33-28-101. Definitions. As used in this chapter, unless the context requires otherwise, the following definitions apply:
(1) "Affiliated company" means any company in the same corporate system as a parent, an industrial insured, or a member organization by virtue of common ownership, control, operation, or management.
(2) "Association" means any legal association of sole proprietorships, corporations, partnerships, limited liability companies, or associations that has been in continuous existence for at least 1 year unless the 1-year requirement is waived by the commissioner, the member organizations of which collectively, or the association itself:
(a) owns, controls, or holds with power to vote all of the outstanding voting securities of an association captive insurance company incorporated as a stock insurer;
(b) has complete voting control over an association captive insurance company incorporated as a mutual insurer; or
(c) constitutes all of the subscribers of an association captive insurance company formed as a reciprocal insurer.
(3) "Association captive insurance company" means any company that insures risks of the member organizations of an association and their affiliated companies.
(4) "Branch business" means any insurance business transacted by a branch captive insurance company in this state.
(5) "Branch captive insurance company" means any foreign captive insurance company licensed by the commissioner to transact the business of insurance in this state through a business unit with a principal place of business in this state.
(6) "Branch operations" means any business operations of a branch captive insurance company in this state.
(7) "Captive insurance company" means any pure captive insurance company, association captive insurance company, sponsored captive insurance company, or industrial insured captive insurance company formed or licensed under the provisions of this chapter.
(8) "Cash equivalent" means any short-term, highly liquid investment that is:
(a) readily convertible to known amounts of cash; and
(b) so near to its maturity that it presents insignificant risk of changes in value because of changes in interest rates. Only an investment with an original maturity of 3 months or less qualifies as a cash equivalent.
(9) "Excess workers' compensation insurance" means, in the case of an employer that has insured or self-insured its workers' compensation risks in accordance with applicable state or federal law, insurance that is in excess of a specified perincident or aggregate limit established by the commissioner.
(10) "Foreign captive insurance company" means any captive insurance company formed under the laws of any jurisdiction other than this state.
(11) "Industrial insured" means an insured:
(a) who procures the insurance of any risk or risks by use of the services of a full-time employee acting as an insurance manager or buyer;
(b) whose aggregate annual premiums for insurance on all risks total at least $25,000; and
(c) who has at least 25 full-time employees.
(12) "Industrial insured captive insurance company" means any company that insures risks of the industrial insureds that comprise the industrial insured group and their affiliated companies.
(13) "Industrial insured group" means any group of industrial insureds that collectively:
(a) owns, controls, or holds with power to vote all of the outstanding voting securities of an industrial insured captive insurance company incorporated as a stock insurer; or
(b) has complete voting control over an industrial insured captive insurance company incorporated as a mutual insurer.
(14) "Member organization" means a sole proprietorship, corporation, partnership, or association that belongs to an association.
(15) "Parent" means a corporation, partnership, or individual that directly or indirectly owns, controls, or holds with power to vote more than 50% of the outstanding voting securities of a pure captive insurance company.
(16) "Participant" means an entity, as enumerated in 33-28-304, and any affiliates of the entity that are insured by a sponsored captive insurance company in which the losses of the participant are limited through a participant contract to the participant's pro rata share of the assets of one or more protected cells identified in the participant contract.
(17) "Participant contract" means a contract by which a sponsored captive insurance company insures the risks of a participant and limits the losses of each participant in the contract.
(18) "Protected cell" means a separate account established by a sponsored captive insurance company formed or licensed under the provisions of this chapter, in which assets are maintained for one or more participants in accordance with the terms of one or more participant contracts to fund the liability of the sponsored captive insurance company with respect to the participants as set forth in the participant contracts.
(19) "Pure captive insurance company" means any company that insures risks of its parent and affiliated companies.
(20) "Sponsor" means any entity that meets the requirements of 33-28-301 and 33-28-302 and is approved by the commissioner to provide all or part of the capital and surplus required by the applicable law and to organize and operate a sponsored captive insurance company.
(21) "Sponsored captive insurance company" means any captive insurance company:
(a) in which the minimum capital and surplus required by applicable law are provided by one or more sponsors;
(b) that is formed or licensed under the provisions of this chapter;
(c) that insures the risks of separate participants through participant contracts; and
(d) that funds its liability to each participant through one or more protected cells and segregates the assets of each protected cell from the assets of other protected cells and from the assets of the sponsored captive insurance company's general account.
History: En. Sec. 1, Ch. 298, L. 2001; amd. Sec. 8, Ch. 383, L. 2003.
