§550.2. Definitions
As used in this Subpart, unless the context otherwise requires, the following
definitions apply:
(1)"Affiliated company" means a company in the same corporate system as its
parent or a member organization by virtue of common ownership, control, operation, or
management.
(2)"Association" means any legal association of individuals, corporations, limited
liability companies, partnerships, associations, or other entities, independently or in
conjunction with some or all of its member organizations, doing any of the following:
(a)Owning, controlling, or holding the power to vote all of the outstanding voting
securities of an association captive insurance company incorporated as a stock insurer.
(b)Having complete voting control over an association captive insurance compa
Free access — add to your briefcase to read the full text and ask questions with AI
§550.2. Definitions
As used in this Subpart, unless the context otherwise requires, the following
definitions apply:
(1) "Affiliated company" means a company in the same corporate system as its
parent or a member organization by virtue of common ownership, control, operation, or
management.
(2) "Association" means any legal association of individuals, corporations, limited
liability companies, partnerships, associations, or other entities, independently or in
conjunction with some or all of its member organizations, doing any of the following:
(a) Owning, controlling, or holding the power to vote all of the outstanding voting
securities of an association captive insurance company incorporated as a stock insurer.
(b) Having complete voting control over an association captive insurance company
incorporated as a mutual insurer.
(c) Having complete voting control over an association captive insurance company.
(d) Constituting all of the subscribers of an association captive insurance company
formed as a reciprocal insurer.
(3) "Association captive insurance company" means any company that insures only
the risks of the member organizations of the association, affiliated companies of the member
organizations, and the risks of the association itself.
(4) "Branch captive insurance company" means an alien captive insurance company
licensed by the commissioner to transact the business of insurance in this state. For the
purposes of this Subpart, a branch captive insurance company is the same as a pure captive
insurance company, as defined in this Section, with respect to operations in this state unless
otherwise permitted by the commissioner.
(5) "Captive insurance company" means any pure captive insurance company,
association captive insurance company, risk retention group, or affiliated reinsurance
company formed or licensed pursuant to this Subpart.
(6) "Cash equivalents" means any short-term, highly liquid investments that are both
of the following:
(a) Readily convertible to known amounts of cash.
(b) So near their maturity that they present insignificant risks of changes in value due
to changes in interest rates.
(7) "Commissioner" means the commissioner of insurance.
(8) "Common ownership and control" means the direct or indirect ownership of
fifty-one percent or more of the outstanding voting stock of two or more corporations by the
same member or members.
(9) "Controlled unaffiliated business" means a business that meets all of the
following criteria:
(a) It is not in the corporate system of a parent and its affiliated companies, in the
case of a pure captive insurance company.
(b) It has an existing contractual relationship with a parent or one of its affiliated
companies, in the case of a pure captive insurance company.
(c) Risks are managed by a pure captive insurance company in accordance with R.S.
22:550.28.
(10) "Department" means the Department of Insurance.
(11) "Excess workers' compensation insurance" means, in the case of an employer
that has insured or self-insured its workers' compensation risks in accordance with applicable
state or federal law, insurance in excess of the specified per-incident or aggregate limit
established by the commissioner.
(12) "Hazardous financial condition" means a present or reasonably anticipated
financial condition in which a captive insurance company, although not yet financially
impaired or insolvent, is unlikely to be able to do either of the following:
(a) Meet obligations to policyholders with respect to known claims and reasonably
anticipated claims.
(b) Pay other obligations in the normal course of business.
(13) "Member organization" means any corporation, partnership, association, or
other form of business organization that belongs to an association. Political subdivisions,
as defined in Article VI, Section 44 of the Constitution of Louisiana, are not eligible for
membership in an association.
(14) "Parent" means a corporation, limited liability company, partnership, other
entity, or an individual who directly or indirectly owns, controls, or holds the power to vote
more than fifty-one percent of the outstanding voting interests in connection with any of the
following:
(a) Securities of a pure captive insurance company organized as a stock corporation.
(b) Membership interests of a pure captive insurance company organized as a
nonprofit corporation.
(c) Membership interests of a captive insurance company organized as a limited
liability company.
(15) "Pure captive insurance company" means any company that insures risks of its
parent and affiliated companies or controlled unaffiliated businesses.
(16) "Risk retention group" means a captive insurance company organized under the
laws of this state pursuant to the Liability Risk Retention Act of 1986, 15 U.S.C. 3901 et
seq., as amended, as a stock corporation, a mutual corporation, a reciprocal, or other limited
liability entity.
(17) "Stock insurer" means an incorporated insurer with issued and outstanding stock
whose capital and surplus is owned by its stockholders.