§550.10. Capital and surplus requirements

            A. Prior to issuing policies of insurance or entering into any contracts of reinsurance, each pure captive insurance company shall possess and thereafter maintain unimpaired paid-in capital and surplus of not less than two hundred fifty thousand dollars and any additional capital or surplus required pursuant to Subsection F of this Section.

            B. Prior to issuing any policies of insurance or entering into any contracts of reinsurance, each association captive insurance company shall possess and thereafter maintain unimpaired paid-in capital and surplus of not less than five hundred thousand dollars and any additional capital or surplus required pursuant to Subsection F of this Section.

            C. Prior to issuing any policies of insurance or entering into any contracts of reinsurance, each risk retention group shall possess and thereafter maintain unimpaired paid-in capital and surplus of not less than one million dollars and any additional capital or surplus required pursuant to Subsection F of this Section.

            D. A branch captive insurance company shall maintain at all times an unimpaired paid-in capital and surplus requirement of two hundred fifty thousand dollars or an amount determined by the commissioner pursuant to Subsection F of this Section. Additionally, as security for the payment of liabilities attributable to branch operations, the commissioner may require that a trust fund, funded by an irrevocable letter of credit or other acceptable asset, be established and maintained in the United States for the benefit of United States policyholders and ceding insurers. The amount of security required shall not be less than the capital and surplus requirement and the reserves on the insurance policies or reinsurance contracts.

            E. Except as otherwise provided by the commissioner pursuant to Subsection F of this Section, the capital required to be maintained pursuant to this Section shall be in the form of cash, cash equivalents, bonds, marketable securities, a trust approved by the commissioner and pledged to the commissioner, or evidences of indebtedness which are direct general obligations of the government of the United States.

            F. The commissioner may prescribe additional requirements relating to capital and surplus based on the type, volume, and nature of the insurance business that is transacted by the captive insurance company.

            Acts 2008, No. 403, §1, eff. Jan. 1, 2009; Redesignated by Acts 2009, No. 503, §3; Acts 2012, No. 633, §1; Acts 2025, No. 313, §2.