V.I. Code tit. 22, § 6665 (2019)
2019 US Virgin Islands Code|Title 22 - Insurance|Chapter 66 - Alternative Markets Act|Subchapter III - Special Purpose Financial Captives|§ 6665. Trust agreements for assets held in trust or pledged to secure obligations

 (a) Assets of the SPFC held in trust to secure obligations under the SPFC contract must at all times be held in: (1) cash and cash equivalents; (2) securities listed by the Securities Valuation Office of the NAIC and qualifying as admitted assets under statutory accounting convention in its state, territory of domicile; or (3) another form of security acceptable to the SAM. (b) Assets of the SPFC that are pledged to secure obligations of the SPFC to a counterparty under an SPFC contract must be held in trust and administered by a qualified United States financial institution. The qualified United States financial institution does not control, is not controlled by, or is not under common control with, the SPFC or the counterparty. (c) The agreement governing this trust must create one or more trust accounts into which all pledged assets must be deposited and held until distributed in accordance with the trust agreement. The pledged assets must be held by the trustee at one of the trustee's offices or branch offices in the United States or the Virgin Islands and may be held in certificated or electronic form. (d) The provisions for withdrawal by the counterparty of assets from the trust must be clear and unconditional, subject only to the following requirements: (1) the counterparty has the right to withdraw assets from the trust account at any time, without notice to the SPFC, subject only to written notice to the trustee from the counterparty that funds in the amount requested are due and payable by the SPFC, pursuant to the terms of the SPFC contract; (2) a statement or document does not need to be presented in order to withdraw assets, but the counterparty may be required to acknowledge receipt of withdrawn assets; (3) the trust agreement must indicate that it is not subject to any conditions or qualifications outside of the trust agreement; and (4) the trust agreement must not contain references to any other agreements or documents. (e) The trust agreement must be established for the sole use and benefit of the counterparty at least to the full extent of the obligations of the SPFC to the counterparty under the SPFC contract. If there is more than one counterparty, or more than one SPFC contract with the same counterparty, a separate trust agreement must be entered into with the counterparty and a separate trust account must be maintained for each SPFC contract with the counterparty, unless otherwise approved by the SAM. (f) The trust agreement must provide for the trustee to: (1) receive assets and hold all assets in a safe place; (2) determine that all assets are in a form that the counterparty or the trustee, upon direction by the counterparty, may negotiate, whenever necessary, the assets, without consent or signature from the SPFC or another person or entity; (3) furnish to the SPFC, the SAM, and the counterparty a statement of all assets in the trust account reported at fair value upon its inception and at intervals no less frequent than the end of each calendar quarter; (4) notify the SPFC and the counterparty, within ten days, of any deposits to or withdrawals from the trust account; (5) upon written demand of the counterparty, immediately take the necessary steps to transfer absolutely and unequivocally all right, title, and interest in the assets held in the trust account to the counterparty and deliver physical custody of the assets to the counterparty; and (6) allow no substitutions or withdrawals of assets from the trust account, except pursuant to the trust agreement or SPFC contract, or as otherwise permitted by the counterparty. (g) The trust agreement must provide that at least thirty days, but not more than forty five days, before termination of the trust account, written notification of termination must be delivered by the trustee to the counterparty with a copy of the notice provided to the SAM. (h) In addition to the requirements for the trust as provided in this subchapter, the trust agreement may be made subject to and governed by the laws of any state or territory. The state or territory must be disclosed in the plan of operation filed with and approved by the SAM. (i) The trust agreement must prohibit invasion of the trust corpus for the purpose of paying compensation to, or reimbursing the expenses of, the trustee. (j) The trust agreement must provide that the trustee must be liable for its own negligence, willful misconduct, or lack of good faith. (k)  (1) Notwithstanding the provisions of subsection (d)(3) and (4), when a trust agreement is established in conjunction with an SPFC contract, then the trust agreement or SPFC contract, or both, may provide that the counterparty shall undertake to use and apply any amounts drawn upon the trust account, without diminution because of the insolvency of the counterparty or the SPFC, only for one or more of the following purposes: (A) to pay or reimburse the counterparty for payment of the SPFC's share of premiums to be returned to owners of counterparty's policies covered under the SPFC contract on account of cancellations of the policies under the counterparties policies; (B) to pay or reimburse the counterparty for payment of the SPFC's share of surrenders, benefits, losses, or other benefits covered and payable pursuant to the provisions of the SPFC contract; (C) to fund an account with the counterparty in an amount to secure the credit or reduction from liability for reinsurance coverage provided under the SPFC contract; or (D) to pay any other amounts the counterparty claims are legally and properly due under the SPFC contract. (2) Any assets deposited into an account of the counterparty pursuant to subparagraph (C) of paragraph (1) or withdrawn by the counterparty pursuant to subparagraph (D) of paragraph (1) and any interest or other earnings on them, must be held by the counterparty in trust and separate and apart from any general assets of the counterparty, for the sole purpose of funding the payments and reimbursements of the SPFC contract described in subparagraphs (A) through (D) of paragraph (1). (3) The counterparty shall return to the SPFC amounts withdrawn under subparagraphs (A) through (D) of paragraph (1) in excess of actual amounts required under subparagraphs (A) through (C) of paragraph (1), and in excess of the amounts subsequently determined to be due under subparagraph (D) of paragraph (1), plus interest at a rate not in excess of the prime rate for the amounts held pursuant to subparagraph (C) of paragraph (1) unless a higher rate of interest has been awarded by a court, and any net costs or expenses, including attorneys' fees, awarded by a court. (4) If the counterparty has received notification of termination of the trust account, and where the SPFC's entire obligations secured under the specific SPFC contract remain unliquidated and undischarged ten days before the termination date, to withdraw amounts equal to the obligations and deposit the amounts in a separate account, in the name of the counterparty, in a qualified United States financial institution, separate and apart from the counterparty's general assets, to the extent the obligations or liabilities have not been funded by the SPFC, in trust only for those uses and purposes specified in subparagraph (A) of paragraph (1) as may remain executory after the withdrawal and for any period after the termination date until discharged.