No. CS/CS/HB 883
Filed under Insurance.
Protected Cell Captive Insurance Companies; Specifying that a protected cell captive insurance company may only insure certain risks; revising the unimpaired paid-in capital requirements for captive insurance companies; authorizing one or more sponsors to form a protected cell captive insurance company; requiring applicant protected cell captive insurance companies to file certain information with the Office of Insurance Regulation; authorizing protected cell captive insurance companies to establish and maintain certain protected cells, subject to certain approvals granted by the office, etc.
Plain English Summary
AI-GENERATEDFlorida creates a new insurance entity type, the protected cell captive, allowing multiple sponsors to share one company while legally isolating each participant's assets and liabilities.
Each protected cell must be fronted by a licensed insurer or secured by a trust, ensuring policyholders are protected even if the parent company fails.
The minimum capital requirement is $100,000, lower than the $250,000 for traditional captives, lowering the barrier to entry for smaller businesses.
The Office of Insurance Regulation must approve each cell's plan of operation, participant changes, and termination before they take effect.
AILimits protected cell captives to insuring only the specific risks of their protected cell participants, preventing them from writing general insurance policies for the broader public.
AICreates a new class of insurance company that can house multiple separate 'cells' for different participants, allowing shared administrative costs while legally isolating each cell's assets and liabilities.
AIMandates that assets and liabilities of each protected cell be kept separate from the general account and other cells, preventing claims against one cell from reaching the assets of another.
AIRequires the Office of Insurance Regulation to approve the plan of operation for each protected cell before it can be established, and to approve any changes to participants or cell termination.
AIRequires that business written by a protected cell be fronted by a licensed insurer, reinsured by an authorized reinsurer, or secured by a trust or letter of credit to protect policyholders.
AISets a minimum unimpaired paid-in capital of $100,000 for protected cell captives, which is lower than the $250,000 required for pure captives, lowering the barrier to entry for this new entity type.
AIDefines a 'sponsor' as a person or entity approved by the insurance office to provide capital and organize the company, creating a specific regulatory approval pathway for the entity's formation.
AIAllows the office to separate solvent protected cells from an insolvent parent company and convert them into new or existing captive insurance companies to preserve value.