Permissive areas of insurance

(1) Except as provided in Subsections (2) and (3), a captive insurance company may not directly insure a risk other than the risk of the captive insurance company's parent or affiliated company. (2) In addition to the risks described in Subsection (1), an association captive insurance company may insure the risk of: (a) a member organization of the association captive insurance company's association; or (b) an affiliate of a member organization of the association captive insurance company's association. (3) The following may insure a risk of a controlled unaffiliated business: (a) an industrial insured captive insurance company; (b) an association captive insurance company; (c) a pure captive insurance company; or (d) a sponsored captive insurance company and the sponsored captive insurance company's cells. (4) To the extent allowed by a captive insurance company's organizational charter, a captive insurance company may provide any type of insurance described in this title, except: (a) workers' compensation insurance; (b) personal motor vehicle insurance; (c) homeowners' insurance; and (d) any component of the types of insurance described in Subsections (4)(a) through (c). (5) A captive insurance company may not provide coverage for: (a) a wager or gaming risk; (b) loss of an election; or (c) the punitive consequences of a crime. (6) Unless the punitive damages award arises out of a criminal act of an insured, a captive insurance company may provide coverage for punitive damages awarded, including through adjudication or compromise, against the captive insurance company's: (a) parent; or (b) affiliated company. (7) Notwithstanding Subsection (4), if approved by the commissioner: (a) a captive insurance company may insure as a reimbursement a limited layer or deductible of workers' compensation coverage; and (b) an association captive insurance company that satisfies the requirements of this chapter may provide homeowners' insurance.