As used in this chapter, unless the context requires otherwise:
(1)"Alien or foreign captive insurance company" means an insurance company or protected cell, or its equivalent, of an insurance company formed to write insurance business for its parents and affiliates and licensed pursuant to the laws of an alien or foreign jurisdiction which imposes statutory or regulatory standards in a form acceptable to the director on companies transacting the business of insurance in such jurisdiction, but may not include a corporation controlled by an alien adversary.
(2)"Affiliate of" or "affiliated with" means a specific person who directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with the person specified.
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As used in this chapter, unless the context requires otherwise: (1) "Alien or foreign captive insurance company" means an insurance company or protected cell, or its equivalent, of an insurance company formed to write insurance business for its parents and affiliates and licensed pursuant to the laws of an alien or foreign jurisdiction which imposes statutory or regulatory standards in a form acceptable to the director on companies transacting the business of insurance in such jurisdiction, but may not include a corporation controlled by an alien adversary. (2) "Affiliate of" or "affiliated with" means a specific person who directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with the person specified. (3) "Association" means a legal association of individuals, corporations, limited liability companies, partnerships, political subdivisions, or associations: (a) the member organizations of which collectively, or which does itself: (i) own, control, or hold with power to vote all of the outstanding voting securities of an association captive insurance company incorporated as a stock insurer or organized as a limited liability company; or (ii) have complete voting control over an association captive insurance company organized as a mutual insurer; or (b) the member organizations of which collectively constitute all of the subscribers of an association captive insurance company formed as a reciprocal insurer. (4) "Association captive insurance company" means a company that insures risks of the member organizations of the association and their affiliated companies. (5) "Branch business" means any insurance business transacted by a branch captive insurance company in this State. (6) "Branch captive insurance company" means an alien or foreign captive insurance company licensed by the director to transact the business of insurance in this State through a business unit with a principal place of business in this State. (7) "Branch operations" means any business operations of a branch captive insurance company in this State. (8) "Captive insurance company" means a pure captive insurance company, association captive insurance company, sponsored captive insurance company, special purpose captive insurance company, risk retention group, or industrial insured captive insurance company formed or licensed under this chapter. For purposes of this chapter, a branch captive insurance company must be a pure captive insurance company with respect to operations in this State, unless otherwise permitted by the director. (9) "Consolidated GAAP net worth" means the consolidated owners' equity determined in accordance with GAAP for reporting to the United States Securities and Exchange Commission. (10) "Control", including the terms "controlling," "controlled by", and "under common control with", means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is the result of an official position with or corporate office held by the person. Control is presumed to exist if any person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing ten percent or more of the voting securities of any other person. This presumption may be rebutted by a showing made in the manner provided by Section 38-21-220 that control does not exist in fact. The director may determine, after furnishing all persons in interest notice and opportunity to be heard and making specific findings of fact to support his determination, that control exists in fact, notwithstanding the absence of a presumption to that effect. (11) "Controlled unaffiliated business" means a person that: (a) is not an affiliate of a parent company; and (b) has an existing contractual relationship pursuant to which a parent or affiliated company exercises control of the risk management function of the person. (12) "Director" means the Director of the South Carolina Department of Insurance or the director's designee. (13) "Department" means the South Carolina Department of Insurance. (14) "GAAP" means generally accepted accounting principles. (15) "General account" means the assets and liabilities of a sponsored captive insurance company other than protected cell assets and protected cell liabilities. (16) "Industrial insured" means an insured as defined in Section 38-25-150(8). (17) "Industrial insured captive insurance company" means a company that insures risks of the industrial insureds that comprise the industrial insured group and their affiliated companies. (18) "Industrial insured group" means a group that meets either of the following criteria: (a) a group of industrial insureds that collectively: (i) own, control, or hold with power to vote all of the outstanding voting securities of an industrial insured captive insurance company incorporated as a stock insurer or limited liability company; or (ii) have complete voting control over an industrial insured captive insurance company incorporated as a mutual insurer; or (b) a risk retention group. (19) "Member organization" means any individual, corporation, limited liability company, partnership, or association that belongs to an association. (20) "Parent" means any corporation, limited liability company, partnership, or individual that directly or indirectly owns, controls, or holds with power to vote more than fifty percent of the outstanding voting interests of a captive insurance company. (21) "Participant" means an entity as defined in Section 38-90-225, and any affiliates of that entity, that are insured by a sponsored captive insurance company, where the losses of the participant are limited through a participant contract to the assets of a protected cell. (22) "Participant contract" means a contract by which a sponsored captive insurance company insures the risks of a participant and limits the losses of the participant to the assets of a protected cell. (23) "Person" means an individual, corporation, partnership, association, joint stock company, trust, unincorporated organization, or any similar entity or combination thereof. (24) "Principal place of business" means the physical location in the State of South Carolina where the complete books and records of the captive company are available for examination by the director. (25) "Protected cell" means an identified pool of assets and liabilities of a sponsored captive insurance company for one or more participants that is segregated and insulated from the remainder of the sponsored captive insurance company's assets and liabilities as set forth in this chapter. A protected cell may be unincorporated or incorporated. (26) "Protected cell account" means a specifically identified bank or custodial account established by a sponsored captive insurance company for the purpose of segregating the protected cell assets of one protected cell from the protected cell assets of other protected cells and from the assets of the sponsored captive insurance company's general account. (27) "Protected cell assets" means all assets, contract rights, and general intangibles, identified with and attributable to a specific protected cell of a sponsored captive insurance company. (28) "Protected cell liabilities" means all liabilities and other obligations identified with and attributable to a specific protected cell of a sponsored captive insurance company. (29) "Pure captive insurance company" means a company that insures risks of its parent, affiliated companies, controlled unaffiliated business, or a combination thereof or cedes or assumes business from a risk pool for the purpose of risk sharing. (30) "Risk retention group" means a captive insurance company formed under the Liability Risk Retention Act of 1986, 15 U.S.C. Section 3901, et seq., as amended. (31) "Special purpose captive insurance company" means a captive insurance company that is formed or licensed under this chapter that does not meet the definition of any other type of captive insurance company defined in this section. (32) "Sponsor" means an entity that is approved by the director to provide all or part of the capital and surplus required by applicable law and to organize and operate a sponsored captive insurance company. (33) "Sponsored captive insurance company" means a captive insurance company: (a) in which the minimum capital and surplus required by applicable law is provided by one or more sponsors; (b) that is formed or licensed under this chapter; (c) that segregates liability through one or more protected cells; and (d) that insures the risks of participants through participant contracts. (34) "Alien adversary" means any alien government or nongovernment person determined by the United States Secretary of Commerce to have engaged in a long-term pattern or serious instances of conduct significantly adverse to the national security of the United States or the security and safety of United States citizens. (35) "Corporation controlled by an alien adversary" means a legal entity engaged in commerce that: (a) is wholly owned by an alien adversary; (b) has an alien adversary as a dominant shareholder, directly or indirectly; (c) is wholly owned by a citizen of an alien adversary; or (d) has one or a number of citizens of an alien adversary whose cumulative ownership is as a dominant shareholder. (36) "Dominant shareholder" means the single owner of ten percent or more of a legal entity engaged in commerce's stock, securities, or other indicia of ownership; or multiple owners of twenty percent or more of a legal entity engaged in commerce's stock, securities, or other indicia of ownership.
HISTORY: 2000 Act No. 331, SECTION 1; 2001 Act No. 58, SECTION 8, eff May 29, 2001; 2002 Act No. 188, SECTION 2, eff March 12, 2002; 2002 Act No. 228, SECTIONS 11.A, 11.B, eff May 1, 2002; 2003 Act No. 73, SECTION 24.A, eff June 25, 2003; 2004 Act No. 291, SECTIONS 15, 16, eff July 29, 2004; 2014 Act No. 282 (S.909), SECTION 4, eff June 10, 2014; 2018 Act No. 251 (H.4675), SECTION 1, eff May 18, 2018; 2025 Act No. 62 (S.210), SECTIONS 1, 2, eff May 22, 2025. Effect of Amendment 2014 Act No. 282, SECTION 4, added paragraph (16), definition of "general account"; rewrote paragraph (24), definition of "protected cell"; added paragraph (25), definition of "protected cell account"; added paragraph (26), definition of "protected cell assets"; added paragraph (27), definition of "protected cell liabilities"; added paragraph (30), definition of "risk retention group"; in paragraph (32), definition of "sponsor", deleted reference to Section 38-90-220; in paragraph (33), definition of "sponsored captive insurance company", rewrote paragraphs (c) and (d); and redesignated the paragraphs accordingly. 2018 Act No. 251, SECTION 1, rewrote the section. 2025 Act No. 62, SECTION 1, replaced the definition of "Alien captive insurance company" with the definition of "Alien or foreign captive insurance company"; in the definition for "Branch captive insurance company", inserted "or foreign" preceding captive; in the definition for "Participant", substituted "38-90-225" for "38-90-240". 2025 Act No. 62, SECTION 2, added (34) to (36), the definitions for "Alien adversary", "Corporation controlled by an alien adversary", and "Dominant shareholder".