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Illinois Compiled Statutes

Information maintained by the Legislative Reference Bureau
Updating the database of the Illinois Compiled Statutes (ILCS) is an ongoing process. Recent laws may not yet be included in the ILCS database, but they are found on this site as Public Acts soon after they become law. For information concerning the relationship between statutes and Public Acts, refer to the Guide.

Because the statute database is maintained primarily for legislative drafting purposes, statutory changes are sometimes included in the statute database before they take effect. If the source note at the end of a Section of the statutes includes a Public Act that has not yet taken effect, the version of the law that is currently in effect may have already been removed from the database and you should refer to that Public Act to see the changes made to the current law.

INSURANCE
(215 ILCS 5/) Illinois Insurance Code.

215 ILCS 5/176

    (215 ILCS 5/176) (from Ch. 73, par. 788)
    Sec. 176. Pending actions.
    Whenever a company agrees to assume and carry out directly with the policyholder any of the policy obligations of the ceding company under a reinsurance agreement, any claim existing or action or proceeding pending arising out of such policy, by or against the ceding company with respect to such obligations may be prosecuted to judgment as if such reinsurance agreement had not been made, or the assuming company may be substituted in place of the ceding company.
(Source: Laws 1937, p. 696.)

215 ILCS 5/177

    (215 ILCS 5/177) (from Ch. 73, par. 789)
    Sec. 177. Transfer of deposits.
    The provisions of section 170 applicable to the transfer of deposits of legal reserves on policies of merged or consolidated companies shall apply to the transfer of deposits of such reserves of a ceding company in the case of a reinsurance agreement, and for the purposes of determining the conditions and requirements for such transfer the assuming company shall be regarded as a surviving or new company and the ceding company shall be regarded as a company that has been merged or consolidated.
(Source: Laws 1937, p. 696.)

215 ILCS 5/178

    (215 ILCS 5/178)
    Sec. 178. (Repealed).
(Source: Laws 1937, p. 696. Repealed by P.A. 98-692, eff. 7-1-14; 98-969, eff. 1-1-15.)

215 ILCS 5/179

    (215 ILCS 5/179) (from Ch. 73, par. 791)
    Sec. 179. Payment of fees to officer or director prohibited.
    (1) No director or officer of any company, party to a reinsurance agreement, except as fully expressed in the reinsurance agreement, shall receive any fee, commission, other compensation or valuable consideration whatever, directly or indirectly, for in any manner aiding, promoting or assisting in the negotiation of such reinsurance agreement.
    (2) Any person violating the provisions of this section shall be guilty of a Class A misdemeanor.
(Source: P.A. 77-2699.)

215 ILCS 5/179a

    (215 ILCS 5/179a)
    Sec. 179a. Managing general agent prohibition.
    (a) No managing general agent, as defined in Section 141a, shall receive any compensation or remuneration for, or in any manner profit from, obtaining or arranging reinsurance for a domestic company with respect to business underwritten by that managing general agent.
    (b) Any person violating the provisions of this Section is guilty of a Class A misdemeanor.
(Source: P.A. 88-364.)

215 ILCS 5/179b

    (215 ILCS 5/179b)
    Sec. 179b. Reinsurance committee. Each domestic company that cedes any reinsurance must establish and maintain a reinsurance committee with not fewer than 3 members, at least one of which must be a member of the company's board of directors. The committee shall review and approve all treaty reinsurance placements and review and approve guidelines for facultative placements for the company, with the exception of a reinsurance agreement in which the aggregate premium ceded in any one year is less than 1% of the company's annual gross written premium. The committee shall give special attention to reinsurers' financial strength and performance record.
(Source: P.A. 88-364.)

215 ILCS 5/Art. XI.5

 
    (215 ILCS 5/Art. XI.5 heading)
ARTICLE XI 1/2. PROTECTED CELL COMPANIES

215 ILCS 5/179A-1

    (215 ILCS 5/179A-1)
    Sec. 179A-1. Short title. This Article may be cited as the Protected Cell Company Law.
(Source: P.A. 91-278, eff. 7-23-99.)

215 ILCS 5/179A-5

    (215 ILCS 5/179A-5)
    Sec. 179A-5. Purpose. This Article is adopted to provide a basis for the creation of protected cells by a domestic insurer as one means of accessing alternative sources of capital and achieving the benefits of insurance securitization. Investors in fully funded insurance securitization transactions provide funds that are available to pay the insurer's insurance obligations or to repay the investors or both. The creation of protected cells is intended to be a means to achieve more efficiencies in conducting insurance securitizations.
    Under the terms of the typical debt instrument underlying an insurance securitization transaction, prepaid principal is repaid to the investor on a specified maturity date with interest, unless a trigger event occurs. The insurance securitization proceeds secure both the protected cell company's insurance obligations if a trigger event occurs, as well as the protected cell company's obligation to repay the insurance securitization investors if a trigger event does not occur. Insurance securitization transactions have been performed through alien companies in order to utilize efficiencies available to alien companies that are not currently available to domestic companies. This Article is adopted in order to create more efficiency in conducting insurance securitization, to allow domestic companies easier access to alternative sources of capital, and to promote the benefits of insurance securitization generally.
(Source: P.A. 91-278, eff. 7-23-99; 92-74, eff. 7-12-01.)

215 ILCS 5/179A-10

    (215 ILCS 5/179A-10)
    Sec. 179A-10. Definitions.
    "Domestic company" means an insurance company domiciled in the State of Illinois.
    "Fully funded" means that, with respect to any exposure attributed to a protected cell, the market value of the protected cell assets, on the date on which the insurance securitization is effected, equals or exceeds the maximum possible exposure attributable to the protected cell with respect to those exposures.
    "General account" means the assets and liabilities of a protected cell company other than protected cell assets and protected cell liabilities.
    "Indemnity trigger" means a transaction term by which relief of the issuer's obligation to repay investors is triggered by its incurring a specified level of losses under its insurance or reinsurance contracts.
    "Market value" has the meaning given that term in Article VIII of this Code (Investments of Domestic Companies).
    "Non-indemnity trigger" means a transaction term by which relief of the issuer's obligation to repay investors is triggered solely by some event or condition other than the individual protected cell company incurring a specified level of losses under its insurance or reinsurance contracts.
    "Protected cell" means an identified pool of assets and liabilities of a domestic company segregated and insulated by means of this Article from the remainder of the company's assets and liabilities.
    "Protected cell account" means a specifically identified bank or custodial account established by a protected cell company for the purpose of segregating the protected cell assets of one protected cell from the protected cell assets of other protected cells and from the assets of the protected cell company's general account.
    "Protected cell assets" means all assets, contract rights, and general intangibles identified with and attributable to a specific protected cell of a protected cell company.
    "Protected cell company" means a domestic company that has one or more protected cells.
    "Protected cell company insurance securitization" means the issuance of debt instruments, the proceeds from which support the exposures attributed to the protected cell, by a protected cell company where repayment of principal or interest, or both, to investors pursuant to the transaction terms is contingent upon the occurrence or nonoccurrence of an event with respect to which the protected cell company is exposed to loss under insurance or reinsurance contracts it has issued.
    "Protected cell liabilities" means all liabilities and other obligations identified with and attributable to a specific protected cell of a protected cell company.
(Source: P.A. 91-278, eff. 7-23-99; 92-74, eff. 7-12-01.)

215 ILCS 5/179A-15

    (215 ILCS 5/179A-15)
    Sec. 179A-15. Establishment of protected cells.
    (a) A domestic company may, with the prior written approval by the Director of a plan of operation submitted by the domestic company with respect to each protected cell, establish one or more protected cells in connection with an insurance securitization. Upon the written approval by the Director of the plan of operation, which shall include, but not be limited to, the specific business and investment guidelines of the protected cell, the protected cell company may, in accordance with the approved plan of operation, attribute to the protected cell insurance obligations with respect to its insurance business and obligations relating to the insurance securitization and assets to fund those obligations. A protected cell shall have its own distinct name or designation, which shall include the words "protected cell". The protected cell company shall transfer all assets attributable to a protected cell to one or more separately established and identified protected cell accounts bearing the name or designation of that protected cell. Protected cell assets shall be held in the protected cell accounts for the purpose of satisfying the obligations of that protected cell.
    (b) All attributions of assets and liabilities between a protected cell and the general account shall be in accordance with the plan of operation approved by the Director. No other attribution of assets or liabilities may be made by a protected cell company between the protected cell company's general account and its protected cells. Any attribution of assets and liabilities between the general account and a protected cell or from investors in the form of principal on a debt instrument issued by a protected cell company shall be in cash or in readily marketable securities with established market values.
    (c) The creation of a protected cell does not create, in respect of that protected cell, a legal person separate from the protected cell company. Amounts attributed to a protected cell under this Article, including assets transferred to a protected cell account, are owned by the protected cell company and the protected cell company may not be, nor hold itself out to be, a trustee with respect to those protected cell assets of that protected cell account. Notwithstanding the foregoing, the company may allow for a security interest to attach to protected cell assets or a protected cell account when in favor of a creditor of the protected cell and otherwise allowed under applicable law.
    (d) This Article shall not be construed to prohibit the protected cell company from contracting with or arranging for an investment advisor, commodity trading advisor, or other third party to manage the protected cell assets of a protected cell, provided that all remuneration, expenses, and other compensation of the third party advisor or manager are payable from the protected cell assets of that protected cell and not from the protected cell assets of other protected cells or the assets of the protected cell company's general account.
    (e) A protected cell company shall establish administrative and accounting procedures necessary to properly identify the one or more protected cells of the protected cell company and the protected cell assets and protected cell liabilities attributable to the protected cells. It shall be the duty of the directors of a protected cell company to:
        (1) keep protected cell assets and protected cell
    
liabilities separate and separately identifiable from the assets and liabilities of the protected cell company's general account; and
        (2) keep protected cell assets and protected cell
    
liabilities attributable to one protected cell separate and separately identifiable from protected cell assets and protected cell liabilities attributable to other protected cells.
    If this Section is violated, the remedy of tracing shall be applicable to protected cell assets when commingled with protected cell assets of other protected cells or the assets of the protected cell company's general account. The remedy of tracing shall not be construed as an exclusive remedy.
    (f) The protected cell company shall, when establishing a protected cell, attribute to the protected cell assets with a value at least equal to the reserves and other insurance liabilities attributed to that protected cell.
(Source: P.A. 91-278, eff. 7-23-99; 92-74, eff. 7-12-01.)

215 ILCS 5/179A-20

    (215 ILCS 5/179A-20)
    Sec. 179A-20. Use and operation of protected cells.
    (a) The protected cell assets of any protected cell may not be charged with liabilities arising out of any other business the protected cell company may conduct. All contracts or other documentation reflecting protected cell liabilities shall clearly indicate that only the protected cell assets are available for the satisfaction of those protected cell liabilities.
    (b) The income, gains, and losses, realized or unrealized, from protected cell assets and protected cell liabilities must be credited to or charged against the protected cell without regard to other income, gains, or losses of the protected cell company, including income, gains, or losses of other protected cells. Amounts attributed to a protected cell and accumulations thereon may be invested and reinvested without regard to any requirements or limitations of Article VIII of this Code (Investments of Domestic Companies), and the investments in a protected cell or cells may not be taken into account in applying the investment limitations otherwise applicable to the investments of the protected cell company.
    (c) Assets attributed to a protected cell must be valued at their market value on the date of valuation, or if there is no readily available market, then as provided in the contract or the rules or other written documentation applicable to the protected cell.
    (d) A protected cell company shall, in respect of any of its protected cells, engage in fully funded indemnity-triggered insurance securitization to support in full the protected cell exposures attributable to that protected cell. A protected cell company insurance securitization that is not indemnity-triggered may qualify as an insurance securitization under the terms of this Article only after the Director adopts rules addressing the methods of:(i) funding of the portion of the risk that is not indemnity based, (ii) accounting, and disclosure, (iii) risk-based capital treatment, and (iv) assessing risk associated with such securitizations. A protected cell company insurance securitization that is not fully funded, whether indemnity triggered or non-indemnity triggered, is prohibited. Protected cell assets may be used to pay interest or other consideration on any outstanding debt or other obligation attributable to that protected cell, and nothing in this subsection shall be construed or interpreted to prevent a protected cell company from entering into a swap agreement or other transaction for the account of the protected cell that has the effect of guaranteeing such interest or other consideration.
    (e) In all protected cell company insurance securitizations, the contracts or other documentation effecting such transaction shall contain provisions identifying the protected cell to which the transaction will be attributed. In addition, the contracts or other documentation shall clearly disclose that the assets of that protected cell, and only those assets, are available to pay the obligations of that protected cell. Notwithstanding the foregoing, and subject to the provisions of this Article and any other applicable law or rule, the failure to include such language in the contracts or other documentation shall not be used as the sole basis by creditors, reinsurers, or other claimants to circumvent the provisions of this Article.
    (f) A protected cell company may attribute to a protected cell account only the insurance obligations relating to the protected cell company's general account. A protected cell may not issue insurance or reinsurance contracts directly to policyholders or reinsureds or have any obligation to the policyholders or reinsureds of the protected cell company's general account.
    (g) At the cessation of business of a protected cell, the protected cell company shall voluntarily close out the protected cell account in accordance with a plan approved by the Director.
(Source: P.A. 91-278, eff. 7-23-99; 92-74, eff. 7-12-01.)

215 ILCS 5/179A-25

    (215 ILCS 5/179A-25)
    Sec. 179A-25. Reach of creditors and other claimants.
    (a) Protected cell assets are available only to the creditors of the protected cell company who are creditors in respect of that protected cell and entitled, in conformity with the provisions of this Article, to have recourse to the protected cell assets attributable to that protected cell. Protected cell assets shall be absolutely protected from the creditors of the protected cell company who are not creditors in respect of that protected cell and who, accordingly, are not entitled to have recourse to the protected cell assets attributable to that protected cell. Creditors with respect to a protected cell shall not be entitled to have recourse against the protected cell assets of other protected cells or the assets of the protected cell company's general account.
    Protected cell assets are available only to creditors of a protected cell company after all protected cell liabilities have been extinguished or otherwise provided for in accordance with the plan of operation relating to that protected cell.
    (b) When an obligation of a protected cell company to a person arises from a transaction, or is otherwise imposed, in respect of a protected cell:
        (1) that obligation of the protected cell company
    
shall extend only to the protected cell assets attributable to that protected cell, and the person shall, in respect of that obligation, be entitled to have recourse only to the protected cell assets attributable to that protected cell; and
        (2) that obligation of the protected cell company
    
shall not extend to the protected cell assets of any other protected cell or the assets of the company's general account, and that person shall not, in respect of that obligation, be entitled to have recourse to the protected cell assets of any other protected cell or the assets of the company's general account.
    (c) When an obligation of a protected cell company relates solely to the general account, the obligation of the protected cell company shall extend only to, and that creditor shall, in respect of that obligation, be entitled to have recourse only to, the assets of the protected cell company's general account.
    (d) The activities, assets, and obligations relating to a protected cell are not subject to the provisions of Article XXXIII1/2 (Illinois Life and Health Guaranty Association Law) or Article XXXIV (Illinois Insurance Guaranty Fund), and neither a protected cell nor a protected cell company shall be assessed by or otherwise be required to contribute to any guaranty fund or guaranty association in this State with respect to the activities, assets, or obligations of a protected cell. Nothing in this subsection shall affect the activities or obligations of a company's general account.
    (e) In no event shall the establishment of one or more protected cells alone constitute or be deemed to be a fraudulent conveyance, an intent by the protected cell company to defraud creditors, or the carrying out of business by the protected cell company for any other fraudulent purpose.
(Source: P.A. 91-278, eff. 7-23-99; 92-74, eff. 7-12-01.)

215 ILCS 5/179A-30

    (215 ILCS 5/179A-30)
    Sec. 179A-30. Rehabilitation and liquidation of protected cell companies.
    (a) Notwithstanding any contrary provision in this Code, the rules promulgated under this Code, or any other applicable law or rule, upon any order of rehabilitation, conservation, or liquidation of a protected cell company, the receiver shall be bound to deal with the protected cell company's assets and liabilities, including protected cell assets and protected cell liabilities, in accordance with the requirements set forth in this Article.
    (b) With respect to amounts recoverable under a protected cell company insurance securitization, the amount recoverable by the receiver shall not be reduced or diminished as a result of the entry of an order of rehabilitation, conservation, or liquidation with respect to the protected cell company notwithstanding any provisions to the contrary in the contracts or other documentation governing the protected cell company insurance securitization.
(Source: P.A. 91-278, eff. 7-23-99; 92-74, eff. 7-12-01.)

215 ILCS 5/179A-35

    (215 ILCS 5/179A-35)
    Sec. 179A-35. No transaction of an insurance business. A protected cell insurance securitization shall not be deemed to be an insurance or reinsurance contract. An investor in a protected cell company insurance securitization shall not, by sole means of such investment, be deemed to be transacting an insurance business in this State. The underwriters or selling agents (and their partners, directors, officers, members, managers, employees, agents, representatives, and advisors) involved in a protected cell company insurance securitization shall not be deemed to be conducting an insurance or reinsurance agency, brokerage, intermediary, advisory, or consulting business by virtue of their activities in connection therewith.
(Source: P.A. 91-278, eff. 7-23-99; 92-74, eff. 7-12-01.)

215 ILCS 5/179A-40

    (215 ILCS 5/179A-40)
    Sec. 179A-40. Rules. The Director may promulgate reasonable rules as may be necessary to effectuate the purposes of this Article.
(Source: P.A. 91-278, eff. 7-23-99.)

215 ILCS 5/Art. XIE

 
    (215 ILCS 5/Art. XIE heading)
ARTICLE XIE. Special Purpose Reinsurance Vehicle Law

215 ILCS 5/179E-1

    (215 ILCS 5/179E-1)
    Sec. 179E-1. Short title. This Article may be cited as the Special Purpose Reinsurance Vehicle Law.
(Source: P.A. 92-124, eff. 7-20-01.)

215 ILCS 5/179E-5

    (215 ILCS 5/179E-5)
    Sec. 179E-5. Purpose. This Article is adopted to provide for the creation of Special Purpose Reinsurance Vehicles ("SPRV") exclusively to facilitate the securitization of one or more ceding insurers' risk as a means of accessing alternative sources of capital and achieving the benefits of securitization. Investors in fully funded insurance securitization transactions provide funds that are available to the SPRV to secure the aggregate limit under an SPRV contract that provides coverage against the occurrence of a triggering event. The creation of SPRVs is intended to achieve greater efficiencies in conducting insurance securitizations, to diversify and broaden insurers' access to sources of risk bearing capital, and to make insurance securitization generally available on reasonable terms to as many U.S. insurers as possible.
    Under the terms of the typical securities underlying an insurance securitization transaction, proceeds from the issuance of securities are repaid to the investor on a specified maturity date with interest or dividends unless a triggering event occurs. The insurance securitization proceeds are available to pay the SPRV's obligations to the ceding insurer if the triggering event occurs, as well as being available to satisfy the SPRV's obligation to repay the insurance securitization investors if a triggering event does not occur. Insurance securitization transactions have been performed by alien companies to utilize efficiencies available to those alien companies that are not currently available to domestic companies. This Article is adopted to allow more efficiency in conducting insurance securitizations, to allow ceding insurers easier access to alternative sources of risk bearing capital, and to promote the benefits of insurance securitization to U.S. insurers.
(Source: P.A. 92-124, eff. 7-20-01.)

215 ILCS 5/179E-10

    (215 ILCS 5/179E-10)
    Sec. 179E-10. Exemption from insurance laws within limitations.
    (a) An SPRV is subject to the following:
        (1) Articles I, XII 1/2, XXIV, XXV (Sections 408 and
    
412 only), and XXVIII (except for Sections 445, 445.1, 445.2, 445.3, 445.4, and 445.5) of this Code; and
        (2) Sections 132.1 through 134, 137 through 140,
    
155.01, 155.03, and 155.04 of this Code.
    (b) No other provisions of this Code apply to an SPRV organized under this Article, except as otherwise provided in this Article.
(Source: P.A. 92-124, eff. 7-20-01.)

215 ILCS 5/179E-15

    (215 ILCS 5/179E-15)
    Sec. 179E-15. Definitions. For purposes of this Article, the following terms have the indicated meanings:
    "Aggregate limit" means the maximum sum payable to the ceding insurer under an SPRV contract.
    "Ceding insurer" means one or more insurers or reinsurers under common control that enters into an SPRV contract with an SPRV.
    "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 shall be presumed to exist if any person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing, 10% 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 Article, the fact that an SPRV exclusively provides reinsurance to a ceding insurer under an SPRV contract shall 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.
    "Fair Value" means:
        (1) as to cash, the amount thereof; 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) quoted market price for the asset in active
        
markets should be used if available; and
            (C) 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.
    "Fully funded" means that, with respect to an 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 Article.
    "Indemnity trigger" means a transaction term by which the SPRV's obligation to pay the ceding insurer for losses covered by an SPRV contract is triggered by the ceding insurer incurring a specified level of losses.
    "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.
    "Non-indemnity trigger" means a transaction term by which the SPRV's obligation to pay the ceding insurer under an 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.
    "Permitted investments" means those investments that meet the qualifications set forth in Section 179E-85.
    "Qualified U.S. financial institution" means, for purposes of meeting the requirements of a trustee under this Article, a financial institution that is eligible to act as a fiduciary of a trust, and that is:
        (1) organized or, in the case of a U.S. branch or
    
agency office of a foreign banking organization, licensed, under the laws of the United States or any state of the United States; and
        (2) regulated, supervised, and examined by federal or
    
state authorities having regulatory authority over banks and trust companies.
    "Special purpose reinsurance vehicle" or "SPRV" means an entity, domiciled in and organized under the laws of this State, that has received a limited certificate of authority from the Director under this Article exclusively for the limited purpose of entering into and effectuating SPRV insurance securitizations, SPRV contracts, and other related transactions permitted by this Article.
    "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.
    "SPRV insurance securitization" means a package of related risk transfer instruments and facilitating administrative agreements by which proceeds are obtained by an SPRV through the issuance of securities, which proceeds are held in trust pursuant to the requirements of this Article to secure the obligations of the SPRV under an SPRV contract with one or more ceding insurers, wherein the SPRV's obligation to return the full initial investment to the holders of those securities, pursuant to the transaction terms, is contingent upon those funds not being used to pay the obligations of the SPRV to the ceding insurers under the SPRV Contract.
    "SPRV organizer" means one or more persons who have organized or intend to organize an SPRV under authority obtained pursuant to Section 179E-20.
    "SPRV securities" means the securities issued by an SPRV.
    "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 an SPRV contract.
(Source: P.A. 92-124, eff. 7-20-01.)

215 ILCS 5/179E-20

    (215 ILCS 5/179E-20)
    Sec. 179E-20. Limited certificate of authority.
    (a) Within 30 days after receipt by the Director of a complete filing by the prospective SPRV organizer for authority to form or acquire an SPRV, which SPRV shall exist and operate expressly for the limited purposes set forth in this Article, the application shall be deemed approved and a limited certificate of authority shall be issued, unless before the expiration of the 30-day period the Director approves or disapproves the application in writing. A limited certificate of authority may not be issued unless the country or state of domicile of each ceding insurer has notified the Director in writing that they have not disapproved the transaction. A complete filing of the application must include the following:
        (1) an affidavit verifying that each prospective SPRV
    
organizer the SPRV meets the requirements as set forth in this Article;
        (2) a representation that the prospective SPRV
    
organizer intends to form an SPRV to operate in accordance with the requirements set forth in this Article;
        (3) the proposed name of the subject SPRV;
        (4) biographical descriptions of each SPRV organizer
    
setting forth their legal names, any names under which they have or are conducting their affairs, and any affiliations with other persons as defined in Article VIII 1/2, together with such other biographical information as the Director may request;
        (5) the source and form of the minimum capital to be
    
contributed to the SPRV;
        (6) any persons with which the SPRV is or, upon
    
formation, will be affiliated as defined in Article VIII 1/2;
        (7) the names and biographical information of the
    
proposed members of the board of directors and principal officers of the SPRV, setting forth their legal names, any names under which they have or are conducting their affairs and any affiliations with other persons as defined in Article VIII 1/2, together with such other biographical information as the Director may request; and
        (8) a plan of operation, consisting of a description
    
of the contemplated insurance securitization, the SPRV contract, and related transactions, which plan of operation must include:
            (A) draft documentation or, at the discretion of
        
the Director, a written summary, of all material agreements that will be entered into to effectuate the insurance securitization and the related SPRV contract, including the names of the ceding insurers, the nature of the risks being assumed, and the maximum amounts, purpose, nature, and interrelationships of the various transactions required to effectuate the insurance securitization;
            (B) the investment strategy of the SPRV and a
        
representation that (i) the investment strategy complies with the investment requirements set forth in this Article and (ii) includes investment practices or other provisions to preserve asset values that will facilitate attainment of full funding during the term of the securitization with assets that can be monetized in response to a triggering event without a substantial loss in value;
            (C) a description of the method by which losses
        
covered by the SPRV contract that may develop after the termination of the contract period are to be addressed under the provisions of the SPRV contract; and
            (D) a representation that the trust agreement and
        
the trusts holding assets that secure the obligations of the SPRV under the SPRV contract and the SPRV contract with the ceding insurers in connection with the contemplated insurance securitization will be structured in accordance with the requirements set forth in this Article.
    (b) The Director may not approve the application or issue a limited certificate of authority until he or she has found that the proposed plan of operation provides a reasonable expectation of a successful operation, based on the proposed SPRV organizer, directors, and officers being of known good character and that there is no good reason to believe that they are affiliated, directly or indirectly, through ownership, control, management, reinsurance transactions, or other insurance or business relations with any person or persons known to have been involved in the improper manipulation of assets, accounts or reinsurance.
    (c) Upon approval by the Director of the application and the issuance of a limited certificate of authority, the SPRV may be acquired or formed and, in accordance with the approved plan of operation, the SPRV may enter into contracts and conduct other activities within the parameters set forth in the filed plan of operation.
    (d) The limited certificate of authority so issued shall state that the SPRV's authorization to be involved in the business of reinsurance is limited to only the reinsurance activities that the SPRV is allowed to conduct under this Article.
    (e) The SPRV organizer must provide a complete set of the documentation of the insurance securitization to the Director upon closing of the transactions including, but not limited to, an opinion of legal counsel with respect to compliance with this and any other applicable laws as of the effective date of the transaction. Any material change of the SPRV's plan of operation described in items (1) through (8) of subsection (a) including, but not limited to, the issuance of new securities to continue the securitization activities of the SPRV under this Article after expiration and full satisfaction of the initial securitization transactions, requires prior approval of the Director, however, a change in the counterparty to swap transactions for an existing securitization as allowed under this Article shall not be deemed a material change. Any material change that is not disapproved by the Director in writing within 15 days after its submission shall be deemed approved.
(Source: P.A. 92-124, eff. 7-20-01.)