(B) To transact business in this State a SPFC shall:

1. (1) obtain from the director a license authorizing it to conduct insurance or reinsurance business, or both, in this State;
2. (2) hold at least one management meeting each year in this State;
3. (3) maintain its principal place of business in this State; and
4. (4) appoint a resident registered agent to accept service of process and to otherwise act on its behalf in this State. If the registered agent, with reasonable diligence, is not found at the registered office of the SPFC, the director must be an agent of the SPFC upon whom any process, notice, or demand may be served.

(C)

1. (1) Before receiving a license, a SPFC shall file with the director a certified copy of its organizational documents, a statement under oath of its president and secretary showing its financial condition, and any other statements or documents required by the director.

2. (2) In addition to the information required by item (1), an applicant SPFC shall file with the director evidence of:

   1. (a) the amount and liquidity of its assets relative to the risks to be assumed;
   2. (b) the adequacy of the expertise, experience, and character of the person or persons who manages it;
   3. (c) the overall soundness of its plan of operation; and
   4. (d) other factors considered relevant by the director in ascertaining whether the proposed SPFC is able to meet its policy obligations.

3. (3) In addition to the information required by items (1) and (2), and to the provisions of Section 38-90-480, if a protected cell is used, an applicant SPFC shall file with the director:

   1. (a) a business plan demonstrating how the applicant accounts for the loss and expense experience of each protected cell at a level of detail found to be sufficient by the director, and how it reports the experience to the director;
   2. (b) a statement acknowledging that all financial records of the SPFC, including records pertaining to any protected cells, must be made available for inspection or examination by the director;
   3. (c) all contracts or sample contracts between the SPFC and any counterparty, related to each protected cell; and
   4. (d) evidence that expenses are allocated to each protected cell in an equitable manner.
4. (4) Information submitted pursuant to this subsection is confidential and is subject to Section 38-90-610.

(E) In addition, a complete SPFC application must include the following:

1. (1) an affidavit from the applicant verifying that the prospective SPFC meets the provisions of this article;
2. (2) a representation from the applicant that the prospective SPFC will operate only pursuant to the provisions in this article;
3. (3) biographical affidavits in NAIC format of all of the prospective SPFC's officers and directors, providing their legal names, any names under which they have or are conducting their affairs, and any affiliations with other persons as defined in Chapter 21 of this title, together with other biographical information as the director may request;
4. (4) the source and form of the minimum capital to be contributed to the SPFC;

5. (5) a plan of operation, consisting of a description of the contemplated insurance securitization, the SPFC contract, and related transactions, which must include:

   1. (a) draft documentation or, at the discretion of the director, a written summary of all material agreements that are entered into to effectuate the SPFC contract and the insurance securitization, to include the names of the counterparty, the nature of the risks being assumed, the proposed use of protected cells, if any, and the maximum amounts, purpose, and nature and the interrelationships of the various transactions required to effectuate the insurance securitization;
   2. (b) the investment strategy of the SPFC and a representation from the applicant that the investment strategy complies with the investment provisions provided for in this article;
   3. (c) a description of the underwriting, reporting, and claims payment methods by which losses covered by the SPFC contract are reported, accounted for, and settled;
   4. (d) a representation from the applicant that the trust agreement, the trusts holding assets that secure the obligations of the SPFC under the SPFC contract, and the SPFC contract with the counterparty in connection with the contemplated insurance securitization is structured pursuant to the provisions in this article;
   5. (e) a pro forma balance sheet and income statements illustrating various stress case scenarios for the performance of SPFC under the SPFC contract; and
   6. (f) an affidavit from the applicant that the securities proposed to be issued are valid legal obligations that are either properly registered with the Securities Commissioner or constitute an exempt security or form part of an exempt transaction pursuant to Section 35-1-201 or Section 35-1-202.

(F)

1. (1) A SPFC shall pay to the department a nonrefundable fee of two hundred dollars for processing its application for license. In addition, the director may retain legal, financial, and examination services from outside the department to examine and investigate the application, the reasonable cost of which may be charged against the applicant, or the director may use internal resources to examine and investigate the application for a fee of twelve thousand dollars, half of which is payable upon filing of the application and the remainder upon licensure.
2. (2) In addition, a SPFC also shall pay a license fee for the year of registration of three hundred dollars and an annual renewal fee of five hundred dollars.
3. (3) A SPFC shall pay an annual review fee of twenty-four hundred dollars or, if higher, the actual cost as determined by the director.

(G) The director may grant a license authorizing the SPFC to transact business as a SPFC in this State upon finding that:

1. (1) the proposed plan of operation provides a reasonable and expected successful operation;
2. (2) the terms of the SPFC contract and related transactions comply with this article;
3. (3) the proposed plan of operation is not hazardous to any counterparty;
4. (4) the commissioner of the state of domicile of each counterparty has notified the director in writing or otherwise provided assurance satisfactory to the director that it has approved or nondisapproved the transaction;
5. (5) the director may grant a license authorizing the SPFC to do insurance or reinsurance business in this State until March first at which time the license may be renewed;
6. (6) the certificate of authority authorizing the SPFC to transact business is limited only to the insurance or reinsurance activities that the SPFC is allowed to conduct pursuant to this article;
7. (7) the SPFC shall provide a complete set of the documentation of the insurance securitization to the director upon closing of the transactions, including an opinion of legal counsel with respect to compliance with this article and any other applicable laws as of the effective date of the transaction;
8. (8) in evaluating the expectation of a successful operation, the director shall consider, among other factors, whether the proposed SPFC, and its management are of known good character and reasonably believed not to be affiliated, directly or indirectly, through ownership, control, management, reinsurance transactions, or other insurance or business relations, with a person known to have been involved in the improper manipulation of assets, accounts, or reinsurance.