098	+	insurer or is posted by a reinsurer with the branch captive insurance 918
	1099	+	company, so long as such security remains posted] assets belonging to: 919
	1100	+	(I) The branch captive insurance company that are held in trust for, 920
	1101	+	or otherwise segregated or controlled by, a ceding insurer, that secure 921
	1102	+	the branch captive insurance company's reinsurance obligations to the 922
	1103	+	ceding insurer; or 923
	1104	+	(II) A reinsurer that are held in trust for, or otherwise under the 924
	1105	+	control of, the branch captive insurance company, that secure the 925
	1106	+	reinsurer's reinsurance obligations to the branch captive insurance 926
	1107	+	company. 927 Governor's Bill No. 11
1119	1108
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1124	1110
1125		-	(I) The branch captive insurance company that are held in trust for, 921
1126		-	or otherwise segregated or controlled by, a ceding insurer, that secure 922
1127		-	the branch captive insurance company's reinsurance obligations to the 923
1128		-	ceding insurer; or 924
1129		-	(II) A reinsurer that are held in trust for, or otherwise under the 925
1130		-	control of, the branch captive insurance company, that secure the 926
1131		-	reinsurer's reinsurance obligations to the branch captive insurance 927
1132		-	company. 928
1133		-	(B) The amounts required under subparagraph (A) of this 929
1134		-	subdivision may be held, with the prior approval of the commissioner, 930
1135		-	in the form of: 931
1136		-	(i) [a] A trust formed under a trust agreement and funded by assets 932
1137		-	acceptable to the commissioner; [,] 933
1138		-	(ii) [an] An irrevocable letter of credit issued or confirmed by a bank 934
1139		-	approved by the commissioner; [,] 935
1140		-	(iii) [with] With respect to the amount required under subparagraph 936
1141		-	(A)(i) of this subdivision only, cash on deposit with the commissioner; 937
1142		-	[,] or 938
1143		-	(iv) [any] Any combination [thereof] of the forms described in 939
1144		-	subparagraphs (B)(i) to (B)(iii), inclusive, of this subdivision. 940
1145		-	(3) The commissioner may exempt a branch captive insurance 941
1146		-	company from the provisions of subdivisions (1) and (2) of this 942
1147		-	subsection if the branch captive insurance company is a foreign captive 943
1148		-	insurance company and the commissioner, in the commissioner's 944
1149		-	discretion, determines that the branch captive insurance company is 945
1150		-	financially stable. 946
1151		-	[(b) The commissioner may adopt regulations, in accordance with 947
1152		-	chapter 54, to establish additional capital and surplus requirements 948
1153		-	based upon the type, volume and nature of insurance business 949 Substitute Bill No. 11
	1111	+	LCO No. 641 32 of 39
	1112	+
	1113	+	(B) The amounts required under subparagraph (A) of this 928
	1114	+	subdivision may be held, with the prior approval of the commissioner, 929
	1115	+	in the form of: 930
	1116	+	(i) [a] A trust formed under a trust agreement and funded by assets 931
	1117	+	acceptable to the commissioner; [,] 932
	1118	+	(ii) [an] An irrevocable letter of credit issued or confirmed by a bank 933
	1119	+	approved by the commissioner; [,] 934
	1120	+	(iii) [with] With respect to the amount required under subparagraph 935
	1121	+	(A)(i) of this subdivision only, cash on deposit with the commissioner; 936
	1122	+	[,] or 937
	1123	+	(iv) [any] Any combination [thereof] of the forms described in 938
	1124	+	subparagraphs (B)(i) to (B)(iii), inclusive, of this subdivision. 939
	1125	+	(3) The commissioner may exempt a branch captive insurance 940
	1126	+	company from the provisions of subdivisions (1) and (2) of this 941
	1127	+	subsection if the branch captive insurance company is a foreign captive 942
	1128	+	insurance company and the commissioner, in the commissioner's 943
	1129	+	discretion, determines that the branch captive insurance company is 944
	1130	+	financially stable. 945
	1131	+	[(b) The commissioner may adopt regulations, in accordance with 946
	1132	+	chapter 54, to establish additional capital and surplus requirements 947
	1133	+	based upon the type, volume and nature of insurance business 948
	1134	+	transacted.] 949
	1135	+	[(c)] (b) Notwithstanding any other provision of this section, the 950
	1136	+	commissioner shall have the discretion to allow a captive insurance 951
	1137	+	company, other than a captive insurance company organized as a risk 952
	1138	+	retention group, to maintain less than the required unimpaired paid-in 953
	1139	+	capital and surplus set forth in subsection (a) of this section. The 954
	1140	+	commissioner shall consider the type, volume and nature of the 955
	1141	+	insurance or reinsurance business transacted by such a captive 956
	1142	+	insurance company in establishing the amount of unimpaired paid-in 957 Governor's Bill No. 11
1154	1143
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1159	1145
1160		-	transacted.] 950
1161		-	[(c)] (b) Notwithstanding any other provision of this section, the 951
1162		-	commissioner shall have the discretion to allow a captive insurance 952
1163		-	company, other than a captive insurance company organized as a risk 953
1164		-	retention group, to maintain less than the required unimpaired paid-in 954
1165		-	capital and surplus set forth in subsection (a) of this section. The 955
1166		-	commissioner shall consider the type, volume and nature of the 956
1167		-	insurance or reinsurance business transacted by such a captive 957
1168		-	insurance company in establishing the amount of unimpaired paid-in 958
1169		-	capital and surplus the company is required to maintain. 959
1170		-	[(d)] (c) Except as specified in subdivision (2) of subsection (a) of this 960
1171		-	section, capital and surplus may be in the form of cash or an irrevocable 961
1172		-	letter of credit issued by a bank approved by the commissioner. 962
1173		-	(d) The commissioner may adopt regulations, in accordance with 963
1174		-	chapter 54, to establish additional capital and surplus requirements 964
1175		-	based upon the type, volume and nature of insurance business 965
1176		-	transacted. 966
1177		-	Sec. 10. Subsection (h) of section 38a-91ff of the general statutes is 967
1178		-	repealed and the following is substituted in lieu thereof (Effective July 1, 968
1179		-	2022): 969
1180		-	(h) In the case of a captive insurance company licensed as a branch 970
1181		-	captive insurance company, the alien captive insurance company or 971
1182		-	foreign captive insurance company shall petition the commissioner to 972
1183		-	issue a certificate setting forth the commissioner's finding that, after 973
1184		-	considering the character, reputation, financial responsibility, insurance 974
1185		-	experience, and business qualifications of the officers and directors of 975
1186		-	the alien captive insurance company or foreign captive insurance 976
1187		-	company, the licensing and maintenance of the branch operations will 977
1188		-	promote the general good of the state. The alien captive insurance 978
1189		-	company or foreign captive insurance company may register to do 979
1190		-	business in this state after the commissioner's certificate is issued. 980 Substitute Bill No. 11
	1146	+	LCO No. 641 33 of 39
	1147	+
	1148	+	capital and surplus the company is required to maintain. 958
	1149	+	[(d)] (c) Except as specified in subdivision (2) of subsection (a) of this 959
	1150	+	section, capital and surplus may be in the form of cash or an irrevocable 960
	1151	+	letter of credit issued by a bank approved by the commissioner. 961
	1152	+	(d) The commissioner may adopt regulations, in accordance with 962
	1153	+	chapter 54, to establish additional capital and surplus requirements 963
	1154	+	based upon the type, volume and nature of insurance business 964
	1155	+	transacted. 965
	1156	+	Sec. 10. Subsection (h) of section 38a-91ff of the general statutes is 966
	1157	+	repealed and the following is substituted in lieu thereof (Effective July 1, 967
	1158	+	2022): 968
	1159	+	(h) In the case of a captive insurance company licensed as a branch 969
	1160	+	captive insurance company, the alien captive insurance company or 970
	1161	+	foreign captive insurance company shall petition the commissioner to 971
	1162	+	issue a certificate setting forth the commissioner's finding that, after 972
	1163	+	considering the character, reputation, financial responsibility, insurance 973
	1164	+	experience, and business qualifications of the officers and directors of 974
	1165	+	the alien captive insurance company or foreign captive insurance 975
	1166	+	company, the licensing and maintenance of the branch operations will 976
	1167	+	promote the general good of the state. The alien captive insurance 977
	1168	+	company or foreign captive insurance company may register to do 978
	1169	+	business in this state after the commissioner's certificate is issued. 979
	1170	+	Sec. 11. Subdivision (1) of subsection (b) of section 38a-91gg of the 980
	1171	+	general statutes is repealed and the following is substituted in lieu 981
	1172	+	thereof (Effective July 1, 2022): 982
	1173	+	(b) (1) (A) [Prior] Except as provided in subparagraph (B) of this 983
	1174	+	subdivision, prior to March first of each year and, in the case of pure 984
	1175	+	captive insurance companies and industrial insured captive insurance 985
	1176	+	companies, prior to March fifteenth of each year, each captive insurance 986
	1177	+	company [other than a branch captive insurance company shall submit 987
	1178	+	to the Insurance Commissioner] shall file with the commissioner a 988 Governor's Bill No. 11
1191	1179
1192	1180
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1196	1181
1197		-	Sec. 11. Subdivision (1) of subsection (b) of section 38a-91gg of the 981
1198		-	general statutes is repealed and the following is substituted in lieu 982
1199		-	thereof (Effective July 1, 2022): 983
1200		-	(b) (1) (A) [Prior] Except as provided in subparagraph (B) of this 984
1201		-	subdivision, prior to March first of each year and, in the case of pure 985
1202		-	captive insurance companies and industrial insured captive insurance 986
1203		-	companies, prior to March fifteenth of each year, each captive insurance 987
1204		-	company [other than a branch captive insurance company shall submit 988
1205		-	to the Insurance Commissioner] shall file with the commissioner a 989
1206		-	report of [its] the captive insurance company's financial condition 990
1207		-	verified by oath of two [of its] executive officers of the captive insurance 991
1208		-	company. The commissioner shall establish the form and content of the 992
1209		-	annual report to be filed by special purpose captive insurance 993
1210		-	companies. 994
1211		-	(B) [In the case of branch captive insurance companies, prior to March 995
1212		-	first of each year, each such] Each branch captive insurance company 996
1213		-	shall [submit to] file with the commissioner a copy of all reports and 997
1214		-	statements required to be filed under the laws of the jurisdiction in 998
1215		-	which the alien captive insurance company or foreign captive insurance 999
1216		-	company is formed. Such reports and statements shall be verified by 1000
1217		-	oath of two [of its] executive officers of the branch captive insurance 1001
1218		-	company and filed with the commissioner on the same day that such 1002
1219		-	reports and statements must be filed in the domiciliary jurisdiction of 1003
1220		-	the alien captive insurance company or foreign captive insurance 1004
1221		-	company. If the commissioner is satisfied that the annual report filed by 1005
1222		-	the alien captive insurance company or foreign captive insurance 1006
1223		-	company in [its] the domiciliary jurisdiction of the alien captive 1007
1224		-	insurance company or foreign captive insurance company provides 1008
1225		-	adequate information concerning the financial condition of the alien 1009
1226		-	captive insurance company or foreign captive insurance company, the 1010
1227		-	commissioner may waive the requirement for completion of the [captive 1011
1228		-	annual statement for business written in the alien jurisdiction] annual 1012
1229		-	report required under subparagraph (A) of this subdivision. If the 1013 Substitute Bill No. 11
	1182	+	LCO No. 641 34 of 39
	1183	+
	1184	+	report of [its] the captive insurance company's financial condition 989
	1185	+	verified by oath of two [of its] executive officers of the captive insurance 990
	1186	+	company. The commissioner shall establish the form and content of the 991
	1187	+	annual report to be filed by special purpose captive insurance 992
	1188	+	companies. 993
	1189	+	(B) [In the case of branch captive insurance companies, prior to March 994
	1190	+	first of each year, each such] Each branch captive insurance company 995
	1191	+	shall [submit to] file with the commissioner a copy of all reports and 996
	1192	+	statements required to be filed under the laws of the jurisdiction in 997
	1193	+	which the alien captive insurance company or foreign captive insurance 998
	1194	+	company is formed. Such reports and statements shall be verified by 999
	1195	+	oath of two [of its] executive officers of the branch captive insurance 1000
	1196	+	company and filed with the commissioner on the same day that such 1001
	1197	+	reports and statements must be filed in the domiciliary jurisdiction of 1002
	1198	+	the alien captive insurance company or foreign captive insurance 1003
	1199	+	company. If the commissioner is satisfied that the annual report filed by 1004
	1200	+	the alien captive insurance company or foreign captive insurance 1005
	1201	+	company in [its] the domiciliary jurisdiction of the alien captive 1006
	1202	+	insurance company or foreign captive insurance company provides 1007
	1203	+	adequate information concerning the financial condition of the alien 1008
	1204	+	captive insurance company or foreign captive insurance company, the 1009
	1205	+	commissioner may waive the requirement for completion of the [captive 1010
	1206	+	annual statement for business written in the alien jurisdiction] annual 1011
	1207	+	report required under subparagraph (A) of this subdivision. If the 1012
	1208	+	commissioner is not satisfied with such reports and statements, or if the 1013
	1209	+	branch captive insurance company is not required to file such reports 1014
	1210	+	and statements in the domiciliary jurisdiction of the alien captive 1015
	1211	+	insurance company or foreign captive insurance company, the branch 1016
	1212	+	captive insurance company shall file a report, at a time and in a form 1017
	1213	+	and manner prescribed by the commissioner, that provides the 1018
	1214	+	commissioner with adequate information concerning the financial 1019
	1215	+	condition of the alien captive insurance company or foreign captive 1020
	1216	+	insurance company. 1021
	1217	+	Sec. 12. Subsection (a) of section 38a-91hh of the general statutes is 1022 Governor's Bill No. 11
1230	1218
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1235	1220
1236		-	commissioner is not satisfied with such reports and statements, or if the 1014
1237		-	branch captive insurance company is not required to file such reports 1015
1238		-	and statements in the domiciliary jurisdiction of the alien captive 1016
1239		-	insurance company or foreign captive insurance company, the branch 1017
1240		-	captive insurance company shall file a report, at a time and in a form 1018
1241		-	and manner prescribed by the commissioner, that provides the 1019
1242		-	commissioner with adequate information concerning the financial 1020
1243		-	condition of the alien captive insurance company or foreign captive 1021
1244		-	insurance company. 1022
1245		-	Sec. 12. Subsection (a) of section 38a-91hh of the general statutes is 1023
1246		-	repealed and the following is substituted in lieu thereof (Effective July 1, 1024
1247		-	2022): 1025
1248		-	(a) (1) [At least once every three years, and additionally whenever the 1026
1249		-	Insurance Commissioner] Except as provided in subdivision (3) of this 1027
1250		-	subsection, the commissioner or the commissioner's designee shall, 1028
1251		-	whenever the commissioner determines it to be prudent [, the 1029
1252		-	commissioner or the commissioner's designee shall visit each captive 1030
1253		-	insurance company and thoroughly] but not less frequently than once 1031
1254		-	every five years, inspect and examine [its] each captive insurance 1032
1255		-	company's affairs to ascertain [its] the captive insurance company's 1033
1256		-	financial condition, [its] the captive insurance company's ability to fulfill 1034
1257		-	its obligations and whether [it] the captive insurance company has 1035
1258		-	complied with the provisions of sections 38a-91aa to 38a-91tt, inclusive, 1036
1259		-	as amended by this act, and any other applicable provisions of this title. 1037
1260		-	[The commissioner may extend the three-year period to five years, 1038
1261		-	provided a captive insurance company is subject to a comprehensive 1039
1262		-	annual audit during such period by independent auditors approved by 1040
1263		-	the commissioner and of a scope satisfactory to the commissioner.] 1041
1264		-	(2) The examination of a branch captive insurance company pursuant 1042
1265		-	to this section shall be of branch business and branch operations only, 1043
1266		-	as long as the branch captive insurance company provides annually to 1044
1267		-	the commissioner a certificate of compliance or its equivalent, issued by 1045
1268		-	or filed with the licensing authority of the jurisdiction in which the 1046 Substitute Bill No. 11
	1221	+	LCO No. 641 35 of 39
	1222	+
	1223	+	repealed and the following is substituted in lieu thereof (Effective July 1, 1023
	1224	+	2022): 1024
	1225	+	(a) (1) [At least once every three years, and additionally whenever the 1025
	1226	+	Insurance Commissioner] Except as provided in subdivision (3) of this 1026
	1227	+	subsection, the commissioner or the commissioner's designee shall, 1027
	1228	+	whenever the commissioner determines it to be prudent [, the 1028
	1229	+	commissioner or the commissioner's designee shall visit each captive 1029
	1230	+	insurance company and thoroughly] but not less frequently than once 1030
	1231	+	every five years, inspect and examine [its] each captive insurance 1031
	1232	+	company's affairs to ascertain [its] the captive insurance company's 1032
	1233	+	financial condition, [its] the captive insurance company's ability to fulfill 1033
	1234	+	its obligations and whether [it] the captive insurance company has 1034
	1235	+	complied with the provisions of sections 38a-91aa to 38a-91tt, inclusive, 1035
	1236	+	as amended by this act, and any other applicable provisions of this title. 1036
	1237	+	[The commissioner may extend the three-year period to five years, 1037
	1238	+	provided a captive insurance company is subject to a comprehensive 1038
	1239	+	annual audit during such period by independent auditors approved by 1039
	1240	+	the commissioner and of a scope satisfactory to the commissioner.] 1040
	1241	+	(2) The examination of a branch captive insurance company pursuant 1041
	1242	+	to this section shall be of branch business and branch operations only, 1042
	1243	+	as long as the branch captive insurance company provides annually to 1043
	1244	+	the commissioner a certificate of compliance or its equivalent, issued by 1044
	1245	+	or filed with the licensing authority of the jurisdiction in which the 1045
	1246	+	branch captive insurance company is formed, and demonstrates to the 1046
	1247	+	commissioner's satisfaction that [it] such branch captive insurance 1047
	1248	+	company is operating in sound financial condition in accordance with 1048
	1249	+	all applicable laws and regulations of such jurisdiction. 1049
	1250	+	(3) The commissioner may waive the requirement that the 1050
	1251	+	commissioner or the commissioner's designee inspect and examine a 1051
	1252	+	captive insurance company's affairs pursuant to this subsection if the 1052
	1253	+	captive insurance company is a pure captive insurance company or a 1053
	1254	+	branch captive insurance company of the pure captive insurance 1054
	1255	+	company. 1055 Governor's Bill No. 11
1269	1256
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1274	1258
1275		-	branch captive insurance company is formed, and demonstrates to the 1047
1276		-	commissioner's satisfaction that [it] such branch captive insurance 1048
1277		-	company is operating in sound financial condition in accordance with 1049
1278		-	all applicable laws and regulations of such jurisdiction. 1050
1279		-	(3) The commissioner may waive the requirement that the 1051
1280		-	commissioner or the commissioner's designee inspect and examine a 1052
1281		-	captive insurance company's affairs pursuant to this subsection if the 1053
1282		-	captive insurance company is a pure captive insurance company or a 1054
1283		-	branch captive insurance company of the pure captive insurance 1055
1284		-	company. 1056
1285		-	Sec. 13. Subdivision (1) of subsection (a) of section 38a-91ii of the 1057
1286		-	general statutes is repealed and the following is substituted in lieu 1058
1287		-	thereof (Effective July 1, 2022): 1059
1288		-	(a) (1) The commissioner may, at any time, for cause, suspend, revoke 1060
1289		-	or refuse to renew any license of a captive insurance company, or in lieu 1061
1290		-	of or in addition to suspension or revocation of such license, the 1062
1291		-	commissioner, after reasonable notice to and hearing of any holder of 1063
1292		-	such license, may impose a fine not to exceed ten thousand dollars. Such 1064
1293		-	hearings may be held by the commissioner or any person designated by 1065
1294		-	the commissioner. For purposes of this subsection, cause for such 1066
1295		-	administrative action shall include, but not be limited to, the following 1067
1296		-	reasons: (A) Insolvency or impairment of capital or surplus; (B) failure 1068
1297		-	to meet the requirements of section 38a-91dd, as amended by this act; 1069
1298		-	(C) refusal or failure to [submit] file an annual report, as required by 1070
1299		-	section 38a-91gg, as amended by this act, or any other report or 1071
1300		-	statement required by law or by lawful order of the commissioner; (D) 1072
1301		-	failure to comply with the provisions of its own charter, bylaws or other 1073
1302		-	organizational document; (E) failure to submit to or pay the cost of 1074
1303		-	examination or any legal obligation relative thereto; (F) use of methods 1075
1304		-	that, although not otherwise specifically prohibited by law, nevertheless 1076
1305		-	render its operation detrimental or its condition unsound with respect 1077
1306		-	to the public or to its policyholders; or (G) failure otherwise to comply 1078
1307		-	with the laws of this state. 1079 Substitute Bill No. 11
	1259	+	LCO No. 641 36 of 39
	1260	+
	1261	+	Sec. 13. Subdivision (1) of subsection (a) of section 38a-91ii of the 1056
	1262	+	general statutes is repealed and the following is substituted in lieu 1057
	1263	+	thereof (Effective July 1, 2022): 1058
	1264	+	(a) (1) The commissioner may, at any time, for cause, suspend, revoke 1059
	1265	+	or refuse to renew any license of a captive insurance company, or in lieu 1060
	1266	+	of or in addition to suspension or revocation of such license, the 1061
	1267	+	commissioner, after reasonable notice to and hearing of any holder of 1062
	1268	+	such license, may impose a fine not to exceed ten thousand dollars. Such 1063
	1269	+	hearings may be held by the commissioner or any person designated by 1064
	1270	+	the commissioner. For purposes of this subsection, cause for such 1065
	1271	+	administrative action shall include, but not be limited to, the following 1066
	1272	+	reasons: (A) Insolvency or impairment of capital or surplus; (B) failure 1067
	1273	+	to meet the requirements of section 38a-91dd, as amended by this act; 1068
	1274	+	(C) refusal or failure to [submit] file an annual report, as required by 1069
	1275	+	section 38a-91gg, as amended by this act, or any other report or 1070
	1276	+	statement required by law or by lawful order of the commissioner; (D) 1071
	1277	+	failure to comply with the provisions of its own charter, bylaws or other 1072
	1278	+	organizational document; (E) failure to submit to or pay the cost of 1073
	1279	+	examination or any legal obligation relative thereto; (F) use of methods 1074
	1280	+	that, although not otherwise specifically prohibited by law, nevertheless 1075
	1281	+	render its operation detrimental or its condition unsound with respect 1076
	1282	+	to the public or to its policyholders; or (G) failure otherwise to comply 1077
	1283	+	with the laws of this state. 1078
	1284	+	Sec. 14. Subsection (a) of section 38a-91kk of the general statutes is 1079
	1285	+	repealed and the following is substituted in lieu thereof (Effective July 1, 1080
	1286	+	2022): 1081
	1287	+	(a) Any captive insurance company may assume reinsurance from 1082
	1288	+	any other insurer. [only on risks that such company is authorized to 1083
	1289	+	write directly.] 1084
	1290	+	Sec. 15. Section 38a-91qq of the general statutes is repealed and the 1085
	1291	+	following is substituted in lieu thereof (Effective July 1, 2022): 1086
	1292	+	The [Insurance Commissioner] commissioner may adopt regulations, 1087 Governor's Bill No. 11
1308	1293
1309	1294
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1313	1295
1314		-	Sec. 14. Subsection (a) of section 38a-91kk of the general statutes is 1080
1315		-	repealed and the following is substituted in lieu thereof (Effective July 1, 1081
1316		-	2022): 1082
1317		-	(a) Any captive insurance company may assume reinsurance from 1083
1318		-	any other insurer. [only on risks that such company is authorized to 1084
1319		-	write directly.] 1085
1320		-	Sec. 15. Section 38a-91qq of the general statutes is repealed and the 1086
1321		-	following is substituted in lieu thereof (Effective July 1, 2022): 1087
1322		-	The [Insurance Commissioner] commissioner may adopt regulations, 1088
1323		-	in accordance with chapter 54, as are necessary to carry out the 1089
1324		-	provisions of sections 38a-91aa to [38a-91tt] 38a-91uu, inclusive, as 1090
1325		-	amended by this act, and sections 38a-91ww and 38a-91xx and to 1091
1326		-	establish standards to ensure that a parent or affiliated company is able 1092
1327		-	to exercise control of the risk management function of any controlled 1093
1328		-	unaffiliated business to be insured by a pure captive insurance 1094
1329		-	company, an industrial insured captive insurance company or a 1095
1330		-	sponsored captive insurance company, except that until such 1096
1331		-	regulations are approved, the commissioner may approve the coverage 1097
1332		-	of such risks by a pure captive insurance company, an industrial insured 1098
1333		-	captive insurance company or a sponsored captive insurance company. 1099
1334		-	Sec. 16. Subparagraph (A) of subdivision (2) of subsection (g) of 1100
1335		-	section 38a-91ss of the general statutes is repealed and the following is 1101
1336		-	substituted in lieu thereof (Effective July 1, 2022): 1102
1337		-	(A) Proceeds from a special purpose financial captive insurance 1103
1338		-	company securitization or letters of credit or other assets described in 1104
1339		-	subdivision [(18)] (19) of section 38a-91aa, as amended by this act; 1105
1340		-	Sec. 17. Subsections (b) and (c) of section 38a-91uu of the general 1106
1341		-	statutes are repealed and the following is substituted in lieu thereof 1107
1342		-	(Effective July 1, 2022): 1108
1343		-	(b) A dormant captive insurance company that is domiciled in this 1109 Substitute Bill No. 11
	1296	+	LCO No. 641 37 of 39
	1297	+
	1298	+	in accordance with chapter 54, as are necessary to carry out the 1088
	1299	+	provisions of sections 38a-91aa to [38a-91tt] 38a-91uu, inclusive, as 1089
	1300	+	amended by this act, and sections 38a-91ww and 38a-91xx and to 1090
	1301	+	establish standards to ensure that a parent or affiliated company is able 1091
	1302	+	to exercise control of the risk management function of any controlled 1092
	1303	+	unaffiliated business to be insured by a pure captive insurance 1093
	1304	+	company, an industrial insured captive insurance company or a 1094
	1305	+	sponsored captive insurance company, except that until such 1095
	1306	+	regulations are approved, the commissioner may approve the coverage 1096
	1307	+	of such risks by a pure captive insurance company, an industrial insured 1097
	1308	+	captive insurance company or a sponsored captive insurance company. 1098
	1309	+	Sec. 16. Subparagraph (A) of subdivision (2) of subsection (g) of 1099
	1310	+	section 38a-91ss of the general statutes is repealed and the following is 1100
	1311	+	substituted in lieu thereof (Effective July 1, 2022): 1101
	1312	+	(A) Proceeds from a special purpose financial captive insurance 1102
	1313	+	company securitization or letters of credit or other assets described in 1103
	1314	+	subdivision [(18)] (19) of section 38a-91aa, as amended by this act; 1104
	1315	+	Sec. 17. Subsections (b) and (c) of section 38a-91uu of the general 1105
	1316	+	statutes are repealed and the following is substituted in lieu thereof 1106
	1317	+	(Effective July 1, 2022): 1107
	1318	+	(b) A dormant captive insurance company that is domiciled in this 1108
	1319	+	state may apply to the Insurance Commissioner for a certificate of 1109
	1320	+	dormancy. The certificate of dormancy shall be subject to renewal once 1110
	1321	+	every [two] five years, and shall be forfeited if the dormant captive 1111
	1322	+	insurance company commences transacting insurance business or fails 1112
	1323	+	to timely renew such certificate. 1113
	1324	+	(c) A dormant captive insurance company that has been issued a 1114
	1325	+	certificate of dormancy shall: 1115
	1326	+	(1) Possess and maintain unimpaired, paid-in capital and surplus of 1116
	1327	+	not less than [twenty-five] fifteen thousand dollars, provided such 1117
	1328	+	dormant captive insurance company shall not be required to add capital 1118 Governor's Bill No. 11
1344	1329
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1349	1331
1350		-	state may apply to the Insurance Commissioner for a certificate of 1110
1351		-	dormancy. The certificate of dormancy shall be subject to renewal once 1111
1352		-	every [two] five years, and shall be forfeited if the dormant captive 1112
1353		-	insurance company commences transacting insurance business or fails 1113
1354		-	to timely renew such certificate. 1114
1355		-	(c) A dormant captive insurance company that has been issued a 1115
1356		-	certificate of dormancy shall: 1116
1357		-	(1) Possess and maintain unimpaired, paid-in capital and surplus of 1117
1358		-	not less than [twenty-five] fifteen thousand dollars, provided such 1118
1359		-	dormant captive insurance company shall not be required to add capital 1119
1360		-	upon entering dormancy if such dormant captive insurance company 1120
1361		-	was never capitalized; 1121
1362		-	(2) Not later than March [15, 2018] fifteenth, annually, submit to the 1122
1363		-	commissioner a report on the financial condition of such company, 1123
1364		-	verified by oath of two executive officers of such company, in such form 1124
1365		-	as the commissioner prescribes; and 1125
1366		-	(3) Pay the license renewal fee specified in section 38a-11 for a captive 1126
1367		-	insurance company. 1127
1368		-	Sec. 18. (NEW) (Effective July 1, 2023) (a) There is established an 1128
1369		-	account to be known as the "children's trust account" which shall be a 1129
1370		-	separate, nonlapsing account within the General Fund. The account 1130
1371		-	shall contain any moneys required by law to be deposited in the account. 1131
1372		-	(b) For the fiscal year ending June 30, 2024, and each fiscal year 1132
1373		-	thereafter, an amount equal to the percentage remaining after the 1133
1374		-	amounts have been calculated pursuant section 2-33c of the general 1134
1375		-	statutes shall be transferred from the resources of the General Fund to 1135
1376		-	the children's trust account. 1136
1377		-	Sec. 19. Section 431 of public act 21-2 of the June special session is 1137
1378		-	repealed. (Effective from passage) 1138 Substitute Bill No. 11
	1332	+	LCO No. 641 38 of 39
1379	1333
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1384		-
	1334	+	upon entering dormancy if such dormant captive insurance company 1119
	1335	+	was never capitalized; 1120
	1336	+	(2) Not later than March [15, 2018] fifteenth, annually, submit to the 1121
	1337	+	commissioner a report on the financial condition of such company, 1122
	1338	+	verified by oath of two executive officers of such company, in such form 1123
	1339	+	as the commissioner prescribes; and 1124
	1340	+	(3) Pay the license renewal fee specified in section 38a-11 for a captive 1125
	1341	+	insurance company. 1126
	1342	+	Sec. 18. Section 431 of public act 21-2 of the June special session is 1127
	1343	+	repealed. (Effective from passage) 1128
1385	1344		This act shall take effect as follows and shall amend the following
1386	1345		sections:
1387	1346
1388	1347		Section 1 from passage 12-704c(b)
1389	1348		Sec. 2 from passage 12-701(a)(20)(B)
1390	1349		Sec. 3 from passage and
1391	1350		applicable to calendar and
1392	1351		income years commencing
1393	1352		on or after January 1, 2022
1394	1353		12-217qq
1395	1354		Sec. 4 from passage PA 21-2 of the June Sp.
1396	1355		Sess., Sec. 453
1397	1356		Sec. 5 from passage New section
1398	1357		Sec. 6 July 1, 2022 38a-91aa
1399	1358		Sec. 7 July 1, 2022 New section
1400	1359		Sec. 8 July 1, 2022 38a-91bb
1401	1360		Sec. 9 July 1, 2022 38a-91dd
1402	1361		Sec. 10 July 1, 2022 38a-91ff(h)
1403	1362		Sec. 11 July 1, 2022 38a-91gg(b)(1)
1404	1363		Sec. 12 July 1, 2022 38a-91hh(a)
1405	1364		Sec. 13 July 1, 2022 38a-91ii(a)(1)
1406	1365		Sec. 14 July 1, 2022 38a-91kk(a)
1407	1366		Sec. 15 July 1, 2022 38a-91qq
1408	1367		Sec. 16 July 1, 2022 38a-91ss(g)(2)(A)
1409	1368		Sec. 17 July 1, 2022 38a-91uu(b) and (c)
1410		-	Sec. 18 ~~July 1,~~ ~~2023 New~~ section
1411		-	~~Sec~~. ~~19 from passage Repealer section~~
	1369	+	Sec. 18 from passage Repealer section
	1370	+	Governor's Bill No. 11
1412	1371
1413		-	FIN Joint Favorable Subst.
	1372	+
	1373	+
	1374	+	LCO No. 641 39 of 39
	1375	+
	1376	+	Statement of Purpose:
	1377	+	To implement the Governor's budget recommendations.
	1378	+	[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except
	1379	+	that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not
	1380	+	underlined.]
1414	1381