reglab/statecodes huggingface dataset:
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 10 - Miscellaneous Insurer Financial Provisions. › § 58-10-435 - License suspension or revocation.

§ 58-10-435. License suspension or revocation.
(a) The license of a captive insurance company may be suspended or revoked if the Commissioner finds, upon audit, hearing, or other evidence, that a captive insurance company has committed one or more of the violations described in subdivisions (1) through (7a) of this subsection, or met any of the criteria in subdivisions (8) through (10) of this subsection, and that the suspension or revocation is in the best interest of the public and the policyholders of such captive insurance company, notwithstanding any other provision of this Chapter:
(1) Insolvency or impairment of capital or surplus.
(2) Failure to meet the requirements of G.S. 58-10-370.
(3) Refusal or failure to submit an annual report or audit report, as required by this Part, or any other report or statement required by law or by lawful order of the Commissioner.
(4) Failure to comply with its own charter, bylaws, or other organizational document.
(5) Failure to submit to or pay the cost of an audit or any legal obligation relative to an audit, as required by this Part.
(6) Use of methods that, although not otherwise specifically prohibited by law, nevertheless render its operation detrimental or its condition unsound with respect to the public or to its policyholders.
(7) Failure otherwise to comply with the laws of this State.
(7a) Failure to operate in accordance with the plan of operation approved by the Commissioner.
(8) Failure to commence business according to its plan of operation within two years of being licensed.
(9) Failure to carry on insurance business in or from this State.
(10) By request of the captive insurance company.
(b) Before the Commissioner suspends or revokes the license of a captive insurance company under subdivisions (a)(7) or (a)(8) of this section, the Commissioner shall give the captive insurance company notice in writing of the grounds on which the Commissioner proposes to suspend or revoke the license and shall afford the captive insurance company an opportunity to make objection in writing within the period of 30 days after receipt of notice. The Commissioner shall take into consideration any objection received by the Commissioner within that period and, if the Commissioner decides to suspend or revoke the license, cause the order of suspension or revocation to be served on the captive insurance company. (2013-116, s. 1; 2016-78, s. 4.1(o); 2022-7, s. 7.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 10 - Miscellaneous Insurer Financial Provisions. › § 58-10-440 - Investment requirements.

§ 58-10-440. Investment requirements.
(a) Except as may be otherwise authorized by the Commissioner, association captive insurance companies and risk retention groups shall comply with the investment requirements contained in G.S. 58-7-167, 58-7-170, 58-7-172, 58-7-173, 58-7-178, 58-7-179, 58-7-180, 58-7-183, 58-7-185, 58-7-187, 58-7-188, 58-7-192, 58-7-193, 58-7-197, 58-7-200, and 58-7-205, as applicable. Notwithstanding any other provision of this Chapter, the Commissioner may approve the use of alternative reliable methods of valuation and rating.
(b) No pure captive insurance company, industrial insured captive insurance company, protected cell captive insurance company, special purpose captive insurance company, or special purpose financial captive insurance company shall be subject to any restrictions on allowable investments, provided that the Commissioner may prohibit or limit any investment that threatens the solvency or liquidity of any such company.
(c) No captive insurance company or protected cell shall make a loan to or an investment in an affiliate or a participant without prior written approval of the Commissioner, and any such loan or investment shall be evidenced by documentation approved by the Commissioner. Loans of minimum capital and surplus funds required by G.S. 58-10-370 are prohibited. G.S. 58-10-345(f) shall apply to all information filed pursuant to this section.
(d) Notwithstanding this section or G.S. 58-7-167, 58-7-170, 58-7-172, 58-7-173, 58-7-178, 58-7-179, 58-7-180, 58-7-183, 58-7-185, 58-7-187, 58-7-188, 58-7-192, 58-7-193, 58-7-197, 58-7-200, and 58-7-205, an association captive insurance company of an association described in G.S. 58-10-340(4)(b) [G.S. 58-10-340(4)b.] may hold any interest in qualified headquarters property, and the qualified headquarters property shall be admitted assets and authorized investments of the association captive insurance company. The net book value of the qualified headquarters property deemed admitted and authorized under this subsection may not exceed two million five hundred thousand dollars ($2,500,000), and an association captive insurance company holding qualified headquarters property pursuant to this subsection shall at all times maintain total surplus, without regard to the qualified headquarters property, of at least the sum of (i) fifty percent (50%) of the net book value of the qualified headquarters property and (ii) the minimum capital and surplus requirements. For purposes of this subsection, "qualified headquarters property" includes the real property and the building in which the principal office of the association captive insurance company is located and also includes any improved and unimproved real property of the association captive insurance company that is located within 1,500 feet of the company's principal office. (2013-116, s. 1; 2014-65, s. 13; 2015-99, s. 1; 2016-78, s. 4.1(p); 2022-7, s. 1(c).)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 10 - Miscellaneous Insurer Financial Provisions. › § 58-10-445 - Reinsurance.

§ 58-10-445. Reinsurance.
(a) Any captive insurance company may provide reinsurance as authorized by this Chapter on risks ceded by any other insurer.
(b) Any captive insurance company may take credit for the reinsurance of risks or portions of risks ceded to reinsurers complying with this Chapter. If the reinsurer is licensed as a risk retention group, then the ceding risk retention group or its members must qualify for membership with the reinsurer. The Commissioner shall have the discretion to allow a captive insurance company to take credit for the reinsurance of risks or portions of risks ceded to an unauthorized reinsurer, after review, on a case-by-case basis. The Commissioner may require any documents, financial information, or other evidence that will allow an unauthorized reinsurer to demonstrate adequate security for its financial obligations.
(c) In addition to reinsurers authorized by this Chapter, a captive insurance company may take credit for the reinsurance of risks or portions of risks ceded to a pool, exchange, or association to the extent authorized by the Commissioner. The Commissioner may require any documents, financial information, or other evidence that such a pool, exchange, or association will be able to provide adequate security for its financial obligations. The Commissioner may deny authorization or impose any limitations on the activities of a reinsurance pool, exchange, or association that in the Commissioner's judgment are necessary and proper to provide adequate security for the ceding captive insurance company and for the protection and benefit of the public at large.
(d) Insurance by a captive insurance company of any workers' compensation or accident and health-qualified self-insured plan shall only be in the form of reinsurance.
(e) No credit shall be allowed for reinsurance where the reinsurance contract does not result in the complete transfer of the risk or liability to the reinsurer.
(f) No credit shall be allowed, as an asset or a deduction from liability, to any ceding insurer for reinsurance unless the reinsurance is payable by the assuming insurer on the basis of the liability of the ceding insurer under the contract reinsured without diminution because of the insolvency of the ceding insurer.
(g) Reinsurance under this section shall be effected through a written agreement of reinsurance setting forth the terms, provisions, and conditions governing such reinsurance. The Commissioner may require that complete copies of all reinsurance treaties and contracts be filed and approved by the Commissioner. (2013-116, s. 1; 2014-65, s. 14.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 10 - Miscellaneous Insurer Financial Provisions. › § 58-10-450 - Membership in rating organizations; exemption from compulsory associations.

§ 58-10-450. Membership in rating organizations; exemption from compulsory associations.
(a) No captive insurance company shall be required to join a rating organization.
(b) No captive insurance company shall be permitted to join or contribute financially to any plan, pool, association, or guaranty or insolvency fund in this State, nor shall any such captive insurance company, or any insured or affiliate thereof, receive any benefit from any such plan, pool, association, or guaranty or insolvency fund for claims arising out of the operations of such captive insurance company. (2013-116, s. 1.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 10 - Miscellaneous Insurer Financial Provisions. › § 58-10-460 - Adoption and amendment of rules by Commissioner.

§ 58-10-460. Adoption and amendment of rules by Commissioner.
The Commissioner may adopt and, from time to time, amend such rules relating to captive insurance companies as are necessary to enable the Commissioner to carry out the provisions of this Part. (2013-116, s. 1.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 10 - Miscellaneous Insurer Financial Provisions. › § 58-10-465 - Applicable provisions.

§ 58-10-465. Applicable provisions.
(a) No provisions of this Chapter, other than those contained in this Part or as expressly provided in this Part, shall apply to captive insurance companies. Risk retention groups shall have the privileges and be subject to Article 22 of this Chapter in addition to the applicable provisions of this Part.
(b) The Commissioner may exempt special purpose captive insurance companies, on a case-by-case basis, from provisions of this Chapter and any rules established under this Chapter that the Commissioner determines to be inappropriate given the nature of the risks to be insured. (2013-116, s. 1; 2014-65, s. 15; 2015-99, s. 1.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 10 - Miscellaneous Insurer Financial Provisions. › § 58-10-475 - Supervision; rehabilitation; liquidation.

§ 58-10-475. Supervision; rehabilitation; liquidation.
Except as otherwise provided in this Part, the terms and conditions set forth in Article 30 of this Chapter shall apply in full to captive insurance companies licensed under this Part. (2013-116, s. 1; 2015-99, s. 1.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 10 - Miscellaneous Insurer Financial Provisions. › § 58-10-480 - Authority for expenditure of public funds.

§ 58-10-480. Authority for expenditure of public funds.
Any municipality, county, authority, utility district, or other public body generally classified as a governmental body or governmental entity whether chartered or organized by local act or public act of the General Assembly, or otherwise, or any agency, board, or commission of any municipality, metropolitan government, county, authority, utility district, or other public body generally classified as a governmental body or governmental entity may expend public funds for the purchase of capital stock in a captive insurance company or to provide guaranty capital in a mutual captive insurance company, provided that at the time of authorization of expenditure of public funds adequate insurance markets in the United States are not available to cover the risks, hazards, and liabilities of the public body or that the needed coverage is only available at excessive rates or with unreasonable deductibles. (2013-116, s. 1.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 10 - Miscellaneous Insurer Financial Provisions. › § 58-10-485 - Violations and penalties.

§ 58-10-485. Violations and penalties.
(a) If, after providing the opportunity for a contested case hearing held in accordance with the provisions of Article 3A of Chapter 150B of the General Statutes, the Commissioner finds that any insurer, person, or entity required to be licensed or authorized to transact the business of insurance under this Part has violated any provision of this Part or any rule or regulation authorized by this Part, the Commissioner may order:
(1) The insurer, person, or entity to cease and desist from engaging in the act or practice giving rise to the violation.
(2) Payment of a monetary penalty pursuant to G.S. 58-2-70.
(3) The suspension or revocation of the insurer's, person's, or entity's license.
(b) Whenever the Commissioner has evidence that any person has violated or is violating any provisions of this Part, or has violated or is violating any order or requirement of the Commissioner issued by the Commissioner under this Part, and that the interests of policyholders, creditors, or the public may be irreparably harmed by delay, the Commissioner may issue an emergency cease and desist order that shall become effective on the date specified in the order. The emergency cease and desist order shall also include a notice of hearing, which shall be conducted as provided under Article 3A of Chapter 150B of the General Statutes. However, the person ordered to cease and desist under this subsection may request and shall be granted an expedited review of the order. The emergency order shall remain in effect prior to and during the proceedings, unless modified by the Commissioner. (2013-116, s. 1; 2015-99, s. 1.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 10 - Miscellaneous Insurer Financial Provisions. › § 58-10-490 - Inactive captive insurance companies.

§ 58-10-490. Inactive captive insurance companies.
(a) As used in this section, unless the context requires otherwise, "inactive captive insurance company" means a captive insurance company which meets all of the following criteria:
(1) The company has ceased transacting the business of insurance.
(2) There are no remaining liabilities associated with policies written or assumed by the company.
(3) The Commissioner declares the company inactive.
(b) The Commissioner may declare a captive insurance company, other than a risk retention group, an inactive captive insurance company, if such captive insurance company meets the criteria of subdivisions (a)(1) and (a)(2) of this section.
(c) An inactive captive insurance company shall possess and maintain unimpaired capital and surplus in an amount determined by the Commissioner.
(d) An inactive captive insurance company shall not be subject to or liable for the payment of any tax under Article 8B of Chapter 105 of the General Statutes for any full year the captive insurance company is inactive.
(e) The Commissioner may exempt an inactive captive insurance company from any of the filing and reporting requirements of this Part.
(f) G.S. 58-10-496 is inapplicable to subsection (a) of this section unless the captive insurance company has been placed into supervision, receivership, or liquidation pursuant to Article 30 of Chapter 58 of the General Statutes and the Commissioner has determined that the payment of the minimum tax required by G.S. 105-228.4A(f) will result in the captive insurance company's inability to meet its insurance obligations. (2015-99, s. 1; 2022-7, s. 9.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 10 - Miscellaneous Insurer Financial Provisions. › § 58-10-495 - Captive insurance companies reinsuring life insurance policies.

§ 58-10-495. Captive insurance companies reinsuring life insurance policies.
(a) A captive insurance company that reinsures life insurance policies, including term, universal, and variable life policies, and related guarantees and riders, shall maintain reserves that are actuarially sufficient to support the liabilities incurred by the captive insurance company in reinsuring life insurance policies.
(b) For purposes of the annual report required pursuant to G.S. 58-10-405, a captive insurance company described by subsection (a) of this section shall comply with the following requirements:
(1) If the company uses statutory accounting principles, it shall submit the annual report in the form of the annual statement approved by the NAIC for life insurers, as modified or supplemented by the Commissioner, unless the Commissioner requires or approves a different form of annual report.
(2) If the company uses generally accepted accounting principles, including any appropriate modifications or adaptations thereto approved by the Commissioner, it shall submit the annual report in a form approved by the Commissioner. (2013-116, s. 1.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 10 - Miscellaneous Insurer Financial Provisions. › § 58-10-496 - Waiver or modification.

§ 58-10-496. Waiver or modification.
The Commissioner may waive or modify any provision of this Part if such waiver or modification, in the Commissioner's opinion, is justified, based on sound actuarial, accounting, or business principles, and does not diminish the solvency prospects of the captive insurance company. No waiver or modification granted by the Commissioner pursuant to this section shall result in a greater regulatory burden than imposed by this Part prior to the exercise of such waiver or modification. (2016-78, s. 4.1(r).)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 10 - Miscellaneous Insurer Financial Provisions. › § 58-10-500 - Forming a protected cell captive insurance company.

§ 58-10-500. Forming a protected cell captive insurance company.
(a) One or more sponsors may form a protected cell captive insurance company under this Subpart.
(b) A protected cell captive insurance company shall be incorporated as a stock insurer with its capital divided into shares and held by the stockholders, as a mutual corporation, as a nonprofit corporation with one or more members, or as a manager-managed limited liability company. (2013-116, s. 1.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 10 - Miscellaneous Insurer Financial Provisions. › § 58-10-505 - Additional filing requirements for applicant protected cell captive insurance companies.

§ 58-10-505. Additional filing requirements for applicant protected cell captive insurance companies.
In addition to the information required by G.S. 58-10-345(c), each applicant protected cell captive insurance company shall file with the Commissioner all of the following:
(1) Materials demonstrating how the applicant will account for the loss and expense experience of each protected cell at a level of detail found to be sufficient by the Commissioner, and how it will report such experience to the Commissioner.
(2) A statement acknowledging that all records of the applicant, including records pertaining to any protected cells, shall be made available for inspection or audit by the Commissioner or the Commissioner's designated agent.
(3) All contracts or sample contracts between the applicant business entity and any participants.
(4) A statement describing how expenses shall be allocated to each protected cell in a fair and equitable manner. (2013-116, s. 1; 2015-99, s. 1; 2016-78, s. 4.1(s).)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 10 - Miscellaneous Insurer Financial Provisions. › § 58-10-512 - Incorporated protected cells.

§ 58-10-512. Incorporated protected cells.
(a) A protected cell of a protected cell captive insurance company may be formed as an incorporated protected cell.
(b) The articles of incorporation or articles of organization of an incorporated protected cell shall refer to the protected cell captive insurance company for which it is a protected cell and shall state that the protected cell is incorporated or organized for the limited purposes authorized by the protected cell captive insurance company's license.
(c) An incorporated protected cell may be organized and operated in any form of business organization authorized by the Commissioner. Unless otherwise permitted by the organizational documents of a protected cell captive insurance company, each incorporated protected cell of the protected cell captive insurance company must have the same governing board members, secretary, and registered office as the protected cell captive insurance company.
(d) In addition to the information required to be filed pursuant to G.S. 58-10-510(a)(1), a protected cell captive insurance company shall meet the requirements of G.S. 58-10-345(c)(1) for each incorporated protected cell. Other documents related to the incorporated protected cell shall be filed with the Commissioner as required before issuing policies of insurance.
(e) It is the intent of the General Assembly under this section to provide protected cell captive insurance companies with the option to establish one or more protected cells as a separate corporation or other legal entity. This section shall not be construed to limit any rights or protections applicable to protected cells that are not incorporated protected cells.
(f) Subject to the prior written approval of the protected cell captive insurance company and of the Commissioner, an incorporated protected cell shall be entitled to enter into contracts and undertake obligations in its own name and for its own account. In the case of a contract or obligation to which the protected cell captive insurance company is not a party, either in its own name and for its own account or on behalf of a protected cell, the counterparty to the contract or obligation shall have no right or recourse against the protected cell captive insurance company and its assets other than against assets properly attributable to the incorporated protected cell that is a party to the contract or obligation. (2015-99, s. 1; 2022-7, s. 4(h).)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 10 - Miscellaneous Insurer Financial Provisions. › § 58-10-513 - Cell shares and cell dividends.

§ 58-10-513. Cell shares and cell dividends.
(a) A protected cell captive insurance company may create and issue shares from any of its protected cells, the proceeds of which shall be included in the assets attributable to the cell from which the cell shares were issued.
(b) The proceeds of the issue of shares other than cell shares created and issued by a protected cell captive insurance company shall be included in the protected cell captive insurance company's general account.
(c) A protected cell captive insurance company may pay dividends to cell shareholders from assets attributable to such cell in accordance with the provisions of G.S. 58-10-375. (2015-99, s. 1.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 10 - Miscellaneous Insurer Financial Provisions. › § 58-10-515 - Participants in a protected cell captive insurance company.

§ 58-10-515. Participants in a protected cell captive insurance company.
(a) Any person may be a participant in a protected cell captive insurance company formed or licensed under this Part.
(b) A sponsor may be a participant in a protected cell captive insurance company.
(c) A participant need not be a shareholder of the protected cell captive insurance company or any affiliate thereof.
(d) Except as otherwise approved by the Commissioner, a participant shall insure only its own risks and the risks of its affiliates through a protected cell captive insurance company. (2013-116, s. 1; 2015-99, s. 1; 2016-78, s. 4.1(u).)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 10 - Miscellaneous Insurer Financial Provisions. › § 58-10-517 - Company to inform persons they are dealing with protected cell captive insurance company.

§ 58-10-517. Company to inform persons they are dealing with protected cell captive insurance company.
A protected cell captive insurance company shall inform any person with whom it transacts business that it is a protected cell captive insurance company, and for the purposes of that transaction, identify or specify the protected cell with which that person is transacting, unless that transaction is not a transaction with a particular protected cell, in which case it shall specify that the transaction is with the protected cell captive insurance company's core. (2015-99, s. 1.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 10 - Miscellaneous Insurer Financial Provisions. › § 58-10-520 - Combining assets of protected cells.

§ 58-10-520. Combining assets of protected cells.
Notwithstanding G.S. 58-10-510, 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. (2013-116, s. 1; 2014-65, s. 17.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 10 - Miscellaneous Insurer Financial Provisions. › § 58-10-525 - Application of supervision, rehabilitation, and liquidation provisions to protected cell captive insurance companies.

§ 58-10-525. Application of supervision, rehabilitation, and liquidation provisions to protected cell captive insurance companies.
(a) Except as otherwise provided in this Part, Article 30 of this Chapter shall apply to a protected cell captive insurance company and to each protected cell of a protected cell captive insurance company.
(b) Upon any order of supervision, rehabilitation, or liquidation of a protected cell or a protected cell captive insurance company, the Commissioner or receiver shall manage the assets and liabilities of the protected cell captive insurance company, including assets and liabilities attributed to protected cells, pursuant to this Part.
(c) Notwithstanding Article 30 of this Chapter:
(1) No assets of a protected cell shall be used to pay any expenses or claims other than those attributable to such protected cell.
(2) Subject to G.S. 58-10-512(f), a protected cell captive insurance company's capital and surplus shall at all times be available to pay any expenses of, or claims against, the protected cell captive insurance company. (2013-116, s. 1; 2015-99, s. 1; 2016-78, s. 4.1(v).)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 10 - Miscellaneous Insurer Financial Provisions. › § 58-10-530 - Establishment of branch captive insurance companies.

§ 58-10-530. Establishment of branch captive insurance companies.
(a) A branch captive insurance company may be established in this State, in accordance with this Subpart, to write in this State any insurance or reinsurance of the employee benefit business of its parent and affiliated companies that is subject to the Employee Retirement Income Security Act of 1974, as amended, or any insurance or reinsurance permitted to be written by captive insurance companies pursuant to this Part.
(b) No branch captive insurance company shall do any insurance business in this State unless it maintains the principal place of business for its branch operations in this State. (2013-116, s. 1.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 10 - Miscellaneous Insurer Financial Provisions. › § 58-10-535 - Security for payment of branch captive insurance company liabilities.

§ 58-10-535. Security for payment of branch captive insurance company liabilities.
(a) No branch captive insurance company shall be issued a license by the Commissioner unless it possesses and maintains as security for the payment of liabilities attributable to the branch operations:
(1) An amount equal to the amount set forth in G.S. 58-10-370 as the minimum capital requirement for a pure captive insurance company.
(2) Reserves on such insurance policies or such reinsurance contracts as may be issued or assumed by the branch captive insurance company through its branch operations, including reserves for losses, allocated loss adjustment expenses, incurred but not reported losses, and unearned premiums with regard to business written through the branch operations; provided, however, that the Commissioner may permit a branch captive insurance company to credit against any such reserve requirement any security for loss reserves that the branch captive insurance company may post with a ceding insurer or that may be posted by a reinsurer with the branch captive insurance company, and in either case if such security remains posted.
(b) Subject to the prior approval of the Commissioner, the amounts required in subsection (a) of this section may be held in the form of:
(1) A trust formed under a trust agreement and funded by assets acceptable to the Commissioner.
(2) An irrevocable letter of credit issued by a bank approved by the Commissioner.
(3) With respect to the amounts required in subdivision (a)(1) of this section only, cash on deposit with the Commissioner.
(4) Any combination of subdivisions (b)(1) through (3) of this section. (2013-116, s. 1; 2015-99, s. 1.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 10 - Miscellaneous Insurer Financial Provisions. › § 58-10-545 - Filing of reports and statements.

§ 58-10-545. Filing of reports and statements.
Prior to March 1 of each year, or with the approval of the Commissioner within 60 days after its fiscal year-end, a branch captive insurance company shall file with the Commissioner a copy of all reports and statements required to be filed under the laws of the jurisdiction in which the alien captive insurance company is formed, verified by oath of two of its executive officers. If the Commissioner is satisfied that the annual report filed by the alien captive insurance company in its domiciliary jurisdiction provides adequate information concerning the financial condition of the alien captive insurance company, the Commissioner may waive the requirement for completion of the captive annual statement for business written in the alien jurisdiction. (2013-116, s. 1.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 10 - Miscellaneous Insurer Financial Provisions. › § 58-10-550 - Audit of a branch captive insurance company.

§ 58-10-550. Audit of a branch captive insurance company.
(a) Any audit of a branch captive insurance company pursuant to G.S. 58-10-430 shall be of branch business and branch operations only so long as the branch captive insurance company files annually with the Commissioner a certificate of compliance, or its equivalent, issued by or filed with the licensing authority of the jurisdiction in which the branch captive insurance company is formed, and demonstrates to the Commissioner's satisfaction that it is operating in sound financial condition in accordance with all applicable laws and regulations of such jurisdiction.
(b) As a condition of licensure, an alien captive insurance company shall grant authority to the Commissioner for audit of the affairs of the alien captive insurance company in the jurisdiction in which the alien captive insurance company is formed. (2013-116, s. 1; 2016-78, s. 4.1(w).)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 10 - Miscellaneous Insurer Financial Provisions. › § 58-10-555 - Creation of special purpose financial captives.

§ 58-10-555. Creation of special purpose financial captives.
Special purpose financial captives (SPFCs) are provided by this Subpart exclusively to facilitate the securitization of one or more risks as a means of accessing alternative sources of capital and achieving the benefits of securitization. SPFCs are created for the limited purpose of entering into SPFC contracts and insurance securitization transactions and into related agreements to facilitate the accomplishment and execution of those transactions. The creation of SPFCs is intended to achieve greater efficiencies in structuring and executing insurance securitizations, to diversify and broaden sources of capital for insurers, to facilitate access for many insurers to insurance securitization and capital markets financing technology, and to further the economic development and expand the interest of this State through its captive insurance program. (2013-116, s. 1.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 10 - Miscellaneous Insurer Financial Provisions. › § 58-10-560 - Controlling provisions when conflict exists; exemptions.

§ 58-10-560. Controlling provisions when conflict exists; exemptions.
(a) No provisions of this Chapter, other than those expressly provided in this Part, shall apply to an SPFC. If any conflict occurs in this Part related to an SPFC, the provisions of this Subpart shall control.
(b) The Commissioner may exempt an SPFC or its protected cells, on a case-by-case basis, from this Part if the Commissioner determines regulation under this Part to be inappropriate given the nature of the risks to be insured. (2013-116, s. 1; 2015-99, s. 1.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 10 - Miscellaneous Insurer Financial Provisions. › § 58-10-570 - Organization of an SPFC.

§ 58-10-570. Organization of an SPFC.
(a) An SPFC may be established as a stock corporation, limited liability company, mutual, partnership, or other form of organization approved by the Commissioner.
(b) The SPFC's organizational documents shall limit the SPFC's authority to transact the business of insurance or reinsurance to those activities the SPFC conducts to accomplish its purpose as expressed in this Part.
(c) The SPFC shall not adopt a name that is the same as, deceptively similar to, or likely to be confused with or mistaken for another existing business name registered in this State. Any name adopted by an SPFC shall comply with State law.
(d) An SPFC shall have at least three incorporators or organizers, of whom at least two shall be residents of this State.
(e) At least one of the members of the management of the SPFC shall be a resident of this State.
(f) An SPFC formed pursuant to this Part has the privileges of and is subject to all other requirements of this State's law applicable to its formation, as well as the applicable provisions contained in this Part, provided that this Part controls if a conflict exists in this State's law. (2013-116, s. 1.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 10 - Miscellaneous Insurer Financial Provisions. › § 58-10-575 - Minimum capital.

§ 58-10-575. Minimum capital.
(a) An SPFC shall initially possess and maintain minimum capital of not less than two hundred and fifty thousand dollars ($250,000). All of the minimum initial capitalization shall be in cash. All other funds of the SPFC in excess of its minimum initial capitalization shall be in the form of cash, cash equivalent, or securities invested as approved by the Commissioner.
(b) Additional capitalization for the SPFC shall be determined, if so required, by the Commissioner after giving due consideration to the SPFC's plan of operation, feasibility study, pro formas, and the nature of the risks being insured or reinsured, which may be prescribed in formulas approved by the Commissioner. (2013-116, s. 1.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 10 - Miscellaneous Insurer Financial Provisions. › § 58-10-580 - Authorized activities.

§ 58-10-580. Authorized activities.
(a) An SPFC shall only insure the risks of a counterparty.
(b) No SPFC shall issue a contract for assumption of risk or indemnification of loss other than an SPFC contract. However, the SPFC may cede risks assumed through an SPFC contract to third-party reinsurers through the purchase of reinsurance or retrocession protection on terms approved by the Commissioner.
(c) An SPFC may enter into contracts and conduct other commercial activities related or incidental to and necessary to fulfill the purposes of the SPFC contract, insurance securitization, and this Part. Those activities may include, but are not limited to:
(1) Entering into SPFC contracts.
(2) Issuing SPFC securities in accordance with applicable securities law.
(3) Complying with the terms of such contracts or securities.
(4) Entering into trust, guaranteed investment contract, letter of credit, swap, tax, administration, reimbursement, or fiscal agent transactions.
(5) Complying with trust indenture, reinsurance, or retrocession, and agreements necessary or incidental to effectuate an insurance securitization in compliance with this Part or the plan of operation approved by the Commissioner.
(d) An SPFC shall do all of the following:
(1) Discount its reserves at discount rates as approved by the Commissioner.
(2) Maintain reserves that are actuarially sufficient to support the liabilities incurred by an SPFC in reinsuring life insurance policies.
(3) File annually with the Commissioner an actuarial opinion on reserves provided by an approved independent actuary. (2013-116, s. 1.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 10 - Miscellaneous Insurer Financial Provisions. › § 58-10-595 - Issuing securities.

§ 58-10-595. Issuing securities.
(a) An SPFC may issue securities, including surplus notes and other forms of financial instruments, subject to and in accordance with applicable law, its approved plan of operation, and its organizational documents.
(b) An SPFC, in connection with the issuance of securities, may enter into and perform all of its obligations under any required contracts to facilitate the issuance of these securities.
(c) Subject to the approval of the Commissioner, an SPFC may lawfully:
(1) Account for the proceeds of surplus notes as surplus and not as debt for purposes of statutory accounting.
(2) Submit for prior approval of the Commissioner periodic written requests for payments of interest on and repayments of principal of surplus notes. In lieu of approval of periodic written requests for authorization to make payments of interest on and repayments of principal of surplus notes and other debt obligations issued by the SPFC, the Commissioner may approve a formula or plan, which shall be included in the SPFC's plan of operation as amended from time to time, for payment of interest, principal, or both, with respect to such surplus notes and debt obligations.
(d) The Commissioner, without otherwise prejudicing the Commissioner's authority, may approve formulas for an ongoing plan of interest payments or principal repayments, or both, to provide guidance in connection with the Commissioner's ongoing reviews of requests to approve the payments on and principal repayments of the surplus notes.
(e) The obligation to repay principal or interest, or both, on the securities issued by the SPFC must reflect the risk associated with the obligations of the SPFC to the counterparty under the SPFC contract. (2013-116, s. 1.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 10 - Miscellaneous Insurer Financial Provisions. › § 58-10-600 - Asset management agreements.

§ 58-10-600. Asset management agreements.
An SPFC may enter into swap agreements, or other forms of asset management agreements, including guaranteed investment contracts, or other transactions that have the objective of leveling timing differences in funding of up-front or ongoing transaction expenses, or managing asset, credit, or interest rate risk of the investments to minimize the likelihood that the investments are not sufficient to assure payment or repayment of the securities, and related interest or principal payments, issued pursuant to an SPFC insurance securitization transaction, or the obligations of the SPFC under the SPFC contract. (2013-116, s. 1; 2015-99, s. 1.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 10 - Miscellaneous Insurer Financial Provisions. › § 58-10-610 - No securities considered to be insurance or reinsurance contracts.

§ 58-10-610. No securities considered to be insurance or reinsurance contracts.
No securities issued by an SPFC pursuant to an insurance securitization shall be considered to be insurance or reinsurance contracts. No investor in these securities or a holder of these securities, by sole means of this investment or holding, shall be considered to be transacting the business of insurance in this State. The underwriter's placement or selling agents and their partners, directors, officers, members, managers, employees, agents, representatives, and advisors involved in an insurance securitization pursuant to this Part shall not be considered to be insurance producers or brokers or conducting business as an insurance or reinsurance company or agency, brokerage, intermediary, advisory, or consulting business only by virtue of their activities in connection with an insurance securitization. (2013-116, s. 1.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 10 - Miscellaneous Insurer Financial Provisions. › § 58-10-615 - Disposition of assets; investment limitations.

§ 58-10-615. Disposition of assets; investment limitations.
(a) The assets of an SPFC shall be preserved and administered by or on behalf of the SPFC to satisfy the liabilities and obligations of the SPFC incident to the reinsurance contract, the insurance securitization, and other related agreements.
(b) In the insurance securitization, the security offering memorandum or other document issued to prospective investors regarding the offer and sale of a surplus note or other security shall include a disclosure that all or part of the proceeds of such insurance securitization will be used to fund the SPFC's obligations to the ceding insurer.
(c) No SPFC shall be subject to any restriction on investments other than the following:
(1) The Commissioner may limit investments by an SPFC to those categories and amounts of authorized investments delineated in G.S. 58-7-167, 58-7-170, 58-7-172, 58-7-173, 58-7-178, 58-7-179, 58-7-180, 58-7-183, 58-7-185, 58-7-187, 58-7-188, 58-7-192, 58-7-193, 58-7-197, 58-7-200, and 58-7-205, as applicable and as amended from time to time.
(2) No SPFC shall make a loan to any person other than as permitted under its plan of operation or as otherwise approved in advance by the Commissioner.
(3) The Commissioner may prohibit or limit any investment that threatens the solvency or liquidity of the SPFC unless the investment is otherwise approved by the Commissioner in writing. (2013-116, s. 1.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 10 - Miscellaneous Insurer Financial Provisions. › § 58-10-620 - Dividends.

§ 58-10-620. Dividends.
(a) No SPFC shall declare or pay dividends in any form to its owners other than in accordance with the insurance securitization transaction agreements, and in no extent shall the dividends decrease the capital of the SPFC below two hundred fifty thousand dollars ($250,000). After giving effect to the dividends, the assets of the SPFC, including assets held in trust pursuant to the terms of the insurance securitization, shall be sufficient to satisfy the Commissioner that the SPFC can meet its obligations. Approval by the Commissioner of an ongoing plan for the payment of dividends or other distribution by an SPFC must be conditioned upon the retention at the time of each payment of capital or surplus equal to or in excess of amounts specified by or determined in accordance with formulas approved for the SPFC by the Commissioner.
(b) The dividends may be declared by the management of the SPFC if the dividends do not violate this Part or jeopardize the fulfillment of the obligations of the SPFC or the trustee pursuant to the SPFC insurance securitization agreements, the SPFC contract, or any related transaction and other provisions of this Part. (2013-116, s. 1.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 10 - Miscellaneous Insurer Financial Provisions. › § 58-10-630 - Cessation of business.

§ 58-10-630. Cessation of business.
At the cessation of business of an SPFC following termination or cancellation of an SPFC contract and the redemption of any related securities issued in connection with the SPFC contract, the authority granted by the Commissioner expires or, in the case of retiring and surviving protected cells, is modified, the SPFC is no longer authorized to conduct activities unless and until a new or modified certificate of authority is issued pursuant to a new filing under this Part or as agreed by the Commissioner. (2013-116, s. 1.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 10 - Miscellaneous Insurer Financial Provisions. › § 58-10-650 - Other laws applicable to captive insurance companies.

§ 58-10-650. Other laws applicable to captive insurance companies.
In addition to the statutes and laws previously referred to in this Part, the following provisions of this Chapter are applicable to all captive insurance companies subject to this Part:
(1) G.S. 58-2-45. – Orders of Commissioner; when writing required.
(2) G.S. 58-2-160. – Reporting and investigation of insurance and reinsurance fraud and the financial condition of licensees; immunity from liability.
(3) G.S. 58-2-162. – Embezzlement by insurance producers, or administrators.
(4) G.S. 58-2-185. – Record of business kept by companies and insurance producers; Commissioner may inspect.
(5) G.S. 58-2-190. – Commissioner may require special reports.
(6) G.S. 58-2-195. – Commissioner may require records, reports, etc., for agencies, insurance producers, and others.
(7) G.S. 58-2-200. – Books and papers required to be exhibited.
(8) G.S. 58-5-1. – Deposits; use of master trust.
(9) G.S. 58-7-50. – Maintenance and removal of records and assets.
(10) G.S. 58-7-55. – Exceptions to requirements of G.S. 58-7-50. (2013-116, s. 1; 2022-46, s. 14(s).)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 10 - Miscellaneous Insurer Financial Provisions. › § 58-10-655 - Commissioner to share information with Department of Revenue.

§ 58-10-655. Commissioner to share information with Department of Revenue.
Notwithstanding any other provisions of Chapter 58 of the General Statutes, the Commissioner may share confidential and privileged documents, materials, or information with the Department of Revenue. The documents, materials, or information shared shall be considered tax information and subject to the provisions of G.S. 105-259. (2015-99, s. 1.)
2023 North Carolina General Statutes › Chapter 58 - Insurance › Article 10 - Miscellaneous Insurer Financial Provisions. › § 58-10-700 - Purpose and scope.

§ 58-10-700. Purpose and scope.
(a) The purpose of this Part is to establish the requirements for maintaining a risk management framework and completing an Own Risk and Solvency Assessment (ORSA) and to establish guidance and instructions for filing an ORSA Summary Report with the Commissioner.
(b) The requirements of this Part shall apply to all insurers domiciled in this State unless exempt pursuant to G.S. 58-10-725. (2017-136, s. 1.)