(1) In addition to the other provisions of this chapter, this section applies to a sponsored captive insurance company under Chapter 37, Captive Insurance Companies Act, that has a certificate of authority as a special purpose financial captive insurance company in accordance with this chapter. (2) A sponsored captive insurance company may have a certificate of authority as a special purpose financial captive insurance company under this chapter. (3) (a) For purposes of a sponsored captive insurance company having a certificate of authority as a special purpose financial captive insurance company, "general account" means the assets and liabilities of the sponsored captive insurance company not attributable to a cell. (b) For purposes of applying Chapter 27a, Insurer Receivership Act, to a sponsored captive insurance company having a certificate of authority as a special purpose financial captive insurance company, the definition of "insolvency" and "insolvent" in Section 31A-37a-102 shall be applied separately to: (i) each cell; and (ii) the special purpose financial captive insurance company's general account. (4) (a) A participant in a sponsored captive insurance company having a certificate of authority as a special purpose financial captive insurance company shall be a ceding insurer, unless approved by the commissioner before a person becomes a participant. (b) A change in a participant in a sponsored captive insurance company having a certificate of authority as a special purpose financial captive insurance company is subject to prior approval by the commissioner. (5) Notwithstanding Section 31A-37-401, a special purpose financial captive insurance company that is a sponsored captive insurance company may issue a security to a person not described in Section 31A-37-401 if the issuance to that person is approved by the commissioner before the issuance of the security. (6) Notwithstanding Section 31A-37a-302, a sponsored captive insurance company having a certificate of authority as a special purpose financial captive insurance company shall: (a) at the time of initial application for a certificate of authority as a special purpose financial captive insurance company, possess unimpaired paid-in capital and surplus of not less than $500,000; and (b) maintain at least $500,000 of unimpaired paid-in capital and surplus of not less than $500,000 during the time that it holds a certificate of authority under this chapter. (7) (a) For purposes of a sponsored captive insurance company having a certificate of authority as a special purpose financial captive insurance company, this Subsection (7) applies to: (i) a security issued by the special purpose financial captive insurance company with respect to a cell; or (ii) a contract or obligation of the special purpose financial captive insurance company with respect to a cell. (b) A sponsored captive insurance company having a certificate of authority as a special purpose financial captive insurance company shall include with a security, contract, or obligation described in Subsection (7)(a): (i) the designation of the cell; and (ii) a disclosure in a form and content satisfactory to the commissioner to the effect that the holder of the security or a counterparty to the contract or obligation has no right or recourse against the special purpose financial captive insurance company and its assets other than against an asset properly attributable to the cell. (c) Notwithstanding the requirements of this Subsection (7) and subject to other statutes or rules including this chapter and Chapter 37, Captive Insurance Companies Act, a creditor, ceding insurer, or another person may not use a failure to include a disclosure described in Subsection (7)(b), in whole or part, as the sole basis to have recourse against: (i) the general account of the special purpose financial captive insurance company; or (ii) the assets of another cell of the special financial captive insurance company. (8) In addition to Section 31A-37-401, a sponsored captive insurance company having a certificate of authority as a special purpose financial captive insurance company is subject to the following with respect to a cell: (a) (i) A sponsored captive insurance company having a certificate of authority as a special purpose financial captive insurance company shall establish a cell only for the purpose of insuring or reinsuring risks of one or more reinsurance contracts with a ceding insurer with the intent of facilitating an insurance securitization. (ii) Subject to Subsection (8)(a)(iii), a sponsored captive insurance company having a certificate of authority as a special purpose financial captive insurance company shall establish a separate cell with respect to a ceding insurer described in Subsection (8)(a). (iii) A sponsored captive insurance company having a certificate of authority as a special purpose financial captive insurance company shall establish a separate cell with respect to each reinsurance contract that is funded in whole or in part by a separate insurance securitization transaction. (b) A sponsored captive insurance company having a certificate of authority as a special purpose financial captive insurance company may not sale, exchange, or transfer an asset by, between, or among any of the sponsored captive insurance company's cells without the prior approval of the commissioner. (9) (a) A sponsored captive insurance company having a certificate of authority as a special purpose financial captive insurance company shall attribute an asset or liability to a cell and to the general account in accordance with the plan of operation approved by the commissioner. (b) Except as provided by Subsection (9)(a), a sponsored captive insurance company having a certificate of authority as a special purpose financial captive insurance company may not attribute an asset or liability between: (i) the sponsored captive insurance company's general account and a cell; or (ii) the sponsored captive insurance company's cells. (c) A sponsored captive insurance company having a certificate of authority as a special purpose financial captive insurance company shall attribute: (i) an insurance obligation, asset, or liability relating to a reinsurance contract entered into with respect to a cell; and (ii) an insurance securitization transaction related to the obligation, asset, or liability described in Subsection (9)(c)(i), including a security issued by the special purpose financial captive insurance company as part of the insurance securitization, to the cell. (d) The following shall reflect an insurance obligation, asset, or liability relating to a reinsurance contract and the insurance securitization transaction that are attributed to a cell: (i) a right, benefit, obligation, or a liability of a security attributable to a cell described in Subsection (9)(c); (ii) the performance under a reinsurance contract and the related insurance securitization transaction; and (iii) a tax benefit, loss, refund, or credit allocated pursuant to a tax allocation agreement to which the special purpose financial captive insurance company is a party, including a payment made by or due to be made to the special purpose financial captive insurance company pursuant to the terms of the tax allocation agreement. (10) In addition to Section 31A-37a-502: (a) Chapter 27a, Insurer Receivership Act, applies to each cell of a sponsored captive insurance company having a certificate of authority as a special purpose financial captive insurance company. (b) A proceeding or action taken by the commissioner pursuant to Chapter 27a, Insurer Receivership Act, with respect to a cell of a sponsored captive insurance company having a certificate of authority as a special purpose financial captive insurance company may not be the sole basis for a proceeding pursuant to Chapter 27a, Insurer Receivership Act, with respect to: (i) another cell of the special purpose financial captive insurance company; or (ii) the special purpose financial captive insurance company's general account. (c) (i) Except as provided in Subsection (10)(c)(ii), the receiver of a special purpose financial captive insurance company shall ensure that the assets attributable to one cell are not applied to the liabilities attributable to: (A) another cell; or (B) the special purpose financial captive insurance company's general account. (ii) Notwithstanding Subsection (10)(c)(i), if an asset or liability is attributable to more than one cell, the receiver shall deal with the asset or liability in accordance with the terms of a relevant governing instrument or contract. (d) The insolvency of a cell of a sponsored captive insurance company having a certificate of authority as a special purpose financial captive insurance company may not be the sole basis for the commissioner to prohibit: (i) a payment by the special purpose financial captive insurance company made pursuant to a special purpose financial captive insurance company security or reinsurance contract with respect to another cell; or (ii) an action required to make a payment described in Subsection (10)(d)(i).
‹ Prev All Utah sections Next ›
Lexace provides legal information, not legal advice, and no attorney–client relationship is created. Statute text is provided for general information and may not reflect the most recent amendments; verify against the official state code.