§ 31A-37-106 — Authority to make rules -- Authority to issue orders.

(1) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the commissioner may adopt rules to:

(1)(a) determine circumstances under which a branch captive insurance company is not required to be a pure captive insurance company;
(1)(b) require a statement, document, or information that a captive insurance company shall provide to the commissioner to obtain a certificate of authority;
(1)(c) determine a factor a captive insurance company shall provide evidence of under Subsection 31A-37-201(4)(b);
(1)(d) prescribe one or more capital requirements for a captive insurance company in addition to those required under Section 31A-37-204 based on the type, volume, and nature of insurance business transacted by the captive insurance company;
(1)(e) waive or modify a requirement for public notice and hearing for the following by a captive insurance company:
(1)(e)(i) merger;
(1)(e)(ii) consolidation;
(1)(e)(iii) conversion;
(1)(e)(iv) mutualization;
(1)(e)(v) redomestication; or
(1)(e)(vi) acquisition;
(1)(f) approve the use of one or more reliable methods of valuation and rating for:
(1)(f)(i) an association captive insurance company;
(1)(f)(ii) a sponsored captive insurance company; or
(1)(f)(iii) an industrial insured group;
(1)(g) prohibit or limit an investment that threatens the solvency or liquidity of:
(1)(g)(i) a pure captive insurance company; or
(1)(g)(ii) an industrial insured captive insurance company;
(1)(h) determine the financial reports a sponsored captive insurance company shall annually file with the commissioner;
(1)(i) prescribe the required forms and reports under Section 31A-37-501;
(1)(j) establish one or more standards to ensure that:
(1)(j)(i) one of the following is able to exercise control of the risk management function of a controlled unaffiliated business to be insured by a pure captive insurance company:

(1)(j)(i)(A) a parent; or
(1)(j)(i)(B) an affiliated company of a parent; or
(1)(j)(ii) one of the following is able to exercise control of the risk management function of a controlled unaffiliated business to be insured by an industrial insured captive insurance company:

(1)(j)(ii)(A) an industrial insured; or
(1)(j)(ii)(B) an affiliated company of the industrial insured; and
(1)(k) establish requirements for obtaining, maintaining, and renewing a certificate of dormancy.
(2) Notwithstanding Subsection (1)(j), until the commissioner adopts the rules authorized under Subsection (1)(j), the commissioner may by temporary order grant authority to insure risks to:

(2)(a) a pure captive insurance company; or
(2)(b) an industrial insured captive insurance company.
(3) The commissioner may issue prohibitory, mandatory, and other orders relating to a captive insurance company as necessary to enable the commissioner to secure compliance with this chapter.

Legislative History

Amended by Chapter 193, 2019 General Session