§ 27-43-4 — § 27-43-4. Minimum capital.

§ 27-43-4. Minimum capital.

(a) No subsidiary captive insurance company, association captive insurance company incorporated as a stock insurance company, or industrial insured captive insurance company incorporated as a stock insurance company shall be issued a license unless it possesses and after this maintains unimpaired paid in capital of:

(1) In the case of a subsidiary captive insurance company, not less than one hundred thousand dollars ($100,000);

(2) In the case of an association captive insurance company incorporated as a stock insurance company, not less than four hundred thousand dollars ($400,000); and

(3) In the case of an industrial insured captive insurance company incorporated as a stock insurance company, not less than two hundred thousand dollars ($200,000). The capital may be in the form of cash or an irrevocable letter of credit issued by a bank chartered by the state of Rhode Island or a member bank of the Federal Reserve System and approved by the commissioner.

(b) The commissioner may prescribe additional capital based upon the type, volume, and nature of insurance business transacted, which capital may be in the form of an irrevocable letter of credit issued by a bank chartered by the state of Rhode Island, or a member bank of the Federal Reserve System.

(c) No captive insurance company may pay a dividend out of, or other distribution with respect to, capital or surplus, in excess of the limitations set forth in § 27-43-12, without the prior approval of the commissioner. Approval of an ongoing plan for the payment of dividends or other distributions shall be conditioned upon the retention, at the time of each payment, of the capital or surplus in excess of amounts specified by, or determined in accordance with formulas approved by, the commissioner.

Legislative History

P.L. 1988, ch. 76, § 1; P.L. 1996, ch. 232, § 1; P.L. 1996, ch. 256, § 1.