V.I. Code tit. 22, § 6672 (2019)
2019 US Virgin Islands Code|Title 22 - Insurance|Chapter 66 - Alternative Markets Act|Subchapter III - Special Purpose Financial Captives|§ 6672. Conservation, rehabilitation, or liquidation of SPFC

 (a) Except as otherwise modified in this section, the terms and conditions set forth in this chapter pertaining to administrative supervision of insurers and the rehabilitation, receiverships, and liquidation of insurers apply in full to SPFCs or each of the SPFC's protected cells, independently, or both, without causing or otherwise effecting a conservation, rehabilitation, receivership, or liquidation of the SPFC or another protected cell. (b) Notwithstanding any other provision of this chapter, and without causing or otherwise affecting the conservation or rehabilitation of an otherwise solvent protected cell of an SPFC and subject to the provisions of subsection (g)(5) of this section, the SAM may apply by petition to the Superior Court for an order authorizing the SAM to conserve, rehabilitate, or liquidate an SPFC domiciled in this Territory on one or more of the following grounds: (1) there has been embezzlement, wrongful sequestration, dissipation, or diversion of the assets of the SPFC intended to be used to pay amounts owed to the counterparty or the holders of SPFC securities; or (2) the SPFC is insolvent and the holders of a majority in outstanding principal amount of each class of SPFC securities request or consent to conservation, rehabilitation, or liquidation pursuant to the provisions of this subchapter. (c) Notwithstanding the provisions of this chapter, the SAM may apply by petition to the Superior Court for an order authorizing the SAM to conserve, rehabilitate, or liquidate one or more of an SPFC's protected cells, independently, without causing or otherwise effecting a conservation, rehabilitation, receivership, or liquidation of the SPFC generally or another of its protected cells, on one or more of the following grounds: (1) there has been embezzlement, wrongful sequestration, dissipation, or diversion of the assets of the SPFC attributable to the affected protected cell or cells intended to be used to pay amounts owed to the counterparty or the holders of SPFC securities of the affected protected cell or cells; or (2) the affected protected cell is insolvent and the holders of a majority in outstanding principal amount of each class of SPFC securities attributable to that particular protected cell request or consent to conservation, rehabilitation, or liquidation pursuant to the provisions of this subchapter. (d) The court may not grant relief provided in subsection (b) or subsection (c) unless, after notice and a hearing, the SAM, who has the burden of proof, establishes by clear and convincing evidence that relief must be granted. The court's order may be made in respect of one or more protected cells by name, rather than the SPFC generally. (e) Notwithstanding another provision in this chapter, regulations promulgated under this chapter, or another applicable law or regulation, upon any order of conservation, rehabilitation, or liquidation of an SPFC, or one or more of the SPFC's protected cells, the receiver shall manage the assets and liabilities of the SPFC pursuant to the provisions of this subchapter. The receiver shall ensure that the assets linked to one protected cell are not applied to the liabilities linked to another protected cell or to the SPFC generally, unless an asset or liability is linked to more than one protected cell, in which case the receiver shall deal with the asset or liability in accordance with the terms of any relevant governing instrument or contract. (f) With respect to amounts recoverable under an SPFC contract, the amount recoverable by the receiver must not be reduced or diminished as a result of the entry of an order of conservation, rehabilitation, or liquidation with respect to the counterparty, notwithstanding another provision in the contracts or other documentation governing the SPFC insurance securitization. (g) Notwithstanding the provisions of this chapter or other laws of this Territory: (1) an application or petition, or a temporary restraining order or injunction issued pursuant to the provisions of this chapter, with respect to a counterparty does not prohibit the transaction of a business by an SPFC, including any payment by an SPFC made pursuant to an SPFC security, or any action or proceeding against an SPFC or its assets; (2) the commencement of a summary proceeding or other interim proceeding commenced before a formal delinquency proceeding with respect to an SPFC, and any order issued by the court does not prohibit the payment by an SPFC made pursuant to an SPFC security or SPFC contract or the SPFC from taking any action required to make the payment; (3) a receiver of a counterparty may not void a non-fraudulent transfer by a counterparty to an SPFC of money or other property made pursuant to an SPFC contract; (4) a receiver of an SPFC may not void a non-fraudulent transfer by the SPFC of money or other property made to a counterparty pursuant to an SPFC contract or made to or for the benefit of any holder of an SPFC security on account of the SPFC security; and (5) the SAM may not seek to have an SPFC with protected cells declared insolvent as long as at least one of the SPFC's protected cells remains solvent, and in the case of such an insolvency, the receiver shall handle SPFC's assets in compliance with subsection (e) and other laws of this Territory. (h) Subsection (g) does not prohibit the SAM from taking any action permitted under this chapter with respect only to the conservation or rehabilitation of an SPFC with protected cell or cells, if the SAM would have had sufficient grounds to seek to declare the SPFC insolvent; subject to and without otherwise affecting the provisions of paragraph (5) of subsection (g). In this case, with respect to the solvent protected cell or cells, the SAM may not prohibit payments made by the SPFC pursuant to the SPFC security, SPFC contract, or otherwise made under the insurance securitization transaction that are attributable to these protected cell or cells or prohibit the SPFC from taking any action required to make these payments. (i) With the exception of the fulfillment of the obligations under an SPFC contract, and notwithstanding another provision of this subchapter or other laws of this Territory, the assets of an SPFC, including assets held in trust, must not be consolidated with or included in the Territory of a counterparty in any delinquency proceeding against the counterparty pursuant to the provisions of this subchapter for any purpose including, without limitation, distribution to creditors of the counterparty.