Terms Used In New York Laws > Insurance > Article 69 - Financial Guaranty Insurance Corporations

• Affidavit: A written statement of facts confirmed by the oath of the party making it, before a notary or officer having authority to administer oaths.
• Affiliate: means a person which, directly or indirectly, owns at least ten percent but less than fifty percent of the financial guaranty insurance corporation or which is at least ten percent but less than fifty percent, directly or indirectly, owned by a financial guaranty insurance corporation. See N.Y. Insurance Law 6901
• Aggregate net liability: means the aggregate amount of insured unpaid principal, interest and other monetary payments, if any, of guarantied obligations insured or assumed, less reinsurance ceded and less collateral. See N.Y. Insurance Law 6901
• Amortization: Paying off a loan by regular installments.
• Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
• Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
• Average annual debt service: means the amount of insured unpaid principal and interest on an obligation, multiplied by the number of such insured obligations (assuming each obligation represents one thousand dollars par value), divided by the amount equal to the aggregate life of all such obligations (assuming each obligation represents one thousand dollars par value). See N.Y. Insurance Law 6901
• Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. ^{Source: OCC}
• Collateral: means :
  
  (1) cash;
  
  (2) the cash flow from specific obligations which are not callable and scheduled to be received based on expected prepayment speed on or prior to the date of scheduled debt service (including scheduled redemptions or prepayments) on the insured obligation provided that (i) such specific obligations are directly payable by, guaranteed by or backed by the full faith and credit of the United States government, (ii) in the case of insured obligations denominated or payable in foreign currency as permitted under paragraph four of subsection (b) of section six thousand nine hundred four of this article, such specific obligations are directly payable by, guaranteed by or backed by the full faith and credit of such foreign government or the central bank thereof, or (iii) such specific obligations are insured by the same insurer that insures the obligations being collateralized, and the cash flows from such specific obligations are sufficient to cover the insured scheduled payments on the obligations being collateralized;
  
  (3) the market value of investment grade obligations, other than obligations evidencing an interest in the project or projects financed with the proceeds of the insured obligations;
  
  (4) the face amount of each letter of credit that:
  
  (A) is irrevocable;
  
  (B) provides for payment under the letter of credit in lieu of or as reimbursement to the insurer for payment required under a financial guaranty insurance policy;
  
  (C) is issued, presentable and payable either:
  
  (i) at an office of the letter of credit issuer in the United States; or
  
  (ii) at an office of the letter of credit issuer located in the jurisdiction in which the trustee or paying agent for the insured obligation is located;
  
  (D) contains a statement that either:
  
  (i) identifies the insurer and any successor by operation of law, including any liquidator, rehabilitator, receiver or conservator, as the beneficiary; or
  
  (ii) identifies the trustee or the paying agent for the insured obligation as the beneficiary;
  
  (E) contains a statement to the effect that the obligation of the letter of credit issuer under the letter of credit is an individual obligation of such issuer and is in no way contingent upon reimbursement with respect thereto;
  
  (F) contains an issue date and a date of expiration;
  
  (G) either:
  
  (i) has a term at least as long as the shorter of the term of the insured obligation or the term of the financial guaranty policy; or
  
  (ii) provides that the letter of credit shall not expire without thirty days prior written notice to the beneficiary and allows for drawing under the letter of credit in the event that, prior to expiration, the letter of credit is not renewed or extended or a substitute letter of credit or alternate collateral meeting the requirements of this subsection is not provided;
  
  (H) states that it is governed by the laws of the state of New York or by the 1983 or 1993 Revision of the Uniform Customs and Practice for Documentary Credits of the International Chamber of Commerce (Publication 400 or 500) or any successor Revision if approved by the superintendent, and contains a provision for an extension of time, of not less than thirty days after resumption of business, to draw against the letter of credit in the event that one or more of the occurrences described in Article 19 of Publication 400 or 500 occurs; and
  
  (I) is issued by a bank, trust company, or savings and loan association that:
  
  (i) is organized and existing under the laws of the United States or any state thereof or, in the case of a non-domestic financial institution, has a branch or agency office licensed under the laws of the United States or any state thereof and is domiciled in a member country of the Organisation for Economic Co-operation and Development having a sovereign rating in one of the top two generic lettered rating classifications by a nationally recognized statistical rating organization acceptable to the superintendent;
  
  (ii) has (or is the principal operating subsidiary of a financial institution holding company that has) a long-term debt rating of at least investment grade; and
  
  (iii) is not a parent, subsidiary or affiliate of the trustee or paying agent, if any, with respect to the insured obligation if such trustee or paying agent is the named beneficiary of the letter of credit; or
  
  (5) the amount of credit protection available to the insurer (or its nominee) under each credit default swap that:
  
  (A) may not be amended without the consent of the insurer and may only be terminated: (i) at the option of the insurer; (ii) at the option of the counterparty to the insurer (or its nominee), if the credit default swap provides for the payment of a termination amount equal to the replacement cost of the terminated credit default swap determined with reference to standard documentation of the International Swap and Derivatives Association, Inc. See N.Y. Insurance Law 6901
• Commercial real estate: means income producing real property other than residential property consisting of less than five units. See N.Y. Insurance Law 6901
• Contingency reserve: means an additional liability reserve established to protect policyholders against the effects of adverse economic developments or cycles or other unforeseen circumstances. See N.Y. Insurance Law 6901
• Continuance: Putting off of a hearing ot trial until a later time.
• Contract: A legal written agreement that becomes binding when signed.
• Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
• corporation: means an insurer licensed to transact the business of financial guaranty insurance in this state. See N.Y. Insurance Law 6901
• Credit default swap: means an agreement referencing the credit derivative definitions published from time to time by the International Swap and Derivatives Association, Inc. See N.Y. Insurance Law 6901
• Dependent: A person dependent for support upon another.
• Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
• Excess spread: means , with respect to any insured issue of asset-backed securities, the excess of (A) the scheduled cash flow on the underlying assets that is reasonably projected to be available, over the term of the insured securities after payment of the expenses associated with the insured issue, to make debt service payments on the insured securities over (B) the scheduled debt service requirements on the insured securities, provided that such excess is held in the same manner as collateral is required to be held under subsection (g) of this section. See N.Y. Insurance Law 6901
• Financial guaranty insurance: means a surety bond, an insurance policy or, when issued by an insurer or any person doing an insurance business as defined in paragraph one of subsection (b) of section one thousand one hundred one of this chapter, an indemnity contract, and any guaranty similar to the foregoing types, under which loss is payable, upon proof of occurrence of financial loss, to an insured claimant, obligee or indemnitee as a result of any of the following events:
  
  (A) failure of any obligor on or issuer of any debt instrument or other monetary obligation (including equity securities guarantied under a surety bond, insurance policy or indemnity contract) to pay when due to be paid by the obligor or scheduled at the time insured to be received by the holder of the obligation, principal, interest, premium, dividend or purchase price of or on, or other amounts due or payable with respect to, such instrument or obligation, when such failure is the result of a financial default or insolvency or, provided that such payment source is investment grade, any other failure to make payment, regardless of whether such obligation is incurred directly or as guarantor by or on behalf of another obligor that has also defaulted;
  
  (B) changes in the levels of interest rates, whether short or long term or the differential in interest rates between various markets or products;
  
  (C) changes in the rate of exchange of currency;
  
  (D) changes in the value of specific assets or commodities, financial or commodity indices, or price levels in general; or
  
  (E) other events which the superintendent determines are substantially similar to any of the foregoing. See N.Y. Insurance Law 6901
• Gift: A voluntary transfer or conveyance of property without consideration, or for less than full and adequate consideration based on fair market value.
• Governmental unit: means the United States of America, Canada, a member country of the Organisation for Economic Co-operation and Development having a sovereign rating in one of the top three generic lettered rating classifications by a nationally recognized statistical rating organization acceptable to the superintendent, a state, territory or possession of the United States of America, the District of Columbia, a province of Canada, a municipality, or a political subdivision of any of the foregoing, or any public agency or instrumentality thereof. See N.Y. Insurance Law 6901
• Guarantor: A party who agrees to be responsible for the payment of another party's debts should that party default. ^{Source: OCC}
• Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. ^{Source: OCC}
• Investment grade: means that:
  
  (1) the obligation or parity obligation of the same issuer has been determined to be in one of the top four generic lettered rating classifications by a nationally recognized statistical rating organization acceptable to the superintendent;
  
  (2) the obligation or parity obligation of the same issuer has been identified in writing by such nationally recognized statistical rating organization to be of investment grade quality; or
  
  (3) if the obligation or parity obligation of the same issuer has not been submitted to any such nationally recognized statistical rating organization, the obligation is determined to be investment grade (as indicated by a rating in category 1 or 2) by the Securities Valuation Office of the National Association of Insurance Commissioners. See N.Y. Insurance Law 6901
• Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
• Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). ^{Source: OCC}
• Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
• member: shall include each person who during the qualifying period was in the employment of a public employer which then participated for such employees in a public retirement system in this state, irrespective of whether the person was a participant in such system at that time, provided that the person has become a participant in such retirement system and has purchased service credit for a period of time that includes some or all of the qualifying period in accordance with provisions of law applicable to such purchase of service credit. See N.Y. Retirement and Social Security Law 2
• Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
• Municipal bonds: means municipal obligation bonds and special revenue bonds. See N.Y. Insurance Law 6901
• Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
• Oversight: Committee review of the activities of a Federal agency or program.
• Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
• Probation: A sentencing alternative to imprisonment in which the court releases convicted defendants under supervision as long as certain conditions are observed.
• Probation officers: Screen applicants for pretrial release and monitor convicted offenders released under court supervision.
• Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
• Reinsurance: means cessions qualifying for credit under section six thousand nine hundred six of this article. See N.Y. Insurance Law 6901
• Trustee: A person or institution holding and administering property in trust.
• Utility first mortgage obligation: means any obligation of an issuer secured by a first priority mortgage on utility property owned by or leased to an investor-owned or cooperative-owned utility company and located in the United States, Canada or a member country of the Organisation for Economic Co-operation and Development having a sovereign rating in one of the top two generic lettered rating classifications by a nationally recognized statistical rating organization acceptable to the superintendent; provided that the utility or utility property or the usage fees or other similar utility rates or charges are subject to regulation or oversight by a governmental unit. See N.Y. Insurance Law 6901