special purpose vehicle (SPV)

A special purpose vehicle (SPV) is a company created by (but not owned by) an insurer or reinsurer for the sole purpose of issuing debt (usually in the form of a catastrophe bond). The use of SPVs is restricted to off-shore domiciles to be able to maintain the issuer's (the US-based insurer or reinsurer) US tax and accounting treatments with regard to such transactions.