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304.7-363 Prohibited actions of insurers.
An insurer shall not, directly or indirectly:
(1) 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 KRS
304.7-365;
(2) Invest in an obligation or security, make a guarantee for the benefit of or in
favor of, or make other investments in a business entity of which ten percent
(10%) or more of the voting securities or equity interests are owned directly or
indirectly by or for the benefit of one (1) or more officers or directors of the
insurer, except as authorized in KRS 304.37-110, or provided in KRS
304.7-365;
(3) Engage on its own behalf or through one (1) or more affiliates in a transaction
or series of transactions designed to evade the prohibitions of this subtitle;
(4) (a) Invest in a partnership as a general partner, except that an insurer may
make an investment as a general partner:
1.
If all other partners in the partnership are subsidiaries of the insurer;
2.
For the purpose of:
a.
Meeting cash calls committed to prior to July 14, 2000;
b.
Completing those specific projects or activities of the
partnership in which the insurer was a general partner as of
July 14, 2000 that had been undertaken as of that date; or
c.
Making capital improvements to property owned by the
partnership on July 14, 2000 if the insurer was a general
partner as of that date; or
3.
In accordance with KRS 304.7-014(3).
(b) This subsection shall not prohibit a subsidiary or other affiliate of the
insurer from becoming a general partner; or
(5) Invest in or lend its funds upon the security of shares of its own stock, except
that an insurer may acquire shares of its own stock for the following purposes,
but the shares shall not be admitted assets of the insurer:
(a) Conversion of a stock insurer into a mutual or reciprocal insurer or a
mutual or reciprocal insurer into a stock insurer;
(b) Issuance to the insurer's officers, employees, or agents in connection with
a plan approved by the commissioner for converting a publicly held
insurer into a privately held insurer or in connection with other stock
option and employee benefit plans; or
(c) In accordance with any other plan approved by the commissioner.
Effective:July 15, 2010
History: Amended 2010 Ky. Acts ch. 24, sec. 1013, effective July 15, 2010. -Created 2000 Ky. Acts ch. 388, sec. 4, effective July 14, 2000.
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