Section 376.298

Title XXIV BUSINESS AND FINANCIAL INSTITUTIONS

Chapter 376

Effective - 28 Aug 2007   

  376.298.  Acquisition of rate credit instruments, when. — 1.  Subject to the limitations of subsection 6 of this section and subsection 2 of section 376.297, an insurer may acquire rated credit instruments issued, assumed, guaranteed or issued by:

  (1)  The United States; or

  (2)  A government-sponsored enterprise of the United States if the instruments of the government-sponsored enterprise are assumed, guaranteed, or insured by the United States or are otherwise backed or supported by the full faith and credit clause of the United States.

  2.  Subject to the limitations of subsection 6^* of this section and subsection 2 of section 376.297, an insurer may acquire rated credit instruments issued, assumed, guaranteed, or insured by:

  (1)  Canada; or

  (2)  A government-sponsored enterprise of Canada if the instruments of the government-sponsored enterprise are assumed, guaranteed, or insured by Canada or are otherwise backed or supported by the full faith and credit clause of Canada.  

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An insurer shall not acquire an instrument under this subsection if as a result of and after giving effect to the investment the aggregate amount of investments then held by the insurer under this subsection would exceed forty percent of its admitted assets.

  3.  Subject to the limitations of subsection 6 of this section and subsection 2 of section 376.297, an insurer may acquire rated credit instruments excluding asset-backed securities:

  (1)  Issued by a government money market mutual fund, a class one money market mutual fund, or a class one bond mutual fund;

  (2)  Issued, assumed, guaranteed, or insured by a government-sponsored enterprise of the United States other than those eligible under subsection 1 of this section;

  (3)  Issued, assumed, guaranteed, or insured by a state if the instruments are general obligations of the state; or

  (4)  Issued by a multilateral development bank.

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An insurer shall not acquire an instrument of any one fund, any one enterprise or entity, or any one state under this subsection if as a result of and after giving effect to the investment the aggregate amount of investments then held by the insurer in any one fund, enterprise, entity, or state under this subsection would exceed ten percent of its admitted assets.

  4.  Subject to the limitations of subsection 6 of this section and section 376.297, an insurer may acquire preferred stocks that are not foreign investments and that meet the requirement of rated credit instruments if as a result of and after giving effect to the investment:

  (1)  The aggregate amount of preferred stocks then held by the insurer under this subsection does not exceed twenty percent of its admitted assets; and

  (2)  The aggregate amount of preferred stocks then held by the insurer under this subsection which are not sinking fund stocks or rated "P1" or "P2" by the SVO does not exceed ten percent of its admitted assets.

  5.  Subject to the limitations of subsection 6 of this section and section 376.297, in addition to those investments eligible under subsections 1 to 4 of this section, an insurer may acquire rated credit instruments that are not foreign investments.

  6.  An insurer shall not acquire special rated credit instruments under this section if as a result of and after giving effect to the investment the aggregate amount of special rated credit instruments then held by the insurer would exceed five percent of its admitted assets.  The director may by rule under section 376.305 identify certain special rated credit instruments that will be exempt from the limitation imposed by this subsection.

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(L. 2007 S.B. 66)

*Words "subdivision (6)" appear in original rolls.