Section 375.1075

Title XXIV BUSINESS AND FINANCIAL INSTITUTIONS

Chapter 375

Effective - 28 Aug 2007   

  375.1075.  Limitations on aggregate of medium or lower quality investments, requirements. — 1.  No domestic insurer shall acquire, directly or indirectly, any medium or lower quality obligation of any institution if, after giving effect to any such acquisition, the aggregate amount of all medium and lower quality obligations then held by the domestic insurer would exceed twenty percent of its admitted assets, and no more than ten percent of its admitted assets consists of obligations rated four, five or six by the Securities Valuation Office, and no more than three percent of its admitted assets consists of obligations rated five or six by the Securities Valuation Office, and no more than one percent of its admitted assets consists of obligations rated six by the Securities Valuation Office.  Attaining or exceeding the limit of any one category shall not preclude an insurer from acquiring obligations in other categories subject to the specific and multicategory limits.

  2.  The provisions of this section shall not prohibit a domestic insurer from acquiring any obligations which it has committed to acquire if the insurer would have been permitted to acquire that obligation pursuant to this section on the date on which such insurer committed to purchase that obligation.

  3.  Notwithstanding the other provisions of this section, a domestic insurer may acquire an obligation of an institution in which the insurer already has one or more obligations, if the obligation is acquired in order to protect an investment previously made in the obligations of the institution, provided that all such acquired obligations shall not exceed one-half of one percent of the insurer's admitted assets.

  4.  The board of directors of any domestic insurance company which acquires or invests in, directly or indirectly, medium or lower quality obligations of any institution shall adopt a written plan for the making of such investments.  The plan, in addition to guidelines with respect to the quality of the obligations invested in, shall contain diversification standards including, but not limited to, standards for issuer, industry, duration, liquidity and geographic location.

  5.  No investments in excess of the limitations provided by this act shall be recognized as an asset of the insurer pursuant to section 379.080.

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(L. 1991 H.B. 385, et al. § 20, A.L. 2007 S.B. 66)