Section 38-14-30 - DefinitionsFor purposes of this chapter, the following terms have the indicated meanings:
(1) "Aggregate limit" means the maximum sum payable to the ceding insurer under a SPRV contract.(2) "Ceding insurer" means one or more insurers or reinsurers under common control that enters into a SPRV contract with a SPRV.(3) "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 nonmanagement services, or otherwise, unless the power is the result of an official position with or corporate office held by the person. Control must be presumed to exist if any 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 any other person. This presumption may be rebutted by a showing that control does not, in fact, exist. Notwithstanding the foregoing, for purposes of this chapter, the fact that a SPRV exclusively provides reinsurance to a ceding insurer under a SPRV contract must not by itself be sufficient grounds for a finding that the SPRV or the SPRV organizer or owner is controlled by or under common control with the ceding insurer.(4) "Fair value" means:(a) as to cash, the amount of it; and(b) as to an asset other than cash:(1) the amount at which that asset could be bought or sold in a current transaction between arms-length, willing parties;(2) the quoted market price for the asset in active markets should be used if available; and(3) if quoted market prices are not available, a value determined using the best information available considering values of like 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.(5) "Fully funded" means that, with respect to a SPRV contract, the fair value of the assets held in trust by or on behalf of the SPRV under the SPRV contract on the date on which the SPRV contract is effected, equals or exceeds the aggregate limit as defined in this chapter.(6) "Indemnity trigger" means a transaction term by which the SPRV's obligation to pay the ceding insurer for losses covered by a SPRV contract is triggered by the ceding insurer incurring a specified level of losses.(7) "Insolvency" or "insolvent" means that the SPRV is unable to pay its obligations when they are due, unless those obligations are the subject of a bona fide dispute.(8) "Nonindemnity trigger" means a transaction term by which the SPRV's obligation to pay the ceding insurer under a SPRV contract arises from the occurrence or existence of some event or condition other than the ceding insurer incurring a specified level of losses under its insurance or reinsurance contracts.(9) "Permitted investments" means those investments that meet the qualifications pursuant to Section 38-14-170 of this chapter.(10) "Qualified United States financial institution" means, for purposes of meeting the requirements of a trustee as specified in Section 38-12-60, a financial institution that is eligible to act as a fiduciary of a trust, and is: (a) 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 any state of the United States; and(b) regulated, supervised, and examined by federal or state authorities having regulatory authority over banks and trust companies.(11) "SPRV" or "Special Purpose Reinsurance Vehicle" means an entity domiciled in and organized under the laws of South Carolina, which has received a Limited Certificate of Authority from the director, or his designee, under this chapter exclusively for the limited purpose of entering into and effectuating SPRV insurance securitizations, SPRV contracts, and other related transactions permitted by this chapter.(12) "SPRV contract" means a contract between the SPRV and the ceding insurer pursuant to which the SPRV agrees to pay the ceding insurer an agreed amount upon the occurrence of a triggering event.(13) "SPRV insurance securitization" means a package of related risk transfer instruments and facilitating administrative agreements by which proceeds are obtained by a SPRV through the issuance of securities, which proceeds are held in trust pursuant to the requirements of this chapter to secure the obligations of the SPRV under a SPRV contract with one or more ceding insurers, wherein the SPRV's obligation to return the full initial investment to the holders of such securities, pursuant to the transaction terms, is contingent upon the funds not being used to pay the obligations of the SPRV to the ceding insurers under the SPRV contract.(14) "SPRV organizer" means one or more persons who have organized or intend to organize a SPRV, under authority obtained pursuant to Section 38-14-40 of this chapter.(15) "SPRV securities" means the securities issued by a SPRV.(16) "Triggering event" means an event or condition that, if and when it occurs or exists, obligates the SPRV to make a payment to the ceding insurer under the provisions of a SPRV contract.2002 Act No. 259, Section 1, eff 5/20/2002.