SB 908 — AN ACT AUTHORIZING FOREIGN BRANCH CAPTIVE INSURANCE COMPANIES.

LCO 4519 \\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-00908-R1 of 17 SB.docx Raised Bill No.

4519908 1 of 17 Raised Bill No.908 (B) Only insures against risks covered by insurance policies sold, solicited or negotiated through the insurance agents or insurance producers that own or control such captive insurance company;

(6) "Branch business" means any insurance business transacted in thisLCO state4519 by{\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-0092 aof branch17 captiveR01-SB.docx insurance} company.Raised Bill No.

LCO908 No.this state by a branch captive insurance company.

4519 2 of 17 Raised Bill No.908 (7) "Branch captive insurance company" means any alien captive insurance company licensed by the commissioner to transact the business of insurance in this state through a business unit with a principal place of business in this state.

(B) Who, (i) in the case of a pure captive insurance company, has an existingLCO contractual4519 relationship{\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-0093 with a parent or one of the17 parent'sR01-SB.docx affiliated} companies,Raised orBill (ii) in the case of an industrial insured captive LCO No.

4519908 3existing contractual relationship with a parent or one of 17the Raisedparent's Billaffiliated No.908companies, or (ii) in the case of an industrial insured captive insurance company, has an existing contractual relationship with an industrial insured or one of the industrial insured's affiliated companies;

(A) Who procures the insurance of any risk or risks by use of the servicesLCO of4519 a{\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-00904 full-timeof employee17 actingR01-SB.docx as} anRaised insuranceBill managerNo. or buyer;

LCO908 No.services of a full-time employee acting as an insurance manager or buyer;

4519(B) 4Whose ofaggregate 17annual Raisedpremiums Billfor No.insurance on all risks total at least twenty-five thousand dollars;

908 (B) Whose aggregate annual premiums for insurance on all risks total at least twenty-five thousand dollars;

(A) A special purpose financial captive insurance company directly orLCO indirectly4519 obtains{\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-009085 proceeds through the issuance of securities17 byR01-SB.docx such} companyRaised orBill anyNo. other person;

908 or (B)indirectly Aobtains personproceeds provides,through for the benefitissuance of asecurities specialby purposesuch financialcompany LCOor No.any other person;

4519or 5(B) A person provides, for the benefit of 17a Raisedspecial Billpurpose No.908financial captive insurance company, one or more letters of credit or other assets that the commissioner has authorized such company to treat as admitted assets for purposes of its annual report.

[(23)] (26) "Participant contract" means a contract entered into by a sponsoredLCO captive4519 insurance{\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-0096 company and a participant by which the sponsored captive insurance company insures the risks of the17 participantR01-SB.docx and} limitsRaised theBill losses of each such participant to its pro rata share of the assets of one or more protected cells identified in such LCO No.

4519908 6sponsored captive insurance company and a participant by which the sponsored captive insurance company insures the risks of 17the Raisedparticipant Billand No.908limits the losses of each such participant to its pro rata share of the assets of one or more protected cells identified in such participant contract.

[(29)] (32) "Special purpose financial captive insurance company" meansLCO a4519 company{\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-0097 thatof is17 licensedR01-SB.docx by} theRaised commissionerBill inNo. accordance with section 38a-91bb, as amended by this act.

[(30)]908 (33)means "Speciala purposecompany financialthat captiveis insurancelicensed companyby LCOthe No.commissioner in accordance with section 38a-91bb, as amended by this act.

4519[(30)] 7(33) of"Special 17purpose Raisedfinancial Billcaptive No.908insurance company security" means a security issued by (A) a special purpose financial captive insurance company, or (B) a third party, the proceeds of which are obtained directly or indirectly by a special purpose financial captive insurance company.

Subsection (e) of section 38a-91bb of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1,LCO 2019):4519 {\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-0098 of 17 R01-SB.docx } Raised Bill No.

(e)908 (1)1, If2019): the commissioner finds that the documents and statements that a captive insurance company, other than a special purpose financial captive insurance company, has filed comply with the LCO No.

4519(e) 8(1) ofIf 17the Raisedcommissioner Billfinds No.908that the documents and statements that a captive insurance company, other than a special purpose financial captive insurance company, has filed comply with the provisions of sections 38a-91aa to 38a-91tt, inclusive, as amended by this act, the commissioner may grant a license authorizing the company to do insurance business in this state until April first thereafter.

(3) The commissioner shall not grant a license to a branch captive insuranceLCO company4519 unless{\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-0099 theof alien17 captiveR01-SB.docx insurance} companyRaised grantsBill theNo. commissioner authority to examine the alien captive insurance company in the jurisdiction in which the alien captive insurance company is formed.

LCO908 No.insurance company unless the alien captive insurance company grants the commissioner authority to examine the alien captive insurance company in the jurisdiction in which the alien captive insurance company is formed.

4519 9 of 17 Raised Bill No.908 (4) The commissioner shall not grant a license to a foreign branch captive insurance company unless the foreign branch captive insurance company or alien captive insurance company grants the commissioner authority to examine the affairs of such foreign branch captive insurance company or alien captive insurance company in the jurisdiction in which such foreign branch captive insurance company or alien captive insurance company was formed, operates or maintains books and records.

(F)LCO In4519 the{\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-00910 case of a17 specialR01-SB.docx purpose} financialRaised captiveBill insuranceNo. company, not less than two hundred fifty thousand dollars;

908 (F) In the case of a special purpose financial captive insurance company, not less than two hundred fifty thousand dollars;

and LCO(H) No.In the case of an agency captive insurance company, not less than five hundred thousand dollars.

4519 10 of 17 Raised Bill No.908 (H) In the case of an agency captive insurance company, not less than five hundred thousand dollars.

(3)LCO (A)4519 The{\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-0011 commissioner shall not issue a license to a foreign branch captive insurance company or allow the company to retain such license unless the company has and maintains, as security for the payment of liabilities17 attributableR01-SB.docx to} theRaised foreignBill branchNo. operations:

908 (3) (A) The commissioner shall not issue a license to a foreign branch captive insurance company or allow the company to retain such license unless the company has and maintains, as security for the payment of liabilities attributable to the foreign branch operations:

and LCO(ii) No.Reserves on such insurance policies or such reinsurance contracts as may be issued or assumed by the foreign branch captive insurance company through its foreign branch operations, including reserves for losses, allocated loss adjustment expenses, incurred but not reported losses and unearned premiums with regard to business written through the foreign branch operations.

4519 11 of 17 Raised Bill No.908 (ii) Reserves on such insurance policies or such reinsurance contracts as may be issued or assumed by the foreign branch captive insurance company through its foreign branch operations, including reserves for losses, allocated loss adjustment expenses, incurred but not reported losses and unearned premiums with regard to business written through the foreign branch operations.

(b) The commissioner may adopt regulations, in accordance with chapter 54, to establish additional capital and surplus requirements based upon the type, volume and nature of insurance business transacted.LCO 4519 {\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-0012 of 17 R01-SB.docx } Raised Bill No.

908 transacted.

The LCOcommissioner No.shall consider the type, volume and nature of the insurance or reinsurance business transacted by such a captive insurance company in establishing the amount of unimpaired paid-in capital and surplus the company is required to maintain.

4519 12 of 17 Raised Bill No.908 commissioner shall consider the type, volume and nature of the insurance or reinsurance business transacted by such a captive insurance company in establishing the amount of unimpaired paid-in capital and surplus the company is required to maintain.

(b) (1) (A) Prior to March first of each year and, in the case of pure captive insurance companies and industrial insured captive insurance companies, prior to March fifteenth of each year, each captive insuranceLCO company,4519 other{\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-0013 than a branch captive insurance company or a foreign branch captive insurance company that is required to submit reports or statements in the foreign branch captive insurance company's domiciliary jurisdiction, shall submit to the [Insurance Commissioner] commissioner a report of its17 financialR01-SB.docx condition} verifiedRaised byBill oathNo. of two of its executive officers.

The908 commissionerinsurance shallcompany, establishother than a branch captive insurance company or a foreign branch captive insurance company that is required to submit reports or statements in the formforeign andbranch contentcaptive ofinsurance company's domiciliary jurisdiction, shall submit to the annual[Insurance Commissioner] commissioner a report toof beits filedfinancial condition verified by LCOoath No.of two of its executive officers.

4519The 13commissioner shall establish the form and content of 17the Raisedannual Billreport No.908to be filed by special purpose captive insurance companies.