(D)

1. (1) A South Carolina coastal captive insurance company formed as a sponsored captive insurance company:

   1. (a) is exempt from the provisions of Section 38-90-220 that require that the business written by a sponsored captive insurance company, with respect to each protected cell, must be fronted by an insurance company license pursuant to the laws of:

      1. (i) a state; or
      2. (ii) a jurisdiction if the insurance company is a wholly owned subsidiary of an insurance company licensed pursuant to the laws of any state; provided that the South Carolina coastal captive insurance company also meets the requirements of subsection (E) of this section.
   2. (b) may create a protected cell as a legal person separate from the protected cell company and may organize a protected cell under any incorporation or organization option available under Section 38-90-60, unless the director finds such option is not feasible pursuant to Section 38-90-860(B);
   3. (c) may have as its sponsor an association formed to address coastal property and insurance issues.
2. (2) A South Carolina coastal captive insurance company may issue directly its own policies to insureds.

(E) Any South Carolina coastal captive insurance company that otherwise qualifies for the limited exemption from the provisions of Section 38-90-220 pursuant to subsection (D)(1) of this section and any South Carolina coastal captive insurance company, regardless of form, that issues policies directly to the public shall comply with the following:

1. (1) it shall not expose itself to a loss on one risk in an amount exceeding ten percent of its surplus to policyholders and any risk or portion of it which has been reinsured must be deducted in determining this limitation of risk;
2. (2) it shall not have loss reserves in excess of five times its surplus to policyholders;
3. (3) it shall not have net premiums written in excess of three times its surplus to policyholders and any risk or portion of it which has been reinsured must be deducted in determining this limitation of risk; and
4. (4) it shall file quarterly and annual statements with the department in accordance with statutory accounting principles on forms and in the manner prescribed by Section 38-13-80 and in conformity with the requirements of Section 38-13-85 with useful or necessary modifications as required and approved by the director as contained in Section 38-90-70.

(F) To conduct business in this State, a South Carolina coastal captive insurance company shall:

1. (1) obtain from the director a license authorizing it to conduct business as a South Carolina coastal captive insurance company in this State;
2. (2) hold at least one meeting of its governing body each year in this State;
3. (3) maintain its principal place of business in this State;
4. (4) appoint a registered agent to accept service of process and act otherwise on its behalf in this State; and
5. (5) name the director as the agent for the South Carolina coastal captive insurance company upon whom process, notice, or demand may be served if a registered agent, with reasonable diligence, is not located and served.

(G) Before receiving a license, a South Carolina coastal captive insurance company shall file with the director:

1. (1) a certified copy of its organizational documents;
2. (2) a statement under oath of its president and secretary or other persons considered appropriate by the director showing its financial condition; and
3. (3) other documents required by the director.

(H) In addition to the information required by subsection (G), the applicant South Carolina coastal captive insurance company shall file with the director evidence of:

1. (1) the amount and liquidity of its assets relative to the risks to be assumed;
2. (2) the adequacy of the expertise, experience, and character of the person who manages it;
3. (3) the overall soundness of its plan of operation;
4. (4) the adequacy of loss prevention programs;
5. (5) other overall factors considered relevant by the director in ascertaining if the proposed South Carolina coastal captive insurance company is able to meet its policy obligations; and
6. (6) any information required by Section 38-90-20 specifically applicable to the form of the South Carolina coastal captive insurance company, and fees prescribed by that section.

(I) Information submitted pursuant to this section is confidential as provided in Section 38-90-35, except that information is discoverable by a party in a civil action or contested case to which the South Carolina coastal captive insurance company that submitted the information is a party, upon a finding by the court that:

1. (1) the captive insurance company is a necessary party to the action and not joined only for the purposes of evading the confidentiality provisions of this chapter;
2. (2) the information sought is relevant, material to, and necessary for the prosecution or defense of the claim asserted in litigation; and
3. (3) the information sought is not available through another source.