Surplus requirements; restriction on payment of dividends.

(1) The office may not issue a license to a captive insurance company unless the company possesses and maintains the following applicable unimpaired surplus requirements:

(a) In the case of a pure captive insurance company, at least $150,000.

(b) In the case of a protected cell captive insurance company, at least $100,000.

(c) In the case of an industrial insured captive insurance company incorporated as a stock insurer, at least $300,000.

(d) In the case of an industrial insured captive insurance company incorporated as a mutual insurer, at least $500,000.

(e) In the case of a special purpose captive insurance company, an amount determined by the office after giving due consideration to the company’s business plan, feasibility study, and pro forma financial statements and projections, including the nature of the risks to be insured.

(2) For purposes of this section, the office may issue a license expressly conditioned upon the captive insurance company providing to the office satisfactory evidence of possession of the minimum required unimpaired surplus. Until this evidence is provided, the captive insurance company may not issue any policy, assume any liability, or otherwise provide coverage. The office may revoke the conditional license if satisfactory evidence of the required surplus is not provided within a maximum period of time, not to exceed 1 year, to be established by the office at the time the conditional license is issued.

(3) A captive insurance company may not pay a dividend out of, or other distribution with respect to, capital or surplus in excess of the limitations set forth in this chapter without the prior approval of the office. Approval of an ongoing plan for the payment of dividends or other distribution must be conditioned upon the retention, at the time of each payment, of capital or surplus in excess of amounts specified by, or determined in accordance with formulas approved by, the office.

(4) An irrevocable letter of credit that is issued by a financial institution other than a bank chartered by this state or a member bank of the Federal Reserve System must meet the same standards as an irrevocable letter of credit that has been issued by a bank chartered by this state or a member bank of the Federal Reserve System.