Utah Code § 31A-37-401 Sponsored captive insurance companies -- Formation.
31A-37-401. Sponsored captive insurance companies -- Formation.
(1) One or more sponsors may form a sponsored captive insurance company under this chapter.
(2) A sponsored captive insurance company formed under this chapter may establish and maintain, with prior approval of the commissioner, a combination of incorporated cells and protected cells to insure risks of a participant if:
(a) the interest holders of a sponsored captive insurance company are limited to:
(i) the participants of the sponsored captive insurance company; and
(ii) the sponsors of the sponsored captive insurance company;
(b) each cell is accounted for separately on the books and records of the sponsored cell captive insurance company to reflect:
(i) the financial condition of each cell;
(ii) the results of operations of each cell;
(iii) the net income or loss of each cell;
(iv) the dividends or other distributions to participants of each cell; and
(v) other factors that may be:
(A) provided in the participant contract; or
(B) required by the commissioner;
(c) the assets of a cell are not chargeable with liabilities arising out of any other insurance business the sponsored captive insurance company may conduct;
(d) a sale, exchange, or other transfer of assets is not made by the sponsored captive insurance company between or among any of the cells of the sponsored captive insurance company without the consent of the cells;
(e) a sale, exchange, transfer of assets, dividend, or distribution is not made from a cell to a sponsor or participant without the commissioner's approval, which may not be given if the sale, exchange, transfer, dividend, or distribution would result in insolvency or impairment with respect to a cell;
(f) a sponsored captive insurance company annually files with the commissioner financial reports the commissioner requires under Section 31A-37-106, including accounting statements detailing the financial experience of each cell;
(g) a sponsored captive insurance company notifies the commissioner in writing within 10 business days of a cell that is insolvent or otherwise unable to meet the claim or expense obligations of the cell;
(h) a participant contract does not take effect without the commissioner's prior written approval; and
(i) the addition of each new cell and withdrawal of a participant of any existing cell does not take effect without the commissioner's prior written approval.
(3) A cell of a sponsored captive insurance company shall pay to the department the following nonrefundable fees established by the department under Sections 31A-3-103, 31A-3-304, and 63J-1-504:
(a) a fee for examining, investigating, and processing an application made by a cell to insure risks under the certificate of authority of a sponsored captive insurance company;
(b) a fee for obtaining a certificate to insure risks under the certificate of authority of a sponsored captive insurance company for the year the cell of the sponsored captive insurance company is issued a certificate by the department; and
(c) a certificate of authority renewal fee.
(4) A sponsor may create a cell or a pooling insurance arrangement for the sponsor's cell participants to provide for pooling of risks to allow for risk distribution upon written approval from every cell under the sponsor and written approval of the commissioner.
Amended by Chapter 175, 2025 General Session