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304.48-090 Investment of funds.
(1)
(2)
The funds of a liability self-insurance group shall be invested in:
(a) United States Government bonds, United States Treasury notes, United States
Treasury bills, or other direct obligations guaranteed by the full faith and
credit of the United States Government or its agencies;
(b) Tax exempt obligations issued by the Commonwealth of Kentucky or its
agencies with a minimum rating of "A" by Standard & Poor's;
(c) Obligations issued by a county, district, municipality, or other legal authority
within the Commonwealth with a minimum rating of "AA" by Standard &
Poor's;
(d) Investment share accounts in a savings and loan association in the
Commonwealth whose deposits are insured by a federal agency;
(e) Certificates of deposit if issued by a duly chartered commercial bank;
(f) Equity securities actively traded on the New York or NASDAQ Stock
Exchanges or other registered national securities exchanges with no individual
equity holding comprising greater than ten percent (10%) of the equity portion
of the portfolio, reflected on the most recent quarterly or annual statement of
financial condition on file with the commissioner, at the time of purchase, as
follows:
1.
An investment in an individual equity holding shall not represent more
than five percent (5%) of the total market value of the security; and
2.
Investments in equity securities shall not exceed twenty percent (20%)
of the total market value of the investment portfolio of the liability selfinsurance group reflected on the most recent quarterly or annual
statement of financial condition on file with the commissioner;
(g) Corporate bonds if:
1.
The bond is issued, assumed, or guaranteed by a solvent institution
created or existing under the laws of the United States, or a state,
province, district, or territory;
2.
The corporate bond investments do not exceed twenty-five percent
(25%) of the total market value of the investment portfolio reflected on
the most recent quarterly or annual statement of financial condition on
file with the commissioner; and
3.
The bond has a minimum rating of "A" by Standard and Poor's; or
(h) Mutual funds and exchange traded funds if, at the time of purchase, the
investments do not exceed twenty percent (20%) of the total market value of
the investment portfolio reflected on the most recent quarterly or annual
statement of financial condition on file with the commissioner.
Of the aggregate investments made under this section:
(a) Not less than fifty percent (50%) of the total market value of the entire
investment portfolio shall be held in cash, cash equivalents, or securities as
described in subsection (1)(a) to (e) of this section; and
(b)
(3)
A minimum of five percent (5%) of the total investment portfolio value shall
be maintained in cash or cash equivalent accounts or United States Treasury
and Federal Agency Securities with a remaining maturity of one (1) year or
less.
The commissioner may permit variation from the requirements of this section for
good cause shown.
Effective: July 15, 2010
History: Amended 2010 Ky. Acts ch. 24, sec. 1595, effective July 15, 2010; and ch. 48,
sec. 2, effective July 15, 2010. -- Created 1994 Ky. Acts ch. 358, sec. 9, effective
July 15, 1994.
Legislative Research Commission Note (7/15/2010). References to the "executive
director" of insurance in subsections (1) and (3) of this section, as amended by 2010
Ky. Acts ch. 48, sec. 2, have been changed in codification to the "commissioner" of
insurance to reflect the reorganization of certain parts of the Executive Branch, as set
forth in Executive Order 2009-535 and confirmed by the General Assembly in 2010
Ky. Acts ch. 24. These changes were made by the Reviser of Statutes pursuant to
2010 Ky. Acts ch. 24, sec. 1938.
Legislative Research Commission Note (7/15/2010). This section was amended by
2010 Ky. Acts chs. 24 and 48, which are in conflict. Under KRS 446.250, Acts ch.
48, which was last enacted by the General Assembly, prevails.
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