2023 Delaware Code › Title 18 - Insurance Code › Chapter 69. CAPTIVE INSURANCE COMPANIES › Subchapter III. Special Purpose Financial Captive Insurance Companies › § 6952. Definitions.

§ 6952. Definitions.
As used in this subchapter, unless the context requires otherwise:
(1) “Counterparty” means a person, other than a natural person, which may but need not be the parent or an affiliate of the special purpose financial captive insurance company, that enters into an SPFC contract with a special purpose financial captive insurance company.
(2) “Insolvency” or “insolvent” means:
a. A person's inability to pay its obligations when they are due, unless those obligations are the subject of a bona fide dispute; or
b. The liabilities of a person exceed the value of all of the assets of the person. In the case of a special purpose financial captive insurance company, liabilities and assets are determined under the method of accounting used by the special purpose financial captive insurance company in accordance with § 6962 of this title.
(3) “Organizational document” means the certificate of incorporation, articles of organization, bylaws, limited liability company agreement or other documents pursuant to which a special purpose financial captive insurance company or a special purpose financial captive insurance company applicant, as the case may be, is formed.
(4) “Permitted investments” means those investments that meet the qualifications set forth in § 6910(b) of this title.
(5) “Securities” has the same meaning as defined in § 73-103(a)(23) of Title 6, and also includes any form of debt obligation, equity, surplus certificate, surplus note, funding agreement, derivative or other financial instrument that the Commissioner designates, by rule or order, as “securities” for purposes of this subchapter.
(6) “Special purpose financial captive insurance company” means a captive insurance company that is granted a certificate of authority under this subchapter.
(7) a. “Special purpose financing transaction” means:
1. A transaction or a group of related transactions, which may include but are not limited to capital market offerings and securitizations, by which:
A. Proceeds are obtained by a special purpose financial captive insurance company through the issuance of securities by the special purpose financial captive insurance company or by any other person, and all or any part of such proceeds are used to fund the special purpose financial captive insurance company's obligations under 1 or more SPFC contracts; or
B. A person provides 1 or more letters of credit or other assets to or for the benefit of the special purpose financial captive insurance company, which the Commissioner authorizes the special purpose financial captive insurance company to treat as admitted assets for purposes of the special purpose financial captive insurance company's annual report, and all or any part of those letters of credit or other assets, as applicable, are used to fund the special purpose financial captive insurance company's obligations under 1 or more SPFC contracts; or
2. Other financing arrangements as the Commissioner may approve.
b. “Special purpose financing transaction” does not include the issuance of a letter of credit to satisfy all or part of the special purpose financial captive's minimum capital and surplus requirements under § 6905 of this title.
(8) “SPFC contract” means a contract or group of related contracts between a special purpose financial captive insurance company and a counterparty or counterparties pursuant to which insurance risk is transferred by the counterparty or counterparties to the special purpose financial captive insurance company. An SPFC contract may include 1 or more other parties.
(9) “Surplus note” means an unsecured subordinated debt obligation treated as surplus and not debt in accordance with § 6956 of this title.
76 Del. Laws, c. 161, §  15;  78 Del. Laws, c. 175, §§  4, 87;  81 Del. Laws, c. 387, § 2;