Louisiana § RS 22:550.13 - Authorized and prohibited types of insurance

§ RS 22:550.13. Authorized and prohibited types of insurance

            A. Except as otherwise provided in this Section, a captive insurance company licensed pursuant to this Subpart may transact any form of insurance classified in R.S. 22:47.

            B. A captive insurance company licensed pursuant to this Subpart shall comply with all of the following:

            (1) The insurer shall not directly provide insurance classified as life; health and accident; title; credit life, health, and accident; credit property and casualty; or annuity as described in R.S. 22:47.

            (2) The insurer shall not directly provide personal motor vehicle, homeowners' insurance coverage, or any other noncommercial line of coverage.

            (3) The insurer shall not directly provide workers' compensation or employers' liability insurance coverage, except in connection with a self-funded insurance program as prescribed in this Section.

            (4) The insurer shall not accept or cede reinsurance, except as otherwise provided in R.S. 22:550.17.

            (5) The insurer may provide excess workers' compensation insurance to its parent and affiliated companies, unless otherwise prohibited by the laws of the state in which the insurance is transacted. Any captive insurance company, unless prohibited by federal law, may reinsure workers' compensation of a qualified self-insured plan of its parent or affiliated companies.

            (6) The insurer may reinsure workers' compensation insurance provided pursuant to a program of self-funded insurance of its parent and affiliated companies if either one of the following applies:

            (a) The parent or affiliated company providing the self-funded insurance is certified as a self-insured employer by Louisiana Works, if the insurance is being transacted in this state.

            (b) The program of self-funded insurance is otherwise qualified pursuant to, or in compliance with, the laws of the state in which the insurance is transacted.

            (7) A risk retention group shall not insure any risks other than those of its members and owners.

            (8) Any captive insurance company may provide excess workers' compensation insurance to its parent and affiliated companies, unless prohibited by federal law or laws of the state having jurisdiction over the transaction. Any captive insurance company, unless prohibited by federal law, may reinsure workers' compensation of a qualified self-insured plan of its parent or affiliated companies.

            C. A pure captive insurance company shall not insure any risks other than those of its parent and affiliated companies or controlled unaffiliated businesses.

            D. An association captive insurance company shall not insure any risks other than those of the member organizations of its association and the affiliated companies of the member organizations.

            E. An association captive insurance company shall not expose itself to loss on any one risk in an amount which exceeds ten percent of the captive insurance company's capital and surplus. A risk, or any portion thereof, which has been reinsured shall be deducted in determining the limitation of risk prescribed in this Section.

            F. An association captive insurance company shall maintain a ratio of actual annual premiums written, net of reinsurance, to current capital and surplus less than or equal to four to one.

            G. Notwithstanding the provisions of this Section, a captive insurance company may obtain a certificate of authority to provide coverage for unrelated risks if the commissioner deems that extraordinary circumstances exist which make the provision of this coverage by a captive insurance company appropriate and in the best interest of the public. In determining whether such extraordinary circumstances exist, the commissioner shall consider all of the following factors:

            (1) The extent to which the particular coverage is available in the voluntary market.

            (2) The existence of a relationship between the parent of the captive insurance company and the proposed policyholders other than that of insurer to insured.

            (3) Whether the captive insurance company has sufficient capital and surplus to insure the proposed risks.

            (4) Any other factors which the commissioner deems appropriate.

            Acts 2008, No. 403, §1, eff. Jan. 1, 2009; Acts 2008, No. 743, §7; Redesignated by Acts 2009, No. 503, §3; Acts 2012, No. 633, §1; Acts 2025, No. 313, §2.