AI-assisted research summary: Captive insurance companies must maintain minimum unimpaired capital and surplus set by the commissioner, with different minimums for different company classes.
(a) Each captive insurance company licensed pursuant to this article shall possess and thereafter maintain unimpaired capital and surplus in the amount established by the commissioner; provided that: (1) The commissioner shall take into account the nature and volume of business transacted by each captive insurance company, and any other factors deemed appropriate by the commissioner; (2) Class 3 companies shall be subject to other applicable provisions of this chapter that may require capital and surplus in excess of those established by the commissioner; and (3) Minimum capital and surplus established by the commissioner shall be no less than the following amounts: (A) Class 1 company: $100,000; (B) Class 2 company: $250,000; (C) Class 3 company: $500,000; (D) Class 4 company: $500,000; and (E) Class 5 company: An amount as determined by the commissioner on a case by case basis. (b) Minimum required capital and surplus established by the commissioner pursuant to subsection (a) shall be in any one or combination of the following forms: cash, irrevocable letter of credit issued by a bank chartered by this State or a member bank of the Federal Reserve System, public obligations as defined in section 431:6-301, or other form approved by the commissioner; provided that minimum required capital and surplus in excess of the amounts listed in subsection (a)(3) shall be allowed to be invested in accordance with a strategic investment policy adopted and monitored by the captive insurance companys governing body, and approved by the commissioner. (c) In the case of a branch captive insurance company, and in lieu of minimum capital and surplus under this section, the commissioner shall determine the amount and form of security to be maintained by the branch captive insurance company in this State after taking into consideration: (1) The amount and nature of risk written through and retained by the branch captive insurance company in this State; (2) The financial condition of the outside captive insurance company whose branch office is located in this State; (3) Trusts or other security posted for ceding insurers; and (4) Any other factors the commissioner deems appropriate. The security required by the commissioner may be in the form of cash, an irrevocable letter of credit issued by a bank chartered in this State or a member bank of the Federal Reserve System, a trust, public obligations as defined in section 431:6-301, or any other forms of security deemed appropriate by the commissioner. [L 1987, c 347, pt of §2; am L 1998, c 150, §4; am L 1999, c 302, §3; am L 2000, c 36, §4 and c 133, §4; am L 2003, c 209, §3; am L 2007, c 232, §6; am L 2008, c 190, §5; am L 2012, c 253, §10]