(a) “Contested case” means a proceeding in which the legal rights, duties, obligations, or privileges of a party are required by law to be determined by the Court after an opportunity for hearing.
(b) “Control” including the terms “controlling”, “controlled by”, and “under common control with” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or non-management services, or otherwise, unless the power is the result of an official position with or corporate office held by the person. Control is presumed to exist if a person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing ten percent or more of the voting securities of another person. This presumption may be rebutted by a showing that control does not exist. Notwithstanding other provisions of this section, for purposes of this subchapter, the fact that an SPFC exclusively provides reinsurance to a ceding insurer under an SPFC contract is not by itself sufficient grounds for a finding that the SPFC and ceding insurer are under common control.
(c) “Counterparty” means a person, other than a natural person, which may but need not be the parent or an affiliate of the SPFC that enters into a contract with a SPFC.
(d) “Court” means the Superior Court of the Virgin Islands.
(e) “Fair value” means:
(1) as to cash, the amount of it; and
(2) as to an asset other than cash:
(A) the amount at which that asset could be bought or sold in a current transaction between arms length, willing parties;
(B) the quoted mid-market price for the asset in active markets must be used if available; and
(C) if quoted mid-market prices are not available, a value determined using the best information available considering values of similar assets and other valuation methods, such as present value of future cash flows, historical value of the same or similar assets, or comparison to values of other asset classes, the value of which have been historically related to the subject asset.
(f) “Insolvency” or “insolvent” means that the SPFC or one 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 SAM previously has established by order other criteria for determining the solvency of the SPFC or one or more of its protected cells, in which case the SPFC is insolvent if it fails to meet that criteria.
(g) “Insurance securitization” means a package of related risk transfer instruments, capital market offerings, and facilitating administrative agreements by which proceeds are obtained by an SPFC directly or indirectly through the issuance of securities, which complies with applicable securities law, and which proceeds are held in trust pursuant to the provisions of this subchapter to secure the obligations of the SPFC under one or more SPFC contracts with a counterparty, where investment risk to the holders of these securities is contingent upon the obligations of the SPFC to the counterparty under the SPFC contract in accordance with the transaction terms.
(h) “Management” means the board of directors or other parties 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.
(i) “Organizational document” means the SPFC's articles of incorporation, articles of organization, bylaws, operating agreement, or other foundational documents that establish the SPFC as a legal entity or prescribes its existence.
(j) “Permitted investments” means those investments that meet the qualifications pursuant to section 6665 of this subchapter.
(k) “Qualified Manager” means an entity formed in the Territory that is owned at least 51 percent by residents of the Territory who possess sufficient experience in the businesses of SPFC transactions, insurance transactions, or other relevant experience as determined by the SAM, and subject to the regulations promulgated by the SAM.
(l) “Qualified United States financial institution” means, for purposes of meeting the requirements of a trustee as specified in section 6665 of this subchapter, a financial institution that is eligible to act as a fiduciary of a trust, and is:
(1) organized or, in the case of a United States branch or agency office of a foreign banking organization, is licensed under the laws of the United States or the Territory; and
(2) regulated, supervised, and examined by federal, state or Territorial authorities having regulatory authority over banks and trust companies.
(m) “Securities”, or in the singular “Security”, means those different types of debt obligations, equity, surplus certificates, surplus notes, funding agreements, derivatives, and other legal forms of financial instruments. Security also means any note, stock, treasury stock, bond; debenture; evidence of indebtedness; certificate of interest or participation in any profit-sharing agreement; collateral-trust certificate; reorganization certificate or subscription; transferable share; investment contract, including pyramid promotion which includes any plan or operation for the sale or distribution or property, services, or any other thing of value wherein a person for a consideration is offered an opportunity to obtain a benefit which is based in whole or in part on the inducement, by himself or herself or by others, of additional persons to purchase the same or a similar opportunity; voting-trust certificate; certificate of deposit for a security; certificate of interest of participation in an oil, gas or mining title or lease or in payments out of production under such a title or lease; options on commodities; or, in general, any interest or instrument commonly known as a “security”, or any certificate of interest or participation in, temporary or interim certificate, for, receipt for guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing. “Security” does not include any insurance or endowment policy or annuity contract under which an insurance company promises to pay money either in a lump sum or periodically for life or for some other specified period.
(n) “Securities commissioner” means the Lieutenant Governor or the Lieutenant Governor's designee.
(o) “SPFC” or “Special Purpose Financial Captive” means an entity as defined in section 6601(a)(26) of this chapter which has received a license from the SAM for the limited purposes provided for in this subchapter.
(p) “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.
(q) “SPFC securities” means the securities issued by an SPFC.
(r) “Surplus note” means an unsecured subordinated debt obligation deemed to be a surplus certificate 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).
(s) “Third party” means a person unrelated to an SPFC or its counterparty, or both, that has been aggrieved by a decision of the SAM regarding that SPFC or its activities.