There is a newer version of the Kentucky Revised Statutes
2009 Kentucky Revised Statutes
Subtitle 7. Investments
304.7.455 Limitations on investments that are guaranteed by a single person -- Investments in certain rating categories -- Canadian investments.
Download pdfresult of and after giving effect to the investment, the insurer would hold more than
five percent (5%) of its admitted assets in investments of all kinds issued, assumed,
accepted, insured, or guaranteed by a single person. (2) This five percent (5%) limitation shall not apply to the aggregate amounts insured by a single financial guaranty insurer with the highest generic rating issued by a
nationally recognized statistical rating organization. (3) Asset-backed securities shall not be subject to the limitations of subsection (1) of this section. However, an insurer shall not acquire an asset-backed security if, as a
result of and after giving effect to the investment, the aggregate amount of asset-
backed securities secured by or evidencing an interest in a single asset or single pool
of assets held by a trust or other business entity, then held by the insurer would
exceed five percent (5%) of its admitted assets. (4) An insurer shall not acquire, directly or indirectly through an investment subsidiary, an investment under KRS 304.7-457, 304.7-463, or 304.7-469, or counterparty
exposure under KRS 304.7-471(4) if, as a result of and after giving effect to the
investment:
(a) The aggregate amount of all medium and lower grade investments then held by the insurer would exceed twenty percent (20%) of its admitted assets; (b) The aggregate amount of lower grade investments then held by the insurer would exceed ten percent (10%) of its admitted assets; (c) The aggregate amount of investments rated 5 or 6 by the SVO then held by the insurer would exceed five percent (5%) of its admitted assets; (d) The aggregate amount of investments rated 6 by the SVO then held by the insurer would exceed one percent (1%) of its admitted assets; or (e) The aggregate amount of medium and lower grade investments then held by the insurer that receive as cash income less than the equivalent yield for
Treasury issues with a comparative average life, would exceed one percent
(1%) of its admitted assets. (5) An insurer shall not acquire, directly or indirectly through an investment subsidiary, an investment under KRS 304.7-457, 304.7-463, or 304.7-469, or counterparty
exposure under KRS 304.7-471(4) if, as a result of and after giving effect to the
investment:
(a) The aggregate amount of medium and lower grade investments issued, assumed, guaranteed, accepted, or insured by any one (1) person or, as to
asset-backed securities secured by or evidencing an interest in a single asset or
pool of assets, then held by the insurer would exceed one percent (1%) of its
admitted assets; or (b) The aggregate amount of lower grade investments issued, assumed, guaranteed, accepted, or insured by any one (1) person or, as to asset-backed Page 2 of 2 securities secured by or evidencing an interest in a single asset or pool of
assets, then held by the insurer would exceed one-half of one percent (0.5%)
of its admitted assets. (6) If an insurer attains or exceeds the limit of any one (1) rating category referred to in subsections (4) to (6) of this section, the insurer shall not thereby be precluded from
acquiring investments in other rating categories subject to the specific and
multicategory limits applicable to those investments. (7) An insurer shall not acquire, directly or indirectly through an investment subsidiary, any Canadian investments authorized by this subtitle, if as a result of and after
giving effect to the investment, the aggregate amount of these investments then held
by the insurer would exceed forty percent (40%) of its admitted assets, or if the
aggregate amount of Canadian investments not acquired under KRS 304.7-457(2)
then held by the insurer would exceed twenty-five percent (25%) of its admitted
assets. (8) However, as to an insurer that is authorized to do business in Canada or that has outstanding insurance, annuity, or reinsurance contracts on lives or risks resident or
located in Canada and denominated in Canadian currency, the limitations of
subsection (7) of this section shall be increased by the greater of:
(a) The amount the insurer is required by Canadian law to invest in Canada or to be denominated in Canadian currency; or (b) One hundred twenty-five percent (125%) of the amount of its reserves and other obligations under contracts on risks resident or located in Canada. Effective: July 14, 2000
History: Created 2000 Ky. Acts ch. 388, sec. 21, effective July 14, 2000.
Disclaimer: These codes may not be the most recent version. Kentucky may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
This site is protected by reCAPTCHA and the Google
Privacy Policy and
Terms of Service apply.