Independent trust or captive created to act as a conduit through which an insurer can transfer insurance risk to the capital market. The SPV sells bonds to investors who will sacrifice principal and/or interest if a defined catastrophe occurs. The SPV like a reinsurer uses the sacrificed funds to indemnify the insurer. The SPV is bankruptcy-remote and holds legal rights over the assets transferred. SPVS do not just apply to insurance-related transactions.