Mr. Oxendine noted that the bill would apply rate-and-form regulation to association captives and put them on par with other insurers that "already do risk-based capital."

He added that captives "currently have the same solvency standards, held to risk-based capital, as Liberty Mutual and other insurers. The only difference is that the association captives do not have rate-and-form regulation and the other insurers do."

He explained that the captives will "have a year to get their rates and forms filed and approved. The only claims that would be eligible would be claims after Jan. 1, 2005."

The bill reads that: "On and after Jan. 1, 2005, every captive insurance company issuing workers' compensation insurance contracts shall become a member of the Georgia Insurers Insolvency Pool. The Georgia Insurers Insolvency Pool shall not be liable for any claims incurred by any captive insurance company before Jan. 1, 2005."

If there is "a troubled captive out there," Mr. Oxendine said, "it's troubled because of claims it already has. And those claims are not eligible for participation."

The bill was designed to protect Georgia workers' comp claimants, he said. "We don't want to have people writing workers' comp unless they are participating in the guaranty fund."

Workers' comp is an important line of insurance, he said. "If someone is out on disability and doesn't get a weekly check, they could miss their payment and get thrown out of their home. There needs to be a fallback mechanism in case there is an insolvency."

He said that the department is not trying to remedy past problems or bail out troubled companies, "we're saying a year from now they will pay contributions into the pool and within the limits of the pool they will be eligible for protection, just like any other company."

According to Georgia captive law, associations that can write workers' comp in a captive must have employees in Georgia. Those associations include the hospitality industry, the textile workers industry and the retail convenience store industries, he said. The domicile has 15 captives, nine licensed in 2003.

Mr. Oxendine said the bill has passed the House Insurance Committee. "We anticipate it will go to the full floor of the House and should pass the House next week without any problems," he said.