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Current Status Bill Number:View additional legislative information at the LPITS web site.485 Type of Legislation:General Bill GB Introducing Body:Senate Introduced Date:20010322 Primary Sponsor:McConnell All Sponsors:McConnell Drafted Document Number:l:\council\bills\dka\4186mm01.doc Residing Body:Senate Current Committee:Banking and Insurance Committee 02 SBI Subject:Captive insurance companies authorized to write workers' compensation insurance, tax provided on premiums History Body Date Action Description Com Leg Involved ______ ________ ______________________________________ _______ ____________ Senate 20010322 Introduced, read first time, 02 SBI referred to Committee Versions of This Bill
TO AMEND CHAPTER 90, TITLE 38, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO CAPTIVE INSURANCE COMPANIES, BY ADDING SECTIONS 38-90-250, 38-90-260, AND 38-90-265 SO AS TO PROVIDE FOR AUTHORITY AND MINIMUM REQUIREMENTS FOR A CAPTIVE INSURANCE COMPANY WRITING WORKERS' COMPENSATION INSURANCE; TO AMEND SECTION 38-90-20, RELATING TO AUTHORITY OF A CAPTIVE INSURANCE COMPANY, SO AS TO DELETE THE EXCLUSION OF AUTHORITY FOR WRITING WORKERS' COMPENSATION INSURANCE; AND TO AMEND SECTION 38-90-140, RELATING TO PAYMENT OF TAXES ON COLLECTED PREMIUMS, SO AS TO PROVIDE FOR A TAX ON WORKERS' COMPENSATION PREMIUMS AT A RATE OF ONE PERCENT.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Chapter 90 of Title 38 of the 1976 Code is amended by adding:
"Section 38-90-250. An insurance policy or bond issued by a captive insurance company for workers' compensation insurance must conform with all minimum requirements for coverages and coverage amounts established by the State for those types of insurance. The insurance policy or bond issued by a captive insurance company is satisfactory proof that the employers insured under them have satisfied the requirements for workers' compensation insurance prescribed by Title 42.
Section 38-90-260. A captive insurer insuring employers in this State against liability for personal injuries to their employees or death caused by the injuries, pursuant to Title 42, shall participate in the Second Injury Fund.
Section 38-90-265. (A) A captive insurer must have minimum capital of five hundred thousand dollars and minimum surplus of one million dollars to write workers' compensation insurance directly.
(B) The department shall require the deposit of an acceptable security, indemnity, or bond to secure payment of the compensation liabilities as they are incurred, in the amount of one million dollars.
(C) The director must approve all reinsurance agreements for captive insurers writing direct workers' compensation insurance before they are effective. The director may issue regulations for additional requirements for captive insurers writing direct workers' compensation insurance as needed to provide greater financial stability."
SECTION 2. Section 38-90-20(A) of the 1976 Code, as added by Act 331 of 2000, is amended to read:
"(A) A captive insurance company, when permitted by its articles of incorporation or charter, may apply to the director for a license to do any and all engage in any insurance, except workers' compensation insurance business, authorized by this title; however except that:
(1) a pure captive insurance company may not insure any risks other than those of its parent and affiliated companies or controlled unaffiliated business;
(2) an association captive insurance company may not insure any risks other than those of the member organizations of its association and their affiliated companies;
(3) an industrial insured captive insurance company may not insure any risks other than those of the industrial insureds that comprise the industrial insured group and their affiliated companies;
(4) a captive insurance company may not provide personal motor vehicle or homeowner's insurance coverage or any a component of these coverages;
(5) a captive insurance company may not accept or cede reinsurance except as provided in Section 38-90-110."
SECTION 3. Section 38-90-140(A) of the 1976 Code, as added by Act 331 of 2000, is amended to read:
"(A)(1) A captive insurance company shall pay to the director by March first of each year, a tax at the rate of:
(a) four-tenths of one percent on the first twenty million dollars; and
(b) three-tenths of one percent on the next twenty million dollars; and
(c) two-tenths of one percent on the next twenty million dollars; and
(d) seventy-five thousandths of one percent on each dollar thereafter after that on the direct premiums collected or contracted for on policies or contracts of insurance written by the captive insurance company during the preceding calendar year ending December thirty-first. next preceding, after deducting from
(2) The amount of the direct premiums subject to the tax imposed by this section does not include the amounts paid to policyholders as return premiums, which shall include including dividends on unabsorbed premiums or premium deposits returned or credited to policyholders.
(3) A captive insurer insuring employers in this State against liability for personal injuries to their employees or death caused by the injuries, pursuant to Title 42, shall pay a tax at the rate of one percent of the amount upon the premiums received, whether in cash or notes, in this State or on account of business done in this State, for the insurance."
SECTION 4. This act takes effect upon approval by the Governor.
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