Kentucky Statutes 304.7-423 – Investment practices that are allowed without regard to limitations of this subtitle
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(1) Solely for the purpose of acquiring investments that exceed the quantitative limitations of KRS § 304.7-403, 304.7-405, 304.7-407, 304.7-409, 304.7-411, 304.7-
413, 304.7-415, and 304.7-417, an insurer may acquire under this subsection an investment, or engage in investment practices described in KRS § 304.7-415, but an insurer shall not acquire an investment, or engage in investment practices described in KRS § 304.7-415, under this subsection if, as a result of and after giving effect to the transaction:
(a) The aggregate amount of investments then held by an insurer under this subsection would exceed three percent (3%) of its admitted assets; or
(b) The aggregate amount of investments as to one (1) limitation in KRS § 304.7-
403, 304.7-405, 304.7-407, 304.7-409, 304.7-411, 304.7-413, 304.7-415, and
304.7-417 then held by the insurer under this subsection would exceed one percent (1%) of its admitted assets.
(2) (a) In addition to the authority provided under subsection (1) of this section, an insurer may acquire under this subsection an investment of any kind, or engage in investment practices described in KRS § 304.7-415, that are not specifically prohibited by this subtitle, without regard to the categories, conditions, standards, or other limitations of KRS § 304.7-403, 304.7-405,
304.7-407, 304.7-409, 304.7-411, 304.7-413, 304.7-415, and 304.7-417 if, as a result of and after giving effect to the transaction, the aggregate amount of investments then held under this subsection would not exceed the lesser of:
1. Ten percent (10%) of its admitted assets; or
2. Seventy-five percent (75%) of its capital and surplus.
(b) However, an insurer shall not acquire any investment or engage in any investment practice under this subsection if, as a result of and after giving effect to the transaction, the aggregate amount of all investments in any one (1) person then held by the insurer under this subsection would exceed three percent (3%) of its admitted assets.
(3) In addition to the investments acquired under subsections (1) and (2) of this section, an insurer may acquire under this subsection an investment of any kind, or engage in investment practices described in KRS § 304.7-415, that are not specifically prohibited by this subtitle without regard to any limitations of KRS § 304.7-403,
304.7-405, 304.7-407, 304.7-409, 304.7-411, 304.7-413, 304.7-415, and 304.7-417 if:
(a) The commissioner grants prior approval;
(b) The insurer demonstrates that its investments are being made in a prudent manner and that the additional amounts will be invested in a prudent manner; and
(c) As a result of and after giving effect to the transaction, the aggregate amount of investments then held by the insurer under this subsection does not exceed the greater of:
1. Twenty-five percent (25%) of its capital and surplus; or
2. One hundred percent (100%) of capital and surplus less ten percent
(10%) of its admitted assets.
(4) An investment prohibited under KRS § 304.7-363, not permitted under KRS § 304.7-
419, or additional derivative instruments acquired under KRS § 304.7-419 shall not be acquired under this section.
Effective: July 15, 2010
History: Amended 2010 Ky. Acts ch. 24, sec. 1020, effective July 15, 2010. — Created
2000 Ky. Acts ch. 388, sec. 18, effective July 14, 2000.
413, 304.7-415, and 304.7-417, an insurer may acquire under this subsection an investment, or engage in investment practices described in KRS § 304.7-415, but an insurer shall not acquire an investment, or engage in investment practices described in KRS § 304.7-415, under this subsection if, as a result of and after giving effect to the transaction:
Terms Used In Kentucky Statutes 304.7-423
- Admitted assets: means assets permitted to be reported as admitted assets in accordance with Subtitle 6 of KRS Chapter 304 on the statutory financial statement of the insurer most recently required to be filed with the commissioner, but excluding assets of separate accounts. See Kentucky Statutes 304.7-012
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Investment practices: means transactions of the types described in KRS §. See Kentucky Statutes 304.7-012
- Person: means an individual, a business entity, a multilateral development bank, or a government or quasi-governmental body, such as a political subdivision or a government sponsored enterprise. See Kentucky Statutes 304.7-012
(a) The aggregate amount of investments then held by an insurer under this subsection would exceed three percent (3%) of its admitted assets; or
(b) The aggregate amount of investments as to one (1) limitation in KRS § 304.7-
403, 304.7-405, 304.7-407, 304.7-409, 304.7-411, 304.7-413, 304.7-415, and
304.7-417 then held by the insurer under this subsection would exceed one percent (1%) of its admitted assets.
(2) (a) In addition to the authority provided under subsection (1) of this section, an insurer may acquire under this subsection an investment of any kind, or engage in investment practices described in KRS § 304.7-415, that are not specifically prohibited by this subtitle, without regard to the categories, conditions, standards, or other limitations of KRS § 304.7-403, 304.7-405,
304.7-407, 304.7-409, 304.7-411, 304.7-413, 304.7-415, and 304.7-417 if, as a result of and after giving effect to the transaction, the aggregate amount of investments then held under this subsection would not exceed the lesser of:
1. Ten percent (10%) of its admitted assets; or
2. Seventy-five percent (75%) of its capital and surplus.
(b) However, an insurer shall not acquire any investment or engage in any investment practice under this subsection if, as a result of and after giving effect to the transaction, the aggregate amount of all investments in any one (1) person then held by the insurer under this subsection would exceed three percent (3%) of its admitted assets.
(3) In addition to the investments acquired under subsections (1) and (2) of this section, an insurer may acquire under this subsection an investment of any kind, or engage in investment practices described in KRS § 304.7-415, that are not specifically prohibited by this subtitle without regard to any limitations of KRS § 304.7-403,
304.7-405, 304.7-407, 304.7-409, 304.7-411, 304.7-413, 304.7-415, and 304.7-417 if:
(a) The commissioner grants prior approval;
(b) The insurer demonstrates that its investments are being made in a prudent manner and that the additional amounts will be invested in a prudent manner; and
(c) As a result of and after giving effect to the transaction, the aggregate amount of investments then held by the insurer under this subsection does not exceed the greater of:
1. Twenty-five percent (25%) of its capital and surplus; or
2. One hundred percent (100%) of capital and surplus less ten percent
(10%) of its admitted assets.
(4) An investment prohibited under KRS § 304.7-363, not permitted under KRS § 304.7-
419, or additional derivative instruments acquired under KRS § 304.7-419 shall not be acquired under this section.
Effective: July 15, 2010
History: Amended 2010 Ky. Acts ch. 24, sec. 1020, effective July 15, 2010. — Created
2000 Ky. Acts ch. 388, sec. 18, effective July 14, 2000.