| (a) A material change in the plan of operations involves
a change in operations of the captive insurance company that results
in a significant modification in the risk profile of the captive insurance
company, including:
(1) adding one or more new lines of business or perils;
(2) modifying policy limit(s) or policy coverage(s);
(3) changing captive management companies;
(4) entering into new reinsurance programs including
loss portfolio transfers;
(5) modifying reinsurance programs, including:
(A) changing counterparties;
(B) changing the attachment point or amount of business
ceded or assumed; and
(C) changing limits of coverage;
(6) changing the captive insurance company's ultimate
controlling person;
(7) any changes to the information associated with
controlled unaffiliated business submitted under §6.202(c) of
this title (relating to Captive Insurance Company Certificate of Authority
Application Contents and Process); and
(8) entering into a runoff mode or eliminating one
or more lines of business or perils, including winding up operations.
(b) All material changes to the plan of operation require
prior approval of the commissioner.
(c) The captive insurance company must provide updated
financial projections if a material change in the plan of operation
will result in a variation in the most recently filed projections
equal to an amount greater than 15 percent of projected net equity.
The updated financial projections must be submitted with the notice
of a material change.
(d) The department will reassess the captive insurance
company's minimum capital and surplus when there is an update to the
captive insurance company's plan of operations. The captive insurance
company must provide an actuarial opinion on the effect of the change
in the plan of operation if requested by the department.
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