Rhode Island General Laws 27-43-3. Licensing – Authority
(a) Any captive insurance company, when permitted by its articles of association or charter, may apply to the commissioner for a license to do any and all insurance; provided, that:
(1) No subsidiary captive insurance company may insure any risks other than those of its parent and affiliated companies;
(2) No association captive insurance company may insure any risks other than those of the member organizations of its association, and their affiliated companies;
(3) No industrial insured captive insurance company may insure any risks other than those of the industrial insureds that comprise the industrial insured group, and their affiliated companies;
(4) No captive insurance company may provide personal lines of insurance, or any component of personal lines insurance; and
(5) No captive insurance company may accept or cede reinsurance, except as provided in § 27-43-7.
Terms Used In Rhode Island General Laws 27-43-3
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Association: means any association of individuals, corporations, partnerships, or associations that has a separate legal existence, the member organizations of which collectively:
(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 insurance company; or
(ii) Have complete voting control over an association captive insurance company incorporated as a mutual insurance company. See Rhode Island General Laws 27-43-1
- Association captive insurance company: means any company that insures risks of the member organizations of the association, and their affiliated companies. See Rhode Island General Laws 27-43-1
- Captive insurance company: means any subsidiary captive insurance company, association captive insurance company, or industrial insured captive insurance company formed or licensed under the provisions of this chapter, including a captive insurance company that is organized as a protected cell company under the Protected Cell Companies Act, chapter 64 of this title. See Rhode Island General Laws 27-43-1
- Commissioner: means the director of the department of business regulation. See Rhode Island General Laws 27-43-1
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- in writing: include printing, engraving, lithographing, and photo-lithographing, and all other representations of words in letters of the usual form. See Rhode Island General Laws 43-3-16
- Industrial insured: means an insured:
(i) Who procures the insurance of any risk or risks by use of the services of a full-time employee acting as an insurance manager or buyer;
(ii) Whose aggregate annual premiums for insurance on all risks total at least twenty-five thousand dollars ($25,000); and
(iii) Who has at least twenty-five (25) full-time employees. See Rhode Island General Laws 27-43-1
- Industrial insured captive insurance company: means any company that insures risks of the industrial insured that comprise the industrial insured group, and their affiliated companies. See Rhode Island General Laws 27-43-1
- Industrial insured group: means any group that meets either of the following criteria:
(i) Any group of industrial insureds that collectively: (A) 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 insurance company, or (B) Have complete voting control over an industrial insured captive insurance company incorporated as a mutual insurance company; or
(ii) Any group created under Rhode Island General Laws 27-43-1
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Parent: means a corporation, partnership, or individual that directly or indirectly owns, controls, or holds with power to vote more than fifty percent (50%) of the outstanding voting securities of a subsidiary captive insurance company. See Rhode Island General Laws 27-43-1
- person: may be construed to extend to and include co-partnerships and bodies corporate and politic. See Rhode Island General Laws 43-3-6
- Personal lines of insurance: means personal motor vehicle, homeowner's insurance coverage, health insurance, life insurance, workers' compensation, residential fire insurance, or any component of them. See Rhode Island General Laws 27-43-1
- Service of process: The service of writs or summonses to the appropriate party.
- Subpoena: A command to a witness to appear and give testimony.
- Subsidiary captive insurance company: means any company that insures risks of its parent and affiliated companies. See Rhode Island General Laws 27-43-1
(b) No captive insurance company shall do any insurance business in this state unless:
(1) It first obtains from the commissioner a license authorizing it to do insurance business in this state;
(2) Its board of directors holds at least one meeting each year in this state;
(3) It maintains its principal place of business in this state; and
(4) It appoints a resident registered agent to accept service of process and to act on its behalf in this state. Whenever the registered agent cannot with reasonable diligence be found at the registered office of the captive insurance company, the commissioner shall 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 shall file with the commissioner a certified copy of its charter and bylaws, a statement under oath of its president and secretary showing its financial condition, and any other statements or documents required by the commissioner.
(2) In addition to the information required by subsection (c)(1) of this section each applicant captive insurance company shall file with the commissioner evidence of the following:
(i) The amount and liquidity of its assets relative to the risks to be assumed;
(ii) The adequacy of the expertise, experience, and character of the person or persons who will manage it;
(iii) The overall soundness of its plan of operation;
(iv) The adequacy of the loss prevention programs of its parent, member organizations, or industrial insured as applicable; and
(v) Any other factors deemed relevant by the commissioner in ascertaining whether the proposed captive insurance company will be able to meet its policy obligations.
(3) Information submitted pursuant to this section shall be and remain confidential, and may not be made public by the commissioner or an employee or agent of the commissioner without the written consent of the company, except that:
(i) The information may be 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 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; and
(C) A subpoena issued by a judicial or administrative officer of competent jurisdiction has been submitted to the commissioner; provided, that the provisions of this subdivision do not apply to any industrial insured captive insurance company insuring the risks of an industrial insured group as defined in § 27-43-1(8)(ii); and
(ii) The commissioner may, in his or her discretion, disclose the information to a public officer having jurisdiction over the regulation of insurance in another state, provided that:
(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 and to remain confidential.
(d) The commissioner is authorized to retain legal, financial, and examination services from outside the department, the reasonable cost of which may be charged to the applicant. Each captive insurance company shall pay to the commissioner a nonrefundable fee of one thousand dollars ($1,000) for examining, investigating, and processing its application for license. In addition, it shall pay a license fee for the first year of registration and an annual fee for each year after this of five hundred dollars ($500).
(e) If the commissioner is satisfied that the documents and statements that the captive insurance company has filed comply with the provisions of this chapter, the commissioner may grant a license authorizing it to do insurance business in this state in accordance with the provisions of this title.
History of Section.
P.L. 1988, ch. 76, § 1; P.L. 1996, ch. 232, § 1; P.L. 1996, ch. 256, § 1; P.L. 2000, ch. 176, § 1; P.L. 2000, ch. 373, § 1.