AI-assisted research summary: This section defines when a captive insurance company is treated as dormant and sets the conditions for getting, keeping, and ending a letter of dormancy.
As used in this section, “dormant captive insurance company” means any captive insurance company other than a captive risk retention group that has: Ceased transacting the business of insurance, including the issuance of insurance policies; and No remaining liabilities associated with insurance business transactions or insurance policies issued prior to the filing of its application for a letter of dormancy under this section. A captive insurance company domiciled in this state that meets the criteria of subsection (a) may apply to the commissioner for issuance of a letter of dormancy. The commissioner may issue the captive insurance company a letter of dormancy in the commissioner's sole discretion. A letter of dormancy issued by the commissioner shall specify an expiration date that is no later than five (5) years from the date of issuance. The commissioner may, before the expiration date, issue a superseding letter of dormancy. The superseding letter of dormancy shall specify a new expiration date no later than five (5) years from the date of issuance of the superseding letter. A dormant captive insurance company that has been issued a letter of dormancy shall: Possess, and thereafter maintain unimpaired, paid-in capital and surplus of not less than twenty five thousand dollars ($25,000); Prior to March 15 of each year, submit to the commissioner a report of its financial condition as required by § 56-13-108; and Pay the fee established by § 56-4-101(a)(4). A dormant captive insurance company that has been issued a letter of dormancy shall not be subject to or liable for the payment of the annual minimum aggregate tax provided for in § 56-13-114(c). A dormant captive insurance company shall be liable for payment of premium tax on premiums received before issuance of a letter of dormancy. A dormant captive insurance company that has been issued a letter of dormancy must apply to the commissioner for and receive a rescission of the letter of dormancy and restore its unimpaired paid-in capital and surplus to the amount required in § 56-13-105 prior to issuing any insurance policies and resuming the business of insurance. The commissioner shall rescind a letter of dormancy issued to any captive insurance company if that company no longer meets the criteria of subsection (a). Such rescission shall be effective as of the date the company ceased to meet the criteria of subsection (a). In the commissioner's sole discretion, an examination required by § 56-13-109 may be held in abeyance during the time the dormant captive insurance company is under a letter of dormancy. An application for a letter of dormancy and an application for a rescission of a letter of dormancy constitute a change of business plan pursuant to § 56-4-101(a)(8). The captive insurance company is responsible for all taxes, fees, and statutory requirements of this title for the year in which the rescission or expiration of its letter of dormancy occurs. The commissioner may promulgate rules as necessary to effectuate the purposes of this section. All rules shall be promulgated in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.