Conversion, Disaffiliation, or Merger of Protected Cell — Conversion to Protected Cell Captive Insurance Company
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Upon the application of a protected cell captive insurance company, one of its protected cells may be converted to any form of captive insurance company authorized pursuant to this chapter with the consent of the commissioner. Upon compliance with part 1 of this chapter, the commissioner may issue to the converting protected cell a certificate of authority with an effective date of its original date of formation as a protected cell.
If the converting protected cell is a series of a limited liability company, the cell shall file organizational documents with the secretary of state that comply with part 1 of this chapter and titles 48 and 61 as applicable. The organizational documents shall include the date of formation as a series. Upon conversion, the formation date of the series shall be deemed the formation date of the new entity. The new entity shall possess all assets and liabilities, including outstanding insurance liabilities, owned by the predecessor series.
If the converting protected cell is any other type of incorporated protected cell entity, then the converting protected cell shall submit amended organizational documents to the secretary of state that comply with part 1 of this chapter and titles 48 and 61 as applicable.
If the converting protected cell is neither a series of a limited liability company nor an incorporated protected cell, the cell shall file organizational documents with the secretary of state that comply with part 1 of this chapter, titles 48 and 61 as applicable, or any other applicable provision governing formation of that type of entity. The organizational documents shall include the date of formation as a cell. Upon conversion, the formation date of the cell shall be deemed the formation date of the new entity. The new entity shall possess all assets and liabilities, including outstanding insurance liabilities, owned by the predecessor cell.
A captive insurance company may apply to the commissioner for conversion to become a protected cell captive insurance company under any form permitted under this part. Upon compliance with this part, approval by the commissioner, and the filing of amended organizational documents with the secretary of state, the captive insurance company shall be issued a revised certificate of authority. The effective date of the revised protected cell captive insurance company's certificate of authority shall remain the same as the effective date of the prior captive insurance company.
With the consent of both the affected protected cell captive insurance companies and the commissioner, an individual protected cell of a captive insurance company may disaffiliate from one protected cell captive insurance company and affiliate with another protected cell captive insurance company. The commissioner may require the affected protected cell captive insurance companies and the individual protected cell to make necessary changes to their business plans, organizational documents, participation agreements, or other governing documents prior to approving the change in affiliation. The formation date of a protected cell that affiliates with another protected cell captive insurance company shall be the date of its original formation with the prior protected cell captive insurance company. A protected cell shall maintain and carry over all assets and liabilities, including outstanding insurance liabilities, to the new protected cell captive insurance company.
With the consent of the affected protected cell captive insurance company or companies, the owners or the participants of the protected cells, and the commissioner, an individual protected cell of a captive insurance company may merge or otherwise combine assets and liabilities with another individual protected cell of a protected cell captive insurance company. The commissioner may require the affected protected cell captive insurance companies and the individual protected cells to make necessary changes to their business plans, organizational documents, participation agreements, or other governing documents prior to approving the change in affiliation. The formation date of a protected cell that merges or otherwise combines assets and liabilities with another protected cell captive insurance company is the date of the original formation of the surviving protected cell. The surviving protected cell must acquire all of the assets and liabilities, including outstanding insurance liabilities, of the merging protected cell. A hearing is not required for mergers of protected cells effectuated under this section.
Solely for the purposes of §§ 56-13-108, 56-13-109, and 56-13-114, the date of final conversion or disaffiliation of a protected cell shall be deemed a termination of that cell from the prior entity. The prior entity shall be responsible for the accounting, oversight, and premium tax on any transactions prior to the date of final conversion or disaffiliation. The successor entity shall be responsible for the accounting, oversight, and premium tax on any transactions on or after the date of final conversion or disaffiliation.