Amendment vs bill Senate Committee Amendment, #2556, INS, Adopted vs Enrolled

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ENROLLED Regular Session HOUSE BILL NO.
SCAHB904 3275 2556 SENATE COMMITTEE AMENDMENTS Regular Session Amendments proposed bySenate Committee on Insurance to Reengrossed House Bill No.
904 BY REPRESENTATIVE BAMBURG AN ACT 3 To amend and reenact R.S.
by Representative Bamburg AMENDMENT NO.
22:550.4, 550.10(E) and (F), 550.11, 550.13(E), 550.20, 550.21(introductoryparagraph)and(1),550.23(H),and550.24(A)andtoenactR.S.
1 On page 1, line 3, after "550.10(E)" delete the comma "," and the remainder of the line and insert "and (F), 550.11, 550.13(E), 550.20, 550.21(introductoryparagraph) and (1)," AMENDMENT NO.
22:550.3(D),550.14(B)(5),and550.21(4),relativetocaptiveinsurers;toprovidefor capital and surplus requirements;
2 On page 1, line 4, delete "550.10(F)," AMENDMENT NO.
to require certain deposits;
3 On page 1, line 11, after"550.10(E)"deletethecomma","andtheremainderof the line and insert "and (F), 550.11, 550.13(E), 550.20, 550.21(introductoryparagraph) and (1)," AMENDMENT NO.
to prohibit insuring certain risks;
4 On page 1, at the beginning of line 13, delete "550.10(F)," AMENDMENT NO.
to provide for the governance of a company;
5 On page 2, at the end of line 6, change "." to "." AMENDMENT NO.
to provide for annual reporting requirements;
6 On page 2, at the beginning of line 17, change "F." to "F." AMENDMENT NO.
to provide for the use of certain taxes;
7 On page 2, line 18, after "volume" and before "and" change "," to "," AMENDMENT NO.
to provide for rate filings;
8 On page 2, at the end of line 20, change "." to "." AMENDMENT NO.
to make technical changes;
9 On page 3, line 3, after "company" and before "risk" delete "and" and insert "or a" AMENDMENT NO.
to provide for effectiveness;
10 On page 3, line 4, after "retention" and before "chartered" change "groups" to "group" AMENDMENT NO.
and to provide for related matters.
11 On page 3, at the end of line 8, after "subdivision" insert "of this state" AMENDMENT NO.
Be it enacted by the Legislature of Louisiana:
12 On page 3, line 20, after "in" and before "this" delete "the" AMENDMENT NO.
Section 1.
13 On page 3, at the beginning of line 27, delete "the" and insert "this" Page 1 of 2 SCAHB904 3275 2556 AMENDMENT NO.
R.S.
14 On page 3, after line 27, insert a set of asteri*ks "**" AMENDMENT NO.
22:550.4, 550.10(E) and (F), 550.11, 550.13(E), 550.20, 550.21(introductoryparagraph)and(1),550.23(H),and550.24(A)areherebyamendedand reenacted and R.S.
15 On page 4, delete line 12 and insert "§550.20.
22:550.3(D), 550.14(B)(5), and 550.21(4) are herebyenacted to read as follows:
Prohibition on ownership Ownership by an insurance company" AMENDMENT NO.
§550.3.
16 On page 4, line 27, after "officers." delete the rest of the line and insert "For a captive insurance company, The the statement shall be in the form prescribed bythe" AMENDMENT NO.
Applicability of other provisions * * * D.
17 On page 5, line 17, after "to this" change "Part" to "Section" and after "imposed by" delete the comma "," AMENDMENT NO.
The commissioner maywaive anyrequirementsimposed in this Title for riskretentiongroups,unlessthewaiverwouldviolatetheaccreditationrequirements of the National Association of Insurance Commissioners.
18 Onpage5,line18,delete"Subpartandenforcingit"andinsert"Sectionandtheenforcement of this Subpart" AMENDMENT NO.
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19 On page 5, line 21, after "insurance" and before "and" change "company" to "company" Page 2 of 2
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HB NO.
904 ENROLLED §550.4.
Regulations Thecommissionermaypromulgaterulesandregulations inaccordancewith the Administrative Procedure Act as are necessary to implement and enforce the provisionsofthisSubpartandtocomplywithaccreditationstandardsoftheNational Association of Insurance Commissioners applicable to risk retention groups chartered and licensed as a captive insurance company.
* * * §550.10.
Capital and surplus requirements * * * E.
ExceptasotherwiseprovidedbythecommissionerpursuanttoSubsection F of this Section, the capital requiredto be maintained pursuant to this Section shall be in the form of cash, cash equivalents, bonds, marketable securities, surplus debentures,lettersofcredit,atrustapprovedbythecommissionerandpledgedtothe commissioner, or evidences of indebtedness which are direct general obligations of the government of the United States, or anyother form of capital as approved bythe commissioner.
F.
Thecommissionermayprescribeadditionalotherformsofcapitalorother requirements relating to capital and surplus based on the type, volume, and nature of theinsurancebusiness thatis transactedbythe captive insurancecompanyor risk retention group chartered and licensed in this state.
§550.11.
Deposit required of association captive insurers A.
Before receiving a certificate of authority, all association captive insurance companies shall deposit with the commissioner a safekeeping or trust receipt from a bank located in the state and doing business within the state or from a savings and loan association chartered to do business in this state indicating that the association captive insurance company has deposited one hundred thousand dollars in money or bonds of the United States, the state of Louisiana, or any political subdivision thereof, of the par value of not less than one hundred thousand dollars.
All securitiesdepositedpursuantto this Sectionshall beheldin trustforthe Page 2 of 6 CODING:
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HB NO.
904 ENROLLED benefit and protection of and as security for all policyholders of the association captive insurance companymaking the deposit.
B.
The commissioner may require a captive insurance company or a risk retentiongroupcharteredandlicensedin this statetodepositwith thecommissioner a safekeeping or trust receipt from a bank located in this state and doing business within this state or from a savings and loan association chartered to do business in this state indicating that the captive insurance company or risk retention group has deposited money or bonds of the United States, this state, or a political subdivision of this state in an amount determined by the commissioner to address any financial solvencyconcerns.
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All securities deposited pursuant to this Section shall be held in trust for the benefit and protection of, and as security for, the policyholders of the captive insurance company or risk retention group or to address financial solvency concerns of the captive insurance companyor risk retention group.
* * * §550.13.
Authorized and prohibited types of insurance * * * E.(1) An association captive insurance company shall not expose itself to loss on anyone risk in an amount which exceeds ten percent of the captive insurer's capital and surplus.
A risk, or any portion thereof, which has been reinsured shall be deducted in determining the limitation of risk prescribed in this Section.
(2) Notwithstanding the provisions of Paragraph (1) of this Subsection, the commissioner may grant authorization to a captive insurance company or a risk retentiongroupcharteredandlicensedin this stateto exposeitselfto loss onasingle risk in any amount up to thirty percent of the capital and surplus of the captive insurancecompanyorriskretentiongroup.
Arisk,oranyportionthereof,whichhas been reinsured shall be deducted in determining the limitation of risk prescribed in this Section.
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HB NO.
904 ENROLLED §550.14.
Formation and meetings of board of directors;
additional requirements to transact insurance * * * B.
A captive insurance companyshall not engage in anyinsurance business in this state unless it complies with all of the following:
* * * (5) Board members of risk retention groups that are chartered and licensed in this state shall complywith the corporate governance standards for domestic risk retention groups established by the National Association of Insurance Commissioners.
* * * §550.20.
Prohibition on ownership Ownership by an insurance company A captive insurance company shall not do business in this state if an insurance company is directly or indirectly a member or owner of such captive insurance company, except when the member of the captive insurance companyare all insurance companies.
A captive insurance company or risk retention group chartered and licensed in this state may do business in this state, regardless of whether an insurance company is directly or indirectly a member or owner of the captive insurance companyor risk retention group.
§550.21.
Annual report of financial condition to commissioner;
regulations designating form;
alternative date to file annual report Every captive insurance company and risk retention group chartered and licensed in this state shall file each of the following with the department:
(1) Annuallyon or before March first, a statement of its financial condition for the year ending December thirty-first immediately preceding, and any amendment to the plan of operation at last year-end, verified bythe oath of at least two of its executive officers.
For a captive insurance company, The the statement shallbeintheformprescribedbythecommissioner.
Riskretentiongroupschartered andlicensedin this stateshall usetheappropriateNationalAssociationofInsurance Commissioners Annual Statement Blank prepared in accordance with the Page 4 of 6 CODING:
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HB NO.
904 ENROLLED Instructions Handbook adopted by the National Association of Insurance Commissioners, as applicable.
Risk retention groups chartered and licensed in this state shall follow the accounting procedures and practices prescribed by the Accounting Practices and Procedures Manual adopted by the National Association of Insurance Commissioners, unless otherwise provided in law.
* * * (4) Risk retention groups chartered and licensed in this state are required to maintaingovernancestandardsthataresubstantiallysimilartothestandardsadopted by the National Association of Insurance Commissioners.
* * * §550.23.
Taxes on premiums and assessments * * * H.
The premium tax revenues collected pursuant to this Section shall be transferred annually to the department for the regulation of captive insurance companies pursuant to this Subpart.
The commissioner may withhold the funds collected pursuant to this Section to defraythe expense of collecting taxes imposed by this Section and the enforcement of this Subpart and for the operation of the department.
* * * §550.24.
Rates A.
Each captive insurance companyand risk retention group chartered and licensed in this state may be required by the commissioner to shall file rates for propertyand casualtylines of insurance in accordance with Subpart O of Part IV of Chapter 4 of this Title, R.S.
22:1451 et seq.
on an actuariallyjustified basis with the department.
and mayuse the rates forty-five days after filing, unless the department disapproves the use of rates within the forty-five period.
For all other lines of insurance, captive insurance companies shall file rates on an actuarially justified basis with the department and may use the rates within the forty-five day period If the commissioner requires a captive insurance company or risk retention group Page 5 of 6 CODING:
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HB NO.
904 ENROLLED chartered and licensed in this state to file its rates with the department, the commissioner may disapprove a filing if it raises financial solvency concerns.
* * * Section 2.
This Act shall become effectiveupon signature bythe governor or, if not signedbythegovernor,uponexpirationofthetimeforbillstobecomelawwithoutsignature by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana.
If vetoed bythe governor and subsequentlyapprovedbythe legislature, this Act shall become effective on the dayfollowing such approval.
SPEAKER OF THE HOUSE OF REPRESENTATIVES PRESIDENT OF THE SENATE GOVERNOR OF THE STATE OF LOUISIANA APPROVED:
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