§ 10-6-107 — Formation and operation of captive insurance companies

Colorado § 10-6-107

• Jurisdiction: Colorado
• Title 10: Insurance
• Art.: Captive Insurance Companies

Text

(1) No
person shall engage in the business of insurance as a captive insurance company
without first applying for and obtaining a certificate of authority from the
commissioner stating that such person complies with the laws of this state.
Applicants shall submit articles of incorporation or other documents of organization
for examination. If accepted and approved by the commissioner and the attorney
general, said articles or other documents of organization shall be filed in the office
of the secretary of state. A copy of said articles or other documents of organization,
certified by the secretary of state, shall be filed with the commissioner.
Amendments to organizational documents shall be filed with the commissioner and
in the office of the secretary of state.

(2) (Deleted by amendment, L. 94, p. 543, � 5, effective April 6, 1994.)

(3) Applicants for a captive insurance company certificate of authority shall
file a detailed plan of operation, which shall include a feasibility study and any
other information deemed relevant by the commissioner in ascertaining whether the
proposed captive insurance company will be able to meet its policy obligations. The
commissioner is authorized to refuse to issue a certificate of authority until the
commissioner is reasonably satisfied that the plan of operation contains sufficient
indication of a successful insurance operation.

(4) (a) Each captive insurance company shall pay to the division of insurance
a nonrefundable application fee of five hundred dollars in addition to any
reasonable expenses to be paid pursuant to section 10-6-120. Each captive
insurance company shall pay an annual license fee of five hundred dollars.

(b) Notwithstanding the amount specified for any fee in paragraph (a) of this
subsection (4), the commissioner by rule or as otherwise provided by law may
reduce the amount of one or more of the fees if necessary pursuant to section 24-75-402 (3), C.R.S., to reduce the uncommitted reserves of the fund to which all or
any portion of one or more of the fees is credited. After the uncommitted reserves
of the fund are sufficiently reduced, the commissioner by rule or as otherwise
provided by law may increase the amount of one or more of the fees as provided in
section 24-75-402 (4), C.R.S.

(5) The principal and home office of every captive insurance company
incorporated under this article shall be in the state of Colorado. Every captive
insurance company shall maintain such books and records in this state as will
enable the financial examination of the company by the commissioner.

(6) Group captive insurance companies shall limit their exposure to loss on
any one risk or hazard to an amount not to exceed ten percent of capital and
surplus, unless such risk or hazard is reinsured through an insurance company
which is licensed or accredited in this state, or unless other safeguards to its
financial solvency and stability are in place and are acceptable to the
commissioner.

Legislative History

Source: L. 72: p. 430, � 1. C.R.S. 1963: � 72-36-7. L. 89: (1) to (3) amended, p. 463, � 4, effective April 15. L. 94: Entire section amended, p. 543, � 5, effective April 6. L. 98: (4) amended, p. 1327, � 30, effective June 1.