Ark. Code § 23-63-1601

Current with legislation from 2024 Fiscal and Special Sessions.

Section 23-63-1601 - Definitions

As used in this subchapter:

(1) "Affiliated company" means a company in the same corporate system as a parent, an industrial insured, or a member organization by virtue of common ownership, control, operation, or management;

(2) "Alien captive insurance company" means an insurance company formed to write insurance business for its parents and affiliates and licensed under the laws of an alien jurisdiction that imposes statutory or regulatory standards in a form acceptable to the Insurance Commissioner on companies transacting the business of insurance in the alien jurisdiction;

(3) "Association" means a legal association of individuals, corporations, partnerships, or associations that has been in continuous existence for at least one (1) year:

(A) The member organizations of which collectively, or which does itself:

(i) 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; or

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

(B) The member organizations of which collectively constitute all of the subscribers of an association captive insurance company formed as a reciprocal insurer;

(4) "Association captive insurance company" means a company that insures risks of the member organizations of the association and their affiliated companies;

(5) "Branch business" means any insurance business transacted by a branch captive insurance company in this state;

(6)

(A) "Branch captive insurance company" means an alien captive insurance company licensed by the commissioner to transact the business of insurance in this state through a business unit with a principal place of business in this state.

(B) A branch captive insurance company shall be a pure captive insurance company with respect to operations in this state unless permitted by the commissioner;

(7) "Branch operations" means any business operations of a branch captive insurance company in this state;

(8) "Captive insurance company" means a producer reinsurance captive insurance company, branch captive insurance company, pure captive insurance company, association captive insurance company, sponsored captive insurance company, special purpose captive insurance company, or industrial insured captive insurance company formed or licensed under this subchapter;

(9) "Commissioner" means the Insurance Commissioner;

(10) "Controlled unaffiliated business" or "controlled unaffiliated entity" means a company:

(A) That is not in the corporate system of a parent and affiliated companies;

(B) That has an existing contractual relationship with a parent or affiliated company; and

(C) Whose risks are managed by a pure captive insurance company or participant in a sponsored captive insurance company;

(11) "Department" means the State Insurance Department;

(12) "General account" means all assets and liabilities of the sponsored captive insurance company not attributable to a protected cell;

(13) "Incorporated protected cell" means a protected cell that is established as a corporation or other legal entity separate from the sponsored captive insurance company or producer reinsurance captive insurance company of which it is a part;

(14)

(A) "Industrial insured" means an insured:

(i) That procures insurance by use of the services of a full-time employee acting as a risk manager or insurance manager or utilizing the services of a regularly and continuously qualified insurance consultant;

(ii) Whose aggregate annual premiums for insurance on all risks total at least twenty-five thousand dollars ($25,000); and

(iii) That has at least twenty-five (25) full-time employees.

(B) "Industrial insured" does not mean "industrial life insurance" as used in § 23-82-101 et seq.;

(15)

(A) "Industrial insured captive insurance company" means a company that insures risks of the industrial insureds that compose the industrial insured group and their affiliated companies.

(B) "Industrial insured captive insurance company" does not encompass "industrial life insurance" as used in § 23-82-101 et seq.;

(16)

(A) "Industrial insured group" means a group that meets either of the following criteria:

(i) A group of industrial insureds that collectively:

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

(b) Have complete voting control over an industrial insured captive insurance company incorporated as a mutual insurer; or

(ii) A group which is created under the Product Liability Risk Retention Act of 1981, 15 U.S.C. § 3901 et seq., as it existed January 1, 2001, or the Risk Retention and Purchasing Groups Act, § 23-94-201 et seq., or as a corporation or other limited liability association taxable as a stock insurance company or a mutual insurer under the Arkansas Insurance Code.

(B) "Industrial insured group" does not encompass "industrial life insurance" as used in § 23-82-101 et seq.;

(17) "Member organization" means an individual, corporation, partnership, or association that belongs to an association;

(18) "Parent" means a corporation, partnership, or individual that directly or indirectly owns, controls, or holds with power to vote more than fifty percent (50%) of the outstanding voting securities of a pure captive insurance company;

(19) "Participant" means an entity as defined in § 23-63-1621 and any affiliates of that entity that are insured by a sponsored captive insurance company when the losses of the participant are limited through a participant contract to the assets of a protected cell;

(20) "Participant contract" means a contract by which a sponsored captive insurance company insures the risks of a participant and limits the losses of the participant to the assets of a protected cell;

(21) "Producer reinsurance captive insurance company" means a company that is wholly owned by a licensed insurance producer and that acts only as a reinsurer for risks written by or placed through its parent or an affiliate of its parent;

(22) "Protected cell" means a separate account established and maintained by a sponsored captive insurance company for one (1) participant or by a producer reinsurance captive insurance company and includes an incorporated protected cell;

(23) "Pure captive insurance company" means a company that insures risks of its parent and affiliated companies or controlled unaffiliated business;

(24) "Special purpose captive insurance company" means a captive insurance company that is formed or licensed under this subchapter and does not meet the definition of any other type of captive insurance company defined in this section;

(25) "Sponsor" means an entity that meets the requirements of § 23-63-1620 and is approved by the commissioner to provide all or part of the capital and surplus required by applicable law and to organize and operate a sponsored captive insurance company; and

(26) "Sponsored captive insurance company" means a captive insurance company:

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

(B) That is formed or licensed under this subchapter;

(C) That insures the risks of separate participants through the contract; and

(D) That segregates each participant's liability through one (1) or more protected cells.

Ark. Code § 23-63-1601

Amended by Act 2021, No. 367,§ 12, eff. 7/28/2021.

Amended by Act 2021, No. 367,§ 11, eff. 7/28/2021.

Amended by Act 2019, No. 521,§ 5, eff. 7/24/2019.

Amended by Act 2017, No. 370,§ 1, eff. 8/1/2017.

Acts 2001, No. 1391, § 1; 2003, No. 466, § 1; 2005, No. 506, § 30.