Rutgers Law

New Jersey Statutes, Title: 17, CORPORATIONS AND INSTITUTIONS FOR FINANCE AND INSURANCE

    Chapter 47b:

      Section: 17:47b-2: Application by captive insurance company for license.

          
2. a. A captive insurance company, if permitted by its articles of association, charter or other organizational document, may apply to the commissioner for a license to do business in any of the lines of insurance in subtitle 3 of Title 17 of the Revised Statutes or Title 17B of the New Jersey Statutes, including contracts or policies of life insurance, health insurance, annuities, indemnity, property and casualty, fidelity, guaranty and title insurance; provided, however, that:

(1) a pure captive insurance company shall not insure risks other than those of its parent and affiliated companies or controlled unaffiliated businesses;

(2) an association captive insurance company shall not insure risks other than those of the member organizations of its association, and their affiliated companies;

(3) an industrial insured captive insurance company shall not insure risks other than those of the industrial insureds that comprise the industrial insured group and their affiliated companies;

(4) a captive insurance company shall not provide private passenger automobile insurance or homeowner's insurance coverage or any component thereof;

(5) a captive insurance company shall not accept or cede reinsurance except as provided in section 10 of this act;

(6) a captive insurance company may provide excess workers' compensation insurance to its parent and affiliated companies, unless prohibited by the federal law or laws of the state having jurisdiction over the transaction. A captive insurance company, unless prohibited by federal law, may reinsure workers' compensation of a qualified self-insured plan of its parent and affiliated companies; and

(7) a captive insurance company shall comply with all applicable State and federal laws.

b. A captive insurance company shall not write any insurance business in this State unless:

(1) it first obtains from the commissioner a license authorizing it to write insurance business in this State;

(2) its board of directors or committee of managers or, in the case of a reciprocal insurer, its subscribers' advisory committee, holds at least one meeting each year in this State;

(3) it maintains its principal place of business in this State with the appropriate number of in-State professional services provider staff to carry out the business of the captive, including but not limited to, attorneys, accountants, managers, actuaries, brokers, and third party administrators; and

(4) it appoints a registered agent to accept service of process and to otherwise act on its behalf in this State; provided that whenever that registered agent cannot with reasonable diligence be found at the registered office of the captive insurance company, the Secretary of State shall be an agent of the captive insurance company upon whom any process, notice or demand may be served.

c. (1) Before receiving a license, a captive insurance company shall:

(a) file with the commissioner a certified copy of its organization documents, a statement under oath of its president and secretary showing its financial condition, and any other statements or documents required by the commissioner; and

(b) submit to the commissioner for approval a description of the coverage limits and rates, together with any additional information as the commissioner may reasonably require. In the event of any subsequent material change in an item in the description, the captive insurance company shall submit to the commissioner for approval an appropriate revision and shall not offer any additional lines of insurance until a revision of the description is approved by the commissioner. The captive insurance company shall inform the commissioner of any material change in rates within 30 days of the adoption of any change.

(2) Each captive insurance company shall also file with the commissioner evidence of the following:

(a) the amount and liquidity of its assets relative to the risks to be assumed;

(b) the adequacy of the expertise, experience and character of the person who will manage it;

(c) the overall soundness of its plan of operation;

(d) the adequacy of the loss prevention programs of its insureds; and

(e) those other factors deemed relevant by the commissioner in determining whether the proposed captive insurance company will be able to meet its policy obligations.

(3) Information submitted pursuant to this subsection shall remain confidential and shall not be made public by the commissioner without the written consent of the company except that:

(a) the information may be discoverable by a party in a civil action or contested case to which the captive insurance company that submitted the information is a party, upon a showing by the party seeking to discover the information that:

(i) the information sought is relevant to and necessary for the furtherance of that action or case;

(ii) the information sought is unavailable from other nonconfidential sources; and

(iii) a subpoena issued by a judicial or administrative officer of competent jurisdiction has been submitted to the commissioner; and

(b) the commissioner may, in the commissioner's discretion, disclose the information to a public official having jurisdiction over the regulation of insurance in another state, if:

(i) the public official agrees in writing to maintain the confidentiality of the information; and

(ii) the laws of the state in which the public official serves require the information to remain confidential.

d. A captive insurance company shall pay to the commissioner a nonrefundable fee for examining, investigating and processing its application for license and the commissioner is authorized to retain legal, financial and examination services from outside the department, the reasonable cost of which may be charged against the applicant. In addition, each captive insurance company shall pay a license fee for the year of registration and a renewal fee for each year thereafter. The commissioner shall establish by regulation fees necessary for the administration of this act.

e. If the commissioner is satisfied that the documents and statements filed by a captive insurance company comply with the provisions of this act, the commissioner may grant a license authorizing it to write insurance business in this State until April 1 thereafter, which license may be renewed.

f. A captive insurance company shall not adopt a name that is the same, deceptively similar, or likely to be confused with or mistaken for any other existing business name registered in the State.

g. The commissioner may establish by regulation an expedited licensing process for a captive insurance company currently formed or licensed pursuant to the laws of a jurisdiction other than this State that applies for license to do business in this State.

L.2011, c.25, s.2.



This section added to the Rutgers Database: 2013-06-10 16:36:30.

Older versions of 17:47b-2 (if available):

Court decisions that cite this statute: CLICK HERE.