Georgia To Amend Its Captive Insurance Company Act
April 07, 2017
After overwhelmingly passing the House and the Senate, an amendment (Senate Bill 173) to the state of Georgia Captive Insurance Company Act was sent to the governor to sign on April 3, 2017. The bill incorporates revisions to certain provisions and definitions that clarify the Captive Insurance Company Act, impose minimum requirements for articles of incorporation, allow captives to be formed as limited liability companies (LLCs) rather than stock companies, and provide for certain powers and requirements by the commissioner of insurance. Providing for captives to be formed as LLCs is a progressive move that is likely to be popular among captive owners.
Another one of the most significant changes to the Georgia Captive Insurance Company Act is to place limitations on the scope of provisions and lines of businesses an agency captive insurance company may write. Agency captives are those owned by an insurance agency, insurance brokerage, managing general agent, or reinsurance intermediary.
With the revisions, an agency captive insurance company may now only reinsure the following.
- The risk of insurance or annuity contracts placed by or through the agency, brokerage, managing general agent, or reinsurance intermediary by which it is owned or controlled; or
- The contractual liability arising out of service contracts or warranties sold through a marketer, producer, administrator, issuer, or provider of service contracts or warranties by which it is owned or controlled.
April 07, 2017