Terms Used In South Carolina Code > Title 38 > Chapter 12 > Article 1 - General Provisions

• abatement: refers to actions taken to ameliorate or correct conditions requiring remediation as defined in this section. See South Carolina Code 40-23-20
• Acceptable collateral: means :
  
  (a) cash, cash equivalents, letters of credit, or direct obligations of, or securities that are fully guaranteed as to principal and interest by the government of the United States, an agency of the United States, the Federal National Mortgage Association, or the Federal Home Loan Mortgage Corporation in respect to securities lending transactions, repurchase transactions, and reverse repurchase transactions and for the purpose of calculating counterparty exposure amount; and
  
  (b) sovereign debt rated 1 by the SVO or an equivalent rating by a nationally recognized statistical rating organization recognized by the SVO as to foreign securities lending transactions. See South Carolina Code 38-12-30
• Accident and health insurance: means protection that provides payment of benefits for covered sickness or accidental injury, excluding credit insurance, disability insurance, accidental death and dismemberment insurance, and long-term care insurance. See South Carolina Code 38-12-30
• Administrator: means the individual to whom the director has delegated authority to administer the programs of a specific board or of a professional or occupational group for which the department has regulatory authority or has delegated authority to administer the programs of a specific board;
  
  (2) "Authorization to practice" or "Practice authorization" means the approval to practice the specified profession, engage in the specified occupation, or use a title protected under this article, which has been granted by the applicable board. See South Carolina Code 40-1-20
• Admitted asset: means an asset that is identified specifically as an admitted asset within the NAIC accounting manual or is not identified specifically as a nonadmitted asset within the NAIC accounting manual, excluding assets of separate accounts because the investments and investment practices of separate accounts are not subject to the provisions of this chapter. See South Carolina Code 38-12-30
• Admitted assets: means assets of an insurer considered admitted on the most recent statutory financial statement of the insurer filed with the department pursuant to § 38-13-80. See South Carolina Code 38-1-20
• Affiliate: means , in respect to a person, another person that, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with the person. See South Carolina Code 38-12-30
• Alien insurer: means an insurer incorporated or organized under the laws of a country other than the United States of America, its states, commonwealths, territories, or insular possessions. See South Carolina Code 38-1-20
• Asset-backed security: means a security or other instrument, excluding a mutual fund, evidencing an interest in or the right to receive payments from or payable from distributions on an asset, a pool of assets, or specifically divisible cash flows that are transferred legally to a trust or another special purpose bankruptcy-remote business entity, on the following conditions:
  
  (a) the trust or other business entity is established for the sole purpose of acquiring specific types of assets or rights to cash flows, issuing securities and other instruments representing an interest in or right to receive cash flows from those assets or rights, and engaging in activities required to service the assets or rights and any credit enhancement or support features held by the trust or other business entity; and
  
  (b) the sole assets of the trust or other business entity are interest bearing obligations or other contractual obligations representing the right to receive payment from the cash flows from the assets or rights. See South Carolina Code 38-12-30
• Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
• Board: means the South Carolina Environmental Certification Board. See South Carolina Code 40-23-20
• Business entity: means a sole proprietorship, corporation, limited liability company, association, general or limited partnership, joint stock company, joint venture, mutual fund, bank, trust, real estate investment trust, joint tenancy, or other similar form of business organization, whether organized for-profit or not-for-profit. See South Carolina Code 38-12-30
• Cap: means an agreement obligating the seller to make payments to the buyer, with each payment based on the amount by which a reference price or level or the performance or value of one or more underlying interests exceeds a predetermined number, sometimes called the "strike rate" or "strike price". See South Carolina Code 38-12-30
• Capital and surplus: means the sum of the capital and surplus of the insurer required to be shown on the statutory financial statement of the insurer filed most recently with the director. See South Carolina Code 38-12-30
• Cash equivalents: means highly rated, highly liquid, and readily marketable obligations that are convertible readily into known amounts of cash without penalty and have a remaining term to maturity of one year or less. See South Carolina Code 38-12-30
• Class one bond mutual fund: means a mutual fund that is qualified for investment using the bond class one reserve factor of the SVO procedures manual. See South Carolina Code 38-12-30
• Commission: means the part of the premium paid to the producer as compensation for his services. See South Carolina Code 38-1-20
• Contract: A legal written agreement that becomes binding when signed.
• Control: means the possession, directly or indirectly, by a person of the power to direct or cause the direction of the management and policies of another person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is the result of an official position with or corporate office held by the person. See South Carolina Code 38-12-30
• Conviction: A judgement of guilt against a criminal defendant.
• 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.
• Counterparty: means the business entity that is the other party to an investment practices transaction with the insurer or, as to a securities lending transaction, the custodian bank or agent, if any, acting on behalf of the insurer. See South Carolina Code 38-12-30
• Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
• Deed: The legal instrument used to transfer title in real property from one person to another.
• Department: means the Department of Labor, Licensing and Regulation;
  
  (5) "Director" means the Director of the Department of Labor, Licensing and Regulation or the director's official designee;
  
  (6) "Licensee" means a person granted an authorization to practice pursuant to this article and refers to a person holding a license, permit, certification, or registration granted pursuant to this article;
  
  (7) "Licensing act" means the individual statute or regulations, or both, of each regulated profession or occupation which include, but are not limited to, board governance, the qualifications and requirements for authorization to practice, prohibitions, and disciplinary procedures;
  
  (8) "Person" means an individual, partnership, or corporation;
  
  (9) "Profession" or "occupation" means a profession or occupation regulated or administered, or both, by the department pursuant to this article. See South Carolina Code 40-1-20
• derivative instrument: includes options, warrants not attached to another financial instrument purchased by the insurer, caps, floors, collars, swaps, forwards, futures, and other substantially similar agreements, options, or instruments, or a series or combination of any of them. See South Carolina Code 38-12-30
• Derivative transaction: means a transaction involving the use of one or more derivative instruments. See South Carolina Code 38-12-30
• directly: when used in connection with an obligation, means that the designated obligor is primarily liable on the instrument representing the obligation. See South Carolina Code 38-12-30
• Director: means the person who is appointed by the Governor upon the advice and consent of the Senate and who is responsible for the operation and management of the department. See South Carolina Code 38-1-20
• Dollar roll transaction: means two simultaneous transactions with different settlement dates no more than ninety-six days apart, so that in the transaction with the earlier settlement date an insurer sells to a counterparty, and in the other transaction the insurer is obligated to purchase from the same counterparty, substantially similar securities of the following types:
  
  (a) asset-backed securities issued, assumed, or guaranteed by the Government National Mortgage Association, the Federal National Mortgage Association, or the Federal Home Loan Mortgage Corporation, or their respective successors; and
  
  (b) other asset-backed securities referred to in Section 106 of Title I of the Secondary Mortgage Market Enhancement Act of 1984 (15 U. See South Carolina Code 38-12-30
• Domestic jurisdiction: means the United States, Canada, or a state, province, or political subdivision of them. See South Carolina Code 38-12-30
• Equity interest: means any of the following that are not rated credit instruments:
  
  (a) common stock;
  
  (b) preferred stock;
  
  (c) trust certificate;
  
  (d) equity investment in an investment company other than a money market mutual fund or a class one bond mutual fund;
  
  (e) investment in a common trust fund of a bank regulated by a federal or state agency;
  
  (f) an ownership interest in minerals, oil, or gas, the rights to which have been separated from the underlying fee interest in the real estate where the minerals, oil, or gas are located;
  
  (g) instruments which are mandatorily, or at the option of the issuer, convertible to equity;
  
  (h) limited partnership interests and those general partnership interests authorized by § 38-12-60(A)(4);
  
  (i) member interests in limited liability companies;
  
  (j) warrants or other rights to acquire equity interests that are created by the owner or issuer of the equity to be acquired; or
  
  (k) instruments that would be rated credit instruments except for the provisions of item (73)(b). See South Carolina Code 38-12-30
• Equivalent securities: means securities that are identical to the:
  
  (a) loaned securities in all features including the amount of the loaned securities, except as to certificate number if held in physical form, but if a different security is exchanged for a loaned security by recapitalization, merger, consolidation, or other corporate action, the different security is considered to be the loaned security, in a securities lending transaction;
  
  (b) purchased securities in all features including the amount of the purchased securities, except as to the certificate number if held in physical form, in a repurchase transaction; or
  
  (c) sold securities in all features including the amount of the sold securities, except as to the certificate number if held in physical form, in a reverse repurchase transaction. See South Carolina Code 38-12-30
• Escrow: Money given to a third party to be held for payment until certain conditions are met.
• 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.
• Federal Reserve System: The central bank of the United States. The Fed, as it is commonly called, regulates the U.S. monetary and financial system. The Federal Reserve System is composed of a central governmental agency in Washington, D.C. (the Board of Governors) and twelve regional Federal Reserve Banks in major cities throughout the United States. ^{Source: OCC}
• Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
• Floor: means an agreement obligating the seller to make payments to the buyer in which each payment is based on the amount by which a predetermined number, sometimes called the floor rate or price, exceeds a reference price, level, performance, or value of one or more underlying interests. See South Carolina Code 38-12-30
• Foreign currency: means a currency other than that of a domestic jurisdiction. See South Carolina Code 38-12-30
• Foreign jurisdiction: means a jurisdiction other than a domestic jurisdiction. See South Carolina Code 38-12-30
• Forward: means an agreement, other than a future, to make or take delivery in the future of, or effect a cash settlement based on the actual or expected price, level, performance, or value of, one or more underlying interests. See South Carolina Code 38-12-30
• Future: includes an insurance future. See South Carolina Code 38-12-30
• Futures exchange: means a qualified foreign exchange or an exchange, contract market, or board of trade on which trading in futures is conducted that the Commodities Futures Trading Commission or its successor has authorized for futures trading in the United States. See South Carolina Code 38-12-30
• Government money market mutual fund: means a money market mutual fund that at all times:
  
  (a) invests only in obligations issued, guaranteed, or insured by the federal government of the United States or collateralized repurchase agreements composed of these obligations; and
  
  (b) qualifies for investment without a reserve pursuant to the SVO procedures manual. See South Carolina Code 38-12-30
• Government sponsored enterprise: means a:
  
  (a) governmental agency; or
  
  (b) corporation, limited liability company, association, partnership, joint stock company, joint venture, trust, or other entity or instrumentality organized pursuant to the laws of a domestic jurisdiction to accomplish a public policy or other governmental purpose. See South Carolina Code 38-12-30
• Guaranteed or insured: when used in connection with an obligation acquired pursuant to this chapter, means that the guarantor or insurer has agreed to:
  
  (a) perform or insure the obligation of the obligor or purchase the obligation; or
  
  (b) be obligated unconditionally until the obligation is repaid to maintain in the obligor a minimum net worth, fixed charge coverage, stockholders' equity, or sufficient liquidity to enable the obligor to pay the obligation in full. See South Carolina Code 38-12-30
• Guarantor: A party who agrees to be responsible for the payment of another party's debts should that party default. ^{Source: OCC}
• Hedging transaction: means a derivative transaction that is entered into and maintained to reduce the:
  
  (a) risk of a change in the value, yield, price, cash flow, or quantity of assets or liabilities, or a portfolio of assets or liabilities or both, that an insurer has acquired or incurred or anticipates acquiring or incurring; or
  
  (b) currency exchange rate risk related to assets or liabilities, or a portfolio of assets or liabilities, or both of them, that an insurer has acquired or incurred or anticipates acquiring or incurring. See South Carolina Code 38-12-30
• High grade investment: means a rated credit instrument rated 1, 2, P1, P2, PFS1, or PFS2 by the SVO or an equivalent rating by a nationally recognized statistical rating organization recognized by the SVO. See South Carolina Code 38-12-30
• highly rated: means an investment rated "P-1" by Moody's Investors Service, Incorporated, or "A-1" by the Standard and Poor's Division of The McGraw Hill Companies, Incorporated, or an equivalent rating by a nationally recognized statistical rating organization recognized by the SVO. See South Carolina Code 38-12-30
• Income generation transaction: means a derivative transaction that is intended to generate income or enhance return. See South Carolina Code 38-12-30
• Initial margin: means the amount of cash, securities, or other consideration initially required to be deposited to establish a futures position. See South Carolina Code 38-12-30
• insurance: includes annuities. See South Carolina Code 38-1-20
• Insurance company: means an "insurer". See South Carolina Code 38-1-20
• Insurance future: means a future relating to an index or pool that is based on insurance-related items. See South Carolina Code 38-12-30
• Insurance futures option: means an option on an insurance future. See South Carolina Code 38-12-30
• Insurer: includes a corporation, fraternal organization, burial association, other association, partnership, society, order, individual, or aggregation of individuals engaging or proposing or attempting to engage as principals in any kind of insurance or surety business, including the exchanging of reciprocal or interinsurance contracts between individuals, partnerships, and corporations. See South Carolina Code 38-1-20
• 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 affiliate: means a subsidiary of an insurer or a direct or indirect subsidiary of the insurer's parent company (parent) that is engaged or organized to engage exclusively in the ownership and management of assets authorized as investments for the insurer, if the affiliate agrees to limit its investment in any asset so that its investments will not cause the amount of the total investment of the insurer to exceed the investment limitations or avoid other provisions of this chapter applicable to the insurer. See South Carolina Code 38-12-30
• Investment company: means an investment company as defined in Section 3(a) of the Investment Company Act of 1940 (15 U. See South Carolina Code 38-12-30
• Investment company series: means an investment portfolio of an investment company organized as a series company to which portfolio assets of the investment company have been allocated specifically. See South Carolina Code 38-12-30
• Investment practices: means transactions of the types described in Sections 38-12-280, 38-12-300, 38-12-490, and 38-12-510. See South Carolina Code 38-12-30
• Investment strategy: means the techniques and methods used by an insurer to meet its investment objectives, such as active bond portfolio management, passive bond portfolio management, interest rate anticipation, growth investing, and value investing. See South Carolina Code 38-12-30
• Joint tenancy: A form of property ownership in which two or more parties hold an undivided interest in the same property that was conveyed under the same instrument at the same time. A joint tenant can sell his (her) interest but not dispose of it by will. Upon the death of a joint tenant, his (her) undivided interest is distributed among the surviving joint tenants.
• 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}
• Letter of credit: means a clean, irrevocable, and unconditional letter of credit issued or confirmed by, and payable and presentable at, a financial institution on the list of financial institutions meeting the standards for issuing letters of credit pursuant to the SVO procedures manual. See South Carolina Code 38-12-30
• Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
• License: means a serially numbered document issued by the board, containing the name of the person registered, certified, or licensed and the date of registration, certification, or licensing and certifying that the person named is authorized to practice a profession regulated by the board as specified on said document. See South Carolina Code 40-23-20
• Licensed activity: means any operation, function, or action of any kind in which one may not engage, or offer to engage, without a license issued pursuant to this chapter. See South Carolina Code 40-23-20
• Licensee: means a person currently or previously authorized to practice a licensed activity pursuant to this chapter and includes a person holding a license, permit, certification, or registration granted pursuant to this chapter. See South Carolina Code 40-23-20
• Lien: A claim against real or personal property in satisfaction of a debt.
• Limited liability company: means a business organization, excluding partnerships and ordinary business corporations, organized or operating pursuant to the laws of the United States or a state of the United States that limits the personal liability of investors to the equity investment of the investor in the business entity. See South Carolina Code 38-12-30
• Lower grade investment: means a rated credit instrument rated 4, 5, 6, P4, P5, P6, PFS4, PFS5, or PFS6 by the SVO or an equivalent rating by a nationally recognized statistical rating organization recognized by the SVO. See South Carolina Code 38-12-30
• Market value: means :
  
  (a) the amount of cash or a letter of credit; or
  
  (b) the price of a security or derivative instrument on any date obtained from a generally recognized source or the most recent quotation from the source or, to the extent no generally recognized source exists, the price for the security or derivative instrument as determined pursuant to the terms of the instrument or in good faith by the parties to a transaction, plus accrued but unpaid income on the security or derivative instrument to the extent that income is not included in the price as of the date that market value is determined. See South Carolina Code 38-12-30
• Medium grade investment: means a rated credit instrument that at the time of acquisition by the insurer is rated 3, P3 or PSF3 by the SVO or an equivalent rating by a nationally recognized statistical rating organization recognized by the SVO. See South Carolina Code 38-12-30
• Money market mutual fund: means a mutual fund that meets the conditions of 17 Code of Federal Regulations Par. See South Carolina Code 38-12-30
• Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
• Mortgage loan: A loan made by a lender to a borrower for the financing of real property. ^{Source: OCC}
• Mortgage loan: means an obligation secured by a mortgage, deed of trust, trust deed, or other consensual lien on real estate. See South Carolina Code 38-12-30
• Multilateral development bank: means an international development organization of which the United States is a member. See South Carolina Code 38-12-30
• Mutual fund: means an investment company or, in the case of an investment company that is organized as a series company, an investment company series, that, in either case, is registered with the United States Securities and Exchange Commission pursuant to the Investment Company Act of 1940 (15 U. See South Carolina Code 38-12-30
• NAIC: means the National Association of Insurance Commissioners. See South Carolina Code 38-12-30
• NAIC accounting manual: means the NAIC "Accounting Practices and Procedures Manual" as amended, or any successor publication. See South Carolina Code 38-12-30
• National Bank: A bank that is subject to the supervision of the Comptroller of the Currency. The Office of the Comptroller of the Currency is a bureau of the U.S. Treasury Department. A national bank can be recognized because it must have "national" or "national association" in its name. ^{Source: OCC}
• 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.
• Obligation: means a bond, note, debenture, trust certificate including an equipment trust certificate, production payment, negotiable bank certificate of deposit, bankers' acceptance, asset-backed security, credit tenant loan, loan secured by financing a net lease or net leases, and other evidence of indebtedness for the payment of money, or participations, certificates, or other evidences of an interest in any of them, whether constituting a general obligation of the issuer or payable only out of certain revenues or certain funds pledged or otherwise dedicated for payment. See South Carolina Code 38-12-30
• Option: includes an insurance futures option. See South Carolina Code 38-12-30
• Over-the-counter derivative instrument: means a derivative instrument entered into with a counterparty other than through a qualified exchange or futures exchange or cleared through a qualified clearinghouse. See South Carolina Code 38-12-30
• 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.
• Person: means an individual, partnership, copartnership, cooperative, firm, company, public or private corporation, political subdivision, government agency, trust, estate, joint structure company, or any other legal entity or its legal representative, agent, or assigns. See South Carolina Code 40-23-20
• Person: means an individual, a business entity, a multilateral development bank, or a government or quasi-governmental body, such as a political subdivision or a government sponsored enterprise. See South Carolina Code 38-12-30
• Policy: means a contract of insurance. See South Carolina Code 38-1-20
• Policyholder obligations: means those liabilities of the insurer to or for its policyholders arising out of its policies and to its creditors and includes the liabilities required to be included in the insurer's annual statement including, but not limited to, the unearned premium reserve, reserves required by applicable mortality or morbidity tables, and claim or loss reserves including incurred but not reported claims. See South Carolina Code 38-12-30
• Potential exposure: means :
  
  (a) the amount of initial margin required for a futures position; or
  
  (b) as to swaps, collars, and forwards, one-half of one percent times the notional amount times the square root of the remaining years to maturity. See South Carolina Code 38-12-30
• Precedent: A court decision in an earlier case with facts and law similar to a dispute currently before a court. Precedent will ordinarily govern the decision of a later similar case, unless a party can show that it was wrongly decided or that it differed in some significant way.
• Preferred stock: means preferred, preference, or guaranteed stock of a business entity authorized to issue the stock, that has a preference in liquidation over the common stock of the business entity. See South Carolina Code 38-12-30
• Premium: means payment given in consideration of a contract of insurance. See South Carolina Code 38-1-20
• Qualified bank: means :
  
  (a) a national bank, state-chartered bank, or trust company that is at all times capitalized adequately as determined by standards adopted by United States banking regulators and that is either regulated by state banking laws or is a member of the Federal Reserve System; or
  
  (b) a bank or trust company incorporated or organized pursuant to the laws of a country other than the United States that is regulated as a bank or trust company by that country's government or an agency of it and that is at all times capitalized adequately as determined by the standards adopted by international banking authorities. See South Carolina Code 38-12-30
• Qualified business entity: means a business entity that is:
  
  (a) an issuer of obligations or preferred stock that are rated 1 or 2 by the SVO or an issuer of obligations, preferred stock, or derivative instruments that are rated the equivalent of 1 or 2 by the SVO or by a nationally recognized statistical rating organization recognized by the SVO;
  
  (b) a primary dealer in United States government securities, that is recognized by the Federal Reserve Bank of New York; or
  
  (c) with respect to investment practices under § 38-12-280, an affiliate of an entity that is a qualified business entity pursuant to this item, provided that the affiliate's obligation pursuant to its agreement with the insurer are guaranteed by a qualified business entity that meets the requirements of subitem (a) or (b). See South Carolina Code 38-12-30
• Qualified clearinghouse: means a clearinghouse subject to the rules of a qualified exchange or a qualified foreign exchange that provides clearing services, including acting as a counterparty to each of the parties to a transaction so that the parties no longer have credit risk to each other. See South Carolina Code 38-12-30
• Qualified exchange: means :
  
  (a) a securities exchange registered as a national securities exchange, or a securities market regulated pursuant to the Securities Exchange Act of 1934 (15 U. See South Carolina Code 38-12-30
• Qualified foreign exchange: means a foreign exchange, board of trade, or contract market located outside the United States, its territories, or possessions:
  
  (a) that has received regulatory comparability relief pursuant to CFTC Rule 30. See South Carolina Code 38-12-30
• Qualified primary credit source: means the credit source to which an insurer looks for payment as to an investment and against which an insurer has a direct claim for full and timely payment, evidenced by a contractual right for which an enforcement action may be brought in a domestic jurisdiction. See South Carolina Code 38-12-30
• Rated credit instrument: means an obligation or other instrument that gives its holder a contractual right to receive cash or another rated credit instrument from another entity, and that:
  
  (i) is rated by the SVO or a nationally recognized statistical rating organization recognized by the SVO;
  
  (ii) is issued, guaranteed, or insured by an entity that is rated by, or another obligation or other instrument of such entity is rated by, the SVO or a nationally recognized statistical rating organization recognized by the SVO, in the case of an obligation or other instrument with a maturity of three hundred ninety-seven days or less;
  
  (iii) has been issued, assumed, accepted, guaranteed, or insured by a qualified bank, in the case of an obligation or other instrument with a maturity of ninety days or less;
  
  (iv) is a share of a class one bond mutual fund; or
  
  (v) is a share of a money market mutual fund. See South Carolina Code 38-12-30
• real estate: includes the leasehold estate only if it has an unexpired term, including renewal options exercisable at the option of the lessee, extending beyond the scheduled maturity date of the obligation that is secured by a mortgage on the leasehold estate by a period equal to at least twenty percent of the original term of the obligation or ten years, whichever is greater. See South Carolina Code 38-12-30
• Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
• Remediation: means the correction, repair, restoration, or any other action taken in order to bring any condition or circumstance into compliance with a statute, standard, or regulation. See South Carolina Code 40-23-20
• Replication transaction: means a derivative transaction or combination of derivative transactions that is entered into separately or in conjunction with other permissible investments held or acquired by the insurer in order to replicate the investment characteristics of otherwise permissible investments or operate as a substitute for cash market transactions, or for both reasons. See South Carolina Code 38-12-30
• Repurchase transaction: means a transaction in which an insurer purchases securities from a counterparty that is obligated to repurchase the purchased securities or equivalent securities from the insurer at a specified price, within a specified period of time or upon demand. See South Carolina Code 38-12-30
• Required liabilities: means total liabilities required to be reported on the statutory financial statement of the insurer most recently required to be filed with the director. See South Carolina Code 38-12-30
• Residential mortgage loan: means a loan primarily secured by a mortgage on real estate improved with a one-to-four family residence. See South Carolina Code 38-12-30
• Reverse repurchase transaction: means a transaction in which an insurer sells securities to a qualified bank or a qualified business entity or a bank or a business entity whose obligations with respect to the transaction are guaranteed by a qualified bank or a qualified business entity and the insurer is obligated to repurchase the sold securities or equivalent securities from the bank or business entity at a specified price, within a specified period of time or upon demand. See South Carolina Code 38-12-30
• Secured location: means the contiguous real estate owned by one person. See South Carolina Code 38-12-30
• Securities lending transaction: means a transaction in which securities are loaned by an insurer or its custodian bank or agent to a qualified bank or a qualified business entity or a bank or a business entity whose obligations with respect to the transaction are guaranteed by a qualified bank or a qualified business entity that is obligated to return the loaned securities or equivalent securities to the insurer, its custodian bank, or agent, within a specified period of time or upon demand. See South Carolina Code 38-12-30
• Sell: means to exchange a contract of insurance by any means, for money or its equivalent, on behalf of an insurance company. See South Carolina Code 38-1-20
• Series company: means an investment company that is organized as a series company, as defined in Rule 18f-2(a) adopted under the Investment Company Act of 1940 (15 U. See South Carolina Code 38-12-30
• Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
• Shell business entity: means a business entity having no economic substance, except as a vehicle for owning interests in assets issued, owned, or previously owned by a person domiciled in a foreign jurisdiction. See South Carolina Code 38-12-30
• Sinking fund stock: means preferred stock that:
  
  (a) is subject to a mandatory sinking fund or similar arrangement that provides for the redemption, or open market purchase, of the entire issue over a period not longer than forty years from the date of acquisition; and
  
  (b) provides for mandatory sinking fund installments, or open market purchases, commencing not more than ten and one-half years from the date of issue, with the sinking fund installments providing for the purchase or redemption, on a cumulative basis commencing ten years from the date of issue, of at least two and one-half percent each year of the original number of shares of that issue of preferred stock. See South Carolina Code 38-12-30
• Special rated credit instrument: means a rated credit instrument that is:
  
  (1) an instrument that is structured so that, if it is held until retired by or on behalf of the issuer, its rate of return based on its purchase cost and any cash flow stream possible under the structure of the transaction may become negative due to reasons other than the credit risk associated with the issuer of the instrument. See South Carolina Code 38-12-30
• State: means a state, territory, or possession of the United States of America, the District of Columbia, or the Commonwealth of Puerto Rico. See South Carolina Code 38-12-30
• Substantially similar securities: means securities that meet all criteria for substantially similar securities specified in the NAIC accounting manual, and in an amount that constitutes good delivery form as determined by "The Bond Market Association". See South Carolina Code 38-12-30
• SVO: means the Securities Valuation Office of the NAIC or any successor office established by the NAIC. See South Carolina Code 38-12-30
• SVO procedures manual: means the "Purposes and Procedures of the Securities Valuation Office" as amended, or any successor publication. See South Carolina Code 38-12-30
• Swap: means an agreement to exchange or to net payments at one or more times based on the actual or expected price, yield, level, performance or value of one or more underlying interests. See South Carolina Code 38-12-30
• Terminate: means the cancellation of the relationship between an insurance producer and the insurer or the termination of a producer's authority to transact insurance. See South Carolina Code 38-1-20
• Underlying interest: means the assets, liabilities, or other interests, or a combination of them, underlying a derivative instrument such as any one or more securities, currencies, rates, indices, commodities, or derivative instruments that are or relate to investments or investment practices that an insurer is permitted to acquire or engage in pursuant to this chapter. See South Carolina Code 38-12-30
• Unrestricted surplus: means the amount by which total admitted assets exceed one hundred twenty-five percent of the insurer's required liabilities. See South Carolina Code 38-12-30
• Variable Rate: Having a "variable" rate means that the APR changes from time to time based on fluctuations in an external rate, normally the Prime Rate. This external rate is known as the "index." If the index changes, the variable rate normally changes. Also see Fixed Rate.
• Warrant: means an instrument that gives the holder the right to purchase an underlying financial instrument at a given price and time or at a series of prices and times outlined in the warrant agreement. See South Carolina Code 38-12-30
• Well: means a manmade horizontal, vertical, or angled opening in the ground made by digging, boring, drilling, jetting, driving, direct push technology, or any other method through which water is injected or withdrawn from beneath the surface of the earth for the purpose of human consumption, irrigation, industrial or commercial processes, or construction of closed loop systems. See South Carolina Code 40-23-20