§550.2. Definitions

            As used in this Subpart, unless the context otherwise requires, the words and terms shall have the following meanings:

            (1) "Affiliated company" means a company in the same corporate system as its parent or a member organization by virtue of common ownership, control, operation or management.

            (2) "Association" means a legal entity consisting of two or more corporations, partnerships, associations or other forms of business organizations that are engaged in businesses or activities similar or related to a common business, trade, product, services, premises or operations.

            (3) "Association captive insurer" means any company that insures only the risks of the member organizations of the association, affiliated companies of the member organizations, and the risks of the association itself.

            (4) "Captive insurer" means any pure captive insurer or association captive insurer formed or licensed under the provisions of this Subpart.

            (5) "Cash equivalents" means any short-term, highly liquid investments that are both (a) readily convertible to known amounts of cash, and (b) so near their maturity that they present insignificant risk of changes in value due to changes in interest rates.

            (6) "Commissioner" means the commissioner of insurance.

            (7) "Common ownership and control" means the direct or indirect ownership of fifty-one percent or more of the outstanding voting stock of two or more corporations by the same member or members.

            (8) "Department" means the Department of Insurance.

            (9) "Excess workers' compensation insurance" means insurance in excess of the specified per-incident or aggregate limit, if any, established by:

            (a) The commissioner, if the insurance is being transacted in this state; or

            (b) The chief regulatory officer for insurance in the state in which the insurance is being transacted.

            (10) "Hazardous financial condition" means that, based upon its present or reasonably anticipated financial condition, a captive insurer, although not yet financially impaired or insolvent, is unlikely to be able to:

            (a) Meet obligations to policyholders with respect to known claims and reasonably anticipated claims.

            (b) Pay other obligations in the normal course of business.

            (11) "Member organization" means any corporation, partnership, association or other form of business organization that belongs to an association. Political subdivisions, as defined in Section 44 of Article VI of the Constitution of Louisiana, shall not be eligible for membership in an association.

            (12) "Parent" means a corporation, limited liability company, partnership, association or other form of business organization that directly or indirectly owns, controls or holds with power to vote more than fifty-one percent of the outstanding voting securities of a captive insurer organized as a stock corporation.

            (13) "Pure captive insurer" means a captive insurer that insures only the risks of its parent and affiliated companies.

            (14) "Stock insurer" shall mean an incorporated insurer with issued and outstanding stock whose capital and surplus is owned by its stockholders.

            Acts 2008, No. 403, §1, eff. Jan. 1, 2009; Redesignated by Acts 2009, No. 503, §3.