Rhode Island’s Protected Cell legislation can be utilized in conjunction with the IBT.  A Rhode Island insurer can be set up as a Protected Cell Company and assume multiple transfers of portfolios as protected cells. Each protected cell will be a pool of assets and liabilities of a Protected Cell Company segregated and insulated from the remainder of the Protected Cell Company’s assets and liabilities. Creating one company with multiple protected cells minimizes capital and statutory reporting requirements.

Rhode Island’s Protected Cell Companies Act permits the formation of cell companies.  A Protected Cell Company (“PCC”) is a single legal entity that is structured in two parts, the core and an unlimited number of cells. Assets and liabilities are fully segregated between cells and between the core and the cells. A cell has no separate legal identity.

  • The key issue which differentiates a PCC from a traditional (non-cellular) company is the segregation of its assets. A PCC is able to limit its liability in respect of a particular contract to a specified pool of assets rather than exposing all of the assets of the PCC to liability in respect of every contract, as would be the case with a non-cellular company.
  • Insurers or Reinsurers can establish a PCC in Rhode Island for the purpose of assuming portfolios of commercial run-off portfolios under the Amendments to Regulation 68.   Regulation 68 allows for multiple transfers to a Rhode Island commercial run-off insurer that is a protected cell company as protected cells.
  • By using the Protected Cell structure a company can limit its capital requirements. Only one Rhode Island company will have to be established to assume multiple portfolios of business. The benefits of the PCC structure are also useful in connection with statutory reporting requirements. Reporting can be carried out at the core or PCC level and will not be required separately for each individual cell. This will significantly reduce the potential costs for each cell.

LINK TO: RI Gen. Laws Section 27-64-1