Section 7003. License; power; filing; fees

(a)  Any captive insurance
  company, when permitted by its articles of association or charter, shall
  apply to the superintendent for a license  to  do  a  captive  insurance
  business  under  this  article. A captive insurance business consists of
  the kinds of insurance set forth in section  one  thousand  one  hundred
  thirteen  and section one thousand one hundred fourteen of this chapter,
  provided that:
    (1) a pure captive insurance company shall insure, on a primary basis,
  only risks of its parent and affiliated companies;
    (2) a group captive insurance  company  shall  insure,  on  a  primary
  basis,   only  risks  of  the  industrial  insureds  that  comprise  the
  industrial insured group;
    (3) a pure captive insurance company  or  a  group  captive  insurance
  company  shall  not  be  authorized to provide, on a primary basis or as
  reinsurance, the kinds of insurance specified in  paragraphs  one,  two,
  three,  eighteen,  twenty-three  and  twenty-five  of  subsection (a) of
  section one thousand one hundred thirteen of this chapter;
    (4) a pure captive insurance company  or  a  group  captive  insurance
  company shall not be authorized to provide, on a primary basis:
    (A) workers' compensation and employers' liability insurance; or
    (B)  any  other  kind  of insurance, including motor vehicle liability
  insurance, that is required,  under  the  laws  of  this  state  or  any
  political  subdivision  of  this  state, as a demonstration of financial
  responsibility for obtaining a license or permit to  undertake  specific
  activities   when  such  requirement  must  be  satisfied  by  obtaining
  insurance coverage from an insurer authorized in this state, up  to  the
  minimum amount of insurance so required under such laws; and
    (C)  except that subparagraphs (A) and (B) of this paragraph shall not
  prohibit  a  pure  captive  insurance  company  from  providing  primary
  indemnity  coverage  to  its  parent  and  affiliated  companies for any
  insurance or self-insurance program specified in such subparagraphs  (A)
  or  (B),  provided the insurance or self-insurance program has qualified
  under the applicable state or federal law requiring the program; and
    (5) a pure captive insurance company  or  a  group  captive  insurance
  company shall reinsure only risks as set forth in section seven thousand
  ten of this article.
    Notwithstanding  any inconsistent provisions of paragraphs one through
  five of this subsection, a pure captive insurance company  formed  by  a
  city  with  a  population  of  one million or more may insure or provide
  reinsurance  for  its  parent,  statutory  subsidiaries  and  affiliated
  companies  only for liability related to or arising out of activities in
  or near the World Trade Center  site  in  response  to  the  attacks  of
  September eleventh, two thousand one.
    (b)  No  captive  insurance  company  shall  do  any captive insurance
  business in this state unless:
    (1) it first obtains from the superintendent a license authorizing  it
  to do captive insurance business in this state;
    (2)  its  board  of  directors holds at least one meeting each year in
  this state;
    (3) it maintains its principal office and its records in this state;
    (4) it utilizes a captive manager resident in this state who is:
    (A) licensed as an agent or a broker under the provisions  of  article
  twenty-one of this chapter; or
    (B)  any other person approved by the superintendent provided that the
  approval may  be  withdrawn  by  the  superintendent,  upon  notice  and
  hearing, if the person has:
    (i) been guilty of fraudulent or dishonest practices; or

    (ii)  demonstrated  incompetency or untrustworthiness to act in such a
  capacity; and
    (5)  it submits a power of attorney, in accordance with the provisions
  of section one thousand two hundred twelve of this chapter,  designating
  the  superintendent as its agent for the purpose of receiving service of
  process in any proceeding against it.
    (c)(1) Before receiving a license to do a captive insurance  business,
  a  captive  insurance company shall file an application for license with
  the superintendent for  review  and  approval.  Such  application  shall
  include  a  certified  copy  of  its  charter  and  bylaws,  a financial
  statement certified by two principal  officers,  a  plan  of  operation,
  which  shall  include  an  actuarial  report  prepared  by  a  qualified
  independent actuary, and any other statements or documents  required  by
  the superintendent.
    (2)  In  evaluating  the  plan  of operation, the superintendent shall
  consider the following factors:
    (A) the amount and liquidity of its assets relative to the risks to be
  assumed;
    (B) the adequacy of the expertise, experience, and  character  of  the
  person or persons who will manage it;
    (C)  the  overall  soundness of the plan and the projections contained
  therein;
    (D) the adequacy of the loss prevention programs of its parent, member
  organizations, or industrial insureds as applicable; and
    (E) such other  factors  deemed  relevant  by  the  superintendent  in
  ascertaining whether the proposed captive insurance company will be able
  to meet its policy obligations.
    (3)  Any  material  filed  with  the  superintendent  pursuant to this
  subsection shall be  given  confidential  treatment  and  shall  not  be
  subject  to  public  inspection under article six of the public officers
  law, or to discovery under article thirty-one of the civil practice  law
  and  rules,  except  to  the  extent the superintendent finds release of
  information necessary to protect the public or necessary to initiate any
  proceeding or action as provided by this article or except where a court
  of competent jurisdiction in an action involving a private litigant  and
  a  captive insurer finds that discovery of same should be allowed upon a
  showing that such information is essential to the establishment  of  the
  claim or defense brought or asserted and the party seeking discovery has
  demonstrated  to the satisfaction of the court that such party is unable
  to otherwise obtain the substantial equivalent of the material.
    (4) In order to provide for the review of  the  application  submitted
  pursuant  to  this subsection in a timely manner, the superintendent may
  engage such other qualified persons and services as  may  be  necessary.
  Prior  to  retaining  any  such persons and services, the superintendent
  shall notify the applicant and provide an estimate of the cost  of  such
  services.  The  superintendent  shall  recover  such costs in the manner
  prescribed in section three hundred thirteen of this chapter.
    (5) In the case of a pure captive insurance company formed by  a  city
  with  a  population  of  one million or more to insure such city and its
  affiliated  companies  for  liability  related  to  or  arising  out  of
  activities  in  or  near  the World Trade Center site in response to the
  attacks of September eleventh, two thousand one, the superintendent,  in
  addition   to  the  provisions  set  forth  in  paragraph  two  of  this
  subsection, shall consider such factors as the unique  risk  insured  by
  such  captive  and  the  source and limits of the premium payments along
  with any limitations on the acceptance of  claims  and  the  payment  of
  accepted  claims  so long as such limitations provide an equitable basis
  for the allocation of the assets of such company to pay claims.

    (d) Any proposed amendments or revisions to the charter and bylaws  of
  a  captive  insurance company shall be filed with the superintendent for
  review and approval.
    (e)  If  the  superintendent  is  satisfied  that  the  documents  and
  statements filed by  the  captive  insurance  company  comply  with  the
  provisions  of  this  article,  a license authorizing it to do a captive
  insurance business in this state shall be issued for a term expiring  on
  June  thirtieth.  Thereafter,  the  superintendent  may  issue a renewal
  license for successive one year terms expiring on June thirtieth.