1. The contractual arrangements relating to the transfer of risk from an insurance or reinsurance undertaking to a special purpose vehicle and from the special purpose vehicle to the providers of debt or financing shall ensure all of the following:
(a) the transfer of risk is effective in all circumstances;
(b) the extent of risk transfer is clearly defined and incontrovertible.
2. The transfer of risk shall not be deemed to be effective in all circumstances where there are connected transactions which could undermine the effective transfer of risk.