§ 22:550.29 — Branch captive insurance companies

Louisiana § 22:550.29

• Jurisdiction: Louisiana
• Title 22: Insurance

Text

§550.29. Branch captive insurance companies
A. As used in this Section, unless the context requires otherwise, the following
definitions apply:
(1) "Alien captive insurance company" means any insurance company formed to
write insurance business for its parents and affiliates and licensed pursuant to the laws of an
alien jurisdiction which imposes statutory or regulatory standards in a form acceptable to the
commissioner on companies transacting the business of insurance in such jurisdiction.
(2) "Branch business" means any insurance business transacted by a branch captive
insurance company in this state.
(3) "Branch captive insurance company" means any alien captive insurance company
that has obtained a certificate of authority from the commissioner to transact the business of
insurance in this state through a business unit with a principal place of business in this state.
(4) "Branch operations" mean any business operations of a branch captive insurance
company in this state.
B. In the case of a branch captive insurance company, as security for the payment of
liabilities attributable to the branch operations, the commissioner shall require that either a
trust fund funded by assets acceptable to the commissioner or an irrevocable letter of credit
be established and maintained in the United States for the benefit of United States
policyholders and United States ceding insurers under insurance policies issued or
reinsurance contracts issued or assumed by the branch captive insurance company through
its branch operations. The amount of such security shall be no less than the amount set forth
in R.S. 22:550.10 and the reserves on such insurance policies or reinsurance contracts,
including reserves for losses, allocated loss adjustment expenses, incurred but not reported
losses, and unearned premiums with regard to business written through the branch
operations; however, the commissioner may permit a branch captive insurance company that
is required to post security for loss reserves on branch business by its reinsurer to reduce the
funds in the trust account or the amount payable under the irrevocable letter of credit
described in Subsection E of this Section by the same amount if the security remains posted
with the reinsurer. If the form of security selected is a letter of credit, the letter of credit shall
be established, issued, or confirmed by a bank chartered in this state or a member bank of the
Federal Reserve System.
C. A branch captive insurance company shall not be issued a certificate of authority
unless it possesses and thereafter maintains, as security for the payment of liabilities
attributable to the branch operations, both of the following:
(1) An amount equal to the amount set forth in R.S. 22:550.10 as the minimum
capital requirement for a pure captive insurance company.
(2) Reserves on such insurance policies or such reinsurance contracts as may be
issued or assumed by the branch captive insurance company through its branch operations,
including reserves for losses, allocated loss adjustment expenses, incurred but not reported
losses, and unearned premiums with regard to business written through the branch
operations; however, the commissioner may permit a branch captive insurance company to
credit against any such reserve requirement any security for loss reserves that the branch
captive insurance company may post with a ceding insurer or that may be posted by a
reinsurer with the branch captive insurance company, in either case as long as such security
remains posted.
D. A branch captive insurance company is considered a pure captive insurance
company with respect to operations in this state.
E. Subject to the prior approval of the commissioner, the amounts required in
Subsection B of this Section may be held in the form of any of the following:
(1) A trust formed under a trust agreement and funded by assets acceptable to the
commissioner.
(2) An irrevocable letter of credit issued or confirmed by a bank in this state and
approved by the commissioner.
(3) With respect to the amounts required in Subsection B of this Section only, cash
on deposit with the commissioner.
(4) Any combination of the funds prescribed in this Subsection.
F. Prior to March first of each year, or by March fifteenth after its fiscal year end
with the approval of the commissioner, a branch captive insurance company shall file with
the commissioner a copy of all reports and statements required to be filed under the laws of
the jurisdiction in which the alien captive insurance company is formed, verified by oath of
two of its executive officers. If the commissioner is satisfied that the annual report filed by
the alien captive insurance company in its domiciliary jurisdiction provides adequate
information concerning the financial condition of the alien captive insurance company, the
commissioner may waive the requirement for completion of the captive annual statement for
business written in the alien jurisdiction.
G.(1) The examination of a branch captive insurance company pursuant to R.S.
22:550.22 shall be of branch business and branch operations only, as long as the branch
captive insurance company provides annually to the commissioner a certificate of
compliance, or its equivalent, issued by or filed with the licensing authority of the
jurisdiction in which the branch captive insurance company is formed, and demonstrates to
the commissioner's satisfaction that it is operating in sound financial condition in accordance
with all applicable laws and regulations of such jurisdiction.
(2) As a condition of licensure, the alien captive insurance company shall grant
authority to the commissioner for examination of the affairs of the alien captive insurance
company in the jurisdiction in which the alien captive insurance company is formed.
H. In the case of a branch captive insurance company, the tax provided for in R.S.
22:550.23 applies only to the branch business of the company.
I. All documents, materials, or other information, including confidential and
privileged documents, examination reports, preliminary examination reports or results,
working papers, recorded information, and copies thereof that are produced or obtained by,
or disclosed to the commissioner or any other person in the course of an examination
pursuant to this Subpart, are confidential and privileged in accordance with the Louisiana
Public Records Law, R.S. 44:1 et seq., examinations pursuant to Chapter 8 of this Title, R.S.
22:1981 et seq., and confidentiality provisions in this Title.
J. In furtherance of the commissioner's duties, the commissioner may share and
receive documents, materials, or other information pursuant to Louisiana Public Records
Law, R.S. 44:1 et seq., examinations pursuant to Chapter 8 of this Title, R.S. 22:1981 et seq.,
and confidentiality provisions in this Title.

Legislative History

Acts 2025, No. 313, §2.