2005 Arizona Revised Statutes - Revised Statutes §20-1098.04  Formation of captive insurers; redomestication

A. An agency captive insurer or protected cell captive insurer shall be incorporated as a stock insurer with its capital divided into shares and held by the stockholders.

B. A group captive insurer may be formed in any of the following ways:

1. Incorporated as a stock insurer with its capital divided into shares and held by the stockholders.

2. Incorporated as a mutual insurer without capital stock, the governing body of which is elected by the member organizations of its association.

3. Organized as a reciprocal insurer pursuant to article 2 of this chapter, except that three or more persons may organize a captive reciprocal insurer and the captive reciprocal insurer subscribers' advisory committee must have one person that is a resident of this state.

4. Incorporated as a nonprofit corporation pursuant to title 10, chapter 25.

C. A pure captive insurer may be formed in any of the following ways:

1. Incorporated as a stock insurer with its capital divided into shares and held by the stockholders.

2. Incorporated as a nonprofit corporation pursuant to title 10, chapter 25.

D. Each owner of an agency captive insurer shall be licensed as an insurance producer or managing general agent.

E. A captive insurer shall have at least three incorporators at least one of whom shall be a resident of this state.

F. The capital stock of a captive insurer incorporated as a stock insurer may be authorized with no par value.

G. The articles of incorporation or bylaws of a captive insurer that is formed as a corporation may authorize a quorum of a board of directors to consist of at least one-third of the fixed or prescribed number of directors. The subscribers' agreement or other organizing document of a captive insurer formed as a reciprocal insurer may authorize a quorum of a subscribers' advisory committee to consist of at least one-third of the number of its members.

H. A captive insurer organized as a stock insurer shall have at least one member of the board of directors who is a resident of this state. A captive insurer that is formed as a reciprocal insurer shall have at least one member of the subscribers' advisory committee who is a resident of this state.

I. Any foreign or alien insurer may become a domestic captive insurer by complying with the requirements of this article relating to the organization and licensing of a domestic captive insurer of the same type, and by complying with all applicable requirements of the laws of this state relating to the formation and authorization of a corporation. The domestic captive insurer is entitled to a license to continue its business and is subject to the authority and jurisdiction of this state.