Senate
File
549
-
Enrolled
Senate
File
549
AN
ACT
RELATING
TO
CAPTIVE
INSURANCE
COMPANIES,
AND
INCLUDING
APPLICABILITY
PROVISIONS.
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
Section
1.
Section
432.1,
subsections
2
and
4,
Code
2023,
are
amended
to
read
as
follows:
2.
The
“applicable
percent”
for
purposes
of
subsection
1
of
this
section
and
section
432.2
is
the
following:
a.
For
calendar
years
beginning
before
the
2003
calendar
year,
two
percent.
b.
For
the
2003
calendar
year,
one
and
three-fourths
percent.
c.
For
the
2004
calendar
year,
one
and
one-half
percent.
d.
For
the
2005
calendar
year,
one
and
one-fourth
percent.
e.
For
the
2006
and
subsequent
calendar
years
year
through
the
2023
calendar
year
,
one
percent.
f.
For
the
2024
calendar
year,
nine
hundred
seventy-five
thousandths
of
one
percent.
g.
For
the
2025
calendar
year,
ninety-five
hundredths
of
one
percent.
h.
For
the
2026
calendar
year,
nine
hundred
twenty-five
thousandths
of
one
percent.
i.
For
the
2027
and
subsequent
calendar
years,
nine-tenths
of
one
percent.
4.
The
“applicable
percent”
for
purposes
of
subsection
3
is
the
following:
Senate
File
549,
p.
2
a.
For
calendar
years
beginning
before
the
2004
calendar
year,
two
percent.
b.
For
the
2004
calendar
year,
one
and
three-fourths
percent.
c.
For
the
2005
calendar
year,
one
and
one-half
percent.
d.
For
the
2006
calendar
year,
one
and
one-fourth
percent.
e.
For
the
2007
and
subsequent
calendar
years
year
through
the
2023
calendar
year
,
one
percent.
f.
For
the
2024
calendar
year,
nine
hundred
seventy-five
thousandths
of
one
percent.
g.
For
the
2025
calendar
year,
ninety-five
hundredths
of
one
percent.
h.
For
the
2026
calendar
year,
nine
hundred
twenty-five
thousandths
of
one
percent.
i.
For
the
2027
and
subsequent
calendar
years,
nine-tenths
of
one
percent.
Sec.
2.
NEW
SECTION
.
432.1A
Tax
on
premiums
——
captive
insurance
companies.
1.
a.
Each
captive
company
under
chapter
521J
shall
pay
on
or
before
March
1
of
each
year
a
tax
on
the
direct
premiums
collected
or
contracted
for
on
policies
or
contracts
of
insurance
written
by
the
captive
company
during
the
immediately
preceding
calendar
year,
after
deducting
from
the
direct
premiums
the
amounts
paid
to
policyholders
as
return
premiums,
including
dividends
on
unabsorbed
premiums
or
premium
deposits
returned
or
credited
to
policyholders.
b.
The
tax
due
under
paragraph
“a”
on
direct
premiums
collected
or
contracted
for
by
a
captive
company
shall
be
calculated
as
follows:
(1)
Seven-twentieths
of
one
percent
on
the
first
twenty
million
dollars
of
direct
premiums.
(2)
One-quarter
of
one
percent
on
each
dollar
of
direct
premiums
after
the
first
twenty
million
dollars
collected
under
subparagraph
(1).
2.
a.
Each
captive
company
under
chapter
521J
shall
pay
on
or
before
March
1
of
each
year
a
tax
on
assumed
reinsurance
premiums.
A
reinsurance
tax
shall
not
apply
to
premiums
for
risks
or
portions
of
risks
that
are
subject
to
taxation
on
a
direct
basis
pursuant
to
subsection
1.
Senate
File
549,
p.
3
b.
A
reinsurance
premium
tax
shall
not
be
payable
by
a
captive
company
in
connection
with
the
receipt
by
the
captive
company
of
assets
in
exchange
for
the
assumption
of
loss
reserves
and
other
liabilities
of
another
insurer
under
common
ownership
and
control
if
the
transaction
is
part
of
a
plan
to
discontinue
the
operations
of
the
other
insurer,
and
if
the
intent
of
the
parties
to
the
transaction
is
to
renew
or
maintain
the
other
insurer’s
business
with
the
captive
company.
c.
The
amount
of
reinsurance
tax
due
from
a
captive
company
under
paragraph
“a”
shall
be
calculated
as
follows:
(1)
Two-tenths
of
one
percent
on
the
first
twenty
million
dollars
of
assumed
reinsurance
premiums.
(2)
One-eighth
of
one
percent
on
the
twenty
million
dollars
of
assumed
reinsurance
premiums
collected
after
the
first
twenty
million
dollars
of
assumed
reinsurance
premiums
collected
under
subparagraph
(1).
(3)
Five
percent
on
each
dollar
of
assumed
reinsurance
premiums
collected
after
the
twenty
million
dollars
collected
under
subparagraph
(1)
and
the
twenty
million
dollars
collected
under
subparagraph
(2).
3.
a.
(1)
Except
as
provided
in
subparagraphs
(2)
and
(3),
if
the
aggregate
taxes
as
calculated
under
subsections
1
and
2
that
are
payable
by
a
captive
company
are
less
than
five
thousand
dollars
for
any
one
tax
year,
the
captive
company
shall
pay
five
thousand
dollars
in
tax
for
that
tax
year.
(2)
If
a
captive
company
is
subject
to
the
minimum
tax
under
subparagraph
(1)
in
the
calendar
year
in
which
the
company
is
first
granted
a
certificate
of
authority
under
section
521J.2,
the
tax
shall
be
prorated
as
follows:
(a)
If
a
certificate
of
authority
is
first
granted
in
the
first
quarter
of
the
calendar
year,
the
tax
shall
be
five
thousand
dollars.
(b)
If
a
certificate
of
authority
is
first
granted
in
the
second
quarter
of
the
calendar
year,
the
tax
shall
be
three
thousand
seven
hundred
fifty
dollars.
(c)
If
a
certificate
of
authority
is
first
granted
in
the
third
quarter
of
the
calendar
year,
the
tax
shall
be
two
thousand
five
hundred
dollars.
(d)
If
a
certificate
of
authority
is
first
granted
in
the
Senate
File
549,
p.
4
fourth
quarter
of
the
calendar
year,
the
tax
shall
be
one
thousand
five
hundred
dollars.
(3)
If
a
captive
company
that
is
subject
to
the
minimum
tax
under
subparagraph
(1)
surrenders
the
company’s
certificate
of
authority
in
the
year
that
the
captive
company
is
subject
to
the
minimum
tax,
the
tax
shall
be
prorated
on
a
quarterly
basis
as
follows:
(a)
If
the
certificate
of
authority
is
surrendered
in
the
first
quarter
of
the
calendar
year,
the
tax
shall
be
one
thousand
dollars.
(b)
If
the
certificate
of
authority
is
surrendered
in
the
second
quarter
of
the
calendar
year,
the
tax
shall
be
two
thousand
five
hundred
dollars.
(c)
If
the
certificate
of
authority
is
surrendered
in
the
third
quarter
of
the
calendar
year,
the
tax
shall
be
three
thousand
seven
hundred
fifty
dollars.
(d)
If
the
certificate
of
authority
is
surrendered
in
the
fourth
quarter
of
the
calendar
year,
the
tax
shall
be
five
thousand
dollars.
b.
Each
protected
cell
in
a
protected
cell
captive
company
shall
be
considered
separately
in
determining
the
aggregate
tax
to
be
paid
by
the
protected
cell
captive
company.
If
the
protected
cell
captive
company
insures
any
risks
in
addition
to
the
protected
cells,
the
determination
of
the
aggregate
tax
shall,
in
addition
to
the
protected
cells,
also
include
the
premium
on
all
insured
risks.
c.
Each
series
of
members
of
a
limited
liability
company
formed
as
a
special
purpose
captive
company
shall
be
considered
separately
under
this
section,
except
that
the
minimum
tax
as
described
in
paragraph
“a”
shall
be
considered
in
the
aggregate.
4.
A
captive
company,
other
than
a
protected
cell
captive
company,
shall
not
be
required
to
pay
aggregate
taxes
under
this
section
that
exceed
one
hundred
thousand
dollars
in
any
one
tax
year.
5.
Two
or
more
captive
companies
under
common
ownership
and
control
shall
be
taxed
as
a
single
captive
company.
For
the
purposes
of
this
subsection,
“common
ownership
and
control”
means
either
of
the
following:
a.
In
the
case
of
a
stock
corporation,
the
direct
or
Senate
File
549,
p.
5
indirect
ownership
of
eighty
percent
or
more
of
the
outstanding
voting
stock
of
two
or
more
corporations
by
the
same
shareholder
or
shareholders.
b.
In
the
case
of
a
mutual
insurer,
the
direct
or
indirect
ownership
of
eighty
percent
or
more
of
the
surplus,
and
the
voting
power
of
two
or
more
insurers,
by
the
same
member
or
members.
6.
Only
the
branch
business
of
a
branch
captive
company
shall
be
subject
to
taxation
under
this
section.
7.
The
tax
provided
for
in
this
section
shall
be
calculated
on
an
annual
basis
notwithstanding
a
policy
or
a
contract
of
insurance,
or
a
contract
of
reinsurance,
that
is
issued
on
a
multiyear
basis.
In
the
case
of
a
multiyear
policy
or
a
multiyear
contract,
the
premium
shall
be
prorated
for
the
purpose
of
calculating
the
appropriate
tax.
Sec.
3.
Section
507C.3,
Code
2023,
is
amended
by
adding
the
following
new
subsection:
NEW
SUBSECTION
.
8.
Captive
companies
under
chapter
521J.
Sec.
4.
NEW
SECTION
.
521J.1
Definitions.
As
used
in
this
chapter,
unless
the
context
otherwise
requires:
1.
“Affiliated
company”
means
a
company
that
is
in
the
same
corporate
system
as
a
parent,
an
industrial
insured,
or
a
member
based
on
common
ownership,
control,
operation,
or
management.
2.
“Alien
captive
company”
means
a
captive
company
formed
under
the
laws
of
an
alien
jurisdiction
that
imposes
statutory
or
regulatory
standards
in
a
form
acceptable
to
the
commissioner
on
companies
transacting
the
business
of
insurance
in
such
jurisdiction.
3.
“Branch
business”
means
any
insurance
business
transacted
by
a
branch
captive
company
in
this
state.
4.
“Branch
captive
company”
means
an
alien
captive
company
authorized
by
the
commissioner
by
rule
to
transact
the
business
of
insurance
in
this
state
through
a
business
entity
with
its
principal
place
of
business
in
this
state.
5.
“Branch
operations”
means
any
business
operations
of
a
branch
captive
company.
6.
“Business
entity”
means
a
corporation,
a
limited
Senate
File
549,
p.
6
liability
company,
or
other
legal
entity
formed
by
an
organizational
document.
“Business
entity”
does
not
include
a
sole
proprietorship.
7.
“Captive
company”
means
any
pure
captive
company,
protected
cell
captive
company,
special
purpose
captive
company,
or
industrial
insured
captive
company
formed
or
authorized
under
this
chapter.
8.
“Captive
reinsurance
company”
means
a
captive
insurance
company
in
this
state,
as
authorized
by
the
commissioner
by
rule,
that
reinsures
the
risk
ceded
by
any
other
insurer.
9.
“Captive
risk
retention
group”
means
a
captive
insurance
risk
retention
group
formed
under
this
chapter
and
that
is
subject
to
chapter
515E.
10.
“Cash
equivalent”
means
any
short-term,
highly
liquid
investment
with
an
original
maturity
of
three
months
or
less
that
is
readily
convertible
to
known
amounts
of
cash.
11.
“Commissioner”
means
the
commissioner
of
insurance.
12.
“Controlled
unaffiliated
business
entity”
means
a
business
entity
or
sole
proprietorship
that
meets
all
of
the
following
requirements:
a.
The
business
entity
or
sole
proprietorship
is
not
in
a
parent’s
corporate
system
that
consists
of
the
parent
and
any
affiliated
companies.
b.
The
business
entity
or
sole
proprietorship
has
an
existing,
controlling
contractual
relationship
with
the
parent
or
an
affiliated
company.
c.
The
business
entity’s
or
sole
proprietorship’s
risks
are
managed
by
a
pure
captive
company
or
an
industrial
insured
captive
company,
as
applicable.
13.
“Excess
workers’
compensation
insurance”
means,
for
an
employer
that
has
insured
or
self-insured
the
employer’s
workers’
compensation
risks
in
accordance
with
applicable
state
or
federal
law,
insurance
in
excess
of
a
specified
per-incident
or
aggregate
limit
as
established
by
the
commissioner
by
rule.
14.
“Industrial
insured”
means
an
insured
that
meets
all
of
the
following
requirements:
a.
The
insured
procures
the
insurance
of
any
risk
by
use
of
the
services
of
a
full-time
employee
acting
as
an
insurance
manager
or
buyer.
Senate
File
549,
p.
7
b.
The
insured’s
aggregate
annual
premiums
for
insurance
on
all
risks
are
at
least
twenty-five
thousand
dollars.
c.
The
insured
employs
a
minimum
of
twenty-five
full-time
employees.
15.
“Industrial
insured
captive
company”
means
an
insurance
company
that
insures
the
risks
of
industrial
insureds,
comprised
of
the
industrial
insured
group
and
the
industrial
insured
group’s
affiliated
companies
and
the
risks
of
the
controlled
unaffiliated
business
of
an
industrial
insured
or
its
affiliates.
16.
“Industrial
insured
group”
means
a
group
of
industrial
insureds
that
meets
either
of
the
following
requirements:
a.
The
group
collectively
owns,
controls,
or
holds
with
the
power
to
vote
all
of
the
outstanding
voting
securities
of
an
industrial
insured
captive
company
incorporated
as
a
stock
insurer,
or
has
complete
voting
control
over
any
of
the
following:
(1)
An
industrial
insured
captive
company
incorporated
as
a
mutual
insurer.
(2)
An
industrial
insured
captive
company
formed
as
a
reciprocal
insurer.
(3)
An
industrial
insured
captive
company
formed
as
a
limited
liability
company.
b.
The
group
is
a
captive
risk
retention
group.
17.
“Mutual
insurer”
means
a
business
entity
that
does
not
have
capital
stock,
and
that
has
a
governing
body
elected
by
the
insurer’s
policyholders.
“Mutual
insurer”
includes
a
nonprofit
corporation
with
members.
18.
“Organizational
document”
means
articles
of
incorporation,
articles
of
organization,
a
subscribers’
agreement,
a
charter,
or
any
other
document
that
can
legally
establish
a
business
entity
in
this
state.
19.
“Parent”
means
a
sole
proprietorship,
a
business
entity,
or
an
individual
that
directly
or
indirectly
owns,
controls,
or
holds
with
power
to
vote
more
than
fifty
percent
of
the
outstanding
voting
securities
or
membership
interests
of
a
captive
company.
20.
“Participant”
means
a
sole
proprietorship
or
a
business
entity
and
any
affiliates
that
are
insured
by
a
protected
cell
Senate
File
549,
p.
8
captive
company
and
whose
losses
are
limited
by
a
participant
contract
to
such
participant’s
pro
rata
share
of
the
assets
of
one
or
more
protected
cells
identified
in
the
participant
contract.
21.
“Participant
contract”
means
a
contract
by
which
a
protected
cell
captive
company
insures
the
risks
of
a
participant
and
limits
the
losses
of
each
participant
in
the
contract
to
the
participant’s
pro
rata
share
of
the
assets
of
one
or
more
protected
cells
as
identified
in
the
contract.
22.
“Protected
cell”
means
a
separate
account
established
by
a
protected
cell
captive
company
formed
or
authorized
under
this
chapter
in
which
an
identified
pool
of
assets
and
liabilities
are
segregated
and
insulated,
as
provided
in
section
521J.17,
from
the
remainder
of
the
protected
cell
captive
company’s
assets
and
liabilities
in
accordance
with
the
terms
of
one
or
more
participant
contracts
to
fund
the
liability
of
the
protected
cell
captive
company
with
respect
to
the
participants.
23.
“Protected
cell
assets”
means
all
assets,
contract
rights,
and
general
intangibles
identified
and
attributable
to
a
specific
protected
cell
of
a
protected
cell
captive
company.
24.
“Protected
cell
captive
company”
means
a
captive
company
that
meets
all
of
the
following
requirements:
a.
The
minimum
legally
required
capital
and
surplus
of
the
company
is
provided
by
one
or
more
sponsors.
b.
The
company
is
formed
or
authorized
under
this
chapter.
c.
The
company
insures
the
risks
of
separate
participants
through
participant
contracts.
d.
The
company
funds
the
company’s
liability
to
each
participant
through
one
or
more
protected
cells,
and
segregates
the
assets
of
each
protected
cell
from
the
assets
of
other
protected
cells,
and
from
the
assets
of
the
protected
cell
captive
company’s
general
account.
e.
The
company
is
incorporated
or
formed
as
a
limited
liability
company.
25.
“Protected
cell
liabilities”
means
all
liabilities
and
other
obligations
identified
with
and
attributable
to
a
specific
protected
cell
of
a
protected
cell
captive
company.
26.
“Public
records”
means
the
same
as
defined
in
section
Senate
File
549,
p.
9
22.1.
27.
“Pure
captive
company”
means
an
insurance
company
that
insures
the
risks
of
the
company’s
parent
and
the
parent’s
affiliated
companies,
and
the
risks
of
controlled
unaffiliated
business
entities.
28.
“Qualified
actuary”
means
an
individual
who
meets
all
of
the
following
requirements:
a.
The
individual
is
a
member
of
the
American
academy
of
actuaries.
b.
The
individual
is
qualified
to
provide
the
certifications
as
described
in
the
United
States
qualifications
standards
promulgated
by
the
American
academy
of
actuaries
pursuant
to
the
code
of
professional
conduct
adopted
by
the
American
academy
of
actuaries,
the
society
of
actuaries,
the
American
society
of
pension
professionals
and
actuaries,
the
casualty
actuarial
society,
and
the
conference
of
consulting
actuaries.
29.
“Series
of
members”
means
a
group
or
collection
of
members
of
a
limited
liability
company
who
share
interests
and
who
have
separate
rights,
powers,
or
duties
with
respect
to
property,
obligations,
or
profits
and
losses
associated
with
property
or
obligations,
and
who
are
specified
in
the
organizational
document
or
operating
agreement
of
the
limited
liability
company,
or
that
are
specified
by
one
or
more
members
or
managers
of
the
limited
liability
company
or
other
persons
as
provided
in
the
organizational
document
or
operating
agreement.
30.
“Sole
proprietorship”
means
an
individual
who
does
business
in
a
noncorporate
form.
31.
“Special
purpose
captive
company”
means
a
captive
company
that
is
formed
or
authorized
under
this
chapter
that
does
not
meet
the
definition
of
any
other
type
of
captive
company
as
defined
in
this
section,
or
that
is
formed
by,
on
behalf
of,
or
for
the
benefit
of
a
political
subdivision
of
this
state.
32.
“Sponsor”
means
any
person
that
meets
the
requirements
of
sections
521J.17
and
521J.18,
and
that
is
approved
by
the
commissioner
to
do
all
of
the
following:
a.
Provide
all
or
part
of
the
capital
and
surplus
required
of
a
protected
cell
captive
company
by
law.
Senate
File
549,
p.
10
b.
Organize
and
operate
a
protected
cell
captive
company.
Sec.
5.
NEW
SECTION
.
521J.2
Certificate
of
authority.
1.
If
permitted
by
its
organizational
document,
a
captive
company
may
apply
to
the
commissioner
for
a
certificate
of
authority
to
provide
property
insurance,
casualty
insurance,
life
insurance,
disability
income
insurance,
surety
insurance,
marine
insurance,
health
insurance,
or
a
group
health
plan,
with
the
following
exceptions:
a.
A
pure
captive
company
shall
only
insure
risks
of
the
company’s
parent
and
affiliated
companies,
and
of
the
company’s
controlled
unaffiliated
business
entities.
b.
An
industrial
insured
captive
company
shall
only
insure
risks
of
the
industrial
insured
company,
comprised
of
the
industrial
insured
group
and
the
industrial
insured
group’s
affiliated
companies,
and
the
controlled
unaffiliated
business
of
an
industrial
insured
group
or
the
industrial
insured
group’s
affiliated
companies.
c.
A
special
purpose
captive
company
shall
not
provide
insurance
or
reinsurance
for
risks
unless
approved
by
the
commissioner.
d.
A
captive
company
or
a
branch
captive
company
shall
not
do
any
of
the
following:
(1)
Provide
personal
lines
of
insurance,
including
but
not
limited
to
motor
vehicle
insurance,
homeowner’s
insurance,
or
any
component
of
motor
vehicle
insurance
or
homeowner’s
insurance
on
a
direct
basis.
(2)
Accept
or
cede
reinsurance
except
as
permitted
by
the
commissioner
by
rule.
(3)
Provide
health
insurance
coverage
or
a
group
health
plan
unless
the
captive
company
or
the
branch
captive
company
provides
the
health
insurance
coverage
or
the
group
health
plan
only
for
the
parent
company
and
the
parent
company’s
affiliated
companies.
(4)
Write
workers’
compensation
insurance
on
a
direct
basis.
(5)
Write
life
insurance
on
a
direct
basis.
e.
A
protected
cell
captive
company
shall
not
insure
any
risks
other
than
those
of
the
protected
cell
captive
company’s
participants.
Senate
File
549,
p.
11
2.
A
captive
company
shall
not
write
any
insurance
business
unless
the
captive
company
complies
with
all
of
the
following:
a.
The
captive
company
obtains
a
certificate
of
authority
from
the
commissioner
prior
to
writing
any
insurance
business.
b.
The
captive
company’s
board
of
directors,
board
of
managing
members,
or
a
reciprocal
insurer’s
subscribers’
advisory
committee,
holds
at
least
one
annual
meeting
in
the
state.
c.
The
captive
company
maintains
its
principal
place
of
business
in
the
state.
d.
The
captive
company
designates
a
registered
agent
to
accept
service
of
process,
files
the
name
and
contact
information
and
any
subsequent
changes
regarding
the
registered
agent
with
the
commissioner,
and
agrees
that
if
the
registered
agent
cannot
be
found
with
reasonable
diligence,
the
commissioner
may
act
as
an
agent
of
the
captive
company
with
respect
to
any
action
or
proceeding
and
may
be
served
pursuant
to
section
505.30.
3.
a.
Prior
to
receiving
a
certificate
of
authority,
a
captive
company
shall
do
all
of
the
following:
(1)
File
with
the
commissioner
all
of
the
following:
(a)
A
certified
copy
of
the
business
entity’s
organizational
document.
(b)
A
statement
under
oath
of
an
officer
of
the
business
entity
showing
the
business
entity’s
financial
condition.
(c)
Any
other
statement
or
document
required
by
the
commissioner
as
established
by
rule.
(2)
Submit
a
description
of
coverages,
deductibles,
coverage
limits,
rates,
and
any
additional
information
requested
by
the
commissioner
to
the
commissioner
for
approval.
(3)
Provide
a
statement
to
the
commissioner
that
describes
all
of
the
following:
(a)
The
character,
reputation,
and
financial
standing
of
the
organizers
of
the
business
entity.
(b)
The
character,
reputation,
financial
responsibility,
insurance
experience,
and
business
qualifications
of
all
officers,
directors,
and
managing
members
of
the
business
entity.
(4)
Provide
any
other
information
required
by
the
Senate
File
549,
p.
12
commissioner
as
established
by
rule.
b.
If
there
is
a
subsequent
material
change
in
the
information
provided
to
the
commissioner
under
paragraph
“a”
,
the
captive
company
shall
submit
appropriate
supporting
documentation
to
the
commissioner
for
approval.
The
captive
company
shall
not
offer
any
additional
lines
of
insurance
until
on
or
after
the
date
on
which
the
commissioner
approves
the
supporting
documentation.
The
captive
company
shall
inform
the
commissioner
of
any
change
in
rates
within
thirty
calendar
days
of
the
captive
company’s
adoption
of
a
change
in
rate.
c.
In
addition
to
the
information
required
under
paragraphs
“a”
and
“b”
,
each
applicant
captive
company
shall
file
with
the
commissioner
evidence
of
all
of
the
following:
(1)
The
amount
and
liquidity
of
the
captive
company’s
assets
relative
to
the
risks
to
be
assumed
by
the
captive
company.
(2)
The
adequacy
of
the
expertise,
experience,
and
character
of
the
persons
who
will
manage
the
captive
company.
(3)
The
overall
soundness
of
the
captive
company’s
plan
of
operation.
(4)
The
adequacy
of
the
loss
prevention
program
of
the
captive
company’s
parent,
members,
or
industrial
insureds,
as
applicable.
(5)
Any
other
factors
deemed
relevant
by
the
commissioner
to
ascertain
if
the
proposed
captive
company
will
be
able
to
meet
the
company’s
policy
obligations.
d.
In
addition
to
the
information
required
under
paragraph
“a”
,
each
applicant
that
is
a
protected
cell
captive
company
shall
file
with
the
commissioner
all
of
the
following:
(1)
A
business
plan
that
demonstrates,
at
a
level
of
detail
deemed
sufficient
by
the
commissioner,
how
the
applicant
will
account
for
the
loss
and
expense
experience
of
each
protected
cell,
and
how
the
applicant
will
report
the
loss
and
expense
experience
of
each
protected
cell
to
the
commissioner.
(2)
A
statement
that
acknowledges
that
all
financial
records
of
the
protected
cell
captive
company,
including
records
pertaining
to
any
protected
cells,
shall
be
made
available
upon
request
for
inspection
or
examination
by
the
commissioner
or
the
commissioner’s
designated
agent.
(3)
A
copy
of
each
participant
contract.
Senate
File
549,
p.
13
(4)
Evidence
that
expenses
will
be
allocated
to
each
protected
cell
in
a
fair
and
equitable
manner.
e.
In
addition
to
the
requirements
of
paragraph
“a”
,
a
captive
company
formed
as
a
reciprocal
insurer
shall
file
with
the
commissioner
a
certified
copy
of
the
power
of
attorney
of
the
reciprocal
insurer’s
attorney-in-fact,
a
certified
copy
of
the
reciprocal
insurer’s
subscribers’
agreement,
a
statement
under
oath
of
the
reciprocal
insurer’s
attorney-in-fact
that
shows
the
reciprocal
insurer’s
financial
condition,
and
any
other
statements
or
documents
required
by
the
commissioner
as
established
by
rule.
f.
All
documents
and
information
submitted
pursuant
to
this
subsection
shall
be
confidential
and
shall
not
be
made
public
without
the
advance
written
consent
of
the
submitting
company,
with
the
following
exceptions:
(1)
The
documents
and
information
shall
be
discoverable
by
a
party
in
a
civil
action
or
in
a
contested
case
to
which
the
captive
company
that
submitted
the
information
is
a
party
upon
a
showing
by
the
party
seeking
to
discover
the
information
that
the
information
sought
is
relevant
to,
and
necessary
for,
the
furtherance
of
the
action
or
case;
the
information
sought
is
unavailable
from
other
nonconfidential
sources;
and
that
a
subpoena
issued
by
a
judicial
or
an
administrative
officer
has
been
submitted
to
the
commissioner.
(2)
The
commissioner
may,
in
the
commissioner’s
discretion,
disclose
the
documents
and
information
to
a
public
official
having
jurisdiction
over
the
regulation
of
insurance
in
another
state,
or
to
a
public
official
of
the
federal
government,
provided
that
the
public
official
agrees
in
writing
to
maintain
the
confidentiality
of
the
information,
and
that
the
laws
of
the
state
in
which
the
public
official
serves
require
that
the
information
remain
confidential.
4.
a.
Each
captive
company,
each
individual
series
of
members
of
a
limited
liability
company,
and
each
protected
cell
shall
pay
a
nonrefundable
fee
to
the
commissioner
of
two
hundred
dollars
for
the
examination,
investigation,
and
processing
of
its
application
for
a
certificate
of
authority.
The
commissioner
shall
be
authorized
to
retain
legal,
financial,
and
examination
services
from
outside
experts
as
Senate
File
549,
p.
14
necessary
for
review
of
the
application,
the
reasonable
cost
of
which
may
be
charged
to
the
applicant.
b.
Each
captive
insurance
company,
each
individual
series
of
members
of
a
limited
liability
company,
and
each
protected
cell
shall
pay
an
initial
registration
fee,
and
an
annual
renewal
registration
fee,
of
three
hundred
dollars.
5.
If
the
commissioner
is
satisfied
with
the
documents
and
statements
that
an
applicant
captive
company
has
filed
in
compliance
with
this
chapter,
and
the
applicable
provisions
of
Title
XIII,
subtitle
1,
the
commissioner
may
grant
a
certificate
of
authority
to
the
captive
company
that
permits
the
company
to
do
the
business
of
insurance
in
this
state.
The
certificate
of
authority
must
be
renewed
annually
and
may
be
renewed
if
the
applicant
is
in
compliance
with
this
chapter.
Sec.
6.
NEW
SECTION
.
521J.3
Captive
companies
——
names.
A
captive
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
already
registered
in
this
state.
Sec.
7.
NEW
SECTION
.
521J.4
Minimum
capital
and
surplus
requirements.
1.
The
commissioner
shall
not
issue
a
certificate
of
authority
to
a
captive
company
unless
the
captive
company
possesses
and
maintains
unimpaired
paid-in
capital
and
surplus
that
meets
the
following
requirements:
a.
Is
not
less
than
two
hundred
fifty
thousand
dollars
for
a
pure
captive
company.
b.
Is
not
less
than
five
hundred
thousand
dollars
for
an
industrial
insured
captive
company,
including
a
captive
risk
retention
group.
c.
Is
an
amount
as
determined
by
the
commissioner
after
giving
due
consideration
to
the
captive
company’s
business
plan,
feasibility
study,
and
pro
forma
documents,
including,
for
a
special
purpose
captive
company,
the
nature
of
the
risks
to
be
insured.
d.
Is
not
less
than
five
hundred
thousand
dollars
for
a
protected
cell
captive
company.
If,
however,
the
protected
cell
captive
company
does
not
assume
any
risks,
the
risks
insured
by
the
protected
cells
are
homogenous,
and
there
are
Senate
File
549,
p.
15
not
more
than
ten
cells,
the
commissioner
may
reduce
the
amount
to
an
amount
not
less
than
two
hundred
fifty
thousand
dollars.
e.
Is
not
less
than
the
applicable
amount
of
capital
and
surplus
required
in
paragraphs
“a”
through
“d”
,
as
determined
based
upon
the
organizational
form
of
the
alien
captive
company,
for
a
branch
captive
company.
The
minimum
capital
and
surplus
shall
be
jointly
held
by
the
commissioner
and
the
branch
captive
company
in
a
bank
of
the
federal
reserve
system
as
approved
by
the
commissioner
by
rule.
f.
Is
not
less
than
fifty
percent
of
the
capital
required
for
that
type
of
captive
company
for
a
captive
reinsurance
company.
2.
The
commissioner
may
require
additional
capital
and
surplus
for
a
captive
company
under
subsection
1
based
upon
the
type,
volume,
and
nature
of
the
insurance
business
transacted
by
the
captive
company.
3.
The
capital
and
surplus
required
under
subsection
1
and
subsection
2,
if
applicable,
shall
be
in
the
form
of
cash,
cash
equivalent,
or
an
irrevocable
letter
of
credit
on
a
form
as
prescribed
by
the
commissioner
by
rule
and
as
issued
by
a
bank
chartered
by
the
state
of
Iowa,
a
member
bank
of
the
federal
reserve
system,
or
a
bank
chartered
by
another
state
if
approved
by
the
commissioner.
Sec.
8.
NEW
SECTION
.
521J.5
Captive
companies
——
formation.
1.
A
captive
company
must
be
formed
or
organized
as
a
business
entity
as
provided
under
this
chapter.
2.
An
industrial
insured
captive
company
shall
be
formed
or
organized
in
one
of
the
following
ways:
a.
Incorporated
as
a
stock
insurer
with
the
stock
insurer’s
capital
divided
into
shares
and
held
by
the
stockholders.
b.
Incorporated
as
a
mutual
insurer
without
capital
stock.
c.
Organized
as
a
reciprocal
insurer
as
permitted
by
the
commissioner
by
rule.
d.
Organized
as
a
manager-managed
limited
liability
company.
3.
A
captive
company
incorporated
or
organized
in
this
state
shall
be
incorporated
or
organized
by
at
least
one
incorporator
or
organizer
who
is
a
resident
of
the
state.
4.
The
capital
stock
of
a
captive
company
incorporated
as
a
stock
insurer
may
be
authorized
with
no
par
value.
Senate
File
549,
p.
16
5.
a.
At
least
one
member
of
the
board
of
directors
of
a
captive
company
shall
be
a
resident
of
this
state.
A
captive
risk
retention
group
shall
have
a
minimum
of
five
directors.
b.
A
captive
company
formed
as
a
limited
liability
company
shall
have
at
least
one
manager
who
is
a
resident
of
this
state.
A
captive
risk
retention
group
formed
as
a
limited
liability
company
shall
not
be
required
to
have
a
manager
who
is
a
resident
of
this
state;
however,
the
limited
liability
company
shall
maintain
a
board
of
directors
of
which
at
least
one
board
member
shall
be
a
resident
of
this
state.
c.
A
reciprocal
insurer
shall
have
at
least
one
member
of
the
subscribers’
advisory
committee
who
is
a
resident
of
this
state.
A
captive
risk
retention
group
formed
as
a
reciprocal
insurer
shall
have
a
minimum
of
five
members
of
the
subscribers’
advisory
committee
who
are
residents
of
this
state.
6.
a.
A
captive
company
formed
as
a
corporation
or
another
business
entity
shall
have
the
privileges
of,
and
shall
be
subject
to,
state
laws
governing
corporations
or
other
business
entities,
and
the
applicable
provisions
of
this
chapter.
b.
In
the
event
of
a
conflict
between
a
state
law
governing
corporations
or
other
business
entities
and
this
chapter,
this
chapter
shall
take
precedence.
7.
a.
A
subscribers’
agreement,
or
other
organizational
document
of
a
captive
company
formed
as
a
reciprocal
insurer,
shall
authorize
a
quorum
of
a
subscribers’
advisory
committee
to
consist
of
at
least
one-third
of
the
number
of
members
on
the
advisory
committee.
b.
In
addition
to
this
chapter,
a
captive
risk
retention
group
shall
be
subject
to
chapter
515E.
In
the
event
of
a
conflict
between
chapter
515E
and
this
chapter,
this
chapter
shall
take
precedence.
8.
Except
as
provided
in
section
521J.11,
applicable
provisions
of
chapter
508B
shall
apply
to
a
merger,
consolidation,
conversion,
mutualization,
or
voluntary
dissolution
by
a
captive
company.
9.
a.
An
alien
captive
company
must
apply
to
the
secretary
of
state
for
a
certificate
of
authority
for
the
alien
captive
company’s
branch
captive
company
to
transact
business
in
this
Senate
File
549,
p.
17
state.
b.
A
branch
captive
company
established
under
this
chapter
to
write,
in
this
state,
only
insurance
or
reinsurance
of
the
employee
benefit
business
of
the
branch
captive
company’s
parent
and
affiliated
companies
shall
be
subject
to
the
federal
Employee
Retirement
Income
Security
Act
of
1974,
29
U.S.C.
§1001,
et
seq.
c.
A
branch
captive
company
shall
not
conduct
any
insurance
business
in
this
state
unless
the
branch
captive
company
maintains
the
principal
place
of
business
for
the
company’s
branch
operations
in
this
state.
Sec.
9.
NEW
SECTION
.
521J.6
Dividends.
1.
A
captive
company
shall
not
pay
a
dividend
out
of,
or
other
distribution
with
respect
to,
the
minimum
capital
or
surplus
required
under
section
521J.4
without
the
prior
written
approval
of
the
commissioner.
2.
The
commissioner’s
approval
of
an
ongoing
plan
for
the
payment
of
dividends
or
other
distributions
shall
be
conditioned
upon
retention,
at
the
time
of
each
payment,
of
capital
and
surplus
in
excess
of
the
amounts
specified
by,
or
determined
in
accordance
with,
a
formula
approved
by
the
commissioner
by
rule.
Sec.
10.
NEW
SECTION
.
521J.7
Reports.
1.
A
captive
company
shall
be
required
to
file
an
annual
report
with
the
commissioner
that
meets
the
following
requirements:
a.
Except
as
provided
in
paragraph
“b”
,
on
or
before
April
1
of
each
year,
each
captive
company
and
each
captive
risk
retention
group
shall
submit
to
the
commissioner
a
report
on
the
company’s
financial
condition
as
of
December
31
of
the
preceding
year,
as
verified
by
oath
of
two
of
the
company’s
or
group’s
executive
officers.
The
report
shall
be
submitted
in
a
form
and
manner
as
prescribed
by
the
commissioner
by
rule.
b.
A
captive
company,
other
than
a
captive
risk
retention
group,
may
apply
to
the
commissioner
to
file
the
report
required
under
paragraph
“a”
on
a
fiscal
year-end
basis.
If
the
commissioner
approves
reporting
on
a
fiscal
year-end
basis,
the
captive
company
shall
comply
with
all
of
the
following
requirements:
Senate
File
549,
p.
18
(1)
Subject
to
subparagraph
(2),
the
captive’s
company
report
shall
be
filed
no
later
than
ninety
calendar
days
after
the
close
of
the
company’s
fiscal
year.
(2)
Prior
to
April
1,
the
captive
company
shall
file
a
report
covering
the
immediately
preceding
calendar
year
with
the
commissioner
to
provide
sufficient
information
to
support
the
captive
company’s
premium
tax
return
under
section
432.1A.
c.
Each
captive
company
shall
use
generally
accepted
accounting
principles,
unless
the
commissioner
requires,
approves,
or
accepts
the
use
of
statutory
accounting
principles
or
any
other
comprehensive
accounting
principles
for
the
company’s
report.
The
commissioner
may
require,
approve,
or
accept
any
appropriate
or
necessary
modifications
of
statutory
accounting
principles
or
other
comprehensive
accounting
principles
based
on
the
type
of
insurance
and
kinds
of
insurers
that
are
included
in
a
captive
company’s
report.
The
report
may
include
letters
of
credit
that
are
established,
issued,
or
confirmed
by
any
of
the
following:
(1)
A
bank
chartered
in
this
state.
(2)
A
member
of
the
federal
reserve
system.
(3)
A
bank
chartered
by
another
state,
if
approved
by
the
commissioner.
d.
An
actuarial
opinion
from
a
qualified
actuary
regarding
the
adequacy
of
the
company’s
required
reserves
to
make
full
provision
for
the
company’s
liabilities,
insured
or
reinsured,
shall
be
included
in
the
report.
The
qualified
actuary
shall
submit
a
memorandum
to
the
commissioner
that
details
the
qualified
actuary’s
support
for
the
actuarial
opinion.
The
commissioner
may
require
that
additional
information
be
submitted
to
supplement
the
actuarial
opinion.
e.
All
captive
companies
shall
be
audited
annually
by
an
independent
certified
public
accountant
and
shall
annually
file
the
audited
financial
report
with
the
commissioner
on
or
before
June
1,
as
a
supplement
to
the
annual
report
required
under
section
521J.7,
subsection
1.
f.
A
captive
company
may
request
an
extension
to
file
a
report
required
by
this
section.
A
written
request
for
an
extension
must
be
received
by
the
commissioner
not
less
than
ten
days
before
the
filing
due
date,
and
the
request
must
Senate
File
549,
p.
19
contain
sufficient
details
to
enable
the
commissioner
to
make
an
informed
decision
regarding
the
request.
The
commissioner
may
grant
a
thirty-day
extension
upon
a
determination
by
the
commissioner
that
a
captive
company
has
good
cause
for
the
extension.
g.
A
captive
company
may
be
required
to
file
a
report
on
the
captive
company’s
financial
condition
on
a
semiannual,
quarterly,
monthly,
or
other
basis
as
determined
by
the
commissioner.
h.
Captive
companies
shall
file
all
reports
required
under
this
section
in
the
form
and
manner
prescribed
by
the
commissioner
by
rule.
2.
All
reports
filed
pursuant
to
this
section
shall
be
considered
confidential
and
shall
not
be
a
public
record.
Sec.
11.
NEW
SECTION
.
521J.8
Examinations.
1.
a.
Except
for
captive
risk
retention
groups
as
provided
under
paragraph
“c”
,
the
commissioner
may
examine
each
captive
company’s
compliance
with
this
chapter,
and
may
examine
the
affairs,
transactions,
accounts,
records,
and
assets
of
each
captive
company
as
the
commissioner
deems
necessary.
b.
The
commissioner
shall
upon
the
completion
of
an
examination
under
paragraph
“a”
,
or
at
such
regular
intervals
prior
to
completion
of
an
examination
as
the
commissioner
determines,
prepare
an
account
of
the
costs
incurred
in
performing
and
preparing
the
report
of
the
examination
which
shall
be
charged
to
and
paid
by
the
captive
company
examined.
If
the
captive
company
fails
or
refuses
to
pay
the
charges,
the
charges
may
be
recovered
in
an
action
brought
in
the
name
of
the
state.
c.
The
commissioner
shall
examine
the
affairs,
transactions,
accounts,
records,
and
assets
of
each
captive
risk
retention
group
as
the
commissioner
deems
necessary,
but
no
less
frequently
than
every
three
calendar
years.
A
report
produced
pursuant
to
the
examination
of
a
captive
risk
retention
group
under
this
section
shall
be
a
public
record.
2.
Except
as
provided
in
subsection
3,
this
section
shall
apply
to
all
business
written
by
a
captive
company.
3.
An
examination
of
a
branch
captive
company
shall
be
conducted
only
on
the
branch
business
and
branch
operations
if
Senate
File
549,
p.
20
all
of
the
following
requirements
are
met:
a.
The
branch
captive
company
annually
provides
the
commissioner
a
certificate
of
compliance,
or
equivalent,
that
was
issued
by
or
filed
with
the
licensing
authority
of
the
jurisdiction
in
which
the
branch
captive
company
is
formed.
b.
The
branch
captive
company
demonstrates
to
the
satisfaction
of
the
commissioner
that
the
company
is
operating
in
sound
financial
condition
and
in
compliance
with
all
applicable
law
and
regulations
of
the
jurisdiction
in
which
the
branch
captive
company
is
formed.
4.
As
a
condition
of
authorization
of
a
branch
captive
company,
the
alien
captive
company
shall
grant
authority
to
the
commissioner
for
examination
of
the
affairs
of
the
alien
captive
company
in
the
jurisdiction
in
which
the
alien
captive
company
is
formed.
5.
The
applicable
provisions
of
chapter
507
shall
apply
to
examinations
conducted
under
this
chapter.
Sec.
12.
NEW
SECTION
.
521J.9
Suspension
or
revocation.
1.
A
captive
company’s
certificate
of
authority
to
conduct
the
business
of
insurance
in
this
state
may
be
suspended
or
revoked
by
the
commissioner
for
any
of
the
following
reasons:
a.
Insolvency
or
impairment
of
capital
or
surplus.
b.
Failure
to
meet
and
maintain
the
minimum
capital
and
surplus
requirements
under
section
521J.4.
c.
Refusal
or
failure
to
submit
an
annual
report
pursuant
to
section
521J.7,
or
to
submit
any
other
report
or
statement
required
by
law
or
by
lawful
order
of
the
commissioner.
d.
Failure
to
comply
with
the
captive
company’s
own
charter,
bylaws,
or
other
organizational
document.
e.
Failure
to
submit
to
an
examination
as
required
under
section
521J.8.
f.
Use
of
methods
that
render
the
captive
company’s
operation
detrimental,
or
the
company’s
condition
unsound,
with
respect
to
the
company’s
policyholders
or
to
the
public.
g.
Failure
to
pay
tax
on
premiums
as
required
under
section
432.1A.
h.
Failure
to
submit
or
pay
any
fee
under
this
chapter.
i.
Failure
to
submit
to
or
pay
the
cost
of
any
examination
under
this
chapter.
Senate
File
549,
p.
21
j.
Failure
to
comply
with
the
laws
of
this
state.
2.
a.
If
the
commissioner
finds
upon
examination,
hearing,
or
other
review
that
a
captive
company
has
committed
an
act
specified
in
subsection
1,
the
commissioner
may
suspend
or
revoke
the
company’s
certificate
of
authority
if
the
commissioner
deems
it
in
the
best
interest
of
the
public
or
of
the
policyholders
of
the
captive
company.
b.
If
the
commissioner
does
not
revoke
a
captive
company’s
certificate
of
authority
during
a
suspension
imposed
by
the
commissioner
under
paragraph
“a”
,
the
company’s
certificate
of
authority
may
be
reinstated
if
the
commissioner
finds
that
the
cause
of
the
suspension
has
been
rectified.
Sec.
13.
NEW
SECTION
.
521J.10
Excess
workers’
compensation
insurance.
1.
A
captive
company
may
provide
excess
workers’
compensation
insurance
to
the
captive
company’s
parent
and
affiliated
companies
unless
the
laws
of
the
state
that
has
jurisdiction
over
the
transaction
prohibits
the
captive
company
from
providing
excess
workers’
compensation
insurance.
2.
A
captive
company
may
reinsure
workers’
compensation
of
a
qualified
self-insured
plan
of
the
captive
company’s
parent
and
affiliated
companies.
Sec.
14.
NEW
SECTION
.
521J.11
Captive
mergers.
1.
A
merger
between
captive
stock
insurers,
or
a
merger
between
captive
mutual
insurers,
shall
meet
the
requirements
of
chapter
521
and
section
521J.5,
as
applicable.
The
commissioner
may,
at
the
commissioner’s
discretion,
provide
notice
to
the
public
of
a
proposed
merger
prior
to
the
commissioner’s
approval
or
disapproval
of
a
merger.
2.
An
industrial
insured
group
formed
as
a
stock
insurer
or
as
a
mutual
insurer
may
be
converted
to
or
merged
with
a
reciprocal
insurer
under
this
section.
3.
A
plan
for
conversion
or
merger
shall
meet
all
of
the
following
requirements:
a.
(1)
The
plan
shall
be
fair
and
equitable
to
the
shareholders
in
the
case
of
a
stock
insurer,
or
to
the
policyholders
in
the
case
of
a
mutual
insurer.
(2)
The
plan
shall
provide
for
the
purchase
of
the
shares
of
any
nonconsenting
shareholder
of
a
stock
insurer,
or
of
the
Senate
File
549,
p.
22
policyholder
interests
of
any
nonconsenting
policyholder
of
a
mutual
insurer.
b.
A
plan
for
conversion
to
a
reciprocal
insurer
must
be
approved
by
the
commissioner.
The
commissioner
shall
not
approve
a
plan
unless
the
plan
meets
all
of
the
following
requirements:
(1)
The
plan
provides
for
a
hearing
upon
notice
to
the
insurer,
directors,
officers,
and
stockholders
or
policyholders
who
have
the
right
to
appear
at
the
hearing,
unless
the
commissioner
waives
or
modifies
the
requirements
for
the
hearing.
(2)
(a)
In
the
case
of
a
stock
insurer,
the
plan
provides
for
the
conversion
of
the
existing
stockholder
interests
into
subscriber
interests
in
the
resulting
reciprocal
insurer
proportionate
to
the
existing
stockholder
interests,
and
is
approved
by
a
majority
of
the
shareholders
who
are
entitled
to
vote,
and
who
are
represented
at
a
regular
or
special
meeting
at
which
a
quorum
is
present
either
in
person
or
by
proxy.
(b)
In
the
case
of
a
mutual
insurer,
the
plan
provides
for
the
conversion
of
the
existing
policyholder
interests
into
subscriber
interests
in
the
resulting
reciprocal
insurer
proportionate
to
the
existing
policyholder
interests,
and
is
approved
by
a
majority
of
the
voting
interests
of
the
policyholders
who
are
represented
at
a
regular
or
special
meeting
at
which
a
quorum
is
present
either
in
person
or
by
proxy.
(3)
The
plan
meets
the
applicable
requirements
of
section
521J.5.
c.
If
the
commissioner
approves
a
plan
of
conversion,
the
certificate
of
authority
for
the
converting
insurer
shall
be
amended
to
state
that
the
converting
insurer
is
a
reciprocal
insurer.
The
conversion
shall
be
effective
and
the
corporate
existence
of
the
converting
entity
shall
cease
to
exist
on
the
date
on
which
the
amended
certificate
of
authority
is
issued
to
the
attorney-in-fact
for
the
reciprocal
insurer.
The
resulting
reciprocal
insurer
shall
file
the
articles
of
merger
or
the
articles
of
conversion
with
the
secretary
of
state.
Sec.
15.
NEW
SECTION
.
521J.12
Captive
insurance
——
regulatory
and
supervision
fund
——
appropriation.
Senate
File
549,
p.
23
1.
A
captive
insurance
regulatory
and
supervision
fund
is
established
in
the
state
treasury
under
the
control
of
the
division.
The
fund
shall
consist
of
all
moneys
deposited
in
the
fund
pursuant
to
this
section
and
any
other
moneys
appropriated
to
or
deposited
in
the
fund.
2.
All
fees,
assessments,
fines,
and
administrative
penalties
collected
under
this
chapter
shall
be
deposited
in
the
fund.
3.
Moneys
in
the
fund
are
appropriated
to
the
division
to
administer
this
chapter,
including
the
maintenance
of
staff,
associated
expenses,
and
necessary
contractual
services,
and
for
the
reimbursement
of
reasonable
expenses
incurred
by
the
division
to
promote
captive
insurance
in
this
state.
4.
a.
Notwithstanding
section
8.33,
moneys
in
the
fund
that
remain
unencumbered
or
unobligated
at
the
close
of
a
fiscal
year
shall
not
revert
but
shall
remain
available
for
expenditure
for
the
purposes
designated.
b.
At
the
close
of
each
fiscal
year,
if
unencumbered
or
unobligated
moneys
remaining
in
the
captive
insurance
regulatory
and
supervision
fund
exceed
five
hundred
thousand
dollars,
moneys
in
excess
of
that
amount
shall
be
transferred
from
the
captive
insurance
regulatory
and
supervision
fund
to
the
general
fund
of
the
state.
5.
The
division
may
temporarily
use
moneys
from
the
general
fund
of
the
state
to
pay
expenses
in
excess
of
moneys
available
in
the
captive
insurance
regulatory
and
supervision
fund
for
the
purposes
designated
in
this
section
if
those
additional
expenditures
are
fully
reimbursable
and
the
division
reimburses
the
general
fund
of
the
state
in
full
by
the
close
of
the
fiscal
year.
Because
any
general
fund
moneys
used
shall
be
fully
reimbursed,
such
temporary
use
of
moneys
from
the
general
fund
of
the
state
shall
not
constitute
an
appropriation
for
purposes
of
calculating
the
state
general
fund
expenditure
limitation
pursuant
to
section
8.54.
Sec.
16.
NEW
SECTION
.
521J.13
Legal
investments.
1.
a.
Industrial
insured
captive
companies
and
captive
risk
retention
groups
shall
comply
with
investment
requirements
as
established
by
the
commissioner
by
rule.
The
commissioner
may
approve
the
use
of
alternative
reliable
methods
of
valuation
Senate
File
549,
p.
24
and
rating.
b.
If
a
captive
company’s
admitted
assets
total
less
than
five
million
dollars,
the
commissioner
may
approve
an
investment
of
up
to
twenty
percent
of
the
captive
company’s
admitted
assets
in
rated
credit
instruments
in
any
one
investment
that
meets
the
requirements
established
by
the
commissioner
by
rule.
2.
A
pure
captive
company,
or
a
protected
cell
captive
company,
shall
not
be
subject
to
any
restrictions
on
allowable
investments,
except
that
the
commissioner
may
prohibit
or
limit
any
investment
that
threatens
the
solvency
or
liquidity
of
the
pure
captive
company.
3.
Any
captive
company
may
make
loans
to
any
of
the
captive
company’s
affiliates
with
prior
written
approval
of
the
commissioner,
and
each
loan
must
be
evidenced
by
a
note
in
a
form
as
approved
by
the
commissioner
by
rule.
Loans
made
from
minimum
capital
and
surplus
funds
required
by
section
521J.4
shall
be
prohibited.
Sec.
17.
NEW
SECTION
.
521J.14
Reinsurance.
1.
Subject
to
the
prior
approval
of
the
commissioner,
a
captive
company
may
provide
reinsurance
on
risks
ceded
by
any
other
insurer.
2.
Any
captive
company
may
take
credit
for
reserves
on
risks,
or
portions
of
risks,
ceded
to
reinsurers
as
provided
under
chapter
521B.
In
order
to
cede
or
take
credit
for
the
reinsurance
of
risks
or
portions
of
risks
ceded
to
reinsurers
that
do
not
comply
with
chapter
521B,
a
captive
company
shall
obtain
the
prior
approval
of
the
commissioner.
3.
Insurance
by
a
captive
company
of
any
workers’
compensation
qualified
self-insured
plan
of
the
captive
company’s
parent
and
affiliates
shall
be
deemed
to
be
reinsurance
under
this
chapter.
4.
In
addition
to
reinsurers
authorized
under
chapter
521B,
a
captive
company
may
take
credit
for
the
reinsurance
of
risks
or
portions
of
risk
ceded
to
a
pool
or
exchange
acting
as
a
reinsurer
which
has
been
authorized
by
the
commissioner.
The
commissioner
may
require
documents,
financial
information,
or
other
evidence
that
such
a
reinsurance
pool
or
exchange
will
be
able
to
provide
adequate
security
for
the
reinsurance
pool’s
or
Senate
File
549,
p.
25
exchange’s
financial
obligations.
The
commissioner
may
deny
authorization
or
impose
any
limitations
on
the
activities
of
a
reinsurance
pool
or
exchange
that,
in
the
commissioner’s
judgment,
are
necessary
and
proper
to
provide
adequate
security
for
the
ceding
captive
company
and
for
the
protection
and
benefit
of
the
public.
5.
No
credit
shall
be
allowed
for
reinsurance
if
the
reinsurance
contract
does
not
result
in
the
complete
transfer
of
the
risk
or
liability
to
the
reinsurer.
6.
No
credit
shall
be
allowed,
as
an
asset
or
a
deduction
from
liability,
to
any
ceding
insurer
for
reinsurance
unless
the
reinsurance
is
payable
by
the
assuming
insurer
on
the
basis
of
the
liability
of
the
ceding
insurer
under
the
contract
reinsured
without
diminution
because
of
the
insolvency
of
the
ceding
insurer.
7.
Reinsurance
under
this
section
shall
be
effected
through
a
written
agreement
of
reinsurance
setting
forth
the
terms,
provisions,
and
conditions
governing
the
reinsurance.
The
commissioner
may
require
that
complete
copies
of
all
reinsurance
agreements
be
filed
with
and
approved
by
the
commissioner.
Sec.
18.
NEW
SECTION
.
521J.15
Rating
organizations.
A
captive
company
shall
not
be
required
to
join
a
rating
organization.
Sec.
19.
NEW
SECTION
.
521J.16
Compulsory
organizations.
A
captive
company
shall
not
join
or
contribute
financially
to
any
plan,
pool,
association,
or
guaranty
or
insolvency
fund
in
this
state.
A
captive
company,
a
captive
company’s
insureds,
a
captive
company’s
parent,
and
any
company
affiliated
with
a
captive
company
shall
not
receive
any
benefit
from
a
plan,
pool,
association,
or
guaranty
or
insolvency
fund
for
claims
arising
out
of
the
operations
of
the
captive
company.
Sec.
20.
NEW
SECTION
.
521J.17
Protected
cell
captive
companies.
1.
One
or
more
sponsors
may
form
a
protected
cell
captive
company.
2.
A
protected
cell
captive
company
formed
or
authorized
under
this
chapter
shall
be
subject
to
all
of
the
following
Senate
File
549,
p.
26
requirements:
a.
(1)
A
protected
cell
captive
company
may
establish
one
or
more
protected
cells
subject
to
the
prior
written
approval
of
the
commissioner
of
a
plan
of
operation
submitted
by
the
protected
cell
captive
company
for
each
protected
cell.
The
plan
of
operation
shall
include
but
is
not
limited
to
the
specific
business
objectives
and
investment
guidelines
of
the
protected
cell.
(2)
Upon
the
commissioner’s
approval
of
the
protected
cell
captive
company’s
plan
of
operation,
the
company,
in
accordance
with
the
approved
plan
of
operation,
may
attribute
insurance
obligations
with
respect
to
its
insurance
business
to
the
protected
cell.
(3)
A
protected
cell
captive
company
shall
transfer
all
assets
attributable
to
a
protected
cell
to
one
or
more
separately
established
and
separately
identified
protected
cell
accounts
bearing
the
name
or
designation
of
that
protected
cell.
Each
protected
cell
shall
have
a
distinct
name
or
designation
that
must
include
the
words
“protected
cell”.
Protected
cell
assets
shall
be
held
in
the
protected
cell
accounts
for
the
purpose
of
satisfying
the
obligations
of
the
specific
protected
cell.
(4)
Each
protected
cell
shall
be
incorporated.
An
incorporated
protected
cell
may
be
organized
and
operated
in
any
form
of
business
organization
as
authorized
by
the
commissioner
by
rule.
Each
protected
cell
of
a
protected
cell
captive
company
shall
be
treated
as
a
captive
insurance
company
under
this
chapter,
except
that
the
limit
on
maximum
yearly
aggregate
taxes
paid
under
section
432.1A,
subsection
4,
shall
not
apply.
Unless
otherwise
permitted
by
the
organizational
document
of
a
protected
cell
captive
company,
each
protected
cell
of
the
protected
cell
captive
company
must
have
the
same
directors,
secretary,
and
registered
office
as
the
protected
cell
captive
company.
b.
All
attributions
of
assets
and
liabilities
between
a
protected
cell
and
the
protected
cell
captive
company’s
general
account
shall
be
in
accordance
with
the
plan
of
operation
and
the
participant
contracts
as
approved
by
the
commissioner.
No
other
attribution
of
assets
and
liabilities
shall
be
made
by
Senate
File
549,
p.
27
a
protected
cell
captive
company
between
the
protected
cell
captive
company’s
general
account
and
the
company’s
protected
cells.
Any
attribution
of
assets
and
liabilities
between
the
general
account
and
a
protected
cell
shall
be
in
cash
or
in
readily
marketable
securities
with
established
market
values.
c.
The
establishment
of
a
protected
cell
shall
create,
with
respect
to
the
protected
cell,
a
legal
person
separate
from
the
protected
cell
captive
company.
Amounts
attributed
to
a
protected
cell
under
this
chapter,
including
assets
transferred
to
a
protected
cell
account,
shall
be
owned
by
the
protected
cell
and
the
protected
cell
captive
company
shall
not
be
a
trustee,
or
hold
itself
out
to
be
a
trustee,
with
respect
to
the
protected
cell
assets
of
that
protected
cell
account.
d.
A
protected
cell
captive
company
may
contract
with
or
arrange
for
an
investment
adviser
or
other
third
party,
approved
by
the
commissioner,
to
manage
the
protected
cell
assets
of
a
protected
cell
if
all
remuneration,
expenses,
and
other
compensation
of
the
third
party
are
paid
from
the
protected
cell
assets
of
that
protected
cell,
and
not
from
the
protected
cell
assets
of
other
protected
cells
or
the
assets
of
the
protected
cell
captive
company’s
general
account.
e.
(1)
A
protected
cell
captive
company
shall
establish
the
administrative
and
accounting
procedures
necessary
to
properly
identify
each
protected
cell
of
the
protected
cell
captive
company,
and
the
protected
cell
assets
and
protected
cell
liabilities
attributable
to
each
protected
cell.
The
directors
of
a
protected
cell
captive
company
shall
be
responsible
for
all
of
the
following:
(a)
Maintaining
the
assets
and
liabilities
of
protected
cells
separately,
and
separately
identifiable,
from
the
assets
and
liabilities
of
the
protected
cell
captive
company’s
general
account.
(b)
Maintaining
protected
cell
assets
and
protected
cell
liabilities
attributable
to
one
protected
cell
separate,
and
separately
identifiable,
from
protected
cell
assets
and
protected
cell
liabilities
attributable
to
another
protected
cell.
(2)
If
a
protected
cell
captive
company
fails
to
comply
with
subparagraph
(1),
the
remedy
of
tracing
shall
be
applicable
to
Senate
File
549,
p.
28
protected
cell
assets
commingled
with
protected
cell
assets
of
other
protected
cells,
or
commingled
with
the
assets
of
the
protected
cell
captive
company’s
general
account.
The
remedy
of
tracing
shall
not
be
the
exclusive
remedy.
f.
When
establishing
a
protected
cell,
a
protected
cell
captive
company
shall
attribute
assets
with
a
value
at
least
equal
to
the
reserves
attributed
to
that
protected
cell
to
the
protected
cell.
3.
Each
protected
cell
shall
be
accounted
for
separately
on
the
books
and
records
of
the
protected
cell
captive
company
to
reflect
the
financial
condition
and
result
of
operations
of
the
protected
cell,
including
but
not
limited
to
the
net
income
or
loss,
dividends
or
other
distributions
to
participants,
and
any
other
factor
provided
in
the
participant
contract,
or
as
required
by
the
commissioner
by
rule.
4.
The
assets
of
a
protected
cell
shall
not
be
chargeable
with
liabilities
arising
from
any
other
insurance
business
of
the
protected
cell
captive
company.
5.
A
protected
cell
captive
company
shall
not
make
a
sale,
exchange,
or
other
transfer
of
assets
among
any
of
the
company’s
protected
cells
without
the
consent
of
the
participants
of
each
affected
protected
cell.
6.
A
protected
cell
shall
not
make
a
sale,
exchange,
transfer
of
assets,
dividend,
or
distribution
to
a
sponsor
or
to
a
participant
without
the
commissioner’s
prior
written
approval,
which
shall
not
be
given
if
the
sale,
exchange,
transfer,
dividend,
or
distribution
will
result
in
the
insolvency
or
impairment
of
the
protected
cell.
7.
A
protected
cell
captive
company
shall
annually
file
with
the
commissioner
any
financial
reports
required
by
the
commissioner,
as
established
by
rule,
and
shall
include,
without
limitation,
accounting
statements
detailing
the
finances
of
each
protected
cell.
8.
A
protected
cell
captive
company
shall
notify
the
commissioner
in
writing
within
ten
business
days
from
the
date
that
a
protected
cell
has
become
impaired
or
insolvent,
or
is
otherwise
unable
to
meet
its
claim
or
expense
obligations.
9.
A
participant
contract
shall
not
take
effect
without
the
commissioner’s
prior
written
approval.
Senate
File
549,
p.
29
10.
An
addition
of
any
new
protected
cell,
or
the
withdrawal
of
any
participant
of
an
existing
protected
cell,
shall
constitute
a
change
in
the
business
plan
of
the
protected
cell
captive
company,
and
the
change
shall
not
become
effective
without
the
prior
written
approval
of
the
commissioner.
11.
With
respect
to
each
protected
cell,
business
written
by
a
protected
cell
captive
company
shall
be
fronted
by
an
insurance
company
authorized
under
the
laws
of
any
state,
or
as
approved
by
the
commissioner.
12.
If
a
protected
cell
captive
company’s
business
is
reinsured,
with
respect
to
each
protected
cell,
the
protected
cell
captive
company
shall
comply
with
at
least
one
of
the
following
requirements:
a.
The
business
shall
be
reinsured
by
a
reinsurer
authorized
or
approved
by
the
commissioner.
b.
The
business
shall
be
secured
by
a
trust
fund
that
is
located
in
the
United
States
for
the
benefit
of
policyholders
and
claimants,
and
which
is
funded
by
an
irrevocable
letter
of
credit
or
other
asset
that
is
acceptable
to
the
commissioner,
and
that
is
subject
to
all
of
the
following:
(1)
The
amount
of
security
provided
by
the
trust
fund
shall
not
be
less
than
the
reserves
associated
with
the
liabilities
that
are
not
fronted
or
reinsured,
including
but
not
limited
to
reserves
for
losses
that
are
allocated
for
loss
adjustment
expenses,
incurred
but
not
reported
losses,
and
unearned
premiums
for
business
written
through
the
participant’s
protected
cell.
(2)
The
commissioner
may
require
the
protected
cell
captive
company
to
increase
the
funding
of
any
trust.
(3)
If
the
form
of
security
in
the
trust
is
a
letter
of
credit,
the
letter
of
credit
shall
be
established,
issued,
or
confirmed
by
a
bank
chartered
in
this
state,
a
member
of
the
federal
reserve
system,
or
a
bank
chartered
by
another
state
if
the
bank
is
approved
by
the
commissioner.
(4)
The
commissioner
shall
approve
the
form
and
terms
of
the
trust
and
trust
instrument.
Sec.
21.
NEW
SECTION
.
521J.18
Sponsors
——
qualifications.
A
sponsor
of
a
protected
cell
captive
company
may
be
any
person
approved
by
the
commissioner,
based
on
the
Senate
File
549,
p.
30
commissioner’s
determination
that
the
approval
of
such
person
as
a
sponsor
is
consistent
with
the
purposes
of
this
chapter.
In
evaluating
the
qualifications
of
a
proposed
sponsor,
the
commissioner
shall
consider
the
type
and
structure
of
the
proposed
sponsor
entity,
the
sponsor’s
experience
in
financial
operations,
the
sponsor’s
financial
stability,
the
sponsor’s
business
reputation,
and
any
other
factors
deemed
relevant
by
the
commissioner.
A
risk
retention
group
shall
not
be
a
sponsor
of
a
protected
cell
captive
company.
Sec.
22.
NEW
SECTION
.
521J.19
Delinquency.
1.
Except
as
otherwise
provided
in
this
section,
chapter
507C
shall
apply
to
a
protected
cell
captive
company.
2.
Upon
any
order
of
supervision,
rehabilitation,
or
liquidation
of
a
protected
cell
captive
company,
the
receiver
shall
manage
the
assets
and
liabilities
of
the
protected
cell
captive
company
pursuant
to
this
section.
3.
Notwithstanding
chapter
507C
or
any
other
provision
to
law
to
the
contrary,
in
the
conservation,
rehabilitation,
or
liquidation
of
a
protected
cell
captive
company,
all
of
the
following
requirements
shall
be
met:
a.
The
assets
and
liabilities
of
a
protected
cell
shall
at
all
times
be
kept
separate
from,
and
shall
not
be
commingled
with,
those
of
other
protected
cells
and
the
protected
cell
captive
company.
b.
The
assets
of
a
protected
cell
shall
not
be
used
to
pay
any
expenses
or
claims
other
than
the
expenses
or
claims
attributable
to
the
protected
cell.
c.
If
the
sponsor
consents
and
the
commissioner
has
granted
prior
written
approval,
the
assets
of
the
protected
cell
captive
company’s
general
account
may
be
used
to
pay
any
expenses
or
claims
attributable
solely
to
a
protected
cell
or
protected
cells
of
the
protected
cell
captive
company.
Notwithstanding
section
521J.4,
if
the
assets
of
the
protected
cell
captive
company’s
general
account
are
used
to
pay
expenses
or
claims
attributed
solely
to
a
protected
cell
or
protected
cells
of
the
protected
cell
captive
company,
the
sponsor
shall
not
be
required
to
contribute
additional
capital
and
surplus
to
the
protected
cell
captive
company’s
general
account.
d.
A
protected
cell
captive
company’s
capital
and
surplus
Senate
File
549,
p.
31
shall
be
available
at
all
times
to
pay
any
expenses
of,
or
claims
against,
the
protected
cell
captive
company.
4.
Notwithstanding
chapter
507C
or
any
other
provision
of
law
to
the
contrary,
in
the
event
of
an
insolvency
of
a
protected
cell
captive
company
where
the
commissioner
determines
that
one
or
more
protected
cells
remain
solvent,
the
commissioner
may
separate
such
cells
from
the
protected
cell
captive
company
and,
on
application
of
the
sponsor,
may
allow
for
the
conversion
of
such
protected
cells
into
one
or
more
new
or
existing
protected
cell
captive
companies,
or
one
or
more
other
captive
companies,
pursuant
to
a
plan
of
operation
approved
by
the
commissioner.
Sec.
23.
NEW
SECTION
.
521J.20
Participants.
Individuals,
business
entities,
and
sponsors
may
be
a
participant
in
a
protected
cell
captive
company.
A
participant
shall
not
be
required
to
be
a
shareholder
of
a
protected
cell
captive
company,
or
of
the
protected
cell
captive
company’s
affiliate.
Sec.
24.
NEW
SECTION
.
521J.21
Investments
——
combined
assets.
The
assets
of
two
or
more
protected
cells
may
be
combined
for
the
purpose
of
investment
by
a
protected
cell
captive
company,
and
combining
the
protected
cells’
assets
shall
not
be
construed
as
defeating
the
segregation
of
the
assets
for
accounting
or
any
other
purpose.
Protected
cell
captive
companies
and
protected
cells
shall
comply
with
the
applicable
investment
requirements
contained
in
section
521J.13;
however,
compliance
with
such
investment
requirements
shall
be
waived
for
protected
cell
captive
companies
to
the
extent
that
credit
for
reinsurance
ceded
to
reinsurers
is
allowed
under
section
521J.14,
or
to
the
extent
that
waiver
of
compliance
with
the
investment
requirements
is
deemed
reasonable
and
appropriate
by
the
commissioner.
The
commissioner
may
exercise
discretion
in
approving
the
accounting
standards
used
by
the
company.
Sec.
25.
NEW
SECTION
.
521J.22
Dormant
captive
companies.
1.
As
used
in
this
section,
“dormant
captive
company”
means
a
captive
company,
other
than
a
captive
risk
retention
group,
that
meets
all
of
the
following:
a.
The
captive
company
has
ceased
transacting
the
business
Senate
File
549,
p.
32
of
insurance,
including
the
issuance
of
insurance
policies.
b.
The
captive
company
does
not
have
any
remaining
liabilities
associated
with
its
insurance
business
transactions
or
insurance
policies
issued
prior
to
the
captive
company’s
filing
of
an
application
for
a
certificate
of
dormancy
under
subsection
2.
2.
Any
captive
company
that
is
domiciled
in
this
state
and
that
complies
with
this
section
may
apply
to
the
commissioner
for
a
certificate
of
dormancy.
A
certificate
of
dormancy
shall
be
subject
to
expiration
five
calendar
years
from
the
date
that
the
certificate
is
issued,
and
the
commissioner
shall
not
renew
a
certificate
of
dormancy.
3.
a.
A
captive
company
that
has
been
issued
a
certificate
of
dormancy
shall
comply
with
all
of
the
following:
(1)
The
dormant
captive
company
shall
possess
and
maintain
unimpaired,
paid-in
capital
and
surplus
of
not
less
than
twenty-five
thousand
dollars.
(2)
Within
ninety
calendar
days
of
the
dormant
captive
company’s
fiscal
year
end,
the
company
shall
annually
submit
to
the
commissioner
a
report
on
the
company’s
financial
condition,
verified
by
oath
of
two
of
the
company’s
executive
officers,
in
the
form
and
manner
as
established
by
the
commissioner
by
rule.
(3)
The
dormant
captive
company
shall
pay
an
annual
one
thousand
dollar
dormancy
tax,
due
on
or
before
March
1,
if
for
any
portion
of
the
immediately
preceding
calendar
year
the
captive
company
held
a
certificate
of
dormancy.
Each
series
of
members
and
each
protected
cell
shall
be
considered
separate
for
purposes
of
paying
the
annual
dormancy
tax
under
a
certificate
of
dormancy.
A
dormant
captive
company
is
not
otherwise
liable
for
any
annual
renewal
as
provided
in
section
521J.2,
subsection
4,
paragraph
“b”
.
b.
A
dormant
captive
insurance
company
that
has
been
issued
a
certificate
of
dormancy
shall
not
be
subject
to
or
liable
for
the
payment
of
tax
under
section
432.1A
from
the
date
the
certificate
of
dormancy
is
issued
through
the
date
the
certificate
of
dormancy
expires.
4.
A
dormant
captive
company
shall
be
subject
to
examination
under
section
521J.9
for
any
year
in
which
the
company
does
not
qualify
as
a
dormant
captive
company.
In
the
commissioner’s
Senate
File
549,
p.
33
discretion,
a
dormant
captive
company
shall
be
subject
to
examination
under
section
521J.9
for
any
year
in
which
the
dormant
captive
company
qualifies
as
a
dormant
captive
company.
5.
Prior
to
a
dormant
captive
company
issuing
an
insurance
policy,
the
dormant
captive
company
shall
apply
to
the
commissioner
for
approval
to
surrender
the
company’s
certificate
of
dormancy
and
to
resume
conducting
the
business
of
insurance.
6.
A
dormant
captive
company’s
certificate
of
dormancy
shall
be
revoked
if
the
company
violates
this
section.
Sec.
26.
NEW
SECTION
.
521J.23
Workers’
compensation
——
compliance
with
state
and
federal
laws.
1.
This
chapter
shall
not
be
construed
to
exempt
a
captive
company,
a
captive
company’s
parent,
or
a
captive
company’s
affiliated
companies
from
compliance
with
applicable
state
and
federal
laws
governing
workers’
compensation
insurance.
2.
This
chapter
shall
not
be
construed
to
divest
the
division
of
workers’
compensation
of
any
jurisdiction,
as
authorized
by
law,
over
workers’
compensation
self-insurance
plans.
Sec.
27.
NEW
SECTION
.
521J.24
Books
and
records.
1.
a.
Unless
otherwise
approved
by
the
commissioner,
a
captive
company
shall
maintain
the
captive
company’s
original
books,
records,
documents,
accounts,
vouchers,
and
agreements
in
this
state
and
make
them
available
for
examination
and
inspection
by
the
commissioner
as
requested
by
the
commissioner.
The
captive
company
may
store
and
reproduce
the
books,
records,
documents,
accounts,
vouchers,
and
agreements
electronically.
b.
All
books,
records,
documents,
accounts,
vouchers,
and
agreements
shall
be
kept
in
a
manner
that
the
commissioner
can
readily
ascertain
the
captive
company’s
financial
condition,
affairs,
and
operations;
can
readily
verify
the
captive
company’s
financial
statements;
and
can
confirm
the
captive
company’s
compliance
with
this
chapter.
2.
Unless
otherwise
approved
by
the
commissioner,
all
books,
records,
documents,
accounts,
vouchers,
and
agreements
maintained
by
a
captive
company
under
subsection
1
shall
remain
available
in
the
state
until
the
commissioner
approves
Senate
File
549,
p.
34
destruction
or
other
disposition
of
the
books,
records,
documents,
accounts,
vouchers,
and
agreements.
Sec.
28.
NEW
SECTION
.
521J.26
Risk
management
of
controlled
unaffiliated
business
——
standards.
The
commissioner
may
adopt
rules
establishing
standards
to
ensure
that
a
parent
or
affiliated
company
is
able
to
exercise
control
of
the
risk
management
function
of
any
controlled
unaffiliated
business
to
be
insured
by
a
captive
company.
If
rules
are
not
adopted
to
establish
standards
pursuant
to
this
section,
the
commissioner
may
approve
the
coverage
of
such
risks
on
a
case-by-case
basis.
Sec.
29.
NEW
SECTION
.
521J.27
Rules.
The
commissioner
shall
adopt
rules
pursuant
to
chapter
17A
to
implement
and
administer
this
chapter.
Sec.
30.
FUTURE
REPEAL.
Chapter
521G,
Code
2023,
is
repealed
effective
January
1,
2025.
Sec.
31.
APPLICABILITY.
The
following
applies
January
1,
2025,
to
protected
cell
captive
companies
formed,
authorized,
or
continued
on
or
after
that
date:
The
section
of
this
Act
enacting
section
521J.17.
______________________________
AMY
SINCLAIR
President
of
the
Senate
______________________________
PAT
GRASSLEY
Speaker
of
the
House
I
hereby
certify
that
this
bill
originated
in
the
Senate
and
is
known
as
Senate
File
549,
Ninetieth
General
Assembly.
______________________________
W.
CHARLES
SMITHSON
Secretary
of
the
Senate
Approved
_______________,
2023
______________________________
KIM
REYNOLDS
Governor