20-611. Definitions

For the purpose of this article:

1. " Ancillary state" means any state other than a domiciliary state.

2. " Commodity exchange act" means the federal commodity exchange act (7 United States Code chapter 1).

3. " Court" means, unless the context otherwise requires, the judge of the superior court assigned to the delinquency proceeding.

4. " Delinquency proceeding" means any proceeding commenced against an insurer pursuant to this article for the purpose of liquidating, rehabilitating, reorganizing or conserving such insurer.

5. " Domiciliary state" means the state in which an insurer is incorporated or organized, or in the case of an insurer incorporated or organized in a foreign country, the state in which such insurer, having become authorized to do business in such state, has, at the commencement of delinquency proceedings, the largest amount of its assets held in trust and assets held on deposit for the benefit of its policyholders or policyholders and creditors in the United States, and any such insurer is deemed to be domiciled in such state.

6. " Foreign country" means territory not in any state.

7. " General assets" means all property, real, personal or otherwise, not specifically mortgaged, pledged, deposited or otherwise encumbered for the security or benefit of specified persons or a limited class or classes of persons, and as to such specifically encumbered property the term includes all such property or its proceeds in excess of the amount necessary to discharge the amount or amounts secured thereby. Assets held in trust and assets held on deposit for the security or benefit of all policyholders or all policyholders and creditors in the United States shall be deemed general assets.

8. " Impairment" or " insolvency" means that the capital of a stock insurer or limited capital stock insurer, or the surplus of a mutual or reciprocal insurer, shall be deemed to be impaired and the insurer shall be deemed to be insolvent, when such insurer is not possessed of assets at least equal to all liabilities and required reserves together with its total issued and outstanding capital stock if a stock insurer, or the minimum surplus if a mutual or reciprocal insurer, required by this title to be maintained for the kind or kinds of insurance it is then authorized to transact.

9. " Insurer" means any person, firm, corporation, association or aggregation of persons doing an insurance business and subject to the insurance supervisory authority of, or to liquidation, rehabilitation, reorganization or conservation by the director or the equivalent insurance supervisory official of another state.

10. " Netting agreement" means:

(a) A contract or an agreement including a master agreement that documents one or more transactions between the parties to the agreement for or involving one or more qualified financial contracts and that provides for the netting, liquidation, setoff, termination, acceleration or close out under or in connection with one or more qualified financial contracts or present or future payment or delivery obligations or payment or delivery entitlements thereunder, including liquidation or close-out values relating to such obligations or entitlements, among the parties to the netting agreement. A master agreement, together with all schedules, confirmations, definitions and addenda thereto and transactions under any thereof, shall be treated as one netting agreement.

(b) Any master agreement or bridge agreement for one or more master agreements described in subdivision (a) of this paragraph.

(c) Any security agreement or arrangement or other credit enhancement or guarantee or reimbursement obligation related to any contract or agreement described in subdivision (a) or (b) of this paragraph. Any contract or agreement described in subdivision (a) or (b) of this paragraph relating to agreements or transactions that are not qualified financial contracts are deemed to be a netting agreement only with respect to those agreements or transactions that are qualified financial contracts.

11. " Preferred claim" means any claim with respect to which the law of the state or of the United States accords priority of payments from the general assets of the insurer.

12. " Qualified financial contract" means any commodity contract, forward contract, repurchase agreement, securities contract, swap agreement and any similar agreement that the director determines by rule or order to be a qualified financial contract for the purposes of this article. For the purposes of this paragraph:

(a) " Commodity contract" means:

(i) A contract for the purchase or sale of a commodity for future delivery on, or subject to the rules of, a board of trade or contract market under the commodity exchange act or a board of trade outside the United States.

(ii) An agreement that is subject to regulation under section 19 of the commodity exchange act and that is commonly known to the commodities trade as a margin account, margin contract, leverage account or leverage contract.

(iii) An agreement or transaction that is subject to regulation under section 6c(b) of the commodity exchange act and that is commonly known to the commodities trade as a commodity option.

(iv) Any combination of the agreements or transactions referred to in this paragraph.

(v) Any option to enter into an agreement or transaction referred to in this paragraph.

(b) " Forward contract" , " repurchase agreement" , " securities contract" and " swap agreement" have the same meanings prescribed in the federal deposit insurance act, 12 United States Code section 1821(e)(8)(D), as amended.

13. " Receiver" means the director as receiver, liquidator, rehabilitator or conservator as the context may require.

14. " Reciprocal state" means any state other than this state in which in substance and effect the provisions of the uniform insurers liquidation act, as defined in section 20-631, are in force, including the provisions requiring that the director of insurance or equivalent insurance supervisory official be the receiver of a delinquent insurer.

15. " Secured claim" means any claim secured by mortgage, trust deed, pledge, deposit as security, escrow or otherwise, including federal, state or local tax liens that are perfected before the commencement of a delinquency proceeding but not including a special deposit claim or claims against general assets. The term also includes claims that more than four months prior to the commencement of delinquency proceedings in the state of the insurer's domicile have become liens on specific assets by reason of judicial process.

16. " Special deposit claim" means any claim secured by a deposit made pursuant to statute for the security or benefit of a limited class or classes of persons, but not including any general assets.

17. " State" means any state of the United States, the District of Columbia and the territories and possessions of the United States.