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304.7-361 Duties of insurer's board of directors.
(1)
(2)
(3)
(4)
(5)
(6)
An insurer's board of directors shall adopt a written plan for acquiring and
holding investments and for engaging in investment practices that specifies
guidelines as to the quality, maturity, diversification of investments, and other
specifications including investment strategies intended to assure that the
investments and investment practices are appropriate for the business
conducted by the insurer, its liquidity needs, and its capital and surplus. The
board shall review and assess the insurer's technical investment and
administrative capabilities and expertise before adopting a written plan
concerning an investment strategy or investment practice.
Investments acquired and held under this subtitle shall be acquired and held
under the supervision and direction of the board of directors of the insurer. The
board of directors shall evidence by formal resolution, at least annually, that it
has determined whether all investments have been made in accordance with
delegations, standards, limitations, and investment objectives prescribed by the
board or a committee of the board charged with the responsibility to direct its
investments.
On no less than a quarterly basis, and more often if deemed appropriate, an
insurer's board of directors or committee of the board of directors shall:
(a) Receive and review a summary report on the insurer's investment
portfolio, its investment activities, and investment practices engaged in
under delegated authority, in order to determine whether the investment
activity of the insurer is consistent with its written plan; and
(b) Review and revise, as appropriate, the written plan.
In discharging its duties under this section, the board of directors shall require
that records of any authorizations or approvals, other documentation as the
board may require, and reports of any action taken under authority delegated
under the plan referred to in subsection (1) of this section shall be made
available on a regular basis to the board of directors.
In discharging their duties under this section, the directors of an insurer shall
perform their duties in good faith and with that degree of care that ordinarily
prudent individuals in like positions would use under similar circumstances.
If an insurer does not have a board of directors, all references to the board of
directors in this subtitle shall be deemed to be references to the governing
body of the insurer having authority equivalent to that of a board of directors.
Effective:July 14, 2000
History: Created 2000 Ky. Acts ch. 388, sec. 3, effective July 14, 2000.
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