Section 27-31B-2

Section 27-31B-2Definitions.

As used in this chapter, the following terms shall have the following meanings, unless the context clearly indicates otherwise:



(1) AFFILIATED COMPANY. Any 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.



(2) ALIEN CAPTIVE INSURANCE COMPANY. Any insurance company formed to write insurance business for its parents and affiliates and licensed pursuant to the laws of an alien jurisdiction which imposes statutory or regulatory standards in a form acceptable to the commissioner on companies transacting the business of insurance in that jurisdiction.



(3) ASSOCIATION. Any legal association of individuals, corporations, partnerships, or associations that has been in continuous existence for at least one year and meets either of the following:



a. The member organizations of which collectively, or which does itself, meet either of the following:



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.



b. The member organizations of which collectively constitute all of the subscribers of an association captive insurance company formed as a reciprocal insurer.



(4) ASSOCIATION CAPTIVE INSURANCE COMPANY. Any company that insures risks of the member organizations of the association, and their affiliated companies.



(5) BRANCH BUSINESS. Any insurance business transacted by a branch captive insurance company in this state.



(6) BRANCH CAPTIVE INSURANCE COMPANY. Any 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.



(7) BRANCH OPERATIONS. Any business operations of a branch captive insurance company in this state.



(8) CAPTIVE INSURANCE COMPANY. Any pure captive insurance company, association captive insurance company, sponsored captive insurance company, or industrial insured captive insurance company formed or licensed under this chapter. For purposes of this chapter, a branch captive insurance company shall be a pure captive insurance company with respect to operations in this state, unless otherwise permitted by the commissioner.



(9) COMMISSIONER. The Alabama Commissioner of Insurance.



(10) CONTROLLED UNAFFILIATED BUSINESS. Any company that meets all of the following criteria:



a. Is not in the corporate system of a parent and affiliated companies.



b. Has an existing contractual relationship with a parent or affiliated company.



c. Whose risks are managed by a pure captive insurance company in accordance with Section 27-31B-20.



(11) EXCESS WORKERS' COMPENSATION INSURANCE. 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.



(12) INDUSTRIAL INSURED. As defined in subdivision (2) of Section 27-10-20.



(13) INDUSTRIAL INSURED CAPTIVE INSURANCE COMPANY. Any company that insures risks of the industrial insureds that comprise the industrial insured group, and their affiliated companies.



(14) INDUSTRIAL INSURED GROUP. Any group that meets either of the following criteria:



a. Any group of industrial insureds that collectively meet any of the following criteria:



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.



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



b. Any group which is created under the Product Liability Risk Retention Act of 1981, 15 U.S. Code § 3901 et seq., as amended, as a corporation or other limited liability association taxable as a stock insurance company or a mutual insurer under the law of the State of Alabama.



(15) MEMBER ORGANIZATION. Any individual, corporation, partnership, or association that belongs to an association.



(16) PARENT. A corporation, partnership, or individual that directly or indirectly owns, controls, or holds with power to vote more than 50 percent of the outstanding voting securities of a pure captive insurance company.



(17) PARTICIPANT. An entity as defined in Section 27-31B-24, and any affiliates thereof, that are insured by a sponsored captive insurance company, where the losses of the participant are limited through a participant contract to the participant's pro rata share of the assets of one or more protected cells identified in the participant contract.



(18) PARTICIPANT CONTRACT. A contract by which a sponsored captive insurance company insures the risks of a participant and limits the losses of each participant to its pro rata share of the assets of one or more protected cells identified in the participant contract.



(19) PROTECTED CELL. A separate account established by a sponsored captive insurance company formed or licensed under this chapter, in which assets are maintained for one or more participants in accordance with the terms of one or more participant contracts to fund the liability of the sponsored captive insurance company to the participants as set forth in the participant contracts.



(20) PURE CAPTIVE INSURANCE COMPANY. Any company that insures risks of its parent and affiliated companies or controlled unaffiliated business.



(21) SPONSOR. Any entity that meets the requirements of Section 27-31B-23 and is approved by the commissioner to provide all or part of the capital and surplus required by applicable law and to organize and operate a sponsored captive insurance company.



(22) SPONSORED CAPTIVE INSURANCE COMPANY. Any captive insurance company meeting all of the following criteria:



a. The minimum capital and surplus required by applicable law is provided by one or more sponsors.



b. Is formed or licensed under this chapter.



c. Insures the risks of separate participants through participant contracts.



d. Funds its liability to each participant through one or more protected cells and segregates the assets of each protected cell from the assets of other protected cells and from the assets of the sponsored captive insurance company's general account.

(Act 2006-509, p. 1153, §1.)