TCA § 56-13-125 — Payment of premiums and claims in foreign currency or foreign securities
AI-assisted research summary: Certain captive insurance companies and individual cells may, with commissioner approval, use foreign currency or foreign securities in their plans and claims processing.
For purposes of this section: “Foreign” means outside the United States, its territories, or possessions; “Foreign currency” means currency issued by a government outside the United States that is recognized by the United States as a legitimate government-issued currency and freely exchangeable with United States currency; and “Foreign securities” means securities that are ordinarily traded on an exchange outside the United States. A captive insurance company or an individual cell of a captive insurance company may, with the approval of the commissioner, include within its plan of operation that the company will: Receive payments of premium in a specified foreign currency or foreign securities and will pay claims on insured losses in a specified currency or foreign securities; Authorize the payment of claims in a specified foreign currency or foreign securities; and Hold foreign currency or foreign securities as surplus for the payment of future claims. In determining the exchange rate between United States currency and the foreign currency or foreign securities, the captive insurance company shall identify in its approved plan of operation a publicly available and reliable exchange rate index. If the exchange rate index identified in the plan of operation is not available, then the commissioner must determine the appropriate exchange rate for the purpose of calculating the amount of premium tax due. For the purpose of calculating the amount of premium tax due under § 56-13-114, a policy issued by a captive insurance company payable in foreign currency or foreign securities is deemed to be of an equivalent value in United States currency as of the date that coverage is bound and is payable in United States currency when due under § 56-13-114. For captive insurance companies and protected cells that have received permission pursuant to subsection (b), all reports required to be filed pursuant to § 56-13-108 must be converted to United States currency for the reporting period covered by the annual report.