HB 342 (BR 1318) - J. Gooch Jr, S. Riggs
AN ACT relating to captive insurers and making an appropriation therefor.
Create new sections of KRS 304.49-010 to 304.49-230 to require a captive insurer to engage a manager who is a resident of Kentucky; require books and records to be maintained or made accessible at a location in Kentucky; authorize the executive director of the Office of Insurance to promulgate administrative regulations to set minimum standards for the formation, structure, examination, and operation of a special purpose captive insurer or an agency captive insurer; require the captive insurer to notify the executive director within ten business days of any material change in the financial condition or management of a captive insurer; specify certain acts that a captive insurer cannot take unless it gives the executive director at least 30 days notice; specify conditions to be met for a captive insurer to establish and maintain one or more protected cells to insure risks of one or more participants; amend KRS 304.49-010 to define "agency captive insurer" and "special purpose captive insurer"; amend KRS 304.49-020 to prohibit a captive insurer that is issued an initial certificate of authority on or after July 1, 2006, to directly provide workers' compensation insurance; designate as confidential portions of license applications, all examination reports, preliminary examination reports, working papers, recorded information, and other documents related to an examination, unless prior written consent of the captive insurer has been given; amend KRS 304.49-040 to require an agency captive insurer to have not less than $500,000 of unimpaired paid-in capital and surplus and a special purpose captive insurer to have not less than $250,000 of unimpaired paid-in capital; permit capital and surplus to be in the form of assets approved by the executive director; amend KRS 304.49-060 to permit a special purpose captive insurer to be incorporated as a stock or nonstock corporation or formed as a limited liability company, partnership, limited partnership, a statutory trust, or other person as approved by the executive director; permit a sponsored captive insurer to be incorporated as a stock or nonstock corporation or formed as a limited liability company, partnership, limited partnership, or a statutory trust; allow a risk retention group to take any form allowed by the Liability Risk Retention Act of 1986; require each owner of an agency captive insurer to be a licensed insurance producer; amend KRS 304.49-070 to permit the executive director to approve the use of international accounting standards for financial condition reports; allow a captive insurer, with the executive director's approval, to make modifications and adaptations to record as admitted the full value of all investments allowed under this subtitle; amend KRS 304.49-100 to authorize the executive director to approve investments made outside the prescription contained in this section; amend KRS 304.49-180 to conform; amend KRS 304.49-220 to direct the Kentucky Revenue Cabinet to annually distribute 75 percent, rather than 10 percent, of the premium tax revenues collected to the Office of Insurance for the regulation of captive insurers; create in the State Treasury the captive insurance regulatory and supervision fund to be appropriated for use only by the Office of Insurance to pay the costs of administering this subtitle and for reasonable expenses incurred in promoting the state's captive insurance industry; appropriation.
HB 342 - AMENDMENTS
HCS - Retain original provisions; amend KRS 304.49-100 to delete provisions subjecting all captive insurers to KRS 304.37-030 regarding material transactions; authorize the executive director to approve investments outside the prescription in this section if they are reasonable and prudent and would not tend to adversely affect the financial condition of the captive insurer.
Jan 12-introduced in House
Jan 13-to Banking and Insurance (H)
Jan 30-posting waived
Feb 1-reported favorably, 1st reading, to Calendar with Committee Substitute
Feb 2-2nd reading, to Rules; recommitted to Appropriations and Revenue (H)