17:47B-17 Sponsored captive insurance company.
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/nj/title-17/chapter-47b/17-47b-17·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
17. a. One or more sponsors may form a sponsored captive insurance company as prescribed in this act.
b. A sponsored captive insurance company may establish and maintain one or more protected cells to insure the risks of one or more participants, subject to the following conditions:
(1)A sponsored captive insurance company shall not have any stockholders other than its participants and sponsors.
(2)A sponsored captive insurance company shall separately account for each protected cell in its books and records to reflect the financial condition and results of operations of each protected cell, net income or loss of each protected cell, dividends or other distributions to participants of each protected cell and any other factors prescribed in the participant contract or required by the commissioner.
(3)The assets of a sponsored captive insurance company are not chargeable with liabilities arising out of any other insurance business the sponsored captive insurance company may conduct.
(4)A sponsored captive insurance company shall not sell, exchange or transfer assets, issue a dividend or make a distribution between or among any of its protected cells without the written consent of all its protected cells.
(5)A sponsored captive insurance company shall not sell, exchange or transfer assets, issue a dividend or make a distribution to a sponsor or participant unless the commissioner approves the transaction and determines that the transaction will not cause insolvency or impairment of any protected cell.
(6)At the time of filing its annual report pursuant to section 6 of this act, a sponsored captive insurance company shall also file with the department:
(a)an accounting statement detailing the financial experience of each protected cell, in a form to be prescribed by the commissioner; and
(b)any other financial report prescribed by the commissioner.
(7)A sponsored captive insurance company shall notify the commissioner in writing within 10 days after learning of any protected cell that is insolvent or otherwise unable to meet its claim or expense obligations.
(8)A sponsored captive insurance company shall obtain the commissioner's written approval of any participant contract before the contract becomes effective.
(9)The addition of a new participant or the withdrawal of a participant from an existing sponsored captive insurance company shall be considered a change in the captive insurer's business plan and shall require the commissioner's approval.
(10)With respect to each protected cell, the insurance business written by a sponsored captive insurance company may be:
(a)assumed from an insurance company licensed under the laws of any state;
(b)reinsured by a reinsurer authorized or accredited by the State; or
(c)secured by a trust fund or an irrevocable letter of credit.
L.2011, c.25, s.17.