1. (A) No provisions of this title, other than those contained in this chapter or contained in specific references contained in this chapter and regulations applicable to them, apply to captive insurance companies.
2. (B) The director may exempt, by rule, regulation, or order, special purpose captive insurance companies, other than a special purpose captive insurance company formed as a risk retention group, on a case by case basis, from provisions of this chapter that he determines to be inappropriate given the nature of the risks to be insured.

3. (C) The provisions of Sections 38-5-120(A)(5), 38-5-120(B), 38-5-120(D)(1), 38-5-120(D)(2), 38-9-225, 38-9-230, 38-21-10, 38-21-30, 38-21-60, 38-21-70, 38-21-80, 38-21-90, 38-21-95, 38-21-100, 38-21-110, 38-21-120, 38-21-130, 38-21-140, 38-21-150, 38-21-160, 38-21-170, 38-21-220, 38-21-225, 38-21-230, 38-21-250, 38-21-270, 38-21-280, 38-21-285, 38-21-290, 38-21-310, 38-21-320, 38-21-330, 38-21-360, 38-55-75 and Chapters 44 and 46, Title 38 apply in full to a risk retention group licensed as a captive insurance company and, if a conflict occurs between those code sections and chapters referenced in this subsection and this chapter (Chapter 90, Title 38), then the code sections and chapters referenced in this subsection control.

   Text of (D) effective until January 1, 2017.

4. (D) Except as provided elsewhere in this chapter, the provisions of Chapter 87, Title 38 apply to a risk retention group licensed as a captive insurance company.

   Text of (D) effective January 1, 2017.

5. (D) Except as provided elsewhere in this chapter, the provisions of Chapter 87, Title 38 apply to a risk retention group licensed as a captive insurance company. The provisions of Section 38-87-30(D) apply in full to a risk retention group licensed as a captive insurance company and control if a conflict occurs between that code section and this chapter.

6. (E)

   1. (1) Except for Section 38-9-330(F) and Section 38-9-440, the provisions of Article 3 and Article 5, Chapter 9, Title 38 apply in full to a risk retention group licensed as a captive insurance company, and if a conflict occurs between those provisions and this chapter, the provisions of this subsection control.

   2. (2) The director may elect not to take regulatory action as otherwise required by Sections 38-9-330, 38-9-340, 38-9-350, and 38-9-360 if any of the following conditions exist:

      1. (a) the director establishes that the risk retention group's members, sponsoring organizations, or both, are well-capitalized entities whose financial condition and support for the risk retention group is adequately documented. In making this determination, the director shall, at a minimum, require the filing of at least three years of historical, audited financial statements of the members, sponsor, or both, to assess the financial ability of the members', sponsor's, or both, support of the risk retention group. In addition, one year of projected financial information must be reviewed if available. The members, sponsor, or both, shall have:

         1. (i) an investment grade rating from a nationally recognized statistical rating organization or A.M. Best rating of A- or better; or
         2. (ii) equity equal to or greater than one hundred million dollars or equity equal to or greater than ten times the risk retention group's largest net retained per occurrence limit;
      2. (b) each policyholder qualifies as an industrial insured in their state or this State, depending on which has the greater requirements, provided that if the policyholder's home state does not have an industrial insured exemption or equivalent, the policyholder must qualify under the industrial insured requirement of this State; or
      3. (c) the risk retention group's certificate of authority date of issue was before January 1, 2011, and, based on a minimum five-year history of successful operations, is specifically exempted, in writing, from the requirements for mandatory risk-based capital action by the director.

HISTORY: 2000 Act No. 331, Section 1; 2002 Act No. 188, Section 7, eff March 12, 2002; 2010 Act No. 217, Section 12, eff June 7, 2010; 2013 Act No. 18, Section 1, eff January 1, 2014; 2014 Act No. 282 (S.909), Section 17, eff June 10, 2014; 2015 Act No. 2 (S.342), Section 17, eff March 9, 2015; 2016 Act No. 191 (S.978), Section 4, eff January 1, 2017.

Effect of Amendment

2014 Act No. 282, Section 17, in subsection (B), inserted "other than a special purpose captive insurance company formed as a risk retention group,"; in subsection (C), substituted "38-5-120(A)(5), 38-5-120(B), 38-5-120(D)(1), 38-5-120(D)(2)," for "38-5-120(A)(3), 38-5-120(C), 38-5-120(D),"; and in subsections (C), (D), (E)(1) substituted "a captive insurance company" for "an industrial insured a captive insurance company".

2015 Act No. 2, Section 17, in (C), inserted reference to the following sections: 38-21-80, 38-21-100, 38-21-110, 38-21-220, 38-21-225, 38-21-230, 38-21-285, and 38-21-290.

2016 Act No. 191, Section 4, in (D) added the second sentence.