376.297. Investment subsidiaries not permitted, when.
Investment subsidiaries not permitted, when.
376.297. 1. (1) Except as otherwise specified in this chapter, aninsurer shall not acquire an investment directly or indirectly through aninvestment subsidiary if, as a result of and after giving effect to theinvestment, the insurer would hold more than three percent of its admittedassets in the investments of all kinds issued, assumed, accepted, insured,or guaranteed by a single person, or five percent of its admitted assets ininvestments in the voting securities of a depository institution or anycompany that controls the institution.
(2) The three percent limitation described in subdivision (1) of thissubsection shall not apply to the aggregate amounts insured by a singlefinancial guaranty insurer with the highest generic rating issued by anationally recognized statistical rating organization.
(3) Asset-backed securities shall not be subject to the limitationsof subdivision (1) of this subsection; however, an insurer shall notacquire an asset-backed security if as a result of and after giving effectto the investment the aggregate amount of asset-backed securities securedby or evidencing an interest in a single asset or single pool of assetsheld by a trust or other business entity then held by the insurer wouldexceed three percent of its admitted assets.
2. (1) An insurer shall not acquire directly or indirectly throughan investment subsidiary an investment under sections 376.298, 376.301, and376.304, or counterparty exposure under subdivision (6) of subsection 2 ofsection 375.345, RSMo, if as a result of and after giving effect to theinvestment:
(a) The aggregate amount of medium and lower grade investments thenheld by the insurer would exceed twenty percent of its admitted assets;
(b) The aggregate amount of lower grade investments then held by theinsurer would exceed ten percent of its admitted assets;
(c) The aggregate amount of investments rated "5" or "6" by the SVOthen held by the insurer would exceed three percent of its admitted assets;
(d) The aggregate amount of investments rated "6" by the SVO thenheld by the insurer would exceed one percent of its admitted assets; or
(e) The aggregate amount of lower grade investments then held by theinsurer that receive cash income less than the equivalent yield fortreasury issues with a comparative average life would exceed one percent ofits admitted assets.
(2) An insurer shall not acquire directly or indirectly through aninvestment subsidiary an investment under sections 376.298, 376.301, and376.304, or counterparty exposure under subdivision (6) of subsection 2 ofsection 375.345, RSMo, if as a result of and after giving effect to theinvestment:
(a) The aggregate amount of medium and lower grade investmentsissued, assumed, accepted, guaranteed, or insured by any one person or asto asset-backed securities secured by or evidencing an interest in a singleasset or pool of assets then held by the insurer would exceed one percentof its admitted assets; or
(b) The aggregate amount of lower grade investments issued, assumed,accepted, guaranteed, or insured by any one person or as to asset-backedsecurities secured by or evidencing an interest in a single asset or poolof assets then held by the insurer would exceed one-half of one percent ofits admitted assets.
(3) If an insurer attains or exceeds the limit of any one ratingcategory referred to in this subsection, the insured shall not thereby beprecluded from acquiring investments in other rating categories subject tothe specific and multicategory limits applicable to those investments.
3. An insurer shall not acquire directly or indirectly through aninvestment subsidiary a Canadian investment authorized by this chapter, ifas a result of and after giving effect to the investment, the aggregateamount of these investments then held by the insurer would exceed fortypercent of its admitted assets or if the aggregate amount of Canadianinvestments not acquired under subsection 2 of section 376.298 then held bythe insurer would exceed twenty-five percent of its admitted assets.However, as to an insurer that is authorized to do business in Canada orthat has outstanding insurance, annuity, or reinsurance contracts on livesor risks resident or located in Canada and denominated in Canadiancurrency, the limitations of this section shall be increased by the greaterof:
(1) The amount the insurer is required by Canadian law to invest inCanada or to be denominated in Canadian currency; or
(2) One hundred fifteen percent of the amount of its reserves andother obligations under contracts on lives or risks resident or located inCanada.
(L. 2007 S.B. 66)