Oklahoma § 36-6470.29 - Sponsored captive insurance company – Supplemental

§ 36-6470.29. Sponsored captive insurance company – Supplemental

materials – Protected cells.

A. In addition to the provisions of Sections 6470.1 through

6470.28 of this title and the provisions of Sections 6470.29 through

6470.31 of this title shall apply to sponsored captive insurance

companies, and the provisions of Section 6470.24.1 of this title

shall apply to each protected cell of a sponsored captive insurance

company.

B. Supplemental license application materials.

In addition to the information required by subsection C of

Section 6470.3 of this title, each applicant sponsored captive

insurance company shall file with the Commissioner the following:

1. Materials demonstrating to the satisfaction of the

Commissioner how the applicant will report to the Commissioner on,

and account for, the loss and expense experience of each protected

cell;

2. A statement acknowledging that all financial records of the

sponsored captive insurance company, including records pertaining to

any protected cells, shall be made available for inspection or

examination by the Commissioner or the Commissioner's designated

agent;

3. All contracts or sample contracts between the sponsored

captive insurance company and any participants; and

4. Evidence that expenses shall be allocated to each protected

cell in a fair and equitable manner.

C. One or more sponsors may form a sponsored captive insurance

company under the Oklahoma Captive Insurance Company Act.

D. A sponsored captive insurance company formed or licensed

under the Oklahoma Captive Insurance Company Act may establish and

maintain one or more protected cells to insure risks of one or more

participants, subject to the following conditions:

1. The persons holding the voting interests of a sponsored

captive insurance company must be limited to its participants and

sponsors; provided, that a sponsored captive insurance company may

issue nonvoting securities or interests to other persons on terms

approved by the Commissioner;

2. Each protected cell must be accounted for separately on the

books and records of the sponsored captive insurance company to

reflect the financial condition and results of operations of the

protected cell, net income or loss, dividends or other distributions

Oklahoma Statutes - Title 36. Insurance

to participants, and other factors may be provided in the

participant contract or required by the Insurance Commissioner;

3. The assets of a protected cell must not be chargeable with

liabilities of any other protected cell or, unless otherwise agreed

in the applicable participant contract, of the sponsored captive

insurance company;

4. No sale, exchange, or other transfer of assets, or dividend

or other distribution, may be made with respect to a protected cell

by the sponsored captive insurance company without the consent of

the participants of each affected protected cell;

5. No sale, exchange, transfer of assets, dividend, or

distribution, other than a payment to a sponsor in accordance with

the applicable participant contract, may be made from a protected

cell to a sponsor or participant without the approval of the

Insurance Commissioner and in no event may the approval be given if

the sale, exchange, transfer, dividend, or distribution would result

in insolvency or impairment with respect to a protected cell;

6. A sponsored captive insurance company annually shall file

with the Insurance Commissioner financial reports the Insurance

Commissioner requires, which shall include, but are not limited to,

accounting statements detailing the financial experience of each

protected cell;

7. A sponsored captive insurance company shall notify the

Insurance Commissioner in writing within ten (10) business days of a

protected cell that is insolvent or otherwise unable to meet its

claim or expense obligations; and

8. No participant contract shall take effect without the prior

written approval of the Insurance Commissioner, and the addition of

each new protected cell and withdrawal of any participant or

termination of any existing protected cell constitutes a change in

the business plan of the sponsored captive insurance company

requiring the prior written approval of the Insurance Commissioner.

Added by Laws 2004, c. 334, § 36, emerg. eff. May 25, 2004. Amended

by Laws 2013, c. 41, § 21, eff. Nov. 1, 2013; Laws 2015, c. 298, §

25, eff. Nov. 1, 2015.