Ohio § 3964.174

§ 3964.174.

(A) If a protected cell captive insurance company enters into a transaction with respect

to a particular protected cell, or incurs a liability arising from an activity or

asset of a particular protected cell, a claim by any person in connection with the

transaction or liability extends only to the cell assets of the protected cell. (B) If a protected cell captive insurance company enters into a transaction in its own

right and not in respect of any of its protected cells, incurs a liability arising

from an activity in its own right and not in respect of any of its protected cells,

or incurs a liability arising from an asset held in its own right and not in respect

of any of its protected cells, then a claim by any person or a liability in connection

with this type of transaction, activity, or ownership shall extend only to the general

assets of the protected cell captive insurance company. (C) Except as provided by divisions (D) and (E) of this section, a protected cell captive

insurance company shall not do either of the following: (1) Satisfy a liability attributable to a particular protected cell of the protected

cell captive insurance company from the general assets of the protected cell captive

insurance company; (2) Satisfy a liability, whether attributable to a particular protected cell or not,

from the cell assets of another protected cell. (D)(1) A protected cell captive insurance company may satisfy any liability attributable

to a particular protected cell from the protected cell captive insurance company's

general assets if both of the following conditions are met: (a) The articles of incorporation, bylaws, code of regulations, or similar organization

documents of the protected cell captive insurance company allow the protected cell

captive insurance company to satisfy the liability. (b) Satisfying the liability has been approved by two-thirds of the participants of the

protected cell or, if the protected cell has more than one class of participants,

two-thirds of each class of participants, unless the organizational document of the

protected cell insurance company requires a greater percentage. (2) Prior to a protected cell captive insurance company satisfying any liability attributable

to a particular protected cell from the protected cell captive insurance company's

general assets, the directors who authorize the satisfaction of the liability shall

state as part of the authorization that, having inquired into the affairs and prospects

of the protected cell captive insurance company, they have formed an opinion that

includes both of the following: (a) Immediately following the date on which the liability is proposed to be met by the

general assets of the protected cell captive insurance company, the protected cell

captive insurance company will be able to discharge its liabilities as they fall due. (b) Having regard to the prospects of the protected cell captive insurance company, the

intentions of the directors with respect to the management of the protected cell captive

insurance company's business, and the amount and character of the financial resources

that will, in their view, be available to the protected cell captive insurance company,

the protected cell captive insurance company will be able to continue its business

and will be able to discharge its liabilities as they fall due for a period of one

year immediately following the date on which the liability is proposed to be satisfied

by the general assets of the protected cell captive insurance company or until the

protected cell captive insurance company is dissolved, whichever first occurs. (E)(1) A protected cell captive insurance company may satisfy any liability, whether attributable

to a particular protected cell or not, from the cell assets of another protected cell

if it is permitted to do so by the articles of incorporation, bylaws, code of regulations,

or other organizational document, as well as the participant agreement, of the protected

cell whose assets are proposed to be used to satisfy the liability. (2)(a) Prior to a protected cell captive insurance company satisfying any liability from

the assets of a protected cell that is not responsible for the liability, the directors

who authorize the satisfaction shall make a full inquiry into the affairs and prospects

of the protected cell whose assets are proposed to be used to satisfy the liability

to determine that both of the following are true: (i) Immediately following the date on which the liability is proposed to be met by the

cell assets of the protected cell in question, the protected cell will be able to

discharge its liabilities as they fall due. (ii) Having regard to the prospects of the protected cell, the intentions of the directors

with respect to the management of the protected cell's business, and the amount and

character of the financial resources that will in their view be available to the protected

cell in question, the protected cell will be able to continue to carry on business

and will be able to discharge its liabilities as they become due or until the protected

cell is dissolved, whichever first occurs. (b) If the criteria of division (E)(2)(a) of this section are met, the directors shall

make a written authorization stating the outcome of their inquiry and shall submit

the authorization to the superintendent for approval prior to satisfying the liability. (F) A director who makes a statement under division (D) or (E) of this section without

having reasonable grounds for the opinion expressed in the statement violates this

chapter and may be removed by order of the superintendent.