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House Bill 1944 |
House Author: Murphy et al. |
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Effective: 6-15-17 |
Senate Sponsor: Hughes |
House Bill 1944 amends the Insurance Code to revise statutory provisions governing captive insurance companies, including provisions relating to such a company's formation, certificate of authority, and capital and surplus requirements. The bill excepts insurance for employee benefits subject to the federal Employee Retirement Income Security Act of 1974 from the prohibition against a captive insurance company issuing life insurance and authorizes a captive insurance company to cede risks to or take credit for reserves on risks ceded to a nonaffiliated reinsurer if the reinsurer meets certain requirements. The bill authorizes the commissioner of insurance to waive the requirement for a captive insurance company to file an actuarial report with the company's annual report if the commissioner determines that the company meets certain criteria, requires a captive insurance company to notify the commissioner in writing when issuing distributions to policyholders, and authorizes the secretary of state to index in the public record any document filed with the secretary by a captive insurance company or related applicant. The bill establishes that a captive insurance company is not required to use a licensed insurance adjuster to adjust losses except to adjust a claim that a person that is not an affiliated company or an insured controlled unaffiliated business makes against an affiliated company insured by the captive insurance company.
House Bill 1944 provides for the formation of a captive exchange as a reciprocal or interinsurance exchange that operates as a captive insurance company. The bill provides for captive exchange subscriber requirements, attorney in fact requirements and powers and duties, and a subscriber declaration.