Note

Part I designation added by L 2008, c 190, §2.

§431:19-101 Definitions. As used in this article:

"Administrator" means the captive insurance administrator established in section 431:19-101.5.

"Affiliated entity" means any company, person, or other entity in the same corporate system as a parent or a member organization by virtue of common ownership, control, operation, or management.

"Association" means two or more members who are engaged in business or activities similar or related to the liability to which these members are exposed by virtue of any related, similar, or common business trade, product, services, premises, or operations; provided that the members of the association shall be individuals, corporations, limited liability companies, partnerships, associations, or other entities, except labor organizations, the member organizations of which or which does itself, whether or not in conjunction with some or all of the member organizations:

(1) Own, control, or hold with power to vote all of the outstanding voting securities of an association captive insurance company incorporated as a stock insurer;

(2) Have complete voting control over an association captive insurance company incorporated as a mutual insurer;

(3) Constitute all of the subscribers of an association captive insurance company formed as a reciprocal insurer; or

(4) Have complete voting control over an association captive insurance company formed as a limited liability company.

"Association captive insurance company" means a captive insurance company that insures risks of the member organizations of the association, and that may insure the risks of affiliated entities of the member organizations and the risks of the association itself.

"Branch captive insurance company" means an outside captive insurance company licensed under this article by the commissioner to transact the business of insurance in this State through a business unit that has its principal place of business in this State.

"Captive insurance company" or "captive insurer" means a class 1 company, class 2 company, class 3 company, class 4 company, or class 5 company formed or authorized under this article.

"Class 1 company" means a pure captive insurance company that is designated and licensed in this State to write business only as a reinsurer.

"Class 2 company" means a pure captive insurance company that is designated and licensed in this State to write business as a direct insurer or as a direct insurer and reinsurer.

"Class 3 company" means an association captive insurance company or risk retention captive insurance company that is designated and licensed in this State.

"Class 4 company" means a sponsored captive insurance company that is designated and licensed in this State.

"Class 5 company" means a reinsurance or excess insurance company that is a captive insurance company designated and licensed in this State pursuant to section 431:19-111.5.

"Controlled unaffiliated business" means, in the case of a pure captive insurance company, any person:

(1) That is not in the corporate system of a parent and its affiliated entities;

(2) That has an existing contractual relationship with a parent or one of its affiliated entities; and

(3) Whose risks are managed by the pure captive insurance company.

"Governing body" means the board of directors, subscriber's advisory committee, membership, or other entity responsible for the governance of a captive insurance company.

"Member organization" means any individual, corporation, limited liability company, partnership, association, or other entity that belongs to an association.

"Organizational document" means a captive insurance company's articles of association, articles of incorporation, articles of organization, subscribers' agreement, bylaws, operating agreement, or any other document that establishes the captive insurance company as a legal entity or prescribes its existence.

"Outside captive insurance company" means an insurance company licensed under the laws of a jurisdiction other than this State and not otherwise admitted to do business as an insurance company in this State, that insures the risks of its parent or any affiliated entities.

"Parent" means a corporation, limited liability company, partnership, other entity, or individual, that directly or indirectly owns, controls, or holds with power to vote more than fifty per cent of the outstanding voting interests of a pure captive insurance company organized as a stock corporation, nonprofit corporation, or limited liability company.

"Participant" means an entity that meets the requirements of section 431:19-305, and any affiliated entities thereof that are insured by a sponsored captive insurance company where the losses of the participant may be limited through a participant contract to the participant's pro rata share of the assets of one or more protected cells identified in the participant contract.

"Participant contract" means a contract by which a sponsored captive insurance company insures the risks of a participant and may also limit the losses of each participant to its pro rata share of the assets of one or more protected cells identified in such participant contract.

"Protected cell" means a separate account established by a sponsored captive insurance company formed or licensed under this article in which assets are maintained for one or more participants in accordance with the terms of one or more participant contracts to fund the liability of the sponsored captive insurance company assumed on behalf of the participants as set forth in the participant contracts.

"Pure captive insurance company" means a captive insurance company that only insures or reinsures risks of its parent and affiliated entities or of a controlled unaffiliated business.

"Pure nonprofit captive insurance company" means a pure captive insurance company formed without capital stock as a nonprofit corporation under chapter 414D, whose voting of membership interest is held by a parent organization formed under a nonprofit law or by such nonprofit parent and its affiliated entities.

"Risk retention captive insurance company" means a captive insurance company that is formed as a "risk retention group" as defined in chapter 431K.

"Sponsor" means any entity that meets the requirements of section 431:19-304 and is approved by the commissioner to provide all or part of the minimum required capital and surplus of a sponsored captive insurance company and to organize and operate a sponsored captive insurance company.

"Sponsored captive insurance company" means a captive insurance company:

(1) In which the minimum required capital and surplus is provided by one or more sponsors;

(2) That is formed or licensed under this article;

(3) That insures the risks only of its participants through separate participant contracts; and

(4) That may fund its liability to each participant through one or more protected cells. A sponsored captive insurance company segregates the assets of each protected cell from the assets of other protected cells and from the assets of the sponsored captive insurance company's general account. [L 1987, c 347, pt of §2; am L 1988, c 187, §8; am L 1989, c 207, §15; am L 1992, c 108, §2; am L 1996, c 248, §1; am L 1998, c 150, §2; am L 1999, c 302, §2; am L 2000, c 36, §2 and c 133, §1; am L 2001, c 194, §3; am L 2002, c 40, §71; am L 2003, c 209, §1; am L 2005, c 31, §1; am L 2007, c 232, §1; am L 2008, c 190, §3; am L 2012, c 253, §2; am L 2014, c 186, §9]