Montana Code 33-12-105. Prohibited investments
33-12-105. Prohibited investments. (1) An insurer may not, directly or indirectly, without the prior written approval of the commissioner:
Terms Used In Montana Code 33-12-105
- Affiliate: has the meaning provided in 33-2-1101. See Montana Code 33-12-102
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Business entity: includes a sole proprietorship, corporation, limited liability company, association, partnership, joint-stock company, joint venture, mutual fund, trust, joint tenancy, or other similar form of business organization, whether organized for profit or not for profit. See Montana Code 33-12-102
- directly: when used in connection with an obligation, means that the designated obligor is primarily liable on the instrument representing the obligation. See Montana Code 33-12-102
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Obligation: means a bond, note, debenture, trust certificate including an equipment certificate, production payment, negotiable bank certificate of deposit, bankers' acceptance, credit tenant loan, loan secured by financing net leases, and other evidence of indebtedness for the payment of money (or participations, certificates, or other evidences of an interest in any of the foregoing), whether constituting a general obligation of the issuer or payable only out of certain revenue or certain funds pledged or otherwise dedicated for payment. See Montana Code 33-12-102
- Option: means an agreement giving the buyer the right to buy or receive (a "call option"), sell or deliver (a "put option"), enter into, extend or terminate, or effect a cash settlement based on the actual or expected price, level, performance, or value of one or more underlying interests. See Montana Code 33-12-102
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
- Property: means real and personal property. See Montana Code 1-1-205
(a)invest in an obligation or security or make a guarantee for the benefit of or in favor of an officer or director of the insurer, except as provided in 33-12-106;
(b)invest in an obligation or security of, make a guarantee for the benefit of or in favor of, or make other investments in a business entity of which 10% or more of the voting securities or equity interests are owned directly or indirectly by or for the benefit of one or more officers or directors of the insurer, except as authorized in Title 33, chapter 2, part 11, or as provided in 33-12-106;
(c)engage on its own behalf or through one or more affiliates in a transaction or series of transactions designed to evade the prohibitions of this chapter; or
(d)except as provided in subsection (2), invest in or lend its funds upon the security of shares of its own stock.
(2)(a) An insurer may acquire shares of its own stock for the following purposes:
(i)conversion of a stock insurer into a mutual or reciprocal insurer or conversion of a mutual or reciprocal insurer into a stock insurer; or
(ii)issuance to the insurer’s officers, employees, or agents in connection with a plan approved by the commissioner in connection with stock option and employee benefit plans.
(b)Shares of stock that are subject to subsection (2)(a) may not be admitted assets of the insurer.
(3)(a) An insurer may not, directly or indirectly, without the prior written approval of the commissioner invest in a partnership as a general partner, except that an insurer may make an investment as a general partner:
(i)if all other partners in the partnership are subsidiaries of the insurer;
(ii)for the purpose of:
(A)meeting cash calls committed to prior to July 1, 1999;
(B)completing those specific projects or activities of the partnership in which the insurer was a general partner as of July 1, 1999, that had been undertaken as of July 1, 1999; or
(C)making capital improvements to property owned by the partnership on July 1, 1999, if the insurer was a general partner as of July 1, 1999; or
(iii)in accordance with 33-12-103(3).
(b)Subsection (3)(a) does not prohibit a subsidiary or other affiliate of the insurer from becoming a general partner.