There are several ongoing requirements associated with an Iowa domiciled captive insurance company. Following is a list of many of these items. Please refer to Iowa Code Chapter 521J and Iowa Administrative Rules 191-113 for complete requirements.
Residency Requirements:
- The captive company’s board of directors, board of managing members, or a reciprocal insurer’s subscribers’ advisory committee must hold at least one annual meeting in Iowa.
- The captive company must maintain its principal place of business in the state. This includes branch captive companies.
- The captive company must designate a registered agent to accept service of process, file the name and contact information and any subsequent changes regarding the registered agent with the commissioner. In addition, they must agree that the commissioner may act as an agent of the captive company with respect to any action or proceeding and may be served pursuant to section 505.30.
- A captive domiciled in Iowa shall be incorporated or organized by at least one incorporator or organizer who is an Iowa resident.
- At least one member of the board of directors of a captive company shall be an Iowa resident. A captive risk retention group shall have a minimum of five directors who are Iowa residents.
- A captive formed as a limited liability company, other than a risk retention group, shall have at least one manager who is an Iowa resident. A risk retention group, formed as a limited liability company, shall maintain a board of directors of which at least one board member shall be a resident of Iowa.
- A reciprocal insurer shall have at least one member of the subscribers’ advisory committee who is an Iowa resident. A risk retention group formed as a reciprocal shall have a minimum of five members of the subscribers’ advisory committee who are residents of this state.
Business Change Reporting:
- Material changes in information filed with the initial application and the business plan must be filed for prior approval.
- Loans to a captive company’s affiliates require prior written approval.
- No person shall offer, exchange securities for, or acquire, any interest in a domestic captive company and no person shall enter into an agreement to merge with or otherwise acquire control of a captive company, without prior written approval.
- A reinsurer that is an affiliate of a captive risk retention group shall not write third-party business without obtaining prior written approval.
- A reinsurer shall not use cell arrangements without obtaining prior written approval.
- An addition of any new protected cell, or the withdrawal of any participant of an existing protected cell shall not become effective without prior written approval.
- Proposed dividends must be approved by the commissioner.
- Changes in board members or officers of the captive company shall be immediately reported to the commissioner.
- Any changes regarding the registered agent to accept service of process shall be filed with the commissioner.
- Changes in rates must be filed within 30 days of adoption.
- Changes of executive officers or directors must be filed, including a biographical affidavit of any new executive officer or director, within 30 days.
- Non-material changes in information filed with the initial application must be filed within 60 days after the change, but do not require prior approval.
- Any change in appointment of independent certified public accountants shall be reported within 90 days.
Service Providers:
- Captive Manager – an individual on the Iowa approved captive management firms list and, pursuant to a written contract with a captive company, provides and coordinates services including but not limited to accounting, statutory filings, signed annual statements and coordination of related services. The captive manager acts as an intermediary who facilitates and assists the captive company in meeting its statutory requirements.
- Qualified Actuary – an individual who is a member of the American academy of actuaries, is qualified to provide the certifications as described in the United States qualifications standards promulgated by the American academy of actuaries pursuant to the code of professional conduct adopted by the American academy of actuaries, the society of actuaries, the American society of pension professionals and actuaries, the casualty actuarial society, and the conference of consulting actuaries. The individual shall be approved by the commissioner and shall be a Fellow of the Casualty Actuarial Society, a member in good standing of the American Academy of Actuaries, a member in good standing of the Society of Actuaries, or an individual who has demonstrated competence to the commissioner.
- Independent Certified Public Accountant – a certified public accountant retained to conduct the independent annual audit may only be appointed from the list of approved certified public accounting firms or individual certified public accountants maintained by the commissioner. The accountant must be independent with respect to the captive company, conforms to the standards of the profession as contained in the Code of Professional Ethics and pronouncements of the American Institute of Certified Public Accountants and the Financial Accounting Standards Board, and is properly licensed by an appropriate state licensing authority.