31A-37a-304 - Securities. - Utah Statutes

31A-37a-304. Securities.
(1) (a) A special purpose financial captive insurance company may:
(i) subject to the prior approval of the commissioner, account for the proceeds of asurplus note issued by the special purpose financial captive insurance company as surplus; and
(ii) except as provided in Subsection (1)(b), submit for prior approval of thecommissioner a periodic written request for authorization to make a payment of interest on or arepayment of principal of a surplus note or other debt obligation issued by the special purposefinancial captive insurance company.
(b) (i) The commissioner may not approve a payment described in Subsection (1)(a)(i) ifthe commissioner determines that the payment would jeopardize the ability of the special purposefinancial captive insurance company or another person to fulfill its respective obligationspursuant to a special purpose financial captive insurance company insurance securitizationagreement, reinsurance contract, or a related transaction.
(ii) In lieu of approval of a periodic written request for authorization to make a paymentof interest on or repayment of principal of a surplus note or other debt obligation issued by thespecial purpose financial captive insurance company, the commissioner may approve a formulaor plan for payment of interest, principal, or both with respect to the surplus note or debtobligation.
(iii) A special purpose financial captive insurance company shall include a formula orplan approved under Subsection (1)(b)(ii) in the special purpose financial captive insurancecompany's plan of operation.
(2) In addition to Section 31A-37-302, a special purpose financial captive insurancecompany may not declare or pay a dividend or distribution if the dividend or distributionjeopardizes the ability of the special purpose financial captive insurance company or anotherperson to fulfill the special purpose financial captive insurance company's or other person'srespective obligations pursuant to a special purpose financial captive insurance companyinsurance securitization agreement, a reinsurance contract, or a related transaction.
(3) (a) A special purpose financial captive insurance company security is not subject toregulation as an insurance or reinsurance contract.
(b) An investor in a special purpose financial captive insurance company security or aholder of a special purpose financial captive insurance company security may not be consideredto be transacting the business of insurance in this state solely by reason of having an interest inthe security.
(c) The following people involved in an insurance securitization by a special purposefinancial captive insurance company may not be considered to be an insurance producer orbroker, or to be conducting business as an insurer, reinsurer, insurance agency, brokerage,intermediary, advisory, or consulting business solely by virtue of the person's underwritingactivities in connection with the insurance securitization:
(i) an underwriter's placement;
(ii) a selling agent; or
(iii) a partner, commissioner, officer, member, manager, employee, agent, representative,or advisor of a person listed in Subsection (3)(c)(i) or (ii).

Enacted by Chapter 302, 2008 General Session