D.C. commissioner could grant inactive status to some captive insurers

The insurance commissioner could grant an eligible captive insurer inactive status, which would exempt it from premium taxes and fees for full inactive years. This applies to captive insurers other than risk retention groups. The insurer must have stopped insurance business, have no remaining obligations from its policies, and follow D.C. law and rules. It must keep at least $5,000 in capital and surplus and get written approval before issuing policies again. The tax and fee exemption applies to each full year the insurer is inactive.

Each protected cell would apply for its own permission to operate, and the commissioner could use a faster approval process. This applies to protected cells within protected cell captive insurers. The manager must file a complete application for the first cell and receive its approval. For later cells, the manager must submit the required plans, financial estimates, and information that differs from the first application. The commissioner could set a substantially similar faster process by rule. Under the stated faster process, the three-business-day period starts when a cell successfully submits the required documents.

Covered insurers could make major business plan changes without the commissioner's advance written approval. This covers pure captive insurers and protected cell captive insurers, including their cells, except cells of risk retention groups. The insurer's board and manager must decide that the change follows the law and does not raise the risk that the insurer cannot pay its debts. The commissioner may reject a pure captive insurer's change if it breaks a law or rule or threatens an insurer's or cell's ability to pay its debts. The insurer or its manager must notify the commissioner in writing within 30 days after the change.

D.C. would keep covered reports confidential and block access through public records requests, subpoenas, and discovery in private civil cases. This covers annual reports and other information submitted under the captive insurer reporting section. The insurer or protected cell could consent to disclosure in writing; the reporting section may also allow disclosure.

The commissioner could require an SPFC to pay outside experts to review its qualifications. This applies to insurers called SPFCs in the bill. The experts could provide legal, financial, or examination services. The SPFC would send their reports and recommendations to the commissioner.