§ 123C-18

(Section scheduled to be repealed on January 1, 2027) Sec. 123C-18. Additional powers, rights, and obligations. In addition to the powers and duties set forth in the other provisions of this Article VIIC and to the extent not inconsistent with the provisions of this Article VIIC: A. The provisions of Article XXVI, subsection E of Section 123B-3, subsection A of Section 123B-4, subsection A of Section 123B-8, and Sections 2.1, 131.4 through 131.12, 131.20, 131.20a(2)(except as otherwise provided by subsection B of Section 123C-12), 131.22, 133, 141.1, 141.2, 144.1, 144.2, 147, 148, 149, 154.5, 154.6, 154.7, 154.8, 155, 186.1, 186.2, 401, 401.1, 402, 403, 403A, 407, 407.1, 407.2, 4l2, 415 and subsections (1) and (3) of Section 441 shall apply to captive insurance companies and all those having dealings therewith. B. The provisions of subsection (2) of Section 9, Section 11, subsection (2) of Section 12, and Sections 27.1, 28, 28.2, 28.2a, 29, 30, 31, 32, 33, 34, and 35 shall apply to stock captive insurance companies and all those having dealings therewith. C. The provisions of subsection (2) of Section 39, Section 41, subsections (1) and (2) of Section 42, and Sections 54, 55, 56, 57, 58, 59, and 60 shall apply to mutual captive insurance companies and all those having dealings therewith. D. The Director and each captive insurance company and all those having dealings therewith shall have the authorities, powers, rights, duties and obligations set forth in Section 144 (excluding paragraph (f) of subsection (4) of Section 144); provided, however, that: (i) subsection (1) of Section 144 shall not apply to pure captive insurance companies; and (ii) the Director may exempt any association captive insurance company and any industrial insured captive insurance company from the requirements of subsection (1) of Section 144, on terms and conditions established by the Director, upon a showing by any such captive insurance company and a determination by the Director that the limitations of subsection (1) of Section 144 are not necessary to protect the interests of policyholders in light of such captive insurance company's financial condition and the nature of the risks insured by such company. E. Nothing in this Article or Code shall be deemed to prohibit the by-laws of a captive insurance company from providing for the allocation of underwriting or investment income or loss to the respective accounts of its members, or to prohibit a captive insurance company, if its by-laws so provide and the requirements of this Article are otherwise met, from distributing to a withdrawing member, whether by way of ordinary or liquidating distributions and whether the withdrawal of such member is voluntary or otherwise, on terms and conditions set forth in the by-laws, that member's share of the company's surplus, as well as that portion of the underwriting and investment income allocated to such withdrawing member for the period that such withdrawing member was a member of the mutual company; provided that (i) no such distribution may be made except out of earned, as distinguished from contributed, surplus, (ii) no such distribution shall be made if the surplus of the captive insurance company is less than the original surplus required for the kind or kinds of business authorized to be transacted by such company, or if the payment of such distribution would reduce its surplus to less than the minimum, and (iii) no such distribution shall be made without the approval of the Director if such distribution, together with other such distributions made within the period of 12 consecutive months ending on the date on which the proposed distribution is scheduled for payment or distribution, exceeds the greater of: (i) 10% of the company's surplus as regards policyholders as of the 31st day of December next preceding, or (ii) the net income of the company for the 12-month period ending the 31st day of December next preceding. For the purposes of this subsection, net income includes net realized capital gains in an amount not to exceed 20% of net unrealized capital gains. The right of a member of a captive insurance company to receive distributions under this Section shall be included within the provisions of paragraph (i) of subsection (1) of Section 205 in the event of liquidation or dissolution of such captive insurance company.

Legislative History

(Source: P.A. 100-863, eff. 8-14-18.)