Application form for a Special Purpose Vehicle (SPV)
ApplicationForm
Insurance Companies Special Purpose Vehicles (SPV)
Name of Applicant
Date Received
Version 1.01 – September 2014
NOTE: All sections must be completed on a "stand-alone" basis which can be supplemented by (but not replaced with) cross references to additional documents. In these cases, the relevant document, page and paragraph number should be clearly indicated in the appropriate section of the form.
About the Applicant
1.1 Name ofSponsor.
1.2 Registered Address/Telephone Number/E-mail Address.
Registered addressPhone number
Fax number
Email address
1.3 Contact details of a principal who will accept receipt of any correspondence from the FSC relating to the application for authorisation.
TitleFirst names
Surname
Job title
Business address
Phone number
Fax number
Email address
1.4Contact details of any professional advisors used to assist in the application.
TitleFirst names
Surname
Job title
Firm name
Business address
Phone number
Fax number
Email address
1.5 Name and contact details of Sponsor’s auditors.
TitleFirst names
Surname
Job title
Firm name
Business address
Phone number
Fax number
Email address
1.6 Date of financial year-end.
DayMonth
1.7 Name and contact details for Sponsor’s principal bankers.
TitleFirst names
Surname
Job title
Bank name
Business address
Phone number
Fax number
Email address
1.8Name and contact details of Sponsor’s legal advisors.
TitleFirst names
Surname
Job title
Firm name
Business address
Phone number
Fax number
Email address
1.9 Name and contact details for the Insurance Manager, where applicable.
TitleFirst names
Surname
Job title
Firm name
Business address
Phone number
Fax number
Email address
1.10 Please provide details of who the FSC should contact to discuss this application, should it be necessary.
TitleFirst names
Surname
Job title
Firm name
Business address
Phone number
Fax number
Email address
Ownership Structure
2.1 Please provide an overview of, and a rationale, for the proposed structure.
2.2 Please provide a structure chart which shows the nature of the relationship between the sponsor and each of the shareholders, or for unincorporated entities, the partners, up to the ultimate beneficial owner.
2.3 Please provide details of all Controllers, Partners and other Qualifying Shareholders (hold more than 10 per cent of the shares of the voting rights of the applicant).
Name / Legal status of controller / Direct Holding / Indirect Holding% Shares / % Voting Rights / % Shares / % Voting Rights
% / % / % / %
% / % / % / %
% / % / % / %
% / % / % / %
% / % / % / %
% / % / % / %
% / % / % / %
2.4 Are any of these voting rights (exercised directly or indirectly) held by a trust?
No
Yes Please provide details.
2.5 Please submit the appropriate notification document for each Controller or qualifying shareholder. Copies of the Individual and Corporate Questionnaires can be downloaded from the FSC website.
Ceding Undertaking and Investors
3.1 Name and address of Ceding Undertaking
Firm nameBusiness address
Phone number
Fax number
Email address
3.2 Please provide a copy of the most recent audited accounts of the Cedant and its Parent Undertaking, as well as for any Ultimate Parent group, where applicable.
Audited accounts attached to application.
3.3 Please provide a copy of the Financial Rating (if any) of the Cedant and its Parent Undertaking, as well as for any Ultimate Parent group, where applicable.
Financial Ratingattached to application.
3.4 Please provide a Corporate structure chart of the Ceding Undertaking’s group where applicable.
Corporate structure chartattached to application.
3.5 Please confirm that the Ceding undertaking has notified its Home Country Supervisory Authority of its intention to cede the proposed risks to a SPV in Gibraltar, and provide contact details for the person who would accept any referral regarding this application.
N/A
YesProvide contact details for the person.
TitleFirst names
Surname
Supervisory Authority
Business address
Phone number
Fax number
Email address
3.6 Please provide details of the proposed investors and debt holders of the SPV including an overview of their professional status and qualifications to assume the risk proposed. It is assumed that providers of debt or financing will comply with the definition of “professional clients” as defined under the MiFID Directive. (Annex II of Directive 2004/39/EC). It is understood that these details may only be available, post-deal.
3.7 It is recognised that for certain types of SPVs, full details of investors will not be available until after closure. In these circumstances, all closing documentation should be submitted within 30 days of the commencement of business.
Legal Structure
4.1 Please confirm that the SPV will be registered in Gibraltar and subject to Gibraltar Law.
Yes
NoPlease provide details.
4.2 Legal Status of Sponsor
Public Limited Company / Limited PartnershipPrivate Limited Company / Other Partnerships
Limited Liability Partnership / Unincorporated Association
4.3 Please attach a certified copy of the Certificate of Incorporation.
Certificate of Incorporationattached to application.
4.4 Please supply a copy of the Memorandum and Articles of Association, or similar document if unincorporated.
Memorandum of Articles of Associationattached to application.
4.5 Please confirm that the objects in the Memorandum and Articles of Association, or similar document if unincorporated, are restricted to the business outlined in this application.
Yes
NoPlease provide details.
4.6 Please confirm that the Sponsor shall not use intra-group SPVs or SPRVs (i.e., where no element of finance is raised externally) to achieve a Regulatory Capital reduction at Group level in the absence of financing external to the group.
Yes
No
4.7 Please confirm that the SPV meets the requirements of a “special purpose vehicle” as defined in Section 4(1) of the Insurance Companies (Special Purpose Vehicles) Regulations 2009.
Yes
No
4.8 Please confirm that the SPV will assume risk from the Ceding undertaking through a reinsurance contract or via a similar arrangement for the transfer of insurance or reinsurance risk.
Yes
NoPlease provide full details of the proposed transfer.
Proposed Operations
5.1 Please provide a copy of the proposed reinsurance business and SPV contract to include information concerning the following.
a)The identities and qualifications of directors and management of the ceding undertaking.
b)The identities and qualifications of the persons who are, or will be, appointed to act as trustees of the assets of the SPV.
c)An overview of the effectiveness of the risk transfer, including a diagram detailing how the transaction would operate and an assessment of any material residual risks.
d)The maximum aggregate exposure limits of the SPV contract and confirmation that the exposure under the contract is limited to the assets offered as collateral.
e)Explanation of trigger events or mechanisms including the nature of the trigger and detail in relation to the nature, level and treatment of any basis risk.
f)A description of any terms and conditions for payments under the contract.
g)Details from the ceding undertaking’s original insurance policy which clarifies what risks assumed will be transferred to the SPV.
h)Actuarial review of insurance risks to be transferred to the SPV, or data from a risk modelling agency, where appropriate.
i)Rating agency’s pre-sale report, or final draft report if applicable.
Capital and Financial Projections
6.1Please provide the following information.
a)Capital including size, growth, investor concentration, and the management share of the capital base.
b)Details of any assets or rights of the SPV held or controlled by the cedant. These should be separated from the non-securitised assets and rights of the cedant and held in a collateral instrument outside the control of either the SPV or the cedant e.g. a Trust. .
c)A summary of financial projections including premium contribution, expenses, and investment income and charges over the lifetime of the SPV.
d)A copy of the Investment Strategy of the SPV and an assessment of the risk implications of that strategy.
e)Details of investment authority and guidelines for all assets held in Trust, along with details of any permitted leverage.
f)Details of any intended hedging instruments such as interest rate swaps or currency contracts.
g)Details relating to the potential use of financial guarantors on any of the tranches of notes to be issued.
h)Details of any off-balance sheet commitments to support the SPV.
i)Details of the use of trusts or other arrangements for holding the SPV assets and collateral, in line with the Trust and Company Management section of the FSC website. A copy of the Trust Agreement or Deed should be provided.
j)Details of the SPV’s liquidity strategy including structure, the types of tiers, or tranches, of the financing mechanism, types of position and note-holder withdrawal rules.
k)A statement confirming that the SPV will be fully-funded and will remain so during the terms of the contract. This should include a schematic detailing the overall retrocession and funding structure.
l)Confirmation that the SPV will not issue debt securities unless the documents specify the rights of the holders of the securities as below:
- Clear that the SPV is a legal entity separate from any Third Party involved in the establishment of the SPV;
- State manner in which claims relating to such securities rank between different security holders in the event of insufficient funds;
- Condition that holders of securities undertake not to initiate nor participate in winding-up proceedings until these securities are discharged.
m)Provide an overview and confirmation that investors will not have recourse to the assets of the ceding undertaking.
n)A contingency plan explaining what action would be taken in the event of:
- Breach in fully-funded principle;
- Disagreement over whether a payment is due to undertaking;
- Counterparty to a material transaction is unable to meet its commitments.
Documentary Requirements
7.1 Please provide independent Legal confirmation that the agreements surrounding the operation of the SPV are legally effective under Gibraltar law, ensure that the repayment of debt holders are subordinated to the SPV’s reinsurance obligations, and would be expected to be legally enforceable in the event of a winding-up of the SPV or any of its participants.
Independent Legal confirmationattached to application.
7.2 Please provide copies of Prospectus, Offering Circular or Private Placement Memorandum. Draft documents will be accepted subject to there being no major departure from these when the contracts are signed.
Copies of Prospectus, Offering Circular and/or Private Placement Memorandumattached to application.
7.3 Please provide copies of draft contracts for any agreement forming part of the SPV structure including any intended hedging instruments such as interest rate swaps or currency contracts, and trustee agreements for holding the SPV’s assets and collateral.
Copies of Draft Contractsattached to application.
7.4 Please provide an overview of any potential conflicts of interest that may arise in respect of the interactions among the various parties into which the SPV may enter.
Organisation and Governance
8.1 Please provide details of the proposed Board of Directors, any sub-committees reporting to the Board, their terms of reference, and the frequency and location of all their meetings.
Additional Documentationattached to application.
8.2 If the SPV will be using an Insurance Manager, please provide full details and a copy of the agreement between the two parties.
Copy of the Agreementattached to application.
8.3 Please provide details of the proposed Compliance Officer with his/her qualifications and/or relevant experience.
TitleFirst names
Surname
Email address
Phone Number
Qualifications
Relevant Experience
8.4 Please provide an overview of how the SPV will be meeting the FSC guidance for its system of governance as outlined in Guidance Note 14.
8.5 Please attach details on how the day-to-day management of the firm will be carried out. This should include a structure chart and a brief summary of key responsibilities for each post.
Copy of the Structure Chart attached to application.
8.6 For all Controllers, Directors, Partners and Managers the relevant Notification Document should be completed.
Notification Documents attached to application.
Risk Management
Detailed information is required in respect of the following key functions.
9.1 To assess the nature of the credit risk presented, please provide:
a) Details of the procedures in place to ensure that the SPV monitors and reports to the Board of Directors counterparty credit risk.
b) Details of each counterparty to the SPV.
9.2 Please provide details in respect of administrative and accounting procedures, internal controls, and risk management techniques that are proportionate to the nature, scale and complexity of the SPV.
9.2.1 Please provide details of the person or organisation that will be providing administration and accounting services to the SPV.
TitleFirst names
Surname
Job title
Firm name
Business address
Phone number
Fax number
Email address
9.3 Any outsourced functions should comply with the FSC Guidelines on Outsourcing. Please provide full details on any proposed outsourcing arrangements:
a)Copies of all Service Level Agreements;
b)Scope of activity covered under the Agreement;
c)Background information on the Third Party;
d)Persons in the SPV who will assume responsibility for the providers, and an outline of monitoring and Key Performance Indicators (KPI) used;
e)Termination clauses and the rights and obligations of the outsourced service provider including confirmation that the FSC has right to access data (and premises) of service provider where necessary to carry out its supervisory functions. Please note that a managing agent is not permitted to terminate the agreement until a replacement managing agent, approved by the FSC, has been found.
f)Please confirm that the SPV will comply with the FSC Guidance Note 2 on Outsourcing.
General
10.1 Please provide any other documentation deemed necessary in the processing of this application.
Documentation attached to application. Please provide details.
10.2 Please confirm that the FSC shall be notified as soon as practicable of any material changes to the current application.
10.3 Please confirm that after authorisation the SPV shall notify the FSC of any subsequent material development that may give rise to possible breaches of the conditions underlying the decision on authorisation.
10.4 The SPV should contact the FSC for approval prior to entering into any additional contracts not specified in this application form.
10.5 The SPV should “meet accounting, prudential and statistical information requirements” as set out in Section 7(b) of the Regulations.
10.7 Where a SPV which was authorised prior to 31 December 2015, commences any new activities after 31 December 2015, the SPV should report any relevant information on how the existing activity of the SPV may impact on its aggregate risk exposure profile in relation to any new activity.
Warranty
The Applicant warrants and undertakes:
(i)that having made all reasonable enquiries, the information supplied to the FSC in connection with this application is, to the best of its knowledge and belief, accurate in all material respects and does not omit any information which might reasonably be considered relevant to the application;
(ii)that on authorisation, no kind of financial services business other than that disclosed in the application or licensed under the Supervisory Acts will be carried on by the Applicant unless it is an authorised or exempted person in respect of that business;
(iii)that the Applicant will notify the FSC of any material change in the information supplied in the application which occurs during the period in which the application for authorisation is being considered and that thereafter it will comply with its Obligations as regards notification of changes.
Dated / dd/mm/yySigned
Position
Signed
Position
Signed
Position
For and on behalf of (name of the applicant);
Statement on Data Protection
The Financial Services Commission is exempted by Section 19 of the Data Protection Act 2004 (the “Act”) from many of the provisions of the Act which includes the Obligation to Register, Principles for data quality and security, information to be given to data subjects, data subject’s access and rectification of data (sections 24, 6, 10, 14 and 15 of the Act). However, to the maximum extent possible, the FSC will follow the obligations imposed by the Act unless it considers that compliance would be likely to prejudice the proper discharge of its functions or prejudice its purposes.
Data Controller
Financial Services Commission of PO Box 940, Suite 3, Ground Floor, Atlantic Suites, Europort Avenue, Gibraltar
Purposes for which data is collected and processed
The Financial Services Commission (FSC) is under a statutory obligation to ensure that those persons who exercise control or significant influence or control over the operations of a regulated financial firm be fit and proper as well as to ensure that they have the correct training and competency to conduct that activity. As such the FSC may conduct enquiries on such individuals for these purposes.
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Your rights to access data held by the FSC on you.
Upon receipt of a written request and subject to being able to prove that the person making the request is the data subject, the FSC will confirm whether or not we hold personal data about you and if so, what this data is. This data will be provided to you in a readily understood format.
The fee for receiving this information is £25 and must be made in a form available from the FSC’s web-site at Alternatively, these forms are available from our reception at Suite 3, Ground Floor, Atlantic Suites, Europort Avenue, Gibraltar or one can be forwarded to you by calling (+350) 200 40283.