1. Limited certificate of authority. In order to securitize one or more ceding insurers’ risks, a special purpose reinsurance vehicle shall obtain a limited certificate of authority from the superintendent according to the provisions of this section.

[PL 2003, c. 249, §2 (NEW).]

Terms Used In Maine Revised Statutes Title 24-A Sec. 782

  • Affidavit: A written statement of facts confirmed by the oath of the party making it, before a notary or officer having authority to administer oaths.
  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Ceding insurer: means an insurer that enters into a special purpose reinsurance vehicle contract with a special purpose reinsurance vehicle and includes a reinsurer retroceding assumed reinsurance to a special purpose reinsurance vehicle. See Maine Revised Statutes Title 24-A Sec. 781
  • Contract: A legal written agreement that becomes binding when signed.
  • contract: means a contract between the special purpose reinsurance vehicle and the ceding insurer pursuant to which the special purpose reinsurance vehicle agrees to pay the ceding insurer an agreed amount upon the occurrence of a triggering event. See Maine Revised Statutes Title 24-A Sec. 781
  • in writing: include printing and other modes of making legible words. See Maine Revised Statutes Title 1 Sec. 72
  • insurance securitization: means a package of related risk transfer instruments, capital market offerings and facilitating administrative agreements by which proceeds are obtained by a special purpose reinsurance vehicle directly or indirectly through the issuance of securities and are held in trust or under the control of the ceding insurer pursuant to the requirements of this subchapter to secure the obligations of the special purpose reinsurance vehicle under one or more special purpose reinsurance vehicle contracts with one or more ceding insurers, when investment risk to the holders of these securities is contingent upon the obligations of the special purpose reinsurance vehicle to the ceding insurer or ceding insurers under the special purpose reinsurance vehicle contract in accordance with the transaction terms. See Maine Revised Statutes Title 24-A Sec. 781
  • Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
  • organizer: means one or more persons that have organized or intend to organize a special purpose reinsurance vehicle under authority obtained as specified in this subchapter. See Maine Revised Statutes Title 24-A Sec. 781
  • Protected cell: means a separate account established and maintained by a special purpose reinsurance vehicle for one special purpose reinsurance vehicle contract and the accompanying insurance securitization with a ceding insurer as further provided for in section 784?A. See Maine Revised Statutes Title 24-A Sec. 781
  • Reinsurance vehicle: means a special purpose reinsurance vehicle. See Maine Revised Statutes Title 24-A Sec. 781
  • Special purpose reinsurance vehicle: means an entity domiciled in and organized under the laws of this State that has received a limited certificate of authority from the superintendent under this subchapter exclusively for the limited purpose of entering into and effectuating special purpose reinsurance vehicle insurance securitizations, special purpose reinsurance vehicle contracts and other related transactions permitted by this subchapter. See Maine Revised Statutes Title 24-A Sec. 781
  • Triggering event: means an event or condition that if and when it occurs or exists obligates the special purpose reinsurance vehicle to make a payment to the ceding insurer under the provisions of a special purpose reinsurance vehicle contract. See Maine Revised Statutes Title 24-A Sec. 781
2. Application. A special purpose reinsurance vehicle organizer seeking to obtain a limited certificate of authority for a special purpose reinsurance vehicle shall file an application for a limited certificate of authority with the superintendent and pay the application fee specified in section 601, subsection 1. A complete application must include the following:
A. An affidavit verifying that each prospective organizer meets the requirements of this subchapter; [PL 2003, c. 249, §2 (NEW).]
B. A representation that the prospective organizer intends to form a special purpose reinsurance vehicle that operates in accordance with the requirements under this subchapter; [PL 2003, c. 249, §2 (NEW).]
C. The proposed name of the special purpose reinsurance vehicle; [PL 2003, c. 249, §2 (NEW).]
D. Biographical affidavits of all organizers setting forth their legal names, any names under which they have conducted or are conducting their affairs and any names of any person affiliated, as defined in section 222, with any organizer, together with such other biographical information as the superintendent may request; [PL 2003, c. 249, §2 (NEW).]
E. The source and form of the minimum capital to be contributed to the special purpose reinsurance vehicle; [PL 2003, c. 249, §2 (NEW).]
F. Any persons with which the special purpose reinsurance vehicle is or upon formation will be affiliated as defined in section 222; [PL 2003, c. 249, §2 (NEW).]
G. The names and biographical affidavits of the proposed members of the board of directors and principal officers of the special purpose reinsurance vehicle pursuant to section 790, setting forth their legal names, any names under which they have conducted or are conducting their affairs and any names of any person affiliated, as defined in section 222, with any proposed director or officer, together with such other biographical information as the superintendent may request; [PL 2003, c. 249, §2 (NEW).]
H. A plan of operation, consisting of a description of the contemplated insurance securitization or securitizations, the special purpose reinsurance vehicle contract and related transactions, which must include:

(1) Draft documentation or at the discretion of the superintendent a written summary of all material agreements that are planned in order to effectuate the insurance securitization or securitizations and the related contract, including the names of the ceding insurers, the nature of the risks being assumed and the maximum amounts, purpose and nature and the interrelationships of the various transactions required to effectuate the insurance securitization or securitizations;
(2) The investment strategy of the special purpose reinsurance vehicle and a representation that the investment strategy complies with the investment requirements set forth in this subchapter and that the strategy includes investment practices or other provisions to preserve asset values that facilitate attainment of full funding during the term of the insurance securitization or securitizations with assets that can be monetized in response to a triggering event without a substantial loss in value;
(3) A description of the method by which losses covered by the contract that may develop after the termination of the contract period are to be addressed under the provisions of the contract;
(4) If applicable, a representation that the special purpose reinsurance vehicle contract with the ceding insurer, the security agreement or trust agreement under section 784, subsection 4, paragraph D?1 or E and any trusts holding assets that secure the obligations of the special purpose reinsurance vehicle under the contract are structured in accordance with the requirements under this subchapter ; and
(5) If protected cells are to be used, a description of the procedures for maintaining and safeguarding separate accounts as required by section 784?A, subsection 1 and an application for approval of each initial protected cell as required by section 784?A, subsection 2. [PL 2007, c. 386, §7 (AMD).]

[PL 2007, c. 386, §7 (AMD).]

3. Additional information. The superintendent shall notify the special purpose reinsurance vehicle organizer if any additional information is needed in order to review the application and shall approve or deny the application within 60 days after determining that the application is complete.
A. The superintendent shall approve the application and issue a limited certificate of authority under this section if the superintendent finds that:

(1) The proposed plan of operation provides a reasonable expectation of a successful operation;
(2) The terms of the contract and related transactions comply with this subchapter and any applicable rules adopted by the superintendent;
(3) The proposed plan of operation is not hazardous to any ceding insurer or to policyholders; and
(4) The insurance regulator of the state of domicile of each ceding insurer has notified the superintendent in writing that it has not disapproved the transaction. The superintendent may waive this requirement for a ceding insurer whose domiciliary state does not have a substantially similar law if the superintendent finds that the domiciliary regulator has had notice and adequate opportunity to review the proposal and has not objected. [PL 2003, c. 249, §2 (NEW).]
B. In evaluating the expectation of a successful operation, the superintendent shall consider, among other factors, whether the proposed organizer, directors and officers of the proposed special purpose reinsurance vehicle are of good character and not reasonably believed to be affiliated, directly or indirectly, through ownership, control, management, reinsurance transactions or other insurance or business relations, with any person known to have been involved in the improper manipulation of assets, accounts or reinsurance. [PL 2003, c. 249, §2 (NEW).]
C. If the superintendent denies the application or if the superintendent withholds consent to a proposed transaction involving a domestic ceding insurer under a similar law of another jurisdiction the proposed organizer or ceding insurer has the right to a hearing upon a timely request filed pursuant to section 229. [PL 2003, c. 249, §2 (NEW).]

[PL 2003, c. 249, §2 (NEW).]

4. Approval. Upon approval of the application by the superintendent and the issuance of a limited certificate of authority, the special purpose reinsurance vehicle may be acquired or formed and, in accordance with the approved plan of operation, the special purpose reinsurance vehicle may enter into contracts and conduct other activities within the scope of the filed plan of operation.

[PL 2003, c. 249, §2 (NEW).]

5. Reinsurance activities. The limited certificate of authority must state that the special purpose reinsurance vehicle’s authorization to be involved in the business of insurance is limited only to the reinsurance activities that the special purpose reinsurance vehicle is allowed to conduct pursuant to this subchapter.

[PL 2003, c. 249, §2 (NEW).]

6. Documentation of insurance securitization. The special purpose reinsurance vehicle organizer shall provide a complete set of the documentation of the insurance securitization to the superintendent upon closing of any transactions, including an opinion of legal counsel with respect to compliance with this subchapter and any other applicable laws as of the effective date of any transaction.

[PL 2007, c. 386, §8 (AMD).]

7. Changes in plan of operation. Any material change to the special purpose reinsurance vehicle’s plan of operation filed pursuant to subsection 2, including, but not limited to, the initiation of a new insurance securitization to continue the activities of the special purpose reinsurance vehicle pursuant to this subchapter after expiration and full satisfaction of the initial securitization transactions, requires prior approval of the superintendent. A change in the counterparty to swap transactions for an existing insurance securitization as allowed under this subchapter is not considered a material change unless the special purpose reinsurance vehicle’s managers know or should know that the new counterparty presents a substantial risk of default.

[PL 2007, c. 386, §9 (NEW).]

SECTION HISTORY

PL 2003, c. 249, §2 (NEW). PL 2007, c. 386, §§7-9 (AMD).
  Previous section
Next section  
 Subchapter 6 Contents