(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.)