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CAPTIVE
INSURANCE COMPANY ADMINISTRATIVE
RULES The following is a summary of the administrative rules
governing Captive Insurance Companies. 1. Each
State will accept a Captive Insurance Company’s application during the organizing process. 2. The
rule before licensing captives permits the commissioner to conduct an
organizational examination or investigation before licensing a captive
insurer. 3. The
rules that apply when captives are authorized: A.
Permit the commissioner to require additional deposits or letters of credit, if
he finds it necessary. B. Permit the Commissioner to establish
requirements concerning reinsurance: i. Credit is not allowed for reinsurance where there is
not a complete transfer of risk to the reinsurer; ii. Credit is not allowed for reinsurance where there is
not an insolvency clause in the reinsurance agreement; iii. A written reinsurance
agreement is required; iv. The Commissioner may require that each reinsurance
contract be filed and approved.
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