2011 Kentucky Revised Statutes Subtitle 7. Investments 304.7.411 Tangible personal property or equity interests acquired through partnerships, joint ventures, trust certificates, and similar instruments.
KY Rev Stat § 304.7.411 (1996 through Reg Sess) What's This?
304.7-411 Tangible personal property or equity interests acquired through
partnerships, joint ventures, trust certificates, and similar instruments.
(1)
(2)
(3)
(4)
(5)
(a)
Subject to the limitations of KRS 304.7-403, an insurer may acquire tangible
personal property or equity interests therein located or used wholly or in part
within a domestic jurisdiction either directly or indirectly through limited
partnership interests and general partnership interests not otherwise prohibited
by KRS 304.7-363(4), joint ventures, stock of an investment subsidiary or
membership interests in a limited liability company, trust certificates, or other
similar instruments.
(b) Investments acquired under paragraph (a) of this subsection shall be eligible
only if:
1.
The property is subject to a lease or other agreement with a person
whose rated credit instruments in the amount of the purchase price of the
personal property the insurer could then acquire under KRS 304.7-405;
and
2.
The lease or other agreement provides the insurer the right to receive
rental, purchase, or other fixed payments for the use or purchase of the
property, and the aggregate value of the payments, together with the
estimated residual value of the property at the end of its useful life and
the estimated tax benefits to the insurer resulting from ownership of the
property, shall be adequate to return the cost of the insurer's investment
in the property, plus a return deemed adequate by the insurer.
The insurer shall compute the amount of each investment under this section on the
basis of the out-of-pocket purchase price and applicable related expenses paid by
the insurer for the investment, net of each borrowing made to finance the purchase
price and expenses, to the extent the borrowing is without recourse to the insurer.
An insurer shall not acquire an investment under this section if, as a result of and
after giving effect to the investment, the aggregate amount of all investments then
held by the insurer under this section would exceed;
(a) Two percent (2%) of its admitted assets; or
(b) One-half of one percent (0.5%) of its admitted assets as to any single item of
tangible personal property.
For purposes of determining compliance with the limitations of KRS 304.7-403,
investments acquired by an insurer under this section shall be aggregated with those
acquired under KRS 304.7-405, and each lessee of the property under a lease
referred to in this section shall be the issuer of an obligation in the amount of the
investment of the insurer in the property determined as provided in subsection (2) of
this section.
Nothing in this section is applicable to tangible personal property lease
arrangements between an insurer and its subsidiaries and affiliates under a cost
sharing arrangement or agreement permitted under KRS 304.37-030.
Effective: July 14, 2000
History: Created 2000 Ky. Acts ch. 388, sec. 12, effective July 14, 2000.
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