31A-37-301 - Incorporation.
31A-37-301. Incorporation.
(1) A pure captive insurance company or a sponsored captive insurance company shall beincorporated as a stock insurer with the capital of the pure captive insurance company orsponsored captive insurance company:
(a) divided into shares; and
(b) held by the stockholders of the pure captive insurance company or sponsored captiveinsurance company.
(2) An association captive insurance company or an industrial insured captive insurancecompany may be:
(a) incorporated as a stock insurer with the capital of the association captive insurancecompany or industrial insured captive insurance company:
(i) divided into shares; and
(ii) held by the stockholders of the association captive insurance company or industrialinsured captive insurance company;
(b) incorporated as a mutual insurer without capital stock, with a governing body electedby the member organizations of the association captive insurance company or industrial insuredcaptive insurance company; or
(c) organized as a reciprocal.
(3) A captive insurance company may not have fewer than three incorporators of whomnot fewer than two must be residents of this state.
(4) (a) Before a captive insurance company formed as a corporation files thecorporation's articles of incorporation with the Division of Corporations and Commercial Code,the incorporators shall obtain from the commissioner a certificate finding that the establishmentand maintenance of the proposed corporation will promote the general good of the state.
(b) In considering a request for a certificate under Subsection (4)(a), the commissionershall consider:
(i) the character, reputation, financial standing, and purposes of the incorporators;
(ii) the character, reputation, financial responsibility, insurance experience, businessqualifications of the officers and directors;
(iii) any information in:
(A) the application for a certificate of authority; or
(B) the department's files; and
(iv) other aspects the commissioner considers advisable.
(5) (a) A captive insurance company formed as a corporation shall file with the Divisionof Corporations and Commercial Code:
(i) the captive insurance company's articles of incorporation;
(ii) the certificate issued pursuant to Subsection (4); and
(iii) the fees required by the Division of Corporations and Commercial Code.
(b) The Division of Corporations and Commercial Code shall file both the articles ofincorporation and the certificate described in Subsection (4) for a captive insurance company thatcomplies with this section.
(6) (a) The organizers of a captive insurance company formed as a reciprocal insurershall obtain from the commissioner a certificate finding that the establishment and maintenanceof the proposed association will promote the general good of the state.
(b) In considering a request for a certificate under Subsection (6)(a), the commissioner
shall consider:
(i) the character, reputation, financial standing, and purposes of the incorporators;
(ii) the character, reputation, financial responsibility, insurance experience, and businessqualifications of the officers and directors;
(iii) any information in:
(A) the application for a certificate of authority; or
(B) the department's files; and
(iv) other aspects the commissioner considers advisable.
(7) (a) An alien captive insurance company that has received a certificate of authority toact as a branch captive insurance company shall obtain from the commissioner a certificatefinding that:
(i) the home state of the alien captive insurance company imposes statutory or regulatorystandards in a form acceptable to the commissioner on companies transacting the business ofinsurance in that state; and
(ii) after considering the character, reputation, financial responsibility, insuranceexperience, and business qualifications of the officers and directors of the alien captive insurancecompany, and other relevant information, the establishment and maintenance of the branchoperations will promote the general good of the state.
(b) After the commissioner issues a certificate under Subsection (7)(a) to an alien captiveinsurance company, the alien captive insurance company may register to do business in this state.
(8) The capital stock of a captive insurance company incorporated as a stock insurer maynot be issued at less than par value.
(9) At least one of the members of the board of directors of a captive insurance companyformed as a corporation shall be a resident of this state.
(10) At least one of the members of the subscribers' advisory committee of a captiveinsurance company formed as a reciprocal insurer shall be a resident of this state.
(11) (a) A captive insurance company formed as a corporation under this chapter has theprivileges and is subject to the provisions of the general corporation law as well as the applicableprovisions contained in this chapter.
(b) If a conflict exists between a provision of the general corporation law and a provisionof this chapter, this chapter shall control.
(c) Except as provided in Subsection (11)(d), the provisions of this title pertaining to amerger, consolidation, conversion, mutualization, and redomestication apply in determining theprocedures to be followed by a captive insurance company in carrying out any of the transactionsdescribed in those provisions.
(d) Notwithstanding Subsection (11)(c), the commissioner may waive or modify therequirements for public notice and hearing in accordance with rules adopted under Section31A-37-106.
(e) If a notice of public hearing is required, but no one requests a hearing, thecommissioner may cancel the public hearing.
(12) (a) A captive insurance company formed as a reciprocal insurer under this chapterhas the powers set forth in Section 31A-4-114 in addition to the applicable provisions of thischapter.
(b) If a conflict exists between the provisions of Section 31A-4-114 and the provisions ofthis chapter with respect to a captive insurance company, this chapter shall control.
(c) To the extent a reciprocal insurer is made subject to other provisions of this titlepursuant to Section 31A-14-208, the provisions are not applicable to a reciprocal insurer formedunder this chapter unless the provisions are expressly made applicable to a captive insurancecompany under this chapter.
(d) In addition to the provisions of this Subsection (12), a captive insurance companyorganized as a reciprocal insurer that is an industrial insured group has the privileges of Section31A-4-114 in addition to applicable provisions of this title.
(13) The articles of incorporation or bylaws of a captive insurance company may notauthorize a quorum of a board of directors to consist of fewer than 1/3 of the fixed or prescribednumber of directors as provided in Section 16-10a-824.
Amended by Chapter 312, 2004 General Session