§ 123C-13

(Section scheduled to be repealed on January 1, 2027) Sec. 123C-13. Reinsurance. A. Any captive insurance company may provide reinsurance on risks ceded by any other insurer; provided, however, that the risks so assumed are the same as the captive insurance company could legally insure on a direct basis. The provisions of Section 174.1 shall not apply to any captive insurance company providing reinsurance. B. Subject to the provisions of Article XI, any captive insurance company may cede, and may take credit for in the establishment of reserves, all or any part of its risks. Furthermore, in addition to Section 173.1, any pure or industrial insured captive insurance company may take credit, as either an asset or a deduction from liability, for reinsurance so ceded to the extent: (1) The reinsurer satisfies all of the following (a) through (g): (a) the principal business of the reinsurer (other than investments in subsidiaries and other investment activities) is to accept reinsurance from captive insurance companies organized under Article VIIC, of which the company accepting the reinsurance directly or indirectly owns, controls, or holds with power to vote more than 80% of the outstanding voting securities if organized as a stock company or more than 80% of the voting control if organized as a mutual company and to provide insurance related services; (b) is licensed to transact insurance or reinsurance in its jurisdiction of domicile; (c) submits to this State's authority to examine its books and records and agrees to pay the cost thereof; (d) files annually with the Director a copy of its most recent audited financial statements; (e) maintains a surplus as regards policyholders in an amount that is not less than $20,000,000; (f) files with the Department the following: (i) evidence of its submission to the jurisdiction of any court of competent jurisdiction in any state of the United States and its agreement to comply with all requirements necessary to give the court jurisdiction and to abide by the final decision of the court or of any appellate court in the event of an appeal; and (ii) an instrument designating the Director or a designated attorney as its true and lawful attorney upon whom may be served any lawful process in any action, suit, or proceeding instituted by or on behalf of the ceding company; (g) has not been the subject of an order of the Director entered after notice and hearing prohibiting the reinsurer from utilizing this paragraph (1); or (2) the taking of credit by the captive insurance company has otherwise received the prior approval of the Director. C. A captive insurance company shall provide notice to the Director of a reinsurance agreement to which the company becomes a party not later than the 30th day after the date of the execution of the agreement. D. A captive insurance company shall provide notice of a termination of a previously filed reinsurance agreement to the Director not later than the 30th day after the date of termination. E. Notwithstanding Section 123C-15 of this Code, a captive insurance company, with the Director's approval, may accept risks from and cede risks to or take credit for reserves on risks ceded to: (1) a captive reinsurance pool composed only of other captive insurance companies holding a certificate of authority under this Article or a similar law of another jurisdiction; or (2) an affiliated captive insurance company holding a certificate of authority under this Article or a similar law of another jurisdiction.

Legislative History

(Source: P.A. 100-1118, eff. 11-27-18.)