(a) An SPFC may issue securities, including surplus notes and other forms of financial instruments, subject to and in accordance with applicable law, its approved plan of operation, and its organizational documents.
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Terms Used In Tennessee Code 56-13-410

  • Commissioner: means the commissioner of the department, or the commissioner's designee. See Tennessee Code 56-13-102
  • Contract: A legal written agreement that becomes binding when signed.
  • 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.
  • Organizational documents: means the documents that must be submitted pursuant to title 48 and title 61 in order to legally form a business in this state or to obtain a certificate of authority to transact business in this state. See Tennessee Code 56-13-102
  • written: includes printing, typewriting, engraving, lithography, and any other mode of representing words and letters. See Tennessee Code 1-3-105
(b) An SPFC, in connection with the issuance of securities, may enter into and perform all of its obligations under any required contracts to facilitate the issuance of these securities.
(c) Subject to the approval of the commissioner, an SPFC may lawfully:

(1) Account for the proceeds of surplus notes as surplus and not as debt for purposes of statutory accounting; and
(2) Submit for prior approval of the commissioner periodic written requests for payments of interest on and repayments of principal of surplus notes. In lieu of approval of periodic written requests for authorization to make payments of interest on and repayments of principal of surplus notes and other debt obligations issued by the SPFC, the commissioner may approve a formula or plan, which shall be included in the SPFC’s plan of operation as amended from time to time, for payment of interest, principal, or both with respect to such surplus notes and debt obligations.
(d) The commissioner, without otherwise prejudicing the commissioner’s authority, may approve formulas for an ongoing plan of interest payments or principal repayments, or both, to provide guidance in connection with the commissioner’s ongoing reviews of requests to approve the payments on and principal repayments of the surplus notes.
(e) The obligation to repay principal or interest, or both, on the securities issued by the SPFC must reflect the risk associated with the obligations of the SPFC to the counterparty under the SPFC contract.
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