South Carolina Code of Laws
Chapter 90 - Captive Insurance Companies
Section 38-90-215. Protected cells.

(A) A protected cell may be either unincorporated or incorporated.
(B) With regard to unincorporated protected cells:
(1) The unincorporated protected cell shall have its own distinct name or designation, which shall include the words "Protected Cell" or the abbreviation "PC". Any captive insurance company or protected cell formed prior to the effective date of this section may not be required to change its name to comply with the provisions of this paragraph.
(2) An unincorporated protected cell must meet the free and unimpaired paid-in capital and surplus requirements applicable to a special purpose captive insurance company and either:
(a) establish loss and loss expense reserves for business written through the unincorporated protected cell; or
(b) the business written through the unincorporated protected cell must be:
(i) fronted by an insurance company licensed pursuant to the laws of:
(A) any state; or
(B) any jurisdiction if the insurance company is a wholly owned subsidiary of an insurance company licensed pursuant to the laws of any state;
(ii) reinsured by a reinsurer authorized or approved by this State; or
(iii) secured by a trust fund in the United States for the benefit of policyholders and claimants funded by an irrevocable letter of credit or other asset acceptable to the director. The amount of security provided by the trust fund may not be less than the reserves associated with those liabilities, including reserves for losses, allocated loss adjustment expenses, incurred but unreported losses, and unearned premiums for business written through the participant's protected cell. The director may require the sponsored captive to increase the funding of a trust established pursuant to this item. If the form of security in the trust is a letter of credit, the letter of credit must be established, issued, or confirmed by a bank chartered in this State, a member of the federal reserve system, or a bank chartered by another state if that state-chartered bank is acceptable to the director. A trust and trust instrument maintained pursuant to this item must be in a form and upon terms approved by the director.
(3) The creation of an unincorporated protected cell does not create, with respect to that protected cell, a legal person separate from the sponsored captive insurance company. Amounts attributed to a protected cell, including assets transferred to a protected cell account, are owned by the sponsored captive insurance company of which the protected cell is a part, and the sponsored captive insurance company may not be, or may not hold itself out to be, a trustee with respect to those protected cell assets of that protected cell account. Notwithstanding the provisions of this subsection, the sponsored captive insurance company may allow for a security interest to attach to protected cell assets or a protected cell account when in favor of a creditor of the protected cell and otherwise allowed under applicable law.
(4) This subsection may not be construed to prohibit the sponsored captive insurance company from:
(a) entering into contracts of insurance on behalf of the protected cell; or
(b) contracting with or arranging for third-party managers or advisors to manage the protected cell to manage the assets of a protected cell, if all remuneration, expenses, and other compensation of the third-party manager or advisor is payable from the protected cell assets of that protected cell and not from the protected cell assets of other protected cells or the assets of the sponsored captive insurance company's general account.
(C) Incorporated protected cells shall be subject to all of the following:
(1) An incorporated protected cell may be organized and operated in any form of business organization set forth in Section 38-90-60(A).
(2) Except as specifically set forth in this chapter, each incorporated protected cell of a sponsored captive insurance company shall be licensed and treated as a special purpose captive insurance company.
(3) A participant in an incorporated protected cell need not be a shareholder of the protected cell or of the sponsored captive insurance company or any affiliate thereof.
(D) The name of an incorporated protected cell must include the words "Incorporated Cell" or the abbreviation "IC".
(E) Any captive insurance company or protected cell formed prior to July 31, 2013, shall not be required to change its name to comply with the provisions of subsection (D).
HISTORY: 2014 Act No. 282 (S.909), Section 2, eff June 10, 2014; 2018 Act No. 251 (H.4675), Section 1, eff May 18, 2018.
Effect of Amendment
2018 Act No. 251, Section 1, in (B)(2), substituted "free and unimpaired paid-in capital and surplus requirements" for "paid-in capital and free surplus requirements", and made a nonsubstantive change.

Structure South Carolina Code of Laws

South Carolina Code of Laws

Title 38 - Insurance

Chapter 90 - Captive Insurance Companies

Section 38-90-10. Definitions.

Section 38-90-20. Licensing; required information and documentation; fee; renewal.

Section 38-90-25. Reserved.

Section 38-90-30. Adoption of name.

Section 38-90-35. Discovery of confidential information in civil actions.

Section 38-90-40. Capitalization requirements.

Section 38-90-45. Reserved.

Section 38-90-50. Reserved.

Section 38-90-55. Reserved.

Section 38-90-60. Incorporation options and requirements.

Section 38-90-70. Reports.

Section 38-90-75. Discounting of loss and loss adjustment expense reserves.

Section 38-90-80. Inspections and examinations; confidentiality of reports; limitations applicable to branch captive insurance companies; application of general provisions.

Section 38-90-90. Suspension or revocation of license.

Section 38-90-100. Applicability of investment requirements.

Section 38-90-105. Loans.

Section 38-90-110. Reinsurance; effect on reserves.

Section 38-90-120. Requirement to join ratings organization.

Section 38-90-130. Participation in plan, pool, association, or guaranty or insolvency fund.

Section 38-90-140. Tax payment; rates; "common ownership and control" defined.

Section 38-90-145. Reserved.

Section 38-90-150. Rules, regulations, and orders.

Section 38-90-160. Application of provisions of title; director discretion; exemption of special purpose captive insurance companies.

Section 38-90-165. Declaration of inactivity.

Section 38-90-175. Captive Insurance Regulatory and Supervision Fund created; disbursements.

Section 38-90-180. Applicability of provisions relating to insurance reorganizations, receiverships, and injunctions; sponsored captive insurance company assets and capital provisions.

Section 30-90-185. Reserved.

Section 38-90-190. Reserved.

Section 38-90-200. Conversion of certain stock, mutual corporations, or limited liability companies into reciprocal insurers; plan for conversion.

Section 38-90-210. Formation of sponsored captive insurance company; establishing protected cells.

Section 38-90-215. Protected cells.

Section 38-90-220. Requirements applicable to sponsors.

Section 38-90-225. Participants in a sponsored captive insurance company.

Section 38-90-230. Protected cell assets; availability to creditors.

Section 38-90-235. Repealed by 2014 Act No. 282, Section 24, eff June 10, 2014.

Section 38-90-240. Reserved.

Section 38-90-250. Certificate of authority.

Section 38-90-410. Purpose.

Section 38-90-420. Definitions.

Section 38-90-430. Relation to other Title 38 provisions.

Section 38-90-440. License to transact business in State; contents of application; fees; foreign corporations.

Section 38-90-450. Organization requirements; privileges and restrictions.

Section 38-90-460. Capitalization.

Section 38-90-470. Authorized contracts.

Section 38-90-480. Protected cells.

Section 38-90-485. Effect of creation of protected cell; naming; management of assets.

Section 38-90-490. Issuance of securities.

Section 38-90-500. Swap agreements and other forms of asset management agreements.

Section 38-90-510. Authority to enter into contracts; contents.

Section 38-90-515. Securities issued by SPFC as insurance contract; underwriters or selling agents as insurance producers.

Section 38-90-520. Requirements and guidelines for asset management.

Section 38-90-530. Trust agreements for assets held in trust or pledged to secure obligations.

Section 38-90-540. Payment of dividends.

Section 38-90-550. Material changes of SPFC'S plan; filing of audit and statement of operations; examination of records.

Section 38-90-560. Examinations by director; confidentiality of examination reports.

Section 38-90-570. Expiration of authority granted by director on cessation of business; suspension or revocation of license; penalties; administrative hearing.

Section 38-90-580. Tax rates and payment schedules.

Section 38-90-590. Conditions for SPFC contract being granted credit for reinsurance treatment or otherwise qualifying as asset or reduction from liability for benefit of counterparty.

Section 38-90-600. Conservation, rehabilitation, or liquidation of SPFC.

Section 38-90-610. Disclosure of information by director.

Section 38-90-620. Standards and criteria applicable in contested case brought by third party and certain actions by director.

Section 38-90-630. Promulgation of regulations.

Section 38-90-810. Repealed.

Section 38-90-820. Repealed.

Section 38-90-830. Repealed.

Section 38-90-840. Repealed.

Section 38-90-850. Repealed.

Section 38-90-860. Repealed.

Section 38-90-870. Repealed.

Section 38-90-875. Repealed.

Section 38-90-880. Repealed.

Section 38-90-890. Repealed.