645.675 Qualified financial contracts.

812 words·~4 min read·/wi/chapter-645/645-675-3

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

(1)In this section:

(a)“Actual direct compensatory damages” includes normal and reasonable costs of cover or other reasonable measures of damages used in the derivatives, securities, or other markets for the contract and agreement claims. “Actual direct compensatory damages” does not include punitive or exemplary damages, damages for lost profit or lost opportunity, or damages for pain and suffering.

(b)“Business day” means any day other than a Saturday, a Sunday, or a day on which the New York Stock Exchange, or the Federal Reserve Bank of New York is closed.

(c)“Commodity contract” means any of the following:

1. A contract for the purchase or sale of a commodity for future delivery on, or subject to the rules of, a board of trade or contract market under the federal Commodity Exchange Act, 7 USC 1 , et seq., or a board of trade outside the United States.

2. An agreement that is subject to regulation under the federal Commodity Exchange Act, 7 USC 23 , and that is commonly known to the commodities trade as a margin account, margin contract, leverage account, or leverage contract.

3. An agreement or transaction that is subject to regulation under the federal Commodity Exchange Act, 7 USC 6c , and that is commonly known to the commodities trade as a commodity option.

4. Any combination of agreements or transactions specified in subds. 1. to 3.

5. Any option to enter into an agreement or transaction specified in subds. 1. to 3.

(d)“Contractual right” includes any right established in a rule or bylaw, or in a resolution, of the governing board of a derivatives clearing organization or board of trade as defined in the federal Commodity Exchange Act, 7 USC 1 , et seq.; a multilateral clearing organization, as defined in the federal Deposit Insurance Corporation Improvement Act of 1991, 12 USC 4402 ; a national securities exchange, a national securities association, a securities clearing agency, or a control market designated under the federal Commodity Exchange Act, 7 USC 1 , et seq.; or a derivatives transaction execution facility registered under the federal Commodity Exchange Act, 7 USC 1 , et seq., or any right, regardless whether it is in writing, arising under statutory or common law, or under the uniform commercial code, or by reason of normal business practice.

(e)“Counterparty” means a person who enters into a qualified financial contract with an insurer.

(f)“Credit insurance” means insurance against loss arising from failure of debtors to meet financial obligations to creditors, except mortgage guaranty insurance.

(g)“Credit life insurance” means insurance on the lives of borrowers or purchasers of goods in connection with specific loans or credit transactions when all or a portion of the insurance is payable to the creditor to reduce or extinguish the debt.

(h)“Disability insurance” means insurance covering injury or death of persons caused by accident or insurance covering the health of persons.

(i)“Financial guaranty insurance” means a surety bond, insurance policy, indemnity contract, or any similar guarantee issued by an insurer under which a loss is payable upon proof of occurrence of financial loss to an insured claimant. “Financial guaranty insurance” does not include credit insurance, credit life insurance, disability insurance, mortgage guaranty insurance, or long-term care insurance.

(j)“First-method provision” means a contract provision in which the nondefaulting party is not required to pay if a net or settlement amount is owed to the defaulting party.

(k)“Forward contract” has the meaning given in 12 USC 1821

(8)(D).

(L)“Mortgage guaranty insurance” means insurance against loss arising from any of the following:

1. Debtors to meet financial obligations to creditors under evidences of indebtedness that are secured by any of the following:

a. A first lien or charge on residential real estate designed for occupancy by not more than 4 families.

b. A first lien of charge on residential real estate designed for occupancy by 5 or more families.

c. A first lien or charge on real estate designed for industrial or commercial purposes.

d. A junior lien or charge on residential real estate.

2. Lessees to make payment on rentals under leases of real estate in which the lease extends for 3 years or longer.

(m)“Netting agreement” means any of the following:

1. A contract or agreement, or terms and conditions in a contract or agreement, including a master agreement together with all schedules, confirmations, definitions, and addenda, that documents one or more transactions between the parties to the agreement for, or involving, one or more qualified financial contracts and that provides for either the netting, liquidation, setoff, termination, acceleration, or close-out under, or in connection with, one or more qualified financial contracts or present or future payment or delivery obligations or entitlements, including related liquidation or close-out values, among the parties to the netting agreement.