§ 27-43-2 - Incorporation of captive insurance companies in this state.
SECTION 27-43-2
§ 27-43-2 Incorporation of captiveinsurance companies in this state. – (a) A subsidiary captive insurance company shall be incorporated as a stockinsurance company with its capital divided into shares and held by thestockholders.
(b) An association captive insurance company or an industrialinsured captive insurance company may be:
(1) Incorporated as a stock insurance company with itscapital divided into shares and held by the stockholders; or
(2) Incorporated as a mutual insurance company withoutcapital stock, the governing body of which is elected by the memberorganizations of its association; or
(3) Organized as a reciprocal insurer in accordance withchapter 17 of this title.
(c) A captive insurance company which is formed as acorporation shall have not less than three (3) incorporators of whom not lessthan two (2) shall be residents of this state.
(d) In the case of a captive insurance company formed as acorporation, before the articles of association are transmitted to thesecretary of state, the incorporators shall petition the commissioner to issuea certificate setting forth his or her finding that the establishment andmaintenance of the proposed corporation will promote the general good of thestate. In arriving at the finding, the commissioner shall consider:
(i) The character, reputation, financial responsibility,insurance experience, and business qualifications of the incorporators and theproposed officers and directors;
(ii) The sources and availability of its capital; and
(iii) Other financial and business matters that thecommissioner deems advisable.
(2) In the case of a captive insurance company formed as areciprocal insurer, the organizers shall petition the commissioner to issue acertificate setting forth the commissioner's finding that the establishment andmaintenance of the proposed association will promote the general good of thestate. In arriving at that finding the commissioner shall consider:
(i) The character, reputation, financial responsibility,insurance experience, and business qualifications of the organizers and theattorney in fact;
(ii) The sources and availability of its capital; and
(iii) Other financial and business matters that thecommissioner shall deem advisable.
(e) The articles of association, the certificate, and theorganization fee shall be transmitted to the secretary of state, who shall thenrecord both the articles of incorporation and the certificate.
(f) The capital stock of a captive insurance companyincorporated as a stock insurance company shall be issued at not less than parvalue, and all capital insurance companies shall have the minimum capitalprovided in § 27-43-4.
(g) In the case of a captive insurance company formed as acorporation in this state, at least one of the members of the board ofdirectors of a captive insurance company incorporated in this state shall be aresident of this state.
(2) In the case of a captive insurance company formed as areciprocal insurer in this state, at least one of the members of thesubscribers' advisory committee shall be a resident of this state.
(h) Every captive insurance company referenced within thissubsection has the powers contained in this chapter, and is subject to theprovisions of this chapter, chapter 1 of this title, and chapter 1.2 of title7; provided, that insofar as the provisions of this chapter are inconsistentwith the provisions of chapter 1 of this title or chapter 1.2 of title 7, theprovisions of this chapter are controlling.
(i) Captive insurance companies formed as corporations underthe provisions of this chapter have the privileges and are subject to theprovisions of the general corporation law and the applicable provisionscontained in this chapter. In the event of conflict between the provisions ofthe general corporation law and the provisions of this chapter, this chaptercontrols.
(j) Captive insurance companies formed as reciprocal insurersunder the provisions of this chapter have all the privileges and are subject toall the obligations imposed by chapter 17 of this title in addition to theapplicable provisions of this chapter. In the event of a conflict between theprovisions of chapter 17 and the provisions of this chapter, this chaptercontrols. To the extent that chapter 17 also subjects a reciprocal insurer tothe other provisions of this title, these other provisions are not applicableto a reciprocal insurer formed under this chapter unless these provisions areexpressly made applicable to these captive insurance companies by this chapter.
(k) The articles of incorporation or bylaws of a captiveinsurance company formed as a corporation may authorize a quorum of a board ofdirectors to consist of no fewer than one third (1/3) of the fixed or amajority of the prescribed number of directors as determined by the charter orthe bylaws of the corporation or by § 7-1.2-802.
(l) The subscribers' agreement or other organizing documentof a captive insurance company formed as a reciprocal insurer may authorize aquorum of a subscriber's advisory committee to consist of no less than onethird ( 1/3) of the number of its members.