SB1286 Summary

• Modifies reporting and tax requirements for industrial insureds procuring insurance directly from unauthorized insurers, with a reduced tax rate of 0.5% (effective January 1, 2018) compared to the standard surplus line tax rate for contracts issued between January 1, 2015 and December 31, 2017.

• Expands the definition of "affiliate" in captive insurance company regulations to include parent entities that control a captive insurance company and clarifies control relationships.

• Adds new definitions including "qualified independent actuary," "controlled unaffiliated business," "operational risk," "captive management company," and "Safety-Net Hospital," while exempting Safety-Net Hospitals from certain reporting requirements.

• Authorizes captive insurance companies to insure operational risks of affiliates and controlled unaffiliated businesses, and allows acceptance of risks from captive reinsurance pools and affiliated captive insurance companies with Director approval.

• Establishes new regulatory provisions for captive management company registration, dividend approvals, reinsurance agreement notice requirements, and Director rulemaking authority, while creating confidentiality protections for applicant and captive insurance company information.