Proposed Rules on Ohio Captive Insurance Regulation Open for Comment Until October 1, 2014

 

The Ohio Department of Insurance (“Department”) advised today, September 17, 2014, that proposed new Rules 3901-11-01, 3901-11-02, 3901-11-03 and 3901-11-04 relating to captive insurance have been posted for public review and comment.

On June 17, 2014, Ohio Governor John Kasich signed legislation allowing for the creation of captive insurance companies in Ohio.  The aforementioned proposed Rules implement that legislation and set forth requirements to regulate captive insurance companies domiciled and operating in Ohio. 

The requirements are designed to assist in providing the proper oversight and record maintenance to track these entities’ well-being, as well as to promote solvency.

To view the proposed Rule texts, click on the following hyperlinks:

• 3901-11-01 – Captive Insurance Company Application
• 3901-11-02 – Additional Capital and Surplus Required
• 3901-11-03 – Auditor Appointment, Audited Financial Statements, Actuarial Opinion, and Annual Statements
• 3901-11-04 – Notification of Materially Misstated Financial Condition

Under proposed Rule 3901-11-01, entities applying for captive licenses must complete an application and submit information attesting to the financial soundness of the entity.  Applicants also must provide an Ohio address of its proposed captive insurer’s place of business, along with the address and date of its Ohio-based Board of Directors’ meeting.

Proposed Rule 3901-11-02 would establish the procedure for the Ohio superintendent of insurance to require additional capital and surplus of a captive insurer.  The basis of determination would include the type of risks insured, volume of coverage and the general business market environment and economic conditions at that time.

No later than 90 days after receiving a Certificate of Authority to do business in Ohio, captive insurers would be required to report to the superintendent of insurance in writing the name and address of the independent certified public accountant (“CPA”) retained to conduct the annual audit, along with other audit-related stipulations under proposed Rule 3901-11-03. 

Proposed Rule 3901-11-04 would establish the notice requirements of a captive insurance company’s CPA in the event of a material misstatement of financial condition.

Comments on the Rules can be submitted electronically during the 10-day comment period, which ends October 1, 2014, at 12:00 a.m.  To comment on one or more of these Rules, visit http://business.ohio.gov/reform or send an email to ecomment@insurance.ohio.gov.

 

Should you have any questions or comments, please contact Colodny Fass& Webb.

 

 

Click here to follow Colodny Fass& Webb on Twitter (@CFTLAWcom)

 

 

To unsubscribe from this newsletter, please send an email to Brooke Ellis at bellis@cftlaw.com.