Iowa law sets oversight rules for life reinsurance companies

Iowa’s insurance commissioner may license life captive reinsurance companies and oversee their operations. Life insurers and their affiliates may organize these companies, which must be corporations and may reinsure only risks of the organizing company and its affiliates. A company may reinsure only risks of a ceding insurer. It needs the commissioner’s prior approval to pass assumed risks to another reinsurer. The company must have at least $5 million in paid-in capital and surplus; the commissioner may require more. The company must receive a certificate of authority before writing insurance business, and must get plan approval before assuming risks under a reinsurance contract.

Life captive reinsurance companies must file financial reports and notify the commissioner about specified events. These duties apply to life captive reinsurance companies licensed in Iowa. The commissioner may suspend or revoke a company’s certificate for listed failures, including not meeting capital requirements or filing required reports. Many annual reports are due by March 1, with other reports due later in the year. Companies must report a material change in their finances or management within two business days.

A foreign or non-U.S. captive company that moves its legal home to Iowa may defer a year of premium tax. This applies to foreign or non-U.S. captive companies organized under the chapter that move their legal home to Iowa. The company must report its annual premium taxes. If it gives up its license or moves to another jurisdiction within five years, it must promptly pay the deferred tax plus 10 percent annual interest. The company may defer payment in the calendar year it moves or the next calendar year. This rule does not apply to tax years beginning on or after January 1, 2030.