2023 CODE OF GEORGIA › Title 33 - INSURANCE (§§ 33-1-1 — 33-66-8) › Chapter 41 - CAPTIVE INSURANCE COMPANIES (§§ 33-41-1 — 33-41-106) › Article 2 - PROTECTED CELLS (§§ 33-41-100 — 33-41-106) › Section 33-41-104 - Accounting and financial matters of incorporated protected cells

(a)
All attributions of assets and liabilities to the protected cells and the general account shall be made by the sponsored captive insurance company in accordance with the business plan and applicable participant contracts as approved by the Commissioner, and unless the sponsor consents and the Commissioner has granted prior written approval, the general account shall not be used to pay any expenses or claims attributed solely to a protected cell.
(b)
When establishing a protected cell, the sponsored captive insurance company shall attribute to the protected cell assets with a value at least equal to the reserves and other insurance liabilities attributable to such protected cell in cash or in readily marketable securities with established market value.
(c)
Amounts attributable to a protected cell under this chapter are owned by the protected cell. No sponsored captive insurance company shall be, or hold itself out to be, a trustee with respect to those protected cell assets of such protected cell account. Notwithstanding this subsection, the sponsored captive insurance company may allow for a security interest to attach to protected cell assets when in favor of a creditor of the protected cell and otherwise allowable under applicable law.
(d)
Each protected cell shall be accounted for separately on the books and records of the sponsored captive insurance company to reflect each protected cell's financial condition and results of operations, net income or loss, dividends or other distributions to participants, and such other factors regarding each protected cell as may be provided in the applicable participant contract or required by the Commissioner.
(e)
The assets of a protected cell shall not be chargeable with liabilities of any other protected cell or, unless otherwise agreed in the applicable participant contract, of the sponsored captive insurance company generally.
(f)
No sale, exchange, transfer of assets, dividend, or distribution, other than a transaction in accordance with the applicable participant contract, may be made with respect to a protected cell by or to a sponsored captive insurance company or participant without the Commissioner's written approval. In no event shall such approval be given if the sale, exchange, transfer, dividend, or distribution would result in the insolvency or impairment of a protected cell.
(g)
The remedy of tracing is applicable to protected cell assets if they are commingled with protected cell assets of other protected cells or the general account in violation of this article and any applicable participant contracts. The remedy of tracing shall not be construed as an exclusive remedy.
(h)
The sponsored captive insurance company shall attribute all insurance obligations, assets, and liabilities relating to a reinsurance contract entered into with respect to a protected cell to such protected cell as set forth in the business plan and participant contracts approved by the Commissioner, which may include a tax allocation agreement to which the sponsored captive insurance company is a party.
(i)
Notwithstanding any other provision of this chapter, the assets of two or more protected cells may be combined for purposes of investment, and such combination shall not be construed as defeating the segregation of such assets for accounting or other purposes.
(j)
Notwithstanding any other provisions of this title, sponsored captive insurance companies shall not be subject to any restrictions on eligible investments whatever; however, the Commissioner may prohibit or limit any investment that threatens the solvency or liquidity of any sponsored captive insurance company.
(k)
If required by the Commissioner, in his or her discretion, the business written by a sponsored captive insurance company, with respect to each protected cell, shall be:
(1)
Fronted by an insurance company licensed pursuant to the laws of any state;
(2)
Reinsured by a reinsurer authorized or approved by the Commissioner; or
(3)
Secured by a trust fund in the United States for the benefit of participants, policyholders, and claimants or funded by an irrevocable letter of credit or other arrangement that is acceptable to the Commissioner. The Commissioner, in his or her sole discretion, shall approve the form, terms, and funding amount of any trust, and may require the sponsored captive insurance company to increase the funding of any security arrangement established under this chapter. If the form of security is a letter of credit, the letter of credit must be in conformance with Code Section
33-41-9
and approved by the Commissioner.
Added by 2019 Ga. Laws 186,§ 2-14, eff. 7/1/2019.