Opinion ID: 2556592
Heading Depth: 2
Heading Rank: 1

Heading: The Plain Meaning of Section 702(c)(2)b.

Text: Amended Section 702(c)(2), subsection b, defines a case as [a]ll contracts issued to all employers or trusts that participate in a private placement under federal securities law. . . . [25] Although the statute does not define the phrase  a private placement, [26] that term (private placement) has a well-understood, specialized meaning in the financial and investment community. We must interpret that term in accordance with its specialized meaning. [27] As used in the statute, the term private placement is singular. That is, the term refers to an offer to sell securities not formally registered under the Securities Act of 1933 [28] and the implementing Rules of the Securities and Exchange Commission. [29] Private placements typically are made to a small number of select private investors such as large banks, mutual funds, insurance companies, and pension funds. [30] The offer is formally made in a document commonly described as a private placement memorandum. [31] Thus, by issuing its seven employer/trust-owned insurance policies to investors through separate private placement memoranda, Sun Life made seven distinct securities offerings, each offering corresponding to a separate insurance policy. [32] Our determination that private placement has a specialized meaning leads to the next question: what is the significance of the article a appearing before the singular term private placement? Because there is nothing special or unique about the word a, we must give that word its ordinary and common meaning. [33] Whether that meaning is singular or plural, however, will necessarily depend on the context in which the word a appears. [34] Where the word a is followed by a singular noun that is a term of art (here, e.g., private placement), the resulting phrase can only refer to one event or item i.e., one private placement. [35] The context of that phrase within the statute requires that conclusion. In contrast, where a statutory phrase is intended to be plural ( i.e., to reference more than one item), the statute uses the word all followed by a plural noun e.g., all contracts and all employers or trusts. [36] Read in context, the plain meaning of the phrase a private placement can only be one securities offering made through the issuance of one private placement memorandum. Accordingly, an insurer may aggregate into one case the premiums from all insurance contracts that are issued to all employers (or trusts) only if all of those contracts were offered in the same private placement memorandum. Sun Life contends that the phrase a private placement means any private placement. We disagree. Had the General Assembly intended to permit insurers to aggregate the premiums derived from all insurance contracts issued through separate private placement memoranda, then presumably that legislative body would have used the phrase all private placements. The General Assembly did that elsewhere in the definition of case in Section 702(c)(2) where it employed the terminology all contracts and all employers or trusts. But the Legislature did not use that form of expression with respect to private placements. Neither the original statutory language nor the amended language used the plural form. We view that choice as deliberate, and not as an oversight. [37] Accordingly, we decline to interpret the phrase  a private placement to mean  any private placement.