An Act To Create Economic Development in the State by Modernizing the State's Captive Insurance Laws
Maine Legislature, Session 124, LD 1436
Committee Amendment CA_A_S220 (Senate)
Amends: 24-A MRSA §6714

COMMITTEE AMENDMENT "A " to S.P. 520, L.D. 1436, Bill, "An Act To 
Create Economic Development in the State by Modernizing the State's Captive Insurance 
Laws" 
Amend the bill in section 2 in subsection 4 in the 3rd line (page 1, line 18 in L.D.) by 
striking out the following: "eF~" and inserting the following: 'or' 
Amend the bill in section 8 by striking out all of subsection 11 (page 2, lines 13 to 18 
in L.D.) and inserting the following: 
'11. Pure captive insurance company. "Pure captive insurance company" means 
any company that insures risks of its parent, and affiliated companies or controlled 
unaffiliated businesses, but does not include those insurers that otherwise qualify for and 
elect to hold a certificate of authority as an insurer under section 414. "Pure captive 
insurance company" includes, with respect to operations in this State unless otherwise 
restricted by the superintendent, a branch captive insurance company.' 
, Amend the bill in section lOin §6704 by striking out all of subsection 1 (page 5, lines 
to 16 in L.D.) and inserting the following: 
'I. 
Minimum capital and surplus. 
A J*ife captive insurance company,...--an 
association captive insurance company incorporated as a stock insurer or an industrial 
insured captive insurance company incorporated as a stock insurer may not be issued a 
license unless the company has and maintains unimpaired paid-in capital and surplus of: 
A. 
In the case of a pure captive insurance company, not less than $100.000 
$250,000; 
B. In the case of an association captive insurance company incomorated Il!': a !':tock 
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not less than $400,000 $750,000; aH4 
C. In the case of an industrial insured captive insurance company incomorated as a 
stock in!':urer, not less than $200,000. $500,000; 
D. ,In the case of a sponsored captive insurance company, not less than $500,000; 
and 
COMMITTEE AMENDMENT 
COMMITIEEAMENDMENT" A"to S.P. 520, L.D. 1436 
E. In the case of a risk retention group, not less than $1,000,000. 
The superintendent may prescribe additional capital based upon the type, volume and 
nature of insurance business transacted.' 
Amend the bill in section 12 in §6706 by striking out all of subsection 1 (page 5, lines 
to 36 and page 6, lines 1 to 4 in L.D.) and inserting the following: 
'I. Pure captive insurance company. A pure captive insurance company must be 
incorporated: 
A. As Incorporated as a stock insurer with capital divided into shares and held by the 
stockholders; ef 
B. As Incorporated as a nonprofit corporation whose votes of membership interest 
are held by a parent organization formed under a nonprofit law or by such nonprofit 
parent and its affiliated companies. corporation with one or more members; or 
C. Organized as a manager-managed limited liability company.' 
Amend the bill in section 12 in §6706 in subsection 2 in paragraph B in the first line 
(page 6, line 9 in L.D.) by striking out the following: "As" and inserting the following: 
'As Incorporated as' 
Amend the bill in section 12 in §6706 in subsection 4 in paragraph C in the last line 
(page 6, line 30 in L.D.) by inserting after the following: "members" the following: 'or a 
limited liability company' 
Amend the bill in section 12 in §6706 by striking out all of subsection 6 (page 6, lines 
to 38 in L.D.) and inserting the following: 
'6. Board of directors. At If formed as a corporation, then at least one of the 
members of the board of directors of a captive insurance company incorporated in this 
State must be a resident of this State. If formed as a reciprocal insurer, then at least one 
of the members of the subscriber's advisory committee must be a resident of this State. If 
organized as a limited liability company, then at least one manager must be a resident of 
this State.' 
Amend the bill in section 16 in §67IO by striking out all of the first paragraph (page 
7, lines 36 to 39 and page 8, lines 1 to 9 in L.D.) and inserting the following: 
'A pure captive insurance company is not subject to the any restrictions on allowable 
investments including those provided under chapter 13 and chapter I3-A, except that a 
pure captive insurance company may petition the superintendent for approval of 
investments that are not specified in this Title may prohibit or limit any investment that 
threatens the solvency or liquidity of such insurance company. A pure captive insurance 
company may not make a loan to or investments in its parent or affiliated companies 
without the prior written approval of the superintendent. A loan of any minimum capital 
and surplus funds required by section 6704 is prohibited. Except as otherwise authorized 
by the superintendent, association captive insurance companies and industrial insured 
captive insurance companies are subject to the restrictions on allowable investments 
applicable to admitted insurers transacting the same type of business. With respect to 
investments of association captive insurance companies, the superintendent may approve 
the use of alternative methods of valuation and rating.' 
COMMI 
EE AMENDMENT 
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COMMJITEE AMENDMENT" A, to S.P. 520, L.D. 1436 
Amend the bill by inserting after section 19 the following: 
'Sec. 20. 24-A MRSA §6714, as enacted by PL 1997, c. 435, § 1, is amended to 
read: 
§6714. Delinquent captive insurers 
The provisions of chapter 4f 57 apply to captive insurers.' 
Amend the bill by striking out all of section 22 (page 10, lines 9 to 13 in L.D.) 
Amend the bill in section 24 in §6725 by striking out all of subsection 7 (page 16, 
lines 14 to 16 in L.D.) 
Amend the bill by relettering or renumbering any nonconsecutive Part letter or 
section number to read consecutively. 
SUMMARY 
The amendment makes technical changes to the bill. 
FISCAL .\()TE R£(JL'IRED, 
!§~!3U~~hed) . 
COMMITTEE AMENDMENT 
Approved: 05/24/09 Mac. 
LD 1436 
LR 1763(02) 
An Act To Create Economic Development in the State by Modernizing the State's Captive Insurance 
Laws 
Fiscal Detail and Notes 
Fiscal Note for Bill as Amended by Committee Amendment "A" 
Committee: Insurance and Financial Services 
Fiscal Note Required: Yes 
Fiscal Note 
Minor cost increase - Other Special Revenue 
Additional costs to the Bureau of Insurance in the Department of Professional and Financial Regulation can be 
absorbed by the bureau utilizing existing budgeted resources. 
LRI763(02) - Fiscal Note - Page I of I 
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