S.C. Code Ann. § 38-90-60 – Incorporation options and requirements

(A) A pure captive insurance company or a sponsored captive insurance company must be incorporated as a stock insurer with its capital divided into shares and held by the stockholders.
(B) An association captive insurance company or an industrial insured captive insurance company may be:
1. (1) incorporated as a stock insurer with its capital divided into shares and held by the stockholders;
2. (2) incorporated as a mutual insurer without capital stock, the governing body of which is elected by the member organizations of its association; or
3. (3) organized as a reciprocal insurer in accordance with Chapter 17.
(C) A captive insurance company may not have fewer than three incorporators of whom not fewer than two must be residents of this State.
(D) In the case of a captive insurance company formed as a corporation, before the articles of incorporation are transmitted to the Secretary of State, the incorporators shall petition the director to issue a certificate setting forth a finding that the establishment and maintenance of the proposed corporation will promote the general good of the State. In arriving at this finding the director shall consider:
1. (1) the character, reputation, financial standing, and purposes of the incorporators;
2. (2) the character, reputation, financial responsibility, insurance experience, and business qualifications of the officers and directors; and
3. (3) other aspects as the director considers advisable.
(E) The articles of incorporation, the certificate issued pursuant to subsection (D), and the organization fees required by Section 38-90-20(D) must be transmitted to the Secretary of State, who shall record both the articles of incorporation and the certificate.
(F) In the case of a captive insurance company formed as a reciprocal insurer, the organizers shall petition the director, to issue a certificate setting forth the director's finding that the establishment and maintenance of the proposed association will promote the general good of the State. In arriving at this finding the director shall consider:
1. (1) the character, reputation, financial standing, and purposes of the incorporators;
2. (2) the character, reputation, financial responsibility, insurance experience, and business qualifications of the officers and directors; and
3. (3) other aspects the director considers advisable.
(G) In the case of a captive insurance company licensed as a branch captive insurance company, the alien captive insurance company shall petition the director to issue a certificate setting forth the director's finding that, after considering the character, reputation, financial responsibility, insurance experience, and business qualifications of the officers and directors of the alien captive insurance company, the licensing and maintenance of the branch operations will promote the general good of the State. The alien captive insurance company may register to do business in this State after the director's certificate has been issued.
(H) The capital stock of a captive insurance company incorporated as a stock insurer must be issued at not less than par value.
(I) In the case of a captive insurance company formed as a 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.
(J) In the case of a captive insurance company formed as a reciprocal insurer, at least one of the members of the subscribers' advisory committee must be a resident of this State.
(K) A captive insurance company formed as a corporation under this chapter has the privileges and is subject to the provisions of the general corporation law as well as the applicable provisions contained in this chapter. If a conflict occurs between a provision of the general corporation law 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.
(L)
1. (1) A captive insurance company formed as a reciprocal insurer under 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 under this chapter unless the provisions are expressly made applicable to a captive insurance company under this chapter.
2. (2) In addition to the provisions of (L)(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.
(M) The articles of incorporation or bylaws of a captive insurance company may authorize a quorum of a board of directors to consist of no fewer than one-third of the fixed or prescribed number of directors as provided for in Section 33-8-240(b).