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304.7-463 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 304.7-455, 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
304.7-457; 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 304.7-455,
investments acquired by an insurer under this section shall be aggregated with
those acquired under KRS 304.7-457, and each lessee of the property under a
lease referred to in this section shall be deemed 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. 25, effective July 14, 2000.
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