N.J. Stat. § 17:47B-1

Current through L. 2024, c. 62.

Section 17:47B-1 - Definitions relative to captive insurers

As used in this act:

"Affiliated company" means a company in the same corporate system as a parent, an industrial insured or a member organization by virtue of common ownership, control, operation or management.

"Alien captive insurance company" means an insurance company formed to write insurance business for its parents and affiliates and licensed pursuant to the laws of a jurisdiction other than this State which imposes statutory or regulatory standards in a form acceptable to the commissioner on companies transacting the business of insurance in that jurisdiction.

"Association" means a legal association of individuals, corporations, limited liability companies, partnerships, associations or other entities that has been in continuous existence for at least one year, the member organizations of which or which does itself, whether or not in conjunction with some or all of the member organizations:

(1) own, control, or hold with power to vote all of the outstanding voting securities of an association captive insurance company incorporated as a stock insurer;

(2) have complete voting control over an association captive insurance company incorporated as a mutual insurer; or

(3) constitute all of the subscribers of an association captive insurance company formed as a reciprocal insurer.

"Association captive insurance company" means a company that insures risks of the member organizations of the association and their affiliated companies.

"Branch business" means any insurance business transacted by a branch captive insurance company in this State.

"Branch captive insurance company" means an alien captive insurance company licensed by the commissioner to transact the business of insurance in this State through a business unit with a principal place of business in this State.

"Branch operations" means any business operations of a branch captive insurance company in this State.

"Captive insurance company" means any pure captive insurance company, association captive insurance company, sponsored captive insurance company, or industrial insured captive insurance company formed or licensed under the provisions of this act. For purposes of this act, a branch captive insurance company shall be a pure captive insurance company with respect to operations in the State, unless otherwise permitted by the commissioner.

"Commissioner" means the Commissioner of Banking and Insurance.

"Controlled unaffiliated business" means a company:

(1) that is not in the corporate system of a parent and any affiliated companies;

(2) that has an existing contractual relationship with a parent or affiliated company; and

(3) whose risks are managed by a pure captive insurance company in accordance with section 15 of this act.

"Excess workers' compensation insurance" means, in the case of an employer that has insured or self-insured its workers' compensation risks in accordance with applicable State or federal law, insurance in excess of a specified per incident or aggregate limit established by the commissioner.

"Industrial insured" means an insured:

(1) who procures the insurance of a risk by use of the services of a full time employee acting as an insurance manager or buyer;

(2) who has at least 25 full time employees; and

(3) whose aggregate annual premiums for insurance on all risks total at least $25,000.

"Industrial insured captive insurance company" means a company that insures risks of the industrial insureds that comprise the industrial insured group, and their affiliated companies.

"Industrial insured group" means a group of industrial insureds that collectively:

(1) own, control, or hold with power to vote all of the outstanding voting securities of an industrial insured captive insurance company incorporated as a stock insurer;

(2) have complete voting control over an industrial insured captive insurance company incorporated as a mutual insurer; or

(3) constitute all of the subscribers of an industrial insured captive insurance company formed as a reciprocal insurer.

"Member organization" means an individual, corporation, limited liability company, partnership, association or other entity that belongs to an association.

"Mutual corporation" means a corporation organized without stockholders and includes a nonprofit corporation with members.

"Parent" means a corporation, limited liability company, partnership, other entity or individual that directly or indirectly owns, controls or holds with power to vote more than 50 percent of the outstanding voting:

(1) securities of a pure captive insurance company organized as a stock corporation; or

(2) membership interests of a pure captive insurance company organized as a nonprofit corporation.

"Protected cell" means a separate account established and maintained by a sponsored captive insurance company for one participant.

"Pure captive insurance company" means a company that insures risks of its parent and affiliated companies or controlled unaffiliated businesses.

"Sponsor" means an entity that meets the requirements of sections 17 and 18 of this act and that the commissioner has approved to provide all or part of the capital and surplus required by applicable law to operate a sponsored captive insurance company.

"Sponsored captive insurance company" means a captive insurance company:

(1) in which the minimum capital and surplus required by applicable law is provided by one or more sponsors;

(2) that is formed or licensed under this act;

(3) that insures the risks of separate participants through the contract; and

(4) that segregates each participant's liability through one or more protected cells.

N.J.S. § 17:47B-1

Added by L. 2011, c. 25,s. 1, eff. 5/22/2011.