HB348: HB348 Insurance; expand lines of insurance or reinsurance in which a limited purpose subsidiary and captive insurance company may engage

25 LC 52 0715/AP House Bill 348 (AS PASSED HOUSE AND SENATE) By: Representatives Williamson of the 112th, Lumsden of the 12th, Tarvin of the 2nd, Burchett of the 176th, Hugley of the 141st, and others A BILL TO BE ENTITLED AN ACT To amend Chapters 14 and 41 of Title 33 of the Official Code of Georgia Annotated, relating1 to domestic stock and mutual insurers and captive insurance companies, respectively, so as2 to expand the lines of insurance or reinsurance in which a limi ted purpose subsidiary and3 captive insurance company may engage; to provide for definition s; to provide for related4 matters; to provide for an effective date; to repeal conflicting laws; and for other purposes.5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:6 SECTION 1.7 Chapter 14 of Title 33 of the Official Code of Georgia Annotated, relating to domestic stock8 and mutual insurers, is amended in Article 5, relating to limited purpose subsidiary insurance9 companies, by revising Code Section 33-14-103, relating to powe rs of limited purpose10 subsidiary, as follows:11 "33-14-103.12 (a) As used in this Code section, the term 'sponsor' means any entity that sponsors or13 co-sponsors the formation of a limited purpose subsidiary or the issuances of securities by14 a limited purpose subsidiary or participates in a limited purpose subsidiary as an investor15 or otherwise assists with the raising of equity or debt for a limited purpose subsidiary.16 H. B. 348 - 1 - 25 LC 52 0715/AP (b) A limited purpose subsidiary that is granted a certificate of authority by the17 Commissioner under this article:18 (1) Is wholly owned by the organizing domestic reinsurer or one or more sponsors;19 (2) Is authorized to engage in the business of reinsurance only for the lines of insurance20 for which the organizing domestic reinsurer or a sponsor is authorized; and21 (3) May reinsure only risks of the organizing domestic reinsurer; and22 (4) May access alternative forms of financing."23 SECTION 2.24 Chapter 41 of said title, relating to captive insurance companies, is amended in Code Section25 33-41-2, relating to definitions, by revising paragraph (6) as follows:26 "(6) 'Controlled unaffiliated business' means:27 (A) Any person:28 (i) That is not in the corporate system of a parent and its affiliated companies;29 (ii) That has an existing a reinsurance, risk-sharing, or other contractual relationship30 with a parent or one of its affiliated companies or is a direct or indirect investor in a31 pure captive insurance company; and32 (iii) Whose risks are managed by or directly or indirectly ceded to a captive insurance33 company in accordance with this chapter and approved by the Commissioner; or34 (B) A reinsurance arrangement with other captive insurance com panies that is35 approved by the Commissioner."36 SECTION 3.37 Said chapter is further amended in Code Section 33-41-3, relati ng to permissible business38 and limitations, by revising subsection (a) as follows:39 "(a) Subject to the provisions of subsection (c) of this Code s ection and the other40 provisions of this chapter, a captive insurance company, where permitted by its formation41 H. B. 348 - 2 - 25 LC 52 0715/AP documents, may engage in the business of any of the following k inds of insurance or42 reinsurance: that the Commissioner may deem reasonable.43 (1) Casualty, as described in Code Section 33-7-3 but excluding accident and sickness44 insurance as defined in Code Section 33-7-2, except for a pure captive insurance45 company, which may engage in the business of accident and sickn ess insurance as46 defined in Code Section 33-7-2;47 (2) Marine and transportation, as described in Code Section 33-7-5;48 (3) Property, as described in Code Section 33-7-6; and49 (4) Surety, as described in Code Section 33-7-7."50 SECTION 4.51 This Act shall become effective on the first day of the month following the month in which52 it is approved by the Governor or upon its becoming law without such approval.53 SECTION 5.54 All laws and parts of laws in conflict with this Act are repealed.55 H. B. 348 - 3 -