304.7-350 Valuation of assets.
(1)
(2)
(3)
(4)
All obligations having a fixed term, rate, and face value held by an insurer
authorized to do business in this state may, if amply secured and not in default
either as to principal or interest, be valued as follows: if acquired at face value, at
the face value; if acquired above or below face value, on the basis of the purchase
price adjusted annually to bring the value to face value at maturity and so as to yield
in each year the effective rate of interest at which the purchase was made. The
amortization provided for in this subsection may be calculated with reasonable
approximations. The commissioner shall have the power to determine by rule the
eligibility of investments for valuation under this subsection.
(a) Securities, other than those referred to in subsection (1) of this section, held
by an insurer shall be valued, in the discretion of the commissioner, at their
fair market value, at their appraised value, or at prices determined by the
commissioner as representing their fair market value.
(b) Preferred or guaranteed stock or shares while paying full dividends may be
carried at a fixed value in lieu of market value, at the discretion of the
commissioner and in accordance with the method of computation he or she
approves.
(c) Securities qualifying under KRS 304.7-120, 304.7-423, or 304.7-473 shall be
valued at their fair value or net equity value, except that securities of a
subsidiary insurance corporation as provided for in KRS 304.7-120 shall be
valued either at cost or on a net equity basis, whichever is greater.
(a) Real property acquired pursuant to a mortgage loan or contract for sale, in the
absence of a recent appraisal deemed by the commissioner to be reliable, shall
not be valued at an amount greater than the unpaid principal of the defaulted
loan or contract at the date of acquisition, together with any taxes and
expenses paid or incurred in connection with acquisition, and the cost of
improvements thereafter made by the insurer and any amounts thereafter paid
by the insurer on assessments levied for improvements in connection with the
property.
(b) Other real property held by an insurer shall not be valued at an amount in
excess of fair value as determined by recent appraisal deemed by the
commissioner to be reliable. If valuation is based on an appraisal more than
three (3) years old, the commissioner may, at his or her discretion, call for and
require a new appraisal in order to determine fair value.
(c) Personal property acquired pursuant to chattel mortgages or security
agreements shall not be valued at an amount greater than the unpaid principal
of the defaulted loan at the date of acquisition, together with any taxes and
expenses paid or incurred in connection with acquisition, or the fair value of
the property, whichever amount is the lesser.
However, in all cases securities shall be valued in accordance with the standards
promulgated by the National Association of Insurance Commissioners including the
Purposes and Procedures of the Securities Valuation Office, the Valuation of
Securities Manual, the Accounting Practices and Procedures Manual, the Annual
Statement Instructions, or any successor valuation procedures officially adopted by
the NAIC.
Effective: July 15, 2010
History: Amended 2010 Ky. Acts ch. 24, sec. 1011, effective July 15, 2010. -Amended 2000 Ky. Acts ch. 388, sec. 34, effective July 14, 2000. -- Amended 1992
Ky. Acts ch. 386, sec. 3, effective July 14, 1982; and ch. 416, sec. 18, effective July
14, 1992. -- Amended 1976 Ky. Acts ch. 188, sec. 2, effective June 19, 1976. -Created 1970 Ky. Acts ch. 301, subtit. 7, sec. 35, effective June 18, 1970.
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