Bill Summary for S 347 (2021-2022)

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Summary date: 

Mar 24 2021

Bill Information:

View NCGA Bill Details2021
Senate Bill 347 (Public) Filed Wednesday, March 24, 2021
Intro. by Johnson, McInnis, Edwards.

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Bill summary

Part I.

Amends GS 58-10-375, concerning when a captive insurance company may pay dividends or other distribution; GS 58-10-395, concerning changes to a captive insurance company’s plan of operation; and GS 58-10-440, concerning requirements to be met when a captive insurance company or protected cell makes a loan or investment in an affiliate or participant, to make GS 58-10-345(f), making information confidential, applicable to information filed under these statutes.

Part II.

Amends GS 58-10-415(c) to allow the Commissioner of Insurance (Commissioner) to grant an exemption from the statute (concerning annual audits and statement of actuarial opinion) if compliance would cause the insurer a financial or organizational hardship.

Part III.

Amends GS 58-10-430 by allowing the Commissioner to conduct a financial analysis of information submitted to or obtained by the Commissioner and provides that the captive insurance company does not have to pay the expense of the analysis. Makes conforming changes.

Part IV.

Amends GS 58-10-340 by adding and defining governing board as it applies to captive insurance companies, as the board of directors or officials possessing similar authority. Amends various statutes to reflect this change, replacing references to "board of directors" with "governing board."

Amends GS 58-10-380 by requiring at least one member of the governing board be a state resident; removes requirements that were dependent on how the company was formed. Allows a captive insurance company’s organizational documents (was, articles of incorporation or bylaws) to authorize a quorum of its governing board to consist of no fewer than one-third of the fixed or prescribed number. 

Part V.

Amends GS 105-228.4A to exclude two or more protected cell captive insurance companies or special purpose captive insurance companies with a cell or series structure that are under common ownership from those that are taxed as single captive insurance companies. Amends GS 105-228.4A further to provide that the aggregate amount of tax payable under the statute by a special purpose captive insurance company with a cell or series structure with 10 or more cells or series may not be less than $10,000 and may not exceed the lesser of (1) $100,000 plus $5,000 multiplied by the number of cells or series over 10 and (2) $200,000. Effective for premium taxes imposed for taxable years beginning on or after January 1, 2022.

Amends GS 105-228.4A by adding an exemption from prorated premium taxes for the year in which the redomestication occurs and the premium taxes imposed for the calendar year following the redomestication if the specified conditions are met. Effective for premium taxes imposed for taxable years beginning on or after January 1, 2021, and expires for taxable years beginning on or after January 1, 2024.

Part VI.

Amends GS 58-10-360 to require all licensed captive insurance companies to be managed at all times by a manager approved by the Commissioner.

Part VII.

Amends GS 58-10-435 to also allow the suspension or revocation of a captive insurance company's license for (1) refusal or failure to submit an audit report or (2) failure to operate in accordance with the plan of operation approved by the Commissioner.

Part VIII.

Amends GS 58-10-345 to prohibit captive insurance companies from providing fidelity and surety insurance for the purpose of becoming surety on or guaranteeing the performance of bail bonds.