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General Assembly Substitute Bill No. 6433
January Session, 2025
AN ACT CONCERNING CAPTIVE INSURANCE.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. Section 38a-91aa of the general statutes is repealed and the 1
following is substituted in lieu thereof (Effective October 1, 2025): 2
As used in this section, sections 38a-91bb to 38a-91uu, inclusive, [and] 3
sections 38a-91ww to 38-91yy, inclusive, and section 3 of this act: 4
(1) "Affiliated company" means any company in the same corporate 5
system as a parent, an industrial insured or a member organization by 6
virtue of common ownership, control, operation or management. 7
(2) "Agency captive insurance company" means a captive insurance 8
company that: 9
(A) Is owned or directly or indirectly controlled by one or more 10
insurance agents or insurance producers licensed in accordance with 11
sections 38a-702a to 38a-702r, inclusive; 12
(B) Only insures against risks covered by insurance policies sold, 13
solicited or negotiated through the insurance agents or insurance 14
producers that own or control such captive insurance company; and 15
(C) Does not insure against risks covered by any health insurance 16 Substitute Bill No. 6433
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policy or plan. 17
(3) "Alien captive insurance company" means any insurance 18
company formed to write insurance business for its parent and affiliated 19
companies and licensed pursuant to the laws of an alien jurisdiction that 20
imposes statutory or regulatory standards on companies transacting the 21
business of insurance in such jurisdiction that the commissioner deems 22
to be acceptable. 23
(4) "Association" means any legal association of individuals, 24
corporations, limited liability companies, partnerships, associations or 25
other entities, where the association itself or some or all of the member 26
organizations: 27
(A) Directly or indirectly own, control or hold with power to vote all 28
of the outstanding voting securities or other voting interests of an 29
association captive insurance company incorporated as a stock insurer; 30
(B) Have complete voting control over an association captive 31
insurance company incorporated as a mutual corporation or formed as 32
a limited liability company; or 33
(C) Constitute all of the subscribers of an association captive 34
insurance company formed as a reciprocal insurer. 35
(5) "Association captive insurance company" means any company 36
that insures risks of the member organizations of an association, and 37
includes a company that also insures risks of such member 38
organizations' affiliated companies or of the association. 39
(6) "Branch business" means any insurance business transacted in this 40
state by a branch captive insurance company. 41
(7) "Branch captive insurance company" means any alien captive 42
insurance company or foreign captive insurance company licensed by 43
the commissioner to transact the business of insurance in this state 44
through a business unit with a principal place of business in this state. 45 Substitute Bill No. 6433
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(8) "Branch operations" means any business operations in this state of 46
a branch captive insurance company. 47
(9) "Captive insurance company" means any (A) pure captive 48
insurance company, agency captive insurance company, association 49
captive insurance company, industrial insured captive insurance 50
company, risk retention group, sponsored captive insurance company 51
or special purpose financial captive insurance company that is 52
domiciled in this state and formed or licensed under the provisions of 53
this section and sections 38a-91bb to 38a-91tt, inclusive, or (B) branch 54
captive insurance company. 55
(10) "Ceding insurer" means an insurance company, approved by the 56
commissioner and licensed or otherwise authorized to transact the 57
business of insurance or reinsurance in its state or country of domicile, 58
that cedes risk to a special purpose financial captive insurance company 59
pursuant to a reinsurance contract. 60
(11) "Commissioner" means the Insurance Commissioner. 61
(12) "Controlled unaffiliated business" means any person: 62
(A) Who, (i) in the case of a pure captive insurance company, is not 63
in the corporate system of a parent and the parent's affiliated companies, 64
(ii) in the case of an industrial insured captive insurance company, is not 65
in the corporate system of an industrial insured and the industrial 66
insured's affiliated companies, or (iii) in the case of a sponsored captive 67
insurance company, is not in the corporate system of a participant and 68
the participant's affiliated companies; 69
(B) Who, (i) in the case of a pure captive insurance company, has an 70
existing contractual relationship with a parent or one of the parent's 71
affiliated companies, (ii) in the case of an industrial insured captive 72
insurance company, has an existing contractual relationship with an 73
industrial insured or one of the industrial insured's affiliated companies, 74
or (iii) in the case of a sponsored captive insurance company, has an 75
existing contractual relationship with a participant or one of the 76 Substitute Bill No. 6433
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participant's affiliated companies; and 77
(C) Whose risks are managed by a pure captive insurance company, 78
an industrial insured captive insurance company or a sponsored captive 79
insurance company, as applicable, in accordance with section 38a-91qq. 80
(13) "Excess workers' compensation insurance" means, in the case of 81
an employer that has insured or self-insured its workers' compensation 82
risks in accordance with applicable state or federal law, insurance in 83
excess of a specified per-incident or aggregate limit established by the 84
commissioner. 85
(14) "Foreign captive insurance company" means any insurance 86
company formed to write insurance business for its parent and affiliated 87
companies and licensed pursuant to the laws of a foreign jurisdiction 88
that imposes statutory or regulatory standards on companies 89
transacting the business of insurance in such jurisdiction that the 90
commissioner deems to be acceptable. 91
(15) "Incorporated protected cell" means a protected cell that is 92
established as a corporation or a limited liability company, separate 93
from the sponsored captive insurance company with which it has 94
entered into a participant contract. 95
(16) "Industrial insured" means an insured: 96
(A) Who procures the insurance of any risk or risks by use of the 97
services of a full-time employee acting as an insurance manager or 98
buyer; 99
(B) Whose aggregate annual premiums for insurance on all risks total 100
at least twenty-five thousand dollars; and 101
(C) Who has at least twenty-five full-time employees. 102
(17) "Industrial insured captive insurance company" means any 103
company that insures risks of the industrial insureds that comprise an 104
industrial insured group, and includes a company that also insures risks 105 Substitute Bill No. 6433
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of such industrial insureds' affiliated companies. 106
(18) "Industrial insured group" means any group of industrial 107
insureds that collectively: 108
(A) Directly or indirectly own, control or hold with power to vote all 109
of the outstanding voting securities or other voting interests of an 110
industrial insured captive insurance company incorporated as a stock 111
insurer; 112
(B) Have complete voting control over an industrial insured captive 113
insurance company incorporated as a mutual corporation or formed as 114
a limited liability company; or 115
(C) Constitute all of the subscribers of an industrial insured captive 116
insurance company formed as a reciprocal insurer. 117
(19) "Insurance securitization" or "securitization" means a transaction 118
or a group of related transactions, which may include capital market 119
offerings, that are effected through related risk transfer instruments and 120
facilitating administrative agreements, in which all or part of the result 121
of such transaction is used to fund a special purpose financial captive 122
insurance company's obligations under a reinsurance contract with a 123
ceding insurer and by which: 124
(A) A special purpose financial captive insurance company directly 125
or indirectly obtains proceeds through the issuance of securities by such 126
company or any other person; or 127
(B) A person provides, for the benefit of a special purpose financial 128
captive insurance company, one or more letters of credit or other assets 129
that the commissioner has authorized such company to treat as 130
admitted assets for purposes of its annual report. "Insurance 131
securitization" or "securitization" does not include the issuance of a 132
letter of credit for the benefit of the commissioner to satisfy all or part of 133
a special purpose financial captive insurance company's capital and 134
surplus requirements under section 38a-91dd. 135 Substitute Bill No. 6433
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(20) "Member organization" means any individual, corporation, 136
limited liability company, partnership, association or other entity that 137
belongs to an association. 138
(21) "Mutual corporation" means a corporation organized without 139
stockholders and includes a nonprofit corporation with members. 140
(22) "Parent" means any individual, corporation, limited liability 141
company, partnership or other entity that directly or indirectly owns, 142
controls or holds with power to vote more than fifty per cent of the 143
outstanding voting: 144
(A) Securities of a pure captive insurance company organized as a 145
stock insurer; or 146
(B) Membership interests of a pure captive insurance company 147
organized as a nonprofit corporation or as a limited liability company. 148
(23) "Participant" means any association, corporation, limited liability 149
company, partnership, trust or other entity, and any affiliated company 150
or controlled unaffiliated business thereof, that is insured by a 151
sponsored captive insurance company pursuant to a participant 152
contract. 153
(24) "Participant contract" means a contract entered into by a 154
sponsored captive insurance company and a participant by which the 155
sponsored captive insurance company insures the risks of the 156
participant and limits the losses of each such participant to its pro rata 157
share of the assets of one or more protected cells identified in such 158
participant contract. 159
(25) "Protected cell" means a separate account established by a 160
sponsored captive insurance company, in which assets are maintained 161
for one or more participants in accordance with the terms of one or more 162
participant contracts to fund the liability of the sponsored captive 163
insurance company assumed on behalf of such participants as set forth 164
in such participant contracts. 165 Substitute Bill No. 6433
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(26) "Pure captive insurance company" means any company that 166
insures risks of its parent and affiliated companies or controlled 167
unaffiliated business. 168
(27) "Reinsurance contract" means a contract entered into by a special 169
purpose financial captive insurance company and a ceding insurer by 170
which the special purpose financial captive insurance company agrees 171
to provide reinsurance to the ceding insurer for risks associated with the 172
ceding insurer's insurance or reinsurance business. 173
(28) "Risk retention group" means a captive insurance company 174
organized under the laws of this state pursuant to the federal Liability 175
Risk Retention Act of 1986, 15 USC 3901 et seq., as amended from time 176
to time, as a stock insurer or mutual corporation, a reciprocal or other 177
limited liability entity. 178
(29) "Security" has the same meaning as provided in section 36b-3 and 179
includes any form of debt obligation, equity, surplus certificate, surplus 180
note, funding agreement, derivative or other financial instrument that 181
the commissioner designates as a security for purposes of this section 182
and sections 38a-91bb to 38a-91tt, inclusive. 183
(30) "Special purpose financial captive insurance company" means a 184
company that is licensed by the commissioner in accordance with 185
section 38a-91bb. 186
(31) "Special purpose financial captive insurance company security" 187
means a security issued by (A) a special purpose financial captive 188
insurance company, or (B) a third party, the proceeds of which are 189
obtained directly or indirectly by a special purpose financial captive 190
insurance company. 191
(32) "Sponsor" means any association, corporation, limited liability 192
company, partnership, trust or other entity that is approved by the 193
commissioner to organize and operate a sponsored captive insurance 194
company and to provide all or part of the required unimpaired paid-in 195
capital and surplus. 196 Substitute Bill No. 6433
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(33) "Sponsored captive insurance company" means a captive 197
insurance company: 198
(A) In which the minimum required unimpaired paid-in capital and 199
surplus are provided by one or more sponsors; 200
(B) That insures risks of its participants only through separate 201
participant contracts; and 202
(C) That funds its liability to each participant through one or more 203
protected cells and segregates the assets of each protected cell from the 204
assets of other protected cells and from the assets of the sponsored 205
captive insurance company's general account. 206
(34) "Surplus note" means an unsecured subordinated debt obligation 207
possessing characteristics consistent with the National Association of 208
Insurance Commissioners Statement of Statutory Accounting Principles 209
No. 41, as amended from time to time, and as modified or supplemented 210
by the commissioner. 211
Sec. 2. Subsection (a) of section 38a-91oo of the general statutes is 212
repealed and the following is substituted in lieu thereof (Effective October 213
1, 2025): 214
(a) Unless otherwise provided in sections 38a-91aa to 38a-91tt, 215
inclusive, as amended by this act, no provision of this title shall apply to 216
captive insurance companies, unless expressly included therein, except 217
for the following: (1) Sections 38a-2, 38a-8, 38a-16, 38a-17, 38a-54 to 38a-218
59, inclusive, 38a-69a, 38a-102h and 38a-250 to 38a-266, inclusive, and 219
chapter 704c; and (2) subsection (d) of section 38a-72 and sections 38a-220
73 and 38a-129 to 38a-140, inclusive, which shall apply only to captive 221
insurance companies formed as risk retention groups. 222
Sec. 3. (NEW) (Effective October 1, 2025) (a) (1) Any captive insurance 223
company domiciled in this state and organized as an agency captive 224
insurance company, association captive insurance company, industrial 225
insured captive insurance company, pure captive insurance company, 226 Substitute Bill No. 6433
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risk retention group or special purpose financial insurance company 227
may, with the commissioner's prior written approval, convert into a 228
protected cell. 229
(2) Any such conversion of a captive insurance company, in 230
accordance with the provisions of subdivision (1) of this subsection, 231
shall be subject to the provisions of sections 38a-91aa to 38a-91tt, 232
inclusive, of the general statutes, as amended by this act, as applicable, 233
and such captive insurance company's plan of operation approved by 234
the commissioner, without affecting the converted captive insurance 235
company's assets, rights, benefits, obligations or liabilities. 236
(b) Any conversion of a captive insurance company into a protected 237
cell shall be deemed to be a continuation of such converted captive 238
insurance company's existence together with all of such captive 239
insurance company's assets, rights, benefits, obligations and liabilities 240
as a protected cell. Any such conversion of a captive insurance company 241
shall be deemed to occur without any transfer or assignment of such 242
captive insurance company's assets, rights, benefits, obligations or 243
liabilities, and without the creation of any reversionary interest in, or 244
impairment of, any such assets, rights, benefits, obligations or liabilities. 245
(c) Any conversion of a captive insurance company shall not be 246
construed to limit any rights or protections applicable to such captive 247
insurance company under subsection (c) of section 38a-91bb of the 248
general statutes, as applicable, that existed immediately prior to the date 249
of such conversion. 250
(d) Any captive insurance company that converts into a protected 251
cell, in accordance with the provisions of this section, shall perform such 252
conversion, in accordance with chapter 601 or 613 of the general statutes, 253
as applicable, or in accordance with any such provisions of the general 254
statutes applicable to the formation of any other type of legal entity 255
permissible under the laws of this state, as applicable. 256
(e) Any sponsored captive insurance company, including a 257
sponsored captive insurance company licensed as a special purpose 258 Substitute Bill No. 6433
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financial insurance company, may, (1) with the prior consent of each 259
participant of the affected protected cell or as otherwise permitted 260
pursuant to a participation agreement, or the consent of the affected 261
incorporated protected cell, (2) upon application of the sponsor, and (3) 262
with the commissioner's prior written approval, sell, transfer, assign or 263
otherwise convey a protected cell, together with all of such protected 264
cell's assets, rights, benefits, obligations and liabilities, to a new or 265
existing sponsored captive insurance company or sponsored captive 266
insurance company licensed as a special purpose financial insurance 267
company, pursuant to any plan of operation approved by the 268
commissioner. 269
(f) Any sale, transfer, assignment or conveyance of a protected cell, in 270
accordance with the provisions of subsection (e) of this section, shall be 271
deemed to be a continuation of such protected cell's existence, together 272
with all of such protected cell's assets, rights, benefits, obligations and 273
liabilities, as a protected cell of the transferee sponsored captive 274
insurance company. 275
(g) No sale, transfer, assignment or conveyance of a protected cell, in 276
accordance with the provisions of subsection (e) of this section, shall 277
limit any rights or protections applicable to the transferred protected 278
cell and the transferor sponsored captive insurance company or 279
sponsored captive insurance company licensed as a special purpose 280
financial insurance company under this chapter, as applicable, that 281
existed immediately prior to the date of such sale, transfer, assignment 282
or conveyance. 283
Sec. 4. Section 38a-91rr of the general statutes is repealed and the 284
following is substituted in lieu thereof (Effective October 1, 2025): 285
(a) Each sponsored captive insurance company may establish and 286
maintain one or more protected cells, subject to the following 287
conditions: 288
(1) The stockholders of a sponsored captive insurance company shall 289
be limited to its participants and sponsors, except that a sponsored 290 Substitute Bill No. 6433
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captive insurance company may issue nonvoting securities to other 291
persons on terms approved by the commissioner; 292
(2) Each sponsored captive insurance company shall account 293
separately on the books and records of such company for each protected 294
cell to reflect the financial condition and results of operations of such 295
protected cell, net income or loss, dividends or other distributions to 296
participants and such other factors as may be provided in the participant 297
contract or required by the commissioner; 298
(3) No liabilities arising out of any other insurance business the 299
sponsored captive insurance company may conduct shall be chargeable 300
against the assets of a protected cell; 301
(4) No sponsored captive insurance company shall make any sale, 302
exchange or other transfer of assets, dividend or distribution between 303
or among any of its protected cells without the consent of such protected 304
cells; 305
(5) No protected cell shall make any sale, exchange or other transfer 306
of assets, dividend or distribution to a sponsor or participant without 307
the commissioner's approval. The commissioner shall not approve such 308
sale, exchange or other transfer if it would result in insolvency or 309
impairment with respect to a protected cell; 310
(6) (A) Except as otherwise specified, each sponsored captive 311
insurance company shall attribute assets and liabilities to the protected 312
cells and the general account in accordance with the plan of operation 313
approved by the commissioner, and shall not attribute any other assets 314
or liabilities between its general account and any protected cell or 315
between any protected cells. For purposes of this subdivision, "general 316
account" means all assets and liabilities of a sponsored captive insurance 317
company that are not attributable to a protected cell. 318
(B) Each sponsored captive insurance company shall attribute all 319
insurance obligations, assets and liabilities relating to a reinsurance 320
contract entered into with respect to a protected cell to such protected 321 Substitute Bill No. 6433
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cell. The performance under such reinsurance contract and any tax 322
benefits, losses, refunds or credits allocated pursuant to a tax allocation 323
agreement to which the sponsored captive insurance company is a 324
party, including any payments made by or due to be made to the 325
sponsored captive insurance company pursuant to the terms of such 326
agreement, shall reflect such obligations, assets and liabilities relating to 327
such reinsurance contract; 328
(7) Each sponsored captive insurance company shall file annually 329
with the commissioner such financial reports as the commissioner shall 330
require, including, but not limited to, accounting statements detailing 331
the financial experience of each protected cell; 332
(8) Each sponsored captive insurance company shall notify the 333
commissioner in writing not later than ten business days after any 334
protected cell becomes insolvent or otherwise unable to meet its claim 335
or expense obligations; 336
(9) No participant contract shall take effect without the 337
commissioner's prior written approval. The addition of each new 338
protected cell or the withdrawal of any participant or termination of any 339
existing protected cell shall constitute a change in the sponsored captive 340
insurance company's plan of operation and shall require the 341
commissioner's prior written approval; 342
(10) If required by the commissioner, the business written by a 343
sponsored captive insurance company with respect to each protected 344
cell shall be (A) fronted by an insurance company licensed under the 345
laws of any state, (B) reinsured by a reinsurer authorized or approved 346
by this state, or (C) secured by a trust fund in the United States for the 347
benefit of policyholders and claimants or funded by an irrevocable letter 348
of credit or other arrangement that is acceptable to the commissioner. 349
The commissioner may require the sponsored captive insurance 350
company to increase the funding of any security arrangement 351
established under this subdivision. If the form of security is a letter of 352
credit, the letter of credit shall be issued or confirmed by a bank 353 Substitute Bill No. 6433
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approved by the commissioner. A trust maintained pursuant to this 354
subdivision shall be established in a form and upon such terms 355
approved by the commissioner; and 356
(11) A protected cell of a sponsored captive insurance company may, 357
with the commissioner's prior written approval, establish one or more 358
separate accounts and may allocate assets to such accounts to provide 359
for the insurance risks of one or more participants, or controlled 360
unaffiliated business of such participants, subject to the following: 361
(A) The income, gains and losses, realized or unrealized, from assets 362
allocated to a separate account shall be credited to or charged against 363
the account, without regard to other income, gains or losses of the 364
protected cell; 365
(B) Amounts allocated to a separate account pursuant to this 366
subdivision are owned by the protected cell and such protected cell shall 367
not be, nor hold itself out to be, a trustee with respect to such amounts; 368
(C) Unless otherwise approved by the commissioner, assets allocated 369
to a separate account shall be valued in accordance with the laws and 370
regulations of this state otherwise applicable to the protected cell's 371
assets; 372
(D) To the extent provided under the applicable contracts, such 373
portion of the assets of any such protected cell equal to the reserves and 374
other contract liabilities with respect to such account shall not be 375
chargeable with liabilities arising out of any other business the protected 376
cell may conduct; 377
(E) No sale, exchange or other transfer of assets may be made by any 378
protected cell between any of such protected cell's separate accounts or 379
between any other investment account and one or more of such 380
protected cell's separate accounts unless, in the case of a transfer into a 381
separate account, such transfer is made solely to establish the account 382
or to support the operation of the contracts with respect to the separate 383
account to which the transfer is made, and unless such transfer, whether 384 Substitute Bill No. 6433
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into or from a separate account, is made (i) by a transfer of cash, or (ii) 385
by a transfer of securities that has a readily determinable market value, 386
provided such transfer of securities is approved by the commissioner. 387
The commissioner may approve other transfers among such accounts if 388
the commissioner determines such transfers would be equitable; and 389
(F) To the extent any protected cell deems it necessary for compliance 390
with any applicable federal or state laws, such protected cell, with 391
respect to any separate account, including, but not limited to, any 392
separate account that is a management investment company or a unit 393
investment trust, may provide for persons having an interest therein 394
appropriate voting and other rights and special procedures for the 395
conduct of the business of such account, including, but not limited to, 396
special rights and procedures relating to investment policy, investment 397
advisory services, selection of independent public accountants and the 398
selection of a committee to manage the business of such account. Such 399
committee members are not required to be affiliated with such protected 400
cell. 401
(b) Each sponsored captive insurance company may combine the 402
assets of two or more protected cells for purposes of investment and 403
such combination shall not be construed as defeating the segregation of 404
such assets for accounting or other purposes. Each sponsored captive 405
insurance company shall comply with all applicable investment 406
requirements under this chapter, except that the commissioner shall 407
waive compliance with such requirements for sponsored captive 408
insurance companies to the extent that credit for reinsurance ceded to 409
reinsurers is allowed pursuant to section 38a-91kk. The commissioner 410
may approve the use of alternative reliable methods of valuation and 411
rating for purposes of this subsection. 412
(c) Each sponsored captive insurance company, including a 413
sponsored captive insurance company licensed as a special purpose 414
financial captive insurance company, may establish and maintain one 415
or more protected cells as a separate corporation formed under chapter 416
601 or a limited liability company formed under chapter 613. This 417 Substitute Bill No. 6433
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section shall not be construed to limit any rights or protections 418
applicable to protected cells not established as corporations or limited 419
liability companies. 420
(d) (1) Each sponsored captive insurance company may establish and 421
maintain a protected cell as an incorporated protected cell. 422
(2) The articles of incorporation or articles of organization of an 423
incorporated protected cell shall refer to the sponsored captive 424
insurance company for which it is a protected cell and shall state that 425
the protected cell is incorporated or organized for the limited purposes 426
authorized by the sponsored captive insurance company's license. Such 427
company shall attach to and file with the articles of incorporation or 428
articles of organization a copy of the commissioner's prior written 429
approval, as required by subdivision (9) of subsection (a) of this section, 430
to add the incorporated protected cell. 431
(e) Notwithstanding the provisions of chapter 704c: 432
(1) If the commissioner determines in the event of an insolvency of a 433
sponsored captive insurance company that one or more protected cells 434
remain solvent, the commissioner may separate such cells from such 435
company and may, on application of a sponsor, allow for the conversion 436
of such cells into one or more new or existing sponsored captive 437
insurance companies with a sponsor or sponsors, or one or more other 438
captive insurance companies, pursuant to such plan or plans of 439
operation as the commissioner deems acceptable; 440
(2) Upon the issuance by a court of any order of conservation, 441
rehabilitation or liquidation of a sponsored captive insurance company, 442
the receiver shall manage the assets and liabilities of such company in 443
accordance with the provisions of this section; 444
(3) The assets of a protected cell shall not be used to pay any expenses 445
or claims other than those attributable to such protected cell; 446
(4) A sponsored captive insurance company's capital and surplus 447 Substitute Bill No. 6433
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shall be available at all times to pay any expenses of or claims against 448
such company; 449
(5) In connection with the conservation, rehabilitation or liquidation 450
of a sponsored captive insurance company, the assets and liabilities of 451
each protected cell shall at all times be kept separate from, and shall not 452
be commingled with, the assets and liabilities of any other protected cell 453
or the sponsored captive insurance company; 454
(6) Unless the sponsor consents and the commissioner has granted 455
prior written approval, the assets of a sponsored captive insurance 456
company's general account shall not be used to pay any expense or claim 457
attributable solely to one or more protected cells of the sponsored 458
captive insurance company. If the assets of a sponsored captive 459
insurance company's general account are used to pay expenses or claims 460
attributable solely to one or more of the company's protected cells, the 461
sponsor shall not be required to contribute additional capital and 462
surplus to the company's general account. Notwithstanding any 463
provision of this subdivision, the sponsor shall satisfy the minimum 464
capital and surplus requirements applicable to such sponsor in order to 465
maintain its license; and 466
(7) A sponsored captive insurance company's capital and surplus 467
shall at all times be available to pay any expense of, or claim against, the 468
sponsored captive insurance company. 469
(f) Consistent with the provisions of this section, a creditor of a 470
sponsored captive insurance company shall have recourse against any 471
asset attributable to a protected cell if it is a creditor of the protected cell. 472
A creditor of a protected cell shall not have any recourse against any 473
asset attributable to another protected cell or in the sponsored captive 474
insurance company's general account. 475
(g) When a sponsored captive insurance company has an obligation 476
to a creditor arising from a transaction, or otherwise imposed, with 477
respect to a particular protected cell, the obligation shall: 478 Substitute Bill No. 6433
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(1) Extend only to the assets attributable to the protected cell, and the 479
creditor shall be entitled to recourse only against the assets attributable 480
to such protected cell; and 481
(2) Not extend to any asset of another protected cell or in the 482
sponsored captive insurance company's general account, and the 483
creditor shall not be entitled to recourse against any asset attributable to 484
another protected cell or in the company's general account. 485
(h) When an obligation of a sponsored captive insurance company 486
relates solely to such company's general account, a creditor shall, with 487
respect to such obligation, be entitled to recourse only against the assets 488
in such account. 489
(i) The establishment of one or more protected cells alone, without 490
more, shall not, by itself, constitute (1) a fraudulent conveyance, (2) 491
evidence of intent by a sponsored captive insurance company to 492
defraud creditors, or (3) the conduct of business by a sponsored captive 493
insurance company for any other fraudulent purpose. 494
(j) (1) In the event of an insolvency of any protected cell of a 495
sponsored captive insurance company, the commissioner may separate 496
such protected cell from the sponsored captive insurance company and 497
allow for the conversion of such protected cell into a new protected cell 498
of another sponsored captive insurance company or into a captive 499
insurance company. 500
(2) Any such conversion of a protected cell, in accordance with the 501
provisions of subdivision (1) of this subsection, shall be deemed to be a 502
continuation of such protected cell's existence together with all of such 503
protected cell's assets, rights, benefits, obligations and liabilities as a 504
new protected cell or captive insurance company, as applicable. Any 505
such conversion of a protected cell shall be deemed to occur without any 506
transfer or assignment of such protected cell's assets, rights, benefits, 507
obligations or liabilities, and without the creation of any reversionary 508
interest in, or impairment of, any such assets, rights, benefits, 509
obligations or liabilities. 510 Substitute Bill No. 6433
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This act shall take effect as follows and shall amend the following
sections:
Section 1 October 1, 2025 38a-91aa
Sec. 2 October 1, 2025 38a-91oo(a)
Sec. 3 October 1, 2025 New section
Sec. 4 October 1, 2025 38a-91rr
INS Joint Favorable Subst.