| (a) Except as provided in subsection (d) of this section,
the captive insurance company must submit a written request to the
commissioner for prior approval of a loan agreement with an affiliate.
(b) Terms of the loan agreement under subsection (a)
of this section must:
(1) be fair and equitable;
(2) prohibit advancement of funds by the captive insurance
company to the affiliate except as defined in the agreement;
(3) include standards for termination of the agreement
with and without cause; and
(4) specify that, if the captive insurance company
is placed in receivership or seized by the commissioner under Insurance
Code Chapter 443:
(A) all of the rights of the captive insurance company
under the agreement extend to the receiver or commissioner; and
(B) all books and records will immediately be made
available to the receiver or the commissioner and must be turned over
to the receiver or commissioner immediately on the receiver's or the
commissioner's request.
(c) The request under subsection (a) of this section
must be labeled as "Loans to Affiliates - Captives" and include the
following information:
(1) the name of the captive insurance company and affiliate;
(2) the home office address of the affiliate;
(3) the relationship of the affiliate to the captive
insurance company, for example, parent entity or affiliate;
(4) a description of the loan, including:
(A) a statement of the nature of the loan and the reasons
for entering into or changing the loan;
(B) a statement of how the loan complies with subsection
(b) of this section;
(C) the proposed effective date of the loan;
(D) the financial impact of the loan on the captive
insurance company;
(E) a description of the maximum amount the captive
insurance company will be obligated to make available under the loan,
the date on which the loan will terminate, and any provisions for
the accrual or deferral of interest; and
(F) a description of the amount and source of funds
or any other assets for the loan.
(d) If the captive insurance company is affiliated
with an insurer that is part of an insurance holding company system
and subject to Insurance Code Chapter 823, the captive insurance company
must comply with the requirements under §6.410 of this title
(relating to Application of Holding Company Requirements).
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