Establishes the Creating Holistic Options in Coverage for Enterprise and Self-Insurance (CHOICES) Law
Impact
The impact of HB 635 is significant as it establishes comprehensive statutory requirements for captive insurance companies. It includes provisions for capital and surplus maintenance, annual financial reporting, and confidentiality of records. These companies must now comply with a structured regulatory framework, including the necessity for annual reporting and audits, increasing transparency in their operations. Additionally, there are regulations related to the formation, governance, and operation of captive insurance companies, which are designed to align them more closely with existing state insurance laws.
Summary
House Bill 635, known as the Creating Holistic Options in Coverage for Enterprise and Self-Insurance Law (CHOICES Law), aims to regulate the formation and operation of domestic captive insurance companies in Louisiana. The bill outlines extensive provisions including the definitions of various types of captive insurance, requirements for application, and operational regulations that these companies must adhere to. Through these measures, the bill seeks to create a framework that supports the growth and sustainability of captive insurance businesses while ensuring adequate consumer protections and compliance with state financial regulations.
Sentiment
The sentiment surrounding HB 635 appears to be generally positive among proponents of captive insurance who see it as a means to foster a more structured and reliable insurance market. Supporters argue that by providing clear guidelines and regulations, the bill will improve the credibility of captive insurance companies and help protect policyholders. However, there could be some concerns from other sectors of the insurance industry regarding potential impacts on competition and market dynamics resulting from the establishment of captive insurers.
Contention
Notable points of contention surround the level of regulation imposed on captive insurance companies, particularly regarding their autonomy and the potential for overregulation. Opponents may argue that too stringent rules could stifle innovation within the captive insurance sector and discourage the formation of new companies. Furthermore, while safeguards to protect policyholders are essential, there may be debates about whether the proposed measures provide adequate flexibility for companies to operate competitively while ensuring consumer protections are met.
Clarifies with respect to the approval process for the conversion and reorganization of a mutual insurer into a insurance stock company and specifies the expression of the legislature that the intent of the legislature is that these clarifications are procedural and interpretive and apply to all contracts that have not yet been approved by both the insurance commissioner and the mutual members. (gov sig) (OR NO IMPACT See Note)
Enacting the Kansas protected cell captive insurance company act, providing for the redomestication of a foreign or alien captive insurance company and updating certain terms, requirements and conditions of the captive insurance act, reducing insurance company premium tax rates, creating parity between the insurance agent and public adjuster licensing requirements, authorizing insurers to file certain travel insurance policies under the accident and health line of insurance and authorizing the commissioner of insurance to select and announce the version of certain instructions, calculations and documents in effect for the upcoming calendar year and cause such announcement to be published in the Kansas register not later than December 1 of the current year.
Insurance Department; requiring certain persons and organizations to furnish adequate response within certain timeframe; Insurance Commissioner duties; Patient's Right to Pharmacy Choice Commission; modifications. Effective date.