Download This Bill in Microsoft Word format
Indicates Matter Stricken
Indicates New Matter
S. 1081
STATUS INFORMATION
General Bill
Sponsors: Senators Thomas, Alexander, Richardson, Ford and Hayes
Document Path: l:\council\bills\dka\3824dw04.doc
Introduced in the Senate on March 18, 2004
Currently residing in the Senate Committee on Banking and Insurance
Summary: Captive insurance companies
HISTORY OF LEGISLATIVE ACTIONS
Date Body Action Description with journal page number ------------------------------------------------------------------------------- 3/18/2004 Senate Introduced and read first time SJ-12 3/18/2004 Senate Referred to Committee on Banking and Insurance SJ-12
View the latest legislative information at the LPITS web site
VERSIONS OF THIS BILL
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 38-90-35 SO AS TO PROVIDE FOR CONFIDENTIALITY OF INFORMATION SUBMITTED BY A CAPTIVE INSURANCE COMPANY PURSUANT TO THE PROVISIONS OF CHAPTER 90, TITLE 38 AND TO PROVIDE EXCEPTIONS; TO AMEND SECTION 38-87-30, RELATING TO CHARTERING RISK RETENTION GROUPS, SO AS TO REQUIRE A CAPTIVE INSURANCE COMPANY TO COMPLY WITH THESE PROVISIONS; TO AMEND SECTION 38-90-10, AS AMENDED, RELATING TO DEFINITIONS USED IN CONNECTION WITH A CAPTIVE INSURANCE COMPANY, SO AS TO CHANGE THE DEFINITIONS OF "INDUSTRIAL INSURED GROUP" AND "PARENT"; TO AMEND SECTION 38-90-20, AS AMENDED, RELATING TO LICENSING A CAPTIVE INSURANCE COMPANY BY THE DIRECTOR OF INSURANCE, SO AS TO AUTHORIZE A NONPROFIT CORPORATION TO BE LICENSED AND PROVIDE CONSISTENCY WITH THE PROVISIONS OF SECTION 38-90-35 REGARDING CONFIDENTIAL MATERIALS, AND PROVIDE A PROCEDURE BY WHICH A FOREIGN OR ALIEN CAPTIVE INSURANCE COMPANY MAY BECOME A DOMESTIC CAPTIVE INSURANCE COMPANY; TO AMEND SECTION 38-90-25, RELATING TO THE AUTHORITY OF A CAPTIVE INSURANCE COMPANY TO WRITE REINSURANCE COVERING PROPERTY AND CASUALTY INSURANCE OR REINSURANCE CONTRACTS, SO AS TO PROVIDE CONSISTENCY WITH THE PROVISIONS OF SECTION 38-90-35 REGARDING CONFIDENTIAL MATERIALS; TO AMEND SECTION 38-90-40, AS AMENDED, RELATING TO THE LICENSING OF A CAPTIVE INSURANCE COMPANY BY THE DIRECTOR OF INSURANCE BASED ON THE CAPITALIZATION OF THE COMPANY, SO AS TO PROVIDE CAPITALIZATION REQUIREMENTS FOR LICENSING A NONPROFIT CORPORATION AS A CAPTIVE INSURANCE COMPANY; TO AMEND SECTION 38-90-50, AS AMENDED, RELATING TO LICENSING A CAPTIVE INSURANCE COMPANY BASED ON CERTAIN MINIMUM AMOUNTS OF FREE SURPLUS, SO AS TO CHANGE THE REQUIREMENTS FOR A SPONSORED CAPTIVE INSURANCE COMPANY; TO AMEND SECTION 38-90-60, AS AMENDED, RELATING TO INCORPORATION OPTIONS AND REQUIREMENTS OF CERTAIN CAPTIVE INSURANCE COMPANIES, SO AS TO ADD AN ADDITIONAL OPTION FOR A NONPROFIT COMPANY; TO AMEND SECTION 38-90-70, AS AMENDED, RELATING TO FILING REPORTS BY A CAPTIVE INSURANCE COMPANY, SO AS TO MAKE CERTAIN INFORMATION SUBMITTED IN A REPORT CONFIDENTIAL; TO AMEND SECTION 38-90-80, RELATING TO THE INSPECTION AND EXAMINATION OF A CAPTIVE INSURANCE COMPANY BY THE DIRECTOR OF INSURANCE, SO AS TO PROVIDE THAT CERTAIN CONFIDENTIALITY PROVISIONS DO NOT APPLY TO THE DIRECTOR IN MAKING FINAL REPORTS; TO AMEND SECTION 38-90-140, AS AMENDED, RELATING TO THE TAXATION OF A CAPTIVE INSURANCE COMPANY, SO AS TO CHANGE THE DEFINITION OF "COMMON OWNERSHIP AND CONTROL" TO INCLUDE NONPROFIT CORPORATIONS; TO AMEND SECTION 38-90-180, AS AMENDED, RELATING TO THE APPLICABILITY OF THE PROVISIONS OF CHAPTERS 26 AND 27, TITLE 38, TO INSURANCE REORGANIZATIONS, RECEIVERSHIPS, AND INJUNCTIONS TO CAPTIVE INSURANCE COMPANIES, SO AS TO MAKE THE TERMS AND CONDITIONS APPLY TO TITLE 38 INSTEAD OF CHAPTERS 26 AND 27, TITLE 38; AND TO REPEAL SECTION 38-90-170 RELATING TO APPLICABILITY OF THE TERMS AND CONDITIONS OF TITLE 38 TO INSURANCE REORGANIZATIONS, RECEIVERSHIPS, AND INJUNCTIONS TO CAPTIVE INSURANCE COMPANIES FORMED UNDER CHAPTER 90, TITLE 38.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Chapter 90, Title 38 of the 1976 Code is amended by adding:
"Section 38-90-35. Information submitted pursuant to the provisions of this chapter is confidential and may not be made public by the director or an agent or employee of the director without the written consent of the company, except that:
(1) information may be discoverable by a party in a civil action or contested case to which the submitting captive insurance company is a party, upon a showing by the party seeking to discover the information that:
(a) the information sought is relevant to and necessary for the furtherance of the action or case;
(b) the information sought is unavailable from other nonconfidential sources; or
(c) a subpoena issued by a judicial or administrative law officer of competent jurisdiction has been submitted to the director; and
(2) the director may disclose the information to the public officer having jurisdiction over the regulation of insurance in another state if:
(a) the public official agrees in writing to maintain the confidentiality of the information; and
(b) the laws of the state in which the public official serves require the information to be confidential."
SECTION 2. Section 38-87-30(A) of the 1976 Code is amended to read:
"(A) A risk retention group must, pursuant to the provisions of this title, must be chartered and licensed to write only liability insurance under this chapter and, except as provided elsewhere in this chapter, or Chapter 90 for a risk retention group licensed as a captive insurance company, shall comply with all of the laws, regulations, and requirements applicable to such these insurers chartered and licensed in this State and with Section 38-87-40 to the extent such these requirements are not a limitation on laws, regulations, or requirements of this State."
SECTION 3. Section 38-90-10(18) and (20) of the 1976 Code, as last amended by Act 73 of 2003, is further amended to read:
"(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 group which is created under the Liability Risk Retention Act of 1986 15 U.S.C. Section 3901, et seq., as amended, and Chapter 87, Title 38, as a corporation or other limited liability association taxable as a stock insurance company or a mutual insurer under this title.
(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 securities interests of a captive insurance company."
SECTION 4. Section 38-90-20(B) and (C) of the 1976 Code, as last amended by Act 73 of 2003, is further amended to read:
"(B) To conduct insurance business in this State a captive insurance company shall:
(1) obtain from the director a license authorizing it to conduct insurance business in this State;
(2) hold at least one board of director's meeting, or in the case of a reciprocal insurer, a subscriber's advisory committee meeting, or in the case of a limited liability company a meeting of the managing board, each year in this State;
(3) maintain its principal place of business in this State, or in the case of a branch captive insurance company, maintain the principal place of business for its branch operations in this State; and
(4) appoint a resident registered agent to accept service of process and to otherwise act on its behalf in this State. In the case of a captive insurance company:
(a) formed as a corporation, a nonprofit corporation, or a limited liability company, whenever the registered agent cannot with reasonable diligence be found at the registered office of the captive insurance company, the director must be an agent of the captive insurance company upon whom any process, notice, or demand may be served;
(b) formed as a reciprocal insurer, whenever the registered agent cannot with reasonable diligence be found at the registered office of the captive insurance company, the director must be an agent of the captive insurance company upon whom any process, notice, or demand may be served.
(C)(1) Before receiving a license, a captive insurance company:
(a) formed as a corporation or a nonprofit corporation, shall file with the director a certified copy of its charter articles of incorporation and bylaws, a statement under oath of its president and secretary showing its financial condition, and any other statements or documents required by the director;
(b) formed as a limited liability company, shall file with the director a certified copy of its articles of organization and operating agreement, a statement under oath by its managers showing its financial condition, and any other statements or documents required by the director;
(c) formed as a reciprocal shall:
(i) file with the director a certified copy of the power of attorney of its attorney-in-fact, a certified copy of its subscribers' agreement, a statement under oath of its attorney-in-fact showing its financial condition, and any other statements or documents required by the director; and
(ii) submit to the director for approval a description of the coverages, deductibles, coverage limits, and rates and any other information the director may reasonably require. If there is a subsequent material change in an item in the description, the reciprocal captive insurance company shall submit to the director for approval an appropriate revision and may not offer any additional kinds of insurance until a revision of the description is approved by the director. The reciprocal captive insurance company shall inform the director of any material change in rates within thirty days of the adoption of the change.
(2) In addition to the information required by (C) item (1), an applicant captive insurance company shall file with the director evidence of:
(a) the amount and liquidity of its assets relative to the risks to be assumed;
(b) the adequacy of the expertise, experience, and character of the person or persons who will manage it;
(c) the overall soundness of its plan of operation;
(d) the adequacy of the loss prevention programs of its parent, member organizations, or industrial insureds as applicable; and
(e) such other factors considered relevant by the director in ascertaining whether the proposed captive insurance company will be able to meet its policy obligations.
(3) In addition to the information required by (C) items (1) and (C)(2) an applicant sponsored captive insurance company shall file with the director:
(a) a business plan demonstrating how the applicant will account for the loss and expense experience of each protected cell at a level of detail found to be sufficient by the director, and how it will report the experience to the director;
(b) a statement acknowledging that all financial records of the sponsored captive insurance company, including records pertaining to any protected cells, must be made available for inspection or examination by the director;
(c) all contracts or sample contracts between the sponsored captive insurance company and any participants; and
(d) evidence that expenses will be allocated to each protected cell in an equitable manner.
(4) Information submitted pursuant to this subsection section is confidential and may not be made public by the director or an agent or employee of the director without the written consent of the company, as provided in Section 38-90-35 except that:
(a) information may be is discoverable by a party in a civil action or contested case to which the captive insurance company that submitted the information is a party, upon a showing by the party seeking to discover the information specific finding by the court that:
(a) the captive is a necessary party to the action and not joined only for the purposes of evading the confidentiality provisions of this chapter;
(i)(b) the information sought is relevant, material to, and necessary for the furtherance of the action or case prosecution or defense of the claim asserted in litigation; and
(ii)(c) the information sought is unavailable from other nonconfidential sources not available through another source; and.
(iii) a subpoena issued by a judicial or administrative officer of competent jurisdiction has been submitted to the director; however, the provisions of subsection (C)(4) do not apply to an industrial insured captive insurance company insuring the risks of an industrial insured group; and
(b) the director may disclose the information to a public officer having jurisdiction over the regulation of insurance in another state if:
(i) the public official agrees in writing to maintain the confidentiality of the information; and
(ii) the laws of the state in which the public official serves require the information to be confidential."
SECTION 5. Section 38-90-20(F) of the 1976 Code, as last amended by Act 228 of 2002, is further amended to read:
"(F) The terms and conditions set forth in Section 38-5-170 apply in full to captive insurance companies licensed under this chapter. A foreign or alien captive insurance company, upon approval of the director or his designee, may become a domestic captive insurance company by complying with all of the requirements of law relative to the organization and licensing of a domestic captive insurance company of the same or equivalent type in this State and by filing with the Secretary of State its articles of association, charter, or other organizational document, together with appropriate amendments to them adopted in accordance with the laws of this State bringing those articles of association, charter, or other organizational document into compliance with the laws of this State, along with a certificate of general good issued by the director. After this is accomplished, the captive insurance company is entitled to the necessary or appropriate certificates and licenses to continue transacting business in this State and is subject to the authority and jurisdiction of this State. In connection with this redomestication, the director may waive any requirements for public hearings. A company redomesticating into this State may not merge, consolidate, transfer assets, or otherwise engage in any other reorganization, other than as specified in this section."
SECTION 6. Section 38-90-25(E) and (F), as added by Act 58 of 2001, is amended to read:
"(E) Information submitted pursuant to this section is confidential and may not be made public by the director or an agent or employee of the director without the written consent of the company as provided in Section 38-90-35, except that:
(1) information may be is discoverable by a party in a civil action or contested case to which the submitting captive reinsurance insurance company that submitted the information is a party, upon a showing by the party seeking to discover the information finding by the court that:
(1) the captive is a necessary party to the action and not joined only for the purposes of evading the confidentiality provisions of this chapter;
(a)(2) the information sought is relevant, material to, and necessary for the furtherance of the action or case prosecution or defense of the claim asserted in litigation; and
(b)(3) the information sought is unavailable from other nonconfidential sources not available through another source;.
(c) a subpoena issued by a judicial or administrative law officer of competent jurisdiction has been submitted to the director; and
(2) the director may disclose the information to the public officer having jurisdiction over the regulation of insurance in another state if:
(a) the public official agrees in writing to maintain the confidentiality of the information; and
(b) the laws of the state in which the public official serves require the information to be confidential.
(F) The provisions of subsection (E) do not apply to an industrial insured captive reinsurance company insuring the risks of an industrial insured group."
SECTION 7. Section 38-90-40 of the 1976 Code, as last amended by Act 73 of 2003, is further amended to read:
"Section 38-90-40. (A)(1) The director may not issue a license to a captive insurance company unless the company possesses and maintains unimpaired paid-in capital of:
(1)(a) in the case of a pure captive insurance company, not less than one hundred thousand dollars;
(2)(b) in the case of an association captive insurance company incorporated as a stock insurer or organized as a limited liability company, not less than four hundred thousand dollars;
(3)(c) in the case of an industrial insured captive insurance company incorporated as a stock insurer or organized as a limited liability company, not less than two hundred thousand dollars;
(4)(d) in the case of a sponsored captive insurance company, not less than five hundred thousand dollars an amount determined by the director after giving due consideration to the company's business plan, feasibility study, and pro-formas, including the nature of the risks to be insured;
(5)(e) in the case of a special purpose captive insurance company, an amount determined by the director after giving due consideration to the company's business plan, feasibility study, and pro-formas, including the nature of the risks to be insured.
(2) The capital may must be in the form of cash, cash equivalent, or an irrevocable letter of credit issued by a bank chartered by this State or a member bank of the Federal Reserve System with a branch office in this State and or as approved by the director.
(B)(1) The director may not issue a license to a captive insurance company incorporated as a nonprofit corporation unless the company possesses and maintains unrestricted net assets of:
(a) in the case of a pure captive insurance company, not less than two hundred fifty thousand dollars; and
(b) in the case of a special purpose captive insurance company, an amount determined by the director after giving due consideration to the company's business plan, feasibility study, and pro-formas, including the nature of the risks to be insured.
(2) Contributions to a captive insurance company incorporated as a nonprofit corporation must in the form of cash, cash equivalent, or an irrevocable letter of credit issued by a bank chartered by this State or a member bank of the Federal Reserve System with a branch office in this State or as approved by the director.
(C) The director may prescribe additional capital or net assets based upon the type, volume, and nature of insurance business transacted. This Contributions in connection with these prescribed additional net assets or capital may be in the form of an irrevocable letter of credit issued by a bank chartered by this State or a member bank of the Federal Reserve System with a branch office in this State or as approved by the director.
(C)(D) In the case of a branch captive insurance company, as security for the payment of liabilities attributable to branch operations, the director shall require that a trust fund, funded by an irrevocable letter of credit or other acceptable asset, 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 the security may be no less than the capital and surplus required by this chapter and the reserves on these 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 branch operations; however, the director 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 required by this section by the same amount so long as the security remains posted with the reinsurer. If the form of security selected is a letter of credit, the letter of credit must be established by, or issued or confirmed by, a bank chartered in this State or a member bank of the Federal Reserve System.
(D)(E)(1) A captive insurance company may not pay a dividend out of, or other distribution with respect to, capital or surplus, in excess of the limitations set forth in Section 38-21-250 through Section 38-21-270, without the prior approval of the director. Approval of an ongoing plan for the payment of dividends or other distributions must be conditioned upon the retention, at the time of each payment, of capital or surplus in excess of amounts specified by, or determined in accordance with formulas approved by, the director.
(2) A captive insurance company incorporated as a nonprofit corporation may not make any distributions without the prior approval of the director."
SECTION 8. Section 38-90-50 of the 1976 Code, as last amended by Act 73 of 2003, is further amended to read:
"Section 38-90-50. (A)(1) The director may not issue a license to a captive insurance company unless the company possesses and maintains free surplus of:
(1)(a) in the case of a pure captive insurance company, not less than one hundred fifty thousand dollars;
(2)(b) in the case of an association captive insurance company incorporated as a stock insurer or organized as a limited liability company, not less than three hundred fifty thousand dollars;
(3)(c) in the case of an industrial insured captive insurance company incorporated as a stock insurer or organized as a limited liability company, not less than three hundred thousand dollars;
(4)(d) in the case of an association captive insurance company incorporated as a mutual insurer, not less than seven hundred fifty thousand dollars;
(5)(e) in the case of an industrial insured captive insurance company incorporated as a mutual insurer, not less than five hundred thousand dollars;
(6)(f) in the case of a sponsored captive insurance company, not less than five hundred thousand dollars an amount determined by the director after giving due consideration to the company's business plan, feasibility study, and pro-formas, including the nature of the risks to be insured; and
(7)(g) in the case of a special purpose captive insurance company, an amount determined by the director after giving due consideration to the company's business plan, feasibility study, and pro-formas, including the nature of the risks to be insured.
(2) The surplus may must be in the form of cash, cash equivalent, or an irrevocable letter of credit issued by a bank chartered by this State or a member bank of the Federal Reserve System with the branch office in this State and approved by the director.
(B) Notwithstanding the requirements of subsection (A) a captive insurance company organized as a reciprocal insurer under this chapter may not be issued a license unless it possesses and thereafter maintains free surplus of one million dollars.
(C) The director may prescribe additional surplus based upon the type, volume, and nature of insurance business transacted. This capital may be in the form of an irrevocable letter of credit issued by a bank chartered by this State, or a member bank of the Federal Reserve System with a branch in this State or as approved by the director.
(D) A captive insurance company may not pay a dividend out of, or other distribution with respect to, capital or surplus in excess of the limitations set forth in Section 38-21-270, without the prior approval of the director. Approval of an ongoing plan for the payment of dividends or other distribution must be conditioned upon the retention, at the time of each payment, of capital or surplus in excess of amounts specified by, or determined in accordance with formulas approved by, the director."
SECTION 9. Section 38-90-60(A), (D), (E), (I), (L), and (M) of the 1976 Code, as last amended by Act 73 of 2003, is further amended to read:
"(A) A pure captive insurance company or a sponsored captive insurance company may be:
(1) incorporated as a stock insurer with its capital divided into shares and held by the stockholders; or
(2) incorporated as a public benefit, mutual benefit, or religious nonprofit corporation with members in accordance with the South Carolina Nonprofit Corporation Act of 1994; or
(3) organized as a limited liability company with its capital divided into capital accounts and held by its members.
(D) In the case of a captive insurance company formed as a corporation, a nonprofit corporation, or a limited liability company, before the articles of incorporation or articles of organization are transmitted to the Secretary of State, the incorporators or organizers shall petition the director to issue a certificate setting forth a finding that the establishment and maintenance of the proposed entity will promote the general good of the State. In arriving at this finding the director shall consider:
(1) the character, reputation, financial standing, and purposes of the incorporators or organizers;
(2) the character, reputation, financial responsibility, insurance experience, and business qualifications of the officers and directors or managers; and
(3) other aspects as the director considers advisable.
(E) The articles of incorporation or articles of organization, the certificate issued pursuant to subsection (D), and the organization fees required by Section 33-1-220, 33-31-122, or 33-44-1204, as applicable, must be transmitted to the Secretary of State, who shall record both the articles of incorporation or articles of organization and the certificate.
(I) In the case of a captive insurance company formed as a corporation or a nonprofit corporation, at least one of the members of the board of directors of a captive insurance company incorporated in this State must be a resident of this State.
(L) A captive insurance company formed as a corporation, a nonprofit corporation, or a limited liability company, pursuant to the provisions of this chapter has the privileges and is subject to the provisions of the general corporation law, including the South Carolina Nonprofit Corporation Act of 1994 for nonprofit corporations and the South Carolina Uniform Limited Liability Company Act of 1996 for limited liability companies, as applicable, as well as the applicable provisions contained in this chapter. If a conflict occurs between a provision of the general corporation law, including the South Carolina Nonprofit Corporation Act of 1994 for nonprofit corporations and the South Carolina Uniform Limited Liability Company Act of 1996 for limited liability companies, as applicable, and a provision of this chapter, the latter controls. The provisions of this title pertaining to mergers, consolidations, conversions, mutualizations, and redomestications apply in determining the procedures to be followed by a captive insurance company in carrying out any of the transactions described in those provisions, except the director may waive or modify the requirements for public notice and hearing in accordance with regulations which the director may promulgate addressing categories of transactions. If a notice of public hearing is required, but no one requests a hearing, the director may cancel the hearing.
(M)(1) A captive insurance company formed as a reciprocal insurer pursuant to the provisions of this chapter has the privileges and is subject to Chapter 17 in addition to the applicable provisions of this chapter. If a conflict occurs between the provisions of Chapter 17 and the provisions of this chapter, the latter controls. To the extent a reciprocal insurer is made subject to other provisions of this title pursuant to Chapter 17, the provisions are not applicable to a reciprocal insurer formed pursuant to the provisions of this chapter unless the provisions are expressly made applicable to a captive insurance company pursuant to the provisions of this chapter.
(2) In addition to the provisions of item (1), a captive insurance company organized as a reciprocal insurer that is an industrial insured group has the privileges and is subject to the provisions of Chapter 17 in addition to applicable provisions of this title."
SECTION 10. Section 38-90-70(B) of the 1976 Code, as last amended by Act 58 of 2001, is further amended to read:
"(B) Before March first of each year, a captive insurance company or a captive reinsurance company shall submit to the director a report of its financial condition, verified by oath of two of its executive officers. Except as provided in Sections 38-90-40 and 38-90-50, a captive insurance company or a captive reinsurance company shall report using generally accepted accounting principles, unless the director approves the use of statutory accounting principles, with useful or necessary modifications or adaptations required or approved or accepted by the director for the type of insurance and kinds of insurers to be reported upon, and as supplemented by additional information required by the director. Except as otherwise provided, an association captive insurance company and an industrial insured group shall file its report in the form required by Section 38-13-80, and each industrial insured group shall comply with the requirements set forth in Section 38-13-85. The director by regulation shall prescribe the forms in which pure captive insurance companies and industrial insured captive insurance companies shall report. Information submitted pursuant to this section is confidential as provided in Section 38-90-35, except for reports submitted by a captive insurance company formed as a Risk Retention Group under the Product Liability Risk Retention Act of 1986, 15 U.S.C. Section 3901 et seq., as amended."
SECTION 11. Section 38-90-80(B) of the 1976 Code is amended to read:
"(B) All examination reports, preliminary examination reports or results, working papers, recorded information, documents and copies of documents produced by, obtained by, or disclosed to the director or any other person in the course of an examination made under this section are confidential and are not subject to subpoena and may not be made public by the director or an employee or agent of the director without the prior written consent of the company, except to the extent provided in this subsection.
(1) Nothing in this subsection prevents the director from using this information in furtherance of the director's regulatory authority under this title.
(2) The director may grant access to this information to public officers having jurisdiction over the regulation of insurance in any other state or country, or to law enforcement officers of this State or any other state or agency of the federal government at any time, so long as the officers receiving the information agree in writing to hold it in a manner consistent with this section.
(3) The confidentiality provisions of this subsection do not extend to final reports produced by the director in inspecting or examining a captive insurance company formed as a Risk Retention Group under the Product Liability Risk Retention Act of 1986, 15 U.S.C. Section 3901 et seq., as amended."
SECTION 12. Section 38-90-140(F) of the 1976 Code is amended to read:
"(F) For the purposes of this section, 'common ownership and control' means:
(1) in the case of stock corporations or limited liability companies, the direct or indirect ownership of eighty percent or more of the outstanding voting stock or membership interests of two or more corporations or limited liability companies by the same person or entity; and
(2) in the case of nonprofit corporations, the direct or indirect ownership of eighty percent or more of the voting power of two or more nonprofit corporations by the same member or members; and
(3) in the case of mutual corporations, the direct or indirect ownership of eighty percent or more of the surplus and the voting power of two or more corporations by the same member or members."
SECTION 13. Section 38-90-180(A) of the 1976 Code, as last amended by Act 82 of 2001, is further amended to read:
"(A) Except as otherwise provided in this section, the terms and conditions set forth in Chapters 26 and 27 in this title pertaining to insurance reorganizations, receiverships, and injunctions apply in full to captive insurance companies formed or licensed under this chapter."
SECTION 14. Section 38-90-170 of the 1976 Code is repealed.
SECTION 15. This act takes effect upon approval by the Governor.
This web page was last updated on Monday, December 7, 2009 at 10:21 A.M.