For purposes of this part:
“Insolvency” or “insolvent” means that the SPFC or one (1) or more of its protected cells is unable to pay its obligations when they are due, unless those obligations are the subject of a bona fide dispute, or the commissioner previously has established by order other criteria for determining the solvency of the SPFC or one (1) or more of its protected cells, in which case the SPFC is insolvent if it fails to meet that criteria;
“Insurance securitization” and “securitization” mean a transaction or a group of related transactions, which:
Include capital market offerings, that are effected through related risk transfer instruments and facilitating administrative agreements where all or part of the result of such transactions is used to fund the SPFC's obligations under a reinsurance contract with a ceding insurer and by which:
Proceeds are obtained by a special purpose financial captive insurance company, directly or indirectly, through the issuance of securities by the SPFC or any other person; or
A person provides one (1) or more letters of credit or other assets for the benefit of the SPFC; that the commissioner authorizes the SPFC to treat such letters of credit or other assets as admitted assets for purposes of the SPFC's annual report; and all or any part of such proceeds, letters of credit, or assets, as applicable, are used to fund the SPFC's obligations under a reinsurance contract with a ceding insurer; and
Do not include the issuance of a letter of credit for the benefit of the commissioner to satisfy all or part of the SPFC's capital and surplus requirements under §56-13-406;
“Management” means the board of directors, managing board, or other individual or individuals vested with overall responsibility for the management of the affairs of the SPFC, including the election and appointment of officers or other of those agents to act on behalf of the SPFC;
“Organizational document” means the SPFC's articles of incorporation, articles of charter, articles of organization, bylaws, operating agreement, or other formation documents as required by the secretary of state that establish the SPFC as a legal entity or prescribes its existence;
“Parent” means any corporation, limited liability company, partnership, or individual that directly or indirectly owns, controls, or holds with power to vote more than fifty percent (50%) of the outstanding voting securities of an SPFC;
“Protected cell” means a separate account established and maintained by an SPFC for one (1) SPFC contract and the accompanying insurance securitization with a counterparty;
“Securities” means those different types of debt obligations, equity, surplus certificates, surplus notes, funding agreements, derivatives, and other legal forms of financial instruments;
“SPFC” or “special purpose financial captive” means a captive insurance company that has received a certificate of authority from the commissioner for the limited purposes provided for in this part;
“SPFC contract” means a contract between the SPFC and the counterparty pursuant to which the SPFC agrees to provide insurance or reinsurance protection to the counterparty for risks associated with the counterparty's insurance or reinsurance business;
“SPFC securities” means the securities issued by a SPFC; and
“Surplus note” means an unsecured subordinated debt obligation deemed to be a surplus certificate under this title and otherwise possessing characteristics consistent with paragraph 3 of the Statement of Statutory Accounting Principles No. 41, as amended, National Association of Insurance Commissioners (NAIC).